Hospitals are wary of California budget plan to shift emergency funds

California emergency room doctors are fighting to preserve a state fund that compensates them for treating poor, uninsured patients at private hospitals — money that lawmakers want to shift to the federal insurance program in order to help bridge the budget gap.

But doctors say the shift would still leave millions uninsured for the next several years, raising questions about who will pick up the tab at already strained emergency rooms.

“We can’t deny care to anybody. The hospitals that are barely making it through, this is going to make it unsustainable,” said Dr. Arturo Pelayo, an emergency physician at St. Francis Medical Center in Lynwood, where up to 20% of the nearly 70,000 emergency patients they see each year are covered by the Emergency Medical Services, or “Maddy,” fund.

That likely includes Patrick Stobie, 62, of Lynwood, an unemployed security guard who went to the emergency room for treatment recently after he was hit by a car and broke his nose.

“I’m just trying to stay healthy,” said Stobie, who lost his Kaiser medical insurance and his job in 2007 and said he had no other form of insurance. “I know the state’s broke — I don’t know what they’re going to do.”

State lawmakers want to transfer $55 million from the fund — named for Kenneth K. Maddy, the late state senator from Fresno who proposed its creation more than two decades ago — which pays doctors to care for patients such as Stobie. Moving the money to Medi-Cal, which serves the state’s poorest residents, would qualify the state for matching funds from the federal government.

Many of the patients formerly covered by the fund would be covered by a federal waiver that takes effect July 1 and by Medi-Cal as it expands under national health reform, according to Mark Hedlund, a spokesman for state Senate President Pro Tem Darrell Steinberg (D-Sacramento), who proposed the transfer along with other legislative leaders.

“That helps maintain the essential services and leverage federal money,” Hedlund said.

The “Maddy Fund” money comes from fines levied for certain traffic violations and is administered by counties. The fund included about $95 million as of the 2008-2009 fiscal year, the most recent period available, according to a recent survey by the Emergency Medical Services Administrators’ Assn. of California. Hedlund said $55 million is about half of the fund.

Dr. Andrea Brault, president of the California Chapter of the American College of Emergency Physicians, said the transfer would effectively eliminate the fund. Brault said moving the money into Medi-Cal would limit hospitals’ ability to maintain panels of on-call surgeons and specialists, increase emergency room wait times and force some emergency rooms to close.

“It’s not just about uninsured people or physicians; it’s about the safety net,” said Brault, an emergency physician at Brotman Medical Center in Culver City. “At some point when you make so many cuts to the safety net, it hurts everybody. These funds are critical to our emergency departments.”

Brault said the federal waiver would cover 500,000 patients only and national health care legislation will not expand Medi-Cal until 2014, leaving about 7 million of the state’s uninsured patients with reduced or no access to emergency medical services in the near future.

Dr. David Frankle, an emergency physician at Cedars-Sinai Medical Center who leads a Los Angeles County advisory group for the fund, said losing it would be “devastating.”

“It won’t just impact indigent people — it will impact all of us if the emergency room is overcrowded, understaffed and overwhelmed by people trying to get limited care,” he said.

Los Angeles County receives about $33 million a year from the fund, which compensates about 4,700 doctors and also helps pay for emergency responder training, emergency stroke and cardiac programs, according to Cathy Chidester, director of Los Angeles County’s emergency medical services agency.

Chidester said she fears that transferring money away from the fund would force emergency rooms to close, particularly at community hospitals such as St. Francis that serve a greater proportion of poor, uninsured patients. She said it would also likely worsen overcrowding at public safety-net hospitals.

“If the Maddy Fund goes, the line for our waiting room will be going around the block,” said Dr. Edward Newton, chairman of the department of emergency medicine at Los Angeles County-USC Medical Center.

But hospital industry officials said that rather than close emergency rooms, California hospital administrators would most likely pay extra to keep specialists on call, shifting the burden of caring for the state’s poorest patients from the state to private hospitals.

“Many hospitals will be hard pressed not to pay for the physician coverage because so much of the admission hospitals have these days comes from the emergency rooms,” said Jim Lott, executive vice president of the Hospital Assn. of Southern California.

Lott said that some hospitals, particularly those in low-income areas such as South Los Angeles, will not be able to afford to pay on-call emergency room specialists and may have to scale back services or hours. More than half of hospitals in Los Angeles are operating at a deficit, he said, and those in low-income areas are closer to the brink. Of the 17 hospitals that have closed statewide in the past 11 years, all were in low-income areas, including six in South Los Angeles, he said.

The governor’s office has not taken a position on the proposal, according to spokesman H.D. Palmer, who said “there is still a potential that there will be some changes.” However, opponents have yet to submit an alternative, and unless they succeed in negotiating changes, the proposal could pass as part of the state budget.

molly.hennessy-fiske@latimes.com