State-funded programs grapple with California IOUs

With the state budget crisis still unresolved, anyone expecting money from Sacramento is a day closer to getting an IOU. The state controller says he’ll start issuing them Thursday. KPCC’s Susan Valot reports.

Susan Valot: At Providence Speech and Hearing Center in Orange, almost two-thirds of the patients – mostly children – rely on state funding for hearing and speech care. The center’s CEO, Linda Smith, says instead of getting a state payment at the start of the week, they got notice that California will issue IOUs. She says the center will have to use credit to cover its bills. But Smith wonders how long she can do that.

Linda Smith: That’s something that we’ve actually been discussing. Do we have to stop taking these patients? It’s part of our mission to serve all patients regardless of financial resources. But there comes a point where, you know, we can’t fund what the state is doing. And then they continue to cut the payments, as well. So it’s definitely a challenge.

Valot: Banks haven’t decided whether they’ll accept the IOUs. They might wait until Thursday when the state sets the interest rate for the IOUs. Linda Smith says Providence Speech and Hearing Center is lucky because Cal Optima, which runs Medi-Cal in Orange County, plans to keep paying the bills.