Health clinics won’t be paid if budget impasse persists all summer

Reporting from Sacramento —  Health clinics that serve hundreds of thousands of California residents face the prospect of not being paid as the state lurches toward a third week of a budget stalemate — despite assertions by the state controller and Gov. Arnold Schwarzenegger’s administration that providers of healthcare for the poor would be immune from missed payments.

Without a spending plan in place, California cannot legally pay all its bills. But the controller said in June that all institutional health providers would be paid this year because of provisions in the federal stimulus act.

Turns out, that was wrong.

Officials now say that only hospitals and nursing homes will be paid in full. According to Norman Williams, a spokesman for the Department of Health Care Services, health clinics and other healthcare providers, such as adult day health centers, will not be paid if the 2-week-old budget standoff continues through the summer.

“The whipsaw effect is really the way to put it,” said Louise McCarthy, vice president of governmental affairs for the Community Clinic Assn. of Los Angeles County, whose members serve 800,000 patients each year. “It’s certainly sends a lot of misinformation”

The office of Controller John Chiang and the Schwarzenegger administration have acknowledged the error, which The Times had also reported. “We went ahead and updated our website with the new, correct information,” said Chiang spokesman Garin Casaleggio.

Health clinics and others providers reimbursed for Medi-Cal bills do have a cushion before the payments stop: a $2-billion emergency treasury they can draw on. But the emergency fund is not expected to last through August, Williams said.

McCarthy said she hopes there will be a budget before the emergency fund runs out. In the meantime, however, health clinics are “riding the knife’s edge” this summer, scrambling to cover expenses until a budget is passed and bracing for any spending cuts adopted in the budget itself. Some have shut down in recent years, McCarthy said.

Progress on the budget in Sacramento has been halting, at best. Top lawmakers are meeting privately, but no accord is in sight. The budget year began July 1.

shane.goldmacher@latimes.com