For the second time in seven months, California lawmakers have crafted a revised budget to address the state’s cash crisis — a budget that includes cuts that could potentially reduce patient-care revenues to City of Hope and leave more Californians without health insurance.

A revised budget from Sacramento cuts spending on health-care programs.

State legislators passed a revised 2009-10 budget in February, but they had to revise it again due to falling revenues and the rising costs of social service programs. This revised budget, which was signed into law on July 28, includes deep cuts in most programs and services.

Cuts in health-care funding that could affect City of Hope include a $1.4 billion reduction in Medi-Cal spending, which includes the following:

• A $1 billion reduction of payments related to Medicaid that are linked to various federal obligations.
• $66 million in assumed savings from the implementation of new federal and state drug-pricing policies aimed at lowering costs.
• $46.8 million in savings legislators believe will come from expanded efforts to fight Medi-Cal fraud.
• Various other cuts totaling $287.2 million.

Other health-care cuts unrelated to Medi-Cal include a $178.6 million cut to the Healthy Families Program; a $4.6 million cut eliminating Certified Application Assistance for Healthy Families; a $59.1 million cut eliminating various programs administered by the Office of AIDS; and a $35.1 million cut eliminating various Community Clinic Grants. These cuts mean that more Californians will be without health insurance and will have fewer places to receive services.

In signing the budget revision, Gov. Arnold Schwarzenegger vetoed another $489 million in additional cuts. Democrats in the legislature and the governor are currently locked in a dispute over whether those line-item vetoes were constitutional.

On July 2, the state stopped issuing checks and began issuing registered warrants, better known as IOUs, as a promise to pay later for certain services.

Hospitals including City of Hope continue to receive payments — not IOUs — to reimburse them for costs incurred by Medi-Cal patients, thanks to the recently enacted federal American Recovery and Reinvestment Act. This national legislation obligated the state to comply with Medicaid requirements for payment or risk losing the federal funding prompted by the act.

However, bills for patients receiving care under the state aid programs California Children’s Services, the Genetically Handicapped Persons Program, Every Woman Counts and Healthy Families have been “paid” with IOUs. At City of Hope these IOUs have accounted for a very small proportion of revenues.

Although the budget was signed into law, the state will continue to issue IOUs until Sept. 4.

To make matters more difficult, this latest revision to the 2009-2010 budget might not be the last. Officials have predicted that the legislature likely will have to address the budget again before December.