Lack of Budget May Send State Medical Programs into Critical Condition

California state lawmakers have returned to Sacramento after the Fourth of July holiday weekend with things the way they left them. There's no state budget, and pretty soon, there'll be no more cash on hand to pay the people who do the state's work. That includes doctors, clinics and hospitals that care for California's poor. KPCC's Julie Small says while the State Legislature works on budget surgery, those medical providers are feeling the pain.

Julie Small: Health care providers who treat Medi-Cal patients have some breathing room.

H.D. Palmer: Medi-Cal providers will still be paid.

Small: H.D. Palmer is with the state's finance department. He says after other budget crises, the state created an interim fund that'll send some cash to Medi-Cal providers, like doctors, pharmacists, and hospitals, until lawmakers work out a new spending plan.

Palmer: There is a fund loan authority that is currently on the books that allows those Medi-Cal providers to be paid, even in the absence of a budget.

Small: But the fund is finite. It's only $2 billion, half of it federal money, the other half from the state. That may sound like a lot, but in the world of rising health care costs, it's not.

Jan Emerson: Unfortunately, that amount has not been increased in 10 years.

Small: Jan Emerson is with the California Hospital Association.

Emerson: The controller's office has told us that they expect that money will be, will run out within about three weeks. And then if there's still no state budget, then no hospitals will be paid for any service.

Small: Hospitals, doctors, and pharmacists that treat the state's poorest patients are all contemplating what to do should the fund run out before state lawmakers pass a budget. Some say they'll be forced to turn away Medi-Cal patients because they cannot afford to front the cost of treatment for months while the Legislature bickers over a budget.