Jumping the Gun on Medi-Cal : Health care: The program's cash reserves are rapidly dwindling. Some nursing homes are billing it early in case the money runs out sooner than projected.


Some nursing homes are billing the state's Medi-Cal program early for money they normally would receive June 15 in order to tap into the public health insurance program's rapidly dwindling cash reserves, which may exhaust the money sooner than projected, Medi-Cal and nursing home industry officials said Wednesday.

Meanwhile, intense lobbying by health-care providers has added momentum to a bill that would appropriate additional money to state programs that are running out, including Medi-Cal. The so-called deficiency bill has been stalled in the Assembly, having failed twice to win enough votes for passage. But Judi Smith, a consultant to the Assembly Ways and Means Committee, whose chairman, John Vasconcellos (D-San Jose), is sponsor of the bill, said the pleas of nursing home operators have helped put the bill up for reconsideration Friday.

Medi-Cal officials estimated last week that they had only enough money to meet obligations through the month of May, and would not be able to make four scheduled payments in June. The $7.5-billion program pays hospitals, doctors, nursing homes and medical suppliers to meet the health needs of the poor.

On Monday, Medi-Cal officials authorized $116 million in payments for bills due in the third week of May and calculated the program has enough money to meet the month's final payment, estimated at about $108 million.

But news of the June shortfall has spurred nursing homes to submit bills for incurred expenses they normally would bill several weeks from now, according to Ben Thomas, supervisor of Medi-Cal payments for the California Department of Health Services. That could swell next week's payment beyond what Medi-Cal can cover, forcing the program to make the final May payment according to a two-tiered priority schedule.

Hospitals and nursing homes will get their money first. Doctors, clinics, laboratories, medical equipment vendors, ambulance companies and others in the program will be paid only if there is enough money for everyone in this second category, Thomas said.

"Hospitals and nursing homes, by the nature of what they do, have to provide 24-hour care and food and utility services. So they will get priority," Thomas said. Medi-Cal participants hope for quick passage of the deficiency bill, which would infuse an estimated $168 million into the program. Though the scheduled reconsideration Friday allows for some optimism, many observers are pessimistic that the bill can overcome remaining hurdles in time. The bill must take effect by June 5 for Medi-Cal to make its first payment of the month. Last year's deficiency bill did not pass until September.

Some nursing home operators traveled to Sacramento on Monday and Tuesday to push their representatives for action on the bill. Blaine Hendrickson, owner of four nursing homes in Orange, Los Angeles and Riverside counties, was one of them. He returned home to Orange County, discouraged.

"The understanding we got is that the deficiency bill is very tied up this year because of controversial programs such as abortion funding attached to it, and also because the governor is reluctant to end the year with a deficit," said Hendrickson, whose company, Sun Mar Management Services of Orange, operates the nursing homes.

Gov. George Deukmejian last week said the state is $3.6 billion short of what it needs to meet expenses and legal obligations in the 1990-1991 fiscal year beginning July 1, and projects a surplus of $86 million in the current year, not enough to fund the deficiency bill.

Hendrickson has a page of sums and subtractions that detail the projected Medi-Cal shortfall's consequences for his business. Sun Mar leases and operates Del Mar Convalescent Hospital in Rosemead, Sunset Manor Convalescent Hospital in El Monte, Sun Mar Nursing Center in Anaheim and Laurel Convalescent Hospital in Fontana.

Of the 318 total beds in the four facilities, 75% to 80% are occupied by Medi-Cal patients. In dollars, the program accounts for 65% of Sun Mar's total operating revenues, Hendrickson said.

"Typically, we would have gotten company-wide a check for $293,000 from Medi-Cal on June 15," Hendrickson said. "Now we don't expect to, yet we have certain obligations we have to pay irrespective of whether we get Medi-Cal money or not. We have payroll, utilities, food for patients and rent. These are absolutes."

He broke out the numbers for Del Mar Convalescent Home, a 59-bed facility with 85% of the patients dependent upon Medi-Cal:

The facility has monthly revenues of $114,000, of which $77,000 comes from Medi-Cal and the remaining $37,000 from private insurers, patient fees and Medicare, the federal health insurance program for the elderly.

Monthly expenses include payroll of $28,000 due June 10 and again on June 25, plus fixed expenses for rent, utilities and food of about $18,500. These totals exclude the amounts due medical supply and equipment vendors.

So Hendrickson calculates that he will have $37,000 in revenues to meet a minimum of $46,500 in expenses by June 10. He already has started talking to banks about extending him credit to cover the June 10 revenue gap, as well as providing an additional $28,000 for paychecks due Del Mar's 45 full- and part-time workers on June 25.

"But they are not anxious to lend us the money when we can't say when we are going to get paid," Hendrickson said.

He is also writing vendors to ask for credit. And he is one of the nursing home operators who on Tuesday billed Medi-Cal for a portion of the money due June 15 in hopes of getting paid before the program's coffers run dry.

"We got about $35,000 of bills into the computer system," Hendrickson said.

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