Judge Rules for County in Fight for CMS Funds : Courts: The verdict holds the state responsible for $23.2 million, but officials say it may be a long time before San Diego sees any money.

The state owes San Diego County as much as $23.2 million for past under-funding of a medical program for the poor, money that can be taken from the state’s $5 billion Medi-Cal budget or a number of other accounts, a Superior Court judge ruled Thursday.

County officials hailed Judge Michael I. Greer’s decision as a major victory but predicted legal appeals by the state that could delay receipt of the payments for years.

“The court’s decision to require the state to fully fund the program . . . is everything we had asked for in the suit,” said San Diego Deputy County Counsel Valerie Tehan, one of two attorneys who presented the county’s case in July. “We’ll keep fighting, no matter how long it takes to get the money.”

“I’m sure that, while the county is ecstatic, we’re all being reserved because it isn’t over,” said Craig Lee, chief of staff for County Supervisor Susan Golding.

Deputy Atty. Gen. Richard Waldow said no decision on whether to file an appeal will be made until he consults with the agencies he represents.

The lawsuit concerned the financially shaky County Medical Services program for 25,000 indigent adults, which nearly shut down in March when state money for the program ran out. A lawsuit against the county, filed by Legal Aid lawyers on behalf of recipients, kept open the program, which pays for hospital care, medicine and doctor visits for the working poor and uninsured.

The county then sued the state, contending that it should be reimbursed for money spent during the 1989-90 and 1990-91 fiscal years, when the state required expenditure of more than $41 million for medical services annually without providing all the promised funds. The state guaranteed the funding in 1982, when it shifted responsibility for the programs to the counties.

Greer ruled June 25 that the state is responsible for funding the program. In Thursday’s decision, he detailed the amount owed and listed several state budget accounts where the money could be found.

A similar lawsuit filed by Los Angeles and San Bernardino counties has advanced to the Court of Appeal level and is being closely watched by local attorneys. An Alameda County case was thrown out by the state Supreme Court last week because of a procedural defect, Waldow and Tehan said.

Greer this week also completed hearing testimony in a separate county lawsuit that contends that the state’s property tax distribution formula since the passage of Proposition 13 has unfairly shortchanged San Diego by nearly $1 billion.

James Lott, president and chief executive officer of the Hospital Council of San Diego and Imperial Counties, said that Thursday’s victory could eventually mean a sizable payment to the 23 county hospitals that have agreed to remain providers of health care to CMS patients.

The hospitals have agreed to remain in the program until Dec. 31, despite having to absorb a nearly $10-million cut in CMS payments for fiscal year 1991-92. Under the hospitals’ agreement with the county, funds gained via the lawsuit will be used to reimburse the hospitals for that cut.

The hospitals were concerned “that we were going to lose the CMS system entirely,” Lott said. “This goes a long way toward making sure this doesn’t happen.”

But the county will face more wrangling with the state over a “poison pill” written into legislation that this year transferred $2.2 billion in health and social services programs to the counties, along with money to pay for it.

Under the “poison pill” provision, if any county should prevail in a CMS-type lawsuit, the so-called “realignment” of the programs--generally supported by San Diego and other counties--would be canceled.

In his ruling, Greer agreed to allow the $23.2-million award to decrease slightly if the county receives any outstanding state payments for the 1990-91 fiscal year. Those payments, due by mid-September, are not expected to total more than $1 million, according to a county official.

But Greer also ordered the state to pay 10% interest on the award--dating back to March 13 for the $1.5-million 1989-90 debt and June 25 for the $21.7-million 1990-91 reimbursement--plus unspecified attorney’s fees and costs.

Greer also determined that a number of state budget accounts “are reasonably related” to the CMS program and could be tapped for the $23.2 million.

Among those are the more than $5-billion state share of the Medi-Cal budget and the State Mandates Claim Fund, which was established to satisfy claims determined to be reimbursable state requirements.

But a state health official said there is no available money in the fiscal 1991-92 state budget, which was drastically cut to fill a $14.3-billion deficit.

“There is not extra money to do this,” said Kassy Perry, associate secretary for public affairs for the state Health and Welfare agency.