California hospitals suffer massive losses from fewer patients, major COVID-19 expenses

With the June 15th budget deadline looming, the Legislature has presented a united front in rejecting many of the provisions set forth in the Governor’s May Revise.  The May Revise typically represents the state’s financial outlook based on receipts from April’s tax filings.  This year however, tax deadline was delayed due to the COVID19 pandemic.

It is anticipated that the Department of Finance will provide an updated financial outlook in August after the delayed tax receipts are calculated. Based on current projections however, California is facing a nearly $54 billion deficit due to in large part to the impact of COVID19 and the resulting recession.

The Governor’s May Revise proposed deep cuts to health and human services, education, and safety-net programs to name a few.  One of the proposals set forth in the May Revise would have capped Medi-Cal managed care rates for inpatient hospital services at the fee-for- service rate using the APR-DRG methodology – imposing a negative financial impact on hospitals including district hospitals.  DHLF’s advocacy efforts have been successful in holding off this proposal and continued efforts will focus on keeping this proposal out of the budget.  High-level negotiations have begun with between the Legislature and the Administration to present the statutorily required balanced budget within the next week and allowing the budget to be in print for review at least 72 hours before it’s voted upon.

Both the Senate and the Assembly continue to work on legislation as they approach the deadline to pass fiscal bills out of the appropriations committees. Once passed, bills will then move to the floor of each house with final action for bills in the “House of Origin” set to occur before the Legislature leaves for a brief summer recess.  DHLF will continue advocacy efforts on priority legislation impacting hospitals and health care.