2 COUNTIES FIGHT CUTS IN MEDICAID.

Byline: Sabrina Decker Staff Writer

Los Angeles and Ventura counties officials are lobbying against a proposal to cut federal Medicaid reimbursements to hospitals, saying they could lose at least $135 million a year.

During a recent conference call with White House officials, county supervisors from around California voiced strong opposition to a plan to reduce the amount of money that counties receive for treating poor and uninsured patients at regional health facilities.

``There was a sense of urgency for all of us because we heard this was moving through the administration,'' Los Angeles County Supervisor Don Knabe said.

Officials estimate California could lose at least $300 million a year - including $125 million to Los Angeles County, where the health-care system is already facing a multimillion-dollar deficit. Neighboring Ventura County estimates it would lose $6 million to $10 million a year.

``The problem is our health-care system is teetering already from a very unstable financial footing,'' said Dr. Keith Richman, a Republican Assemblyman from Granada Hills. ``More than two-thirds of all hospitals in California are already losing money.''

Currently, the federal government pays a so-called ``upper payment limit'' of 150 percent for low-income Medicaid patients. The amount is calculated from amounts paid out to seniors through Medicare.

Medicaid's extra 50 percent is designed to cover the costs associated with treating uninsured patients, as well as other expenses incurred by county hospitals and clinics - and some strategically located private hospitals - that serve as the medical ``safety net'' for the general public.

But officials in the Bush administration have proposed eliminating the cushion as early as January. They proposed the change after finding that some states spent the money on road improvements and other projects unrelated to health care.

Reducing the compensation rate to 100 percent would cut overall public health care expenses nationwide, but California counties argue they desperately need the money and shouldn't be penalized for other states' abuses.

``Whatever they need to validate how the money is being spent, we are willing to do,'' Knabe said.

Los Angeles County officials project their health-care system will be $884 million in the red by 2005 because of other reductions in federal revenue - cuts that are expected to result in closures and reduced services among the six hospitals and 26 clinics.

Losing at least $125 million more a year in annual revenue would be devastating, Knabe said.

As much as $50 million in medical services might have to be cut in neighboring Ventura County if the federal revenue is withdrawn.

``This would be a disaster for us,'' Ventura County Supervisor Frank Schillo said.

Knabe and Schillo both suggested that in addition to implementing stronger fiscal accountability, the federal government should pay the money directly to the counties instead of filtering it through the state and paying the state's related administrative expenses.

White House officials suggested expanding Medi-Cal, California's version of Medicaid, to include more uninsured residents with higher incomes. But such action would require more state funding for Medi-Cal, which industry officials say is highly unlikely.

Knabe said he has assurances from White House officials that the counties will be contacted again on the matter if it moves forward. It is currently under review by the Office of Management and Budget and the Department of Health and Human Services, the White House departments that coordinated the conference call.

Opposition to the Medicaid reduction is backed by 48 of California's 52 congressional delegates, U.S. Sens. Dianne Feinstein and Barbara Boxer, and Gov. Gray Davis. Legislative approval is not required for the reduction to be implemented.