California Budget Update - Posted 6.26.2009

California Budget Update

Yesterday, State Controller John Chiang announced that the State will begin issuing registered warrants, commonly known as "IOUs", on July 2nd if a new State Budget is not in place. Traditionally, the State has covered cash shortages created by late Budgets through short-term borrowing. This year, however, a combination of the credit crunch on Wall Street and the State's sagging credit rating has made that impossible.

According to the State Controller's Office, this will not immediately affect Medi-Cal providers. Medi-Cal payments will continue until the State's cash reserves are completely exhausted, which would come sometime in September. Healthy Families plans will also continue to receive payments from the State.

However, after July 2, physicians will receive IOUs for services provided for California Children's Services, Children's Health and Disability Prevention Program, and Genetically Handicapped Persons Program. These programs are not covered by the same Federal mandates as Medi-Cal. Normal payments for these programs will begin after the new Budget is in place.

Please contact David Ford at 916-551-2554 or dford@cmanet.org for more information.