OPPOSE Proposed Budget Trailer Bill, Managed Care Adjustments 6/1/20

June 1, 2020


The Honorable Holly Mitchell, Chair                       The Honorable Jim Nielsen, Vice Chair
Senate Budget Committee                                           Senate Budget Committee
State Capitol, Room 5019                                           State Capitol, Room 5019
Sacramento, CA 95814                                                Sacramento, CA 95814


RE: OPPOSE Proposed Budget Trailer Bill, Managed Care Adjustments


Dear Senators Mitchell and Nielsen,

On behalf of Inland Action, a non-profit, non-partisan organization based in the Inland Empire region of California, I write to strongly oppose the proposal to adjust Medi-Cal Managed Care rates by imposing a cap on hospital reimbursement rates based on Medi-Cal fee-for-service APR-DRG reimbursement.

Hospitals have been on the front-line of the COVID-19 public health emergency, taking extraordinary measures to keep our communities, our citizens and our healthcare providers safe. In collaboration with state and local governments, our hospitals eliminated scheduled procedures, drastically reducing the income they rely on for patient care, salaries and equipment. Since the beginning of the crisis, hospital patient volume has been drastically reduced, resulting in massive financial losses for our hospitals.

The proposed trailer bill will cap managed Medi-Cal payments tying them to fee-for-service APR-DRG rates. This will have a devastating effect and will be a drastic blow to California’s safety-net in the midst

of an unprecedented health crisis. Hospitals are already managing the fallout of drastic revenue losses as a result of COVID-19, thus the magnitude of loss that this action would cause is simply unacceptable. It would cause a major disruption in hospital services across the State, would have the compounding effect of unravelling value-based care arrangements, and will eliminate care coordination for the most vulnerable. This would likely drive up costs and reduce the availability of quality care to the poorest communities.

Our region would be severely impacted by this action, thus Inland Action writes requesting that you reject this trailer bill. Please work with stakeholders to develop a thoughtful approach to addressing the budget shortfall without decimating the healthcare safety net in California.


Carole Beswick, CEO