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RCB_20110915_MEDI_CAL_0069.JPGThe perennially contentious relationship between the state and county governments over money has a new flash point -- the expansion of Medi-Cal coverage to more than a million low-income Californians under the new Affordable Care Act.

The conflict -- aired Wednesday in an Assembly budget subcommittee hearing -- has two prongs:

• Whether the state or counties will manage the expansion.
• Whether the state should "claw back" some of the money it now pays to counties to pay for indigent medical care -- on the theory that many of the half-million poor beneficiaries will become Medi-Cal patients next year, raising state costs.

Gov. Jerry Brown's administration is still undecided whether to opt for county or state management, but the larger counties have said they don't want it, the Legislature's own budget analyst recommends state management, and the major pending implementation bill also opts for state operation.

Dr. Mitchell Katz, the Los Angeles County health services director, suggested during the hearing that the state is using the specter of pushing management onto counties as leverage to persuade their officials to accept cuts in state payments for indigent care.

Katz said that the state's funds already fail to meet county costs for that care and that even with Medi-Cal expansion, counties will still have major indigent care costs for those who don't qualify for Medi-Cal.

The administration has suggested that the "claw back" of indigent care money be in the form of shifting more responsibilities for child care and social services to counties, rather than pulling the money back into the state treasury.

That tactic is aimed at preventing the funds -- the amount is not specified -- from being counted as state revenue, thereby triggering additional spending on schools under the Proposition 98 formula.

The Legislature's budget analyst, Mac Taylor, says some return of indigent care money would be "reasonable" because it would "offset the state's costs for the (Medi-Cal) expansion or other state priorities."

"It has to be sustainable in the long haul," Toby Douglas, the state director of health care services, told the committee, in explaining why the counties should relinquish some of their indigent care funds.

The Medi-Cal financing flap is a continuation of a decades-long jousting between state and local officials over sharing of costs for jointly financed programs. The indigent medical care money was part of a 1991 "realignment" of those costs and responsibilities. Last year, there was another "realignment" of some criminal justice and social services that's still being implemented.

PHOTO CREDIT: Dr. Douglas Tolly checks on a Medi-Cal patient on Sept. 15, 2011, in Yuba City. Renée C. Byer / Sacramento Bee file, 2011



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