Funding Shift for Hospitals Would Aid L.A. County : Legislation: Assemblywoman calls for giving more money to public institutions that care for poor.

Assemblywoman Barbara Friedman (D-North Hollywood) said Wednesday that she is seeking a redistribution of certain hospital funds as another way of assisting financially strapped counties, a maneuver that would benefit Los Angeles County by as much as $50 million.

Coming a day after she proposed bailout help based on a new tobacco tax, Friedman introduced a bill (AB 54XX) that would allow public institutions such as County-USC Medical Center to receive a larger share from a pot of money that goes to hospitals that care for the poor.

As a result, some private, mostly nonprofit hospitals also serving the poor would receive a smaller share than they receive now.

Friedman admitted that the scheme would impose new financial pressures on private hospitals that are already economically stressed.

“Everyone’s in tough financial shape, but the financial burdens of this program need to be spread to the private [hospitals] who benefit,” Friedman said. She said she was “certainly interested in working with the privates in any way I can so we can all reach a consensus.”

The $2.1-billion fund at issue is the so-called Medicaid Disproportionate Share Program. Hospitals, public or private, that meet various criteria for treating the poor can qualify for funds. Any hospital whose patient load is at least 43% poor people, for example, would be eligible.

Half the fund for California is from federal sources; the other half comes from county hospitals, university training hospitals and hospital special districts--but not from the private hospitals that also benefit from the system.

Under Friedman’s legislation, about $100 million in allocations from the program would be shifted from private hospitals and would be added to the share going to public hospitals. About $45 million to $50 million would change hands in Los Angeles County.

Jim Ringrose, a lobbyist for Private Essential Access Community Hospitals Inc., represents clients that would be financial losers under Friedman’s bill, among them Garfield Medical Center and Hollywood Presbyterian and a dozen other private Los Angeles area health care centers.

“We oppose the bill,” Ringrose said. “We take care of poor people and [public hospitals] take care of poor people.”

Private hospitals participating in the aid program “provide almost one-third of all Medi-Cal services in California as well as a high percentage of service to the indigent,” he said. The loss of $100 million “would force these private community hospitals to significantly curtail services for the poor and would devastate the health care safety net,” Ringrose said.

Bonnie Chun, a management analyst for the Los Angeles County chief administrative officer, said the Friedman bill held the promise of much-needed funds, especially to defray costs of caring for the uninsured among the large indigent population.

“Our main problem is funding indigent care,” she said. “Medi-Cal costs are in part reimbursed. But there is no reimbursement coming in for indigent care. So any help on that score is sorely needed.”