In a pivotal meeting held by the Health Services Committee at the University of California, discussions centered on the future of Medicaid funding and the potential impacts of budget reconciliation processes. Erica Murray, president and CEO of the California Association of Public Hospitals and Health Systems, took the floor to outline the critical funding threats facing Medi-Cal, California's Medicaid program.

Murray emphasized the importance of supplemental payments, which are essential for covering the costs of care that base payments do not adequately address. She highlighted that the appropriations process had recently resulted in a continuing resolution that delayed cuts to Medicaid Disproportionate Share Hospital (DSH) funds until September, providing a temporary reprieve for public health care systems.

As the meeting progressed, Murray shifted focus to the ongoing budget reconciliation process, where the House Energy and Commerce Committee is currently deliberating on significant cuts to Medicaid. The committee has been tasked with identifying $880 billion in cuts over the next decade, with proposed reductions amounting to $912 billion, including $715 billion from Medicaid. This overshooting of their target indicates a fluid and uncertain legislative environment, with many amendments and discussions expected to unfold.

Murray pointed out that the stakes are high for public health care systems, particularly regarding state-directed payments, which are crucial for bridging the gap between the costs of care and the low base rates received. She warned that proposed caps on these payments to Medicare levels could negate recent gains of $1.8 billion secured for 2025 and beyond.

While the markup process is ongoing, Murray noted that some proposals, such as broad-based reductions to the Federal Medical Assistance Percentage (FMAP), have not been included, which she described as a relief. However, she cautioned that any limitations on supplemental payments could have detrimental effects on both private hospitals and the overall Medicaid system.

The meeting also touched on the contentious issue of work requirements for Medicaid beneficiaries, a proposal that has garnered bipartisan support despite evidence suggesting it creates bureaucratic barriers for those already working.

As the committee continues to navigate these complex discussions, the implications for California's public health care systems remain significant. The outcome of the budget reconciliation process will not only shape the future of Medi-Cal funding but also determine the accessibility and quality of care for millions of Californians.