Crisis for poor as Medi-Cal funds end

MEDICAL_035_LH_.JPG Left to right--Maryam Ebrahimian, 87 years old, Robabeh Mashhadian, 83 years old, and Gholamali Jedarikarimi, 83 years old, during physical therapy at Grace Center in Sunnyvale, a facility for the elderly which has about 250 registered participants. Budget stalemate has caused medical payments to stop, and the owner, Manooch Pouransari, is scrambling to get funding to keep the facility open, including trying to secure a personal loan. Liz Hafalia/The Chronicle/San Francisco/7/31/07 **Maryam Ebrahimian, Robabeh Mashhadian, Gholamali Jedarikarimi, Manooch Pouransari cq �2007, San Francisco Chronicle/ Liz Hafalia MANDATORY CREDIT FOR PHOTOG AND SAN FRANCISCO CHRONICLE. NO SALES- MAGS OUT. less MEDICAL_035_LH_.JPG Left to right--Maryam Ebrahimian, 87 years old, Robabeh Mashhadian, 83 years old, and Gholamali Jedarikarimi, 83 years old, during physical therapy at Grace Center in Sunnyvale, a facility ... more Photo: Liz Hafalia Photo: Liz Hafalia Image 1 of / 1 Caption Close Crisis for poor as Medi-Cal funds end 1 / 1 Back to Gallery

In an emerging crisis for California's elderly and poor, all Medi-Cal funding will be halted this week to an estimated 500 hospitals throughout the state and 11,000 nursing homes, hospices and adult day care centers.

Medi-Cal funds have run out because of the state's monthlong budget impasse, forcing community programs and other facilities into a frantic scramble to cover their bills. Some care facilities for the aged are making plans to close.

California has nearly 6.8 million elderly, frail and chronically infirm Medi-Cal beneficiaries, and many would be forced to find help elsewhere, or make do on their own, without emergency funding from the state Legislature.

But help is unlikely because both the Senate and the Assembly would have to approve an emergency bailout, and the Assembly has gone on summer recess.

"We have not been cut off from Medi-Cal funding before so early in the fiscal year," said Lydia Missaelides, executive director of the California Association for Adult Day Services. "The magnitude of this crisis is overwhelming."

Medi-Cal coffers ran dry last week when the state was scheduled to issue $223 million to managed-care providers. Instead, checks for only $143 million were issued.

On Thursday, $227 million was scheduled to be paid to assorted hospitals, clinics and other providers of Medi-Cal services. No money will be paid.

"This is the perfect storm," said H.D. Palmer, spokesman for the state Department of Finance. "In the absence of an enacted budget, we don't have the authority to pay certain vendors."

Medi-Cal payment crises are nothing new to California, which has a long history of protracted budget battles. In 1998, the Legislature put into place a fail-safe measure allocating $2 billion to tide over Medi-Cal during a budget logjam. That cushion was expected to last two months whenever budget negotiations dragged on, said Palmer.

But Medi-Cal changed accounting processes several years ago and, with the addition of inflated medical costs, "We had to start tapping those funds earlier," Palmer said. "The effect was the two-month cushion became a one-month cushion, which has led to our inability to issue checks at all this week."

One man who could be affected is 75-year-old Roy A., a San Leandro resident and veteran of the Korean War who spent Tuesday at his favorite place: an adult day health care facility in Berkeley.

He drew pictures of a fat bear and parrots, ate chicken tacos and chocolate cake and had some occupational therapy, and a nurse monitored his response to the 18 medications he's taking.

"The center helps me tremendously," said Roy, who has been diagnosed with 11 conditions, including hypertension and coronary heart disease. "It gives me life."

Because of the help Roy receives three days a week from Alzheimer's Services of the East Bay's Adult Day Health Care Program, he still lives at home with his wife instead of being confined to a hospital or a nursing facility.

But this program, like others around the state, is in peril, said Executive Director Karen Grimsich. Her program serves 175 people whose average age is 86. All have dementia or Alzheimer's.

"There's no time to find places for clients - and other programs are equally affected by the funding problem," she said. "People with Alzheimer's can't just take two months off the disease while the state figures out its budget."

As the current budget stalemate drags on, the emergency will worsen, said Missaelides.

The state, she said, has 340 adult day health care centers providing services to 38,000 Medi-Cal beneficiaries. She said that a handful of centers are planning to close operations next week unless there is a budget reprieve. Facilities most in jeopardy are small and independently owned, and with little financial wiggle room.

In the last few days, Manooch Pouransari has spent countless hours talking to bankers, hoping to secure a line of credit to keep afloat the Sunnyvale health center he runs with his wife. Entirely funded by Medi-Cal, Grace Adult Day Health Care has 275 elderly participants, many of whom suffer from Alzheimer's or dementia. His center has a staff of 30, including four nurses, four social workers, a physical therapist and a dietician.

On Tuesday, he learned that a hoped-for line of credit had fallen through. Now he's hoping a bank will extend him a personal loan.

"This is a life-threatening situation," he said. "It's a borderline crime. The state is literally kicking elderly people out on the street. For many of them, this is the only meal they get. The people who receive Medi-Cal are very poor. If centers like ours close, these people will have to be placed somewhere."

Assemblywoman Noreen Evans, D-Santa Rosa, predicted that Medi-Cal recipients will begin flooding hospital emergency rooms, "making the health crisis even worse ... (as) emergency rooms are already stretched to the breaking point."

She called the Medi-Cal crisis "highly irresponsible."

"It's outrageous that in a state as rich as California, we could have people dying on the street for lack of medical care," she said. "This is going to affect the disabled, seniors, children and the poor ... people are going to start to get hurt."

The state has been without a budget since July 1. On Tuesday, budget negotiations continued with little visible progress even though Gov. Arnold Schwarzenegger met personally with the entire Republican Senate caucus for more than an hour. Senate Leader Don Perata, D-Oakland, has scheduled a Senate session tonight to discuss the budget.

Senate Republican Leader Dick Ackerman, R-Irvine (Orange County), said he is not overly concerned about the budget stalemate dragging out weeks or even months longer. He said the state continues to take in tax revenue and most agencies have plenty of money in reserve.

Ackerman said that even if the budget is delayed another month, his goal of cutting spending is worthwhile. "Our goal is to get a responsible budget," he said. "We'd like to get it sooner than later, but I think the most important goal for the people of California is to have a budget that does not spend more than it takes in."

But for Assemblyman John Laird, D-Santa Cruz, the current Medi-Cal crisis stirs disturbing memories. Laird was the executive director of a nonprofit AIDS service center in the early 1990s when budget negotiations stalled for more than a month.

"I was just days away from closing our doors," he said. "I'd borrowed from every fund I could. People have to realize that real people are paying a price for this."

How to express your opinion

Contact the following state senators to register an opinion about the decision to cut off Medi-Cal funds:

Senate Republican leader Dick Ackerman of Irvine

Sacramento office: (916) 651-4033

District office: (714) 573-1853

E-mail: senator.ackerman@sen.ca.gov

Senate President Pro Tem Don Perata, D-Oakland

Sacramento office: (916) 651-4009

District office: (510) 286-1333

E-mail: senator.perata@sen.ca.gov