Medi-Cal Runs Dry, Can’t Pay Bills for June : Budget: The shortfall, coming a month before the fiscal year ends, had been expected.

The state Medi-Cal program, as expected, has run out of money a month before the end of the fiscal year. Without quick approval of an additional appropriation--deemed unlikely in the face of a projected $3.6-billion state budget shortfall--hospitals, doctors, nursing homes and others who care for the poor will not be paid for their services through June, a top Medi-Cal official said.

Ben Thomas, supervisor of Medi-Cal payments for the California Department of Health Services, said the program’s budget will stretch to cover only those bills incurred in May.

Health care providers have known since January that Medi-Cal’s current budget was inadequate. At that time, the projected shortfall was two weeks, and Gov. George Deukmejian proposed incorporating those final payments of June into the budget for the 1990-91 fiscal year, beginning July 1.

That the $7.5-billion program might actually be a month short of cash was not widely known until two weeks ago. A similar shortfall last year resulted in a one-week interruption in payment. Money from the fiscal 1989-90 budget was used to cover the deficit, a maneuver that many say laid the groundwork for the current situation.

Lack of Medi-Cal income will force a significant number of facilities to take out loans to cover payroll and other expenses during the month, according to hospital and nursing home officials. Although Medi-Cal is expected eventually to pay the June bills, health care providers expect to suffer a net loss from the costs of borrowing and putting off creditors.

Hardest hit are expected to be nursing homes, most of which depend on Medi-Cal for more than half of their operating revenue. Also hurt will be hospitals, clinics and doctors located in poverty areas with a high percentage of Medi-Cal patients.

One of those is White Memorial Medical Center, a 377-bed hospital in East Los Angeles with 45% of its patients dependent upon Medi-Cal.

Edward Fox, the hospital’s chief financial officer, said the effect of a prolonged interruption in Medi-Cal income--normally close to $3 million a month--will be disastrous. He said the hospital will be forced to borrow money to meet payroll, postpone equipment purchases and forgo discounts that vendors give for timely payment.

Hospital and nursing home officials are pessimistic about passage of a supplemental appropriations bill in time to avert the cash-flow crisis.

The so-called deficiency bill, which contains additional money for Medi-Cal, among other state programs, is stalled in the Assembly, having failed twice to win enough votes.

Judi Smith, consultant to the Assembly Ways and Means Committee, whose chairman, John Vasconcellos (D-San Jose), is the bill’s sponsor, said a vote this week is unlikely. Controversy over funding for Medfly spraying, included in the bill, is one of the things holding it up, Smith said.

Medi-Cal’s Thomas said the money ran out so soon partly because nursing homes last week rushed bills into the system in hopes of getting at least part of the money due them in June. Nursing homes generally bill the program once a month. Regulations, however, permit expenses to be billed as incurred, an option many nursing homes used when they learned Medi-Cal was running out of money.

The result, Thomas said, was a larger-than-expected payment for the last week of May. Projected at about $108 million, early billing by nursing homes brought payout to $139 million.