Pilot Medi-Cal Plan Won’t Be Funded by State

Gov. George Deukmejian’s proposed budget for 1986-87, which will be unveiled today, does not contain money to implement a controversial Medi-Cal pilot project in the San Fernando Valley area, according to two members of the California Medical Assistance Commission, which is overseeing the experiment.

Without the funds, the Expanded Choice project will not start this year as scheduled, the commissioners said Thursday.

The governor, however, has included money in the budget for an identical pilot project scheduled to begin July 1 in San Diego County, Commissioner Don Mulford said.

Under Expanded Choice, about 87,000 Medi-Cal recipients in the San Fernando and Santa Clarita valleys would be required to join one of seven participating health maintenance organizations. Medi-Cal recipients would no longer be able to see their own physicians unless the doctors were affiliated with a participating HMO.

Commissioners John Burton and Don Mulford said a state Department of Finance official told the commission in an executive session this week that the Valley portion of the experiment will not be funded this year.

Fiscal Consideration

Burton, a former Democratic congressman from San Francisco, said he believes the governor’s move is “purely a fiscal determination.” The Administration, he said, “may feel it is more prudent to concentrate on the San Diego area and move into other areas later.”

Expanded Choice has been heralded by supporters as a way to provide quality health care to patients under Medi-Cal, the state’s health insurance program for the poor, disabled and elderly, and save the state money at the same time.

Commission officials originally said the experiment would trim Medi-Cal costs by 5% annually. But the state legislative analyst predicted in November that the experiment will cost an extra $51 million the first two years because of starting costs.

Mulford, a former Republican assemblyman from Oakland and a Deukmejian appointee, said the commission was told that the Administration is postponing the Valley experiment, not killing it. “I’ve constantly said we should proceed carefully and cautiously,” he said.

Possible Reprieve

The Valley-area project is not necessarily dead for the year, said Michael W. Murray, executive director of the medical commission. The governor could decide to include funds for the project in the budget in May after a series of legislative budget hearings. The budget year begins July 1.

“It’s premature to say what precisely is going to happen,” Murray said.

The Valley-area program was expected to begin by this summer.

The project’s postponement came to light Thursday when Assemblywoman Cathie Wright (R-Simi Valley) issued a press release announcing the governor’s decision to withhold funds.

Feasibility Questioned

Wright said in her release that political opposition and serious questions about the feasibility of the plan triggered the postponement. She also contended that the Valley-area project has not attracted the same breadth of physician and hospital participation as the San Diego project.

“It was obvious to the governor that patients would suffer if the program was implemented,” Wright said. “The elderly and the disabled would be particularly impacted. Doctor-patient relationships are an essential part of good medical treatment and this program would have disrupted many long-term associations.”

Assemblyman Burt Margolin (D-Los Angeles), chairman of the Joint Committee on Medi-Cal Oversight, called the governor’s decision a major setback for the experiment. “It may be the best outcome, given the fact that this plan was seriously flawed,” he said.