Association Backing Governor’s Health Reform Proposal

The California Hospital Association Board of Trustees reached an agreement Sept. 6 to support Gov. Schwarzenegger’s health care reform proposal. This agreement includes a comprehensive legislative package and a 2008 ballot initiative. Issues that remain in need of resolution include the guarantee of long-term stability and predictability of the financing of hospital services, with the fee on hospitals permanently capped at 4 percent. Also, the CHA seeks that funds generated by the hospital fee be placed in a separate hospital trust account, apart from the state’s General Fund. These funds must first be spent to raise Medi-Cal fee-for-service inpatient and outpatient payments to hospitals to the maximum allowed under federal law and to increase Medi-Cal managed care payments by the same amount. Lastly, CHA seeks to have annual Medi-Cal rate increases in payments to hospitals guaranteed, a guaranteed state “maintenance of effort” in General Fund financing to hospitals and a guarantee that hospitals will benefit from every dollar they contribute.