Hospitals Received $27.4 Million for Staffing Rules Suspended by Governor

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http://sev.prnewswire.com/health-care-hospitals/20050309/SFW11609032005-1.html

Hospitals Received $27.4 Million for Staffing Rules Suspended by Governor Schwarzenegger

Governor Has Budgeted Another $52.6 Million for Next Year

SACRAMENTO, Calif., March 9 /PRNewswire/ -- Gov. Arnold Schwarzenegger's administration paid $27.4 million for additional nurse staffing this year even though the governor suspended the improved care standards last November, according to documents released by the California Nurses Association today.

The budget allocation, for fiscal year 2004-2005, was to reimburse hospitals for costs associated with improving minimum patient care staffing from one registered nurse for every six patients to one to five in general medical units.

"We are shocked," said CNA Executive Director Rose Ann DeMoro. "The specter of impropriety is unavoidable. This raises serious questions that demand investigation."

Of the $27.4 million, $15.1 million went directly to hospitals with Medi-Cal contracts; another $12.3 million went to HMOs that participate in Medi-Cal managed care programs, funds that ultimately go to hospitals for patient care as well.

Additionally, in January the governor proposed paying hospitals another $52.6 million in next year's budget for the costs of implementing the 1:5 ratios -- two months after the governor had suspended that requirement.

The budget plan was prepared in the midst of CNA's high profile challenge to the governor's emergency order. "It is not credible the governor and his staff could have been unaware that they were planning to continue to pay hospitals for a 1:5 ratio that they had blocked," DeMoro said.

The healthcare industry, including hospitals and HMOs, are among the many corporate donors who have helped Gov. Schwarzenegger shatter previous records in California for corporate fundraising. At the hospital industry's request, Schwarzenegger suspended the 1:5 requirement that was supposed to go into effect in January, 2005 and vetoed many bills opposed by the healthcare industry. Last Friday, a Sacramento Superior Court judge declared the emergency order suspending the 1:5 ratio to be illegal.

Assembly Speaker Fabian Nunez and Senate President Pro Tem Don Perata have called on the Schwarzenegger administration to provide an accounting of how the funds were "inappropriately awarded" and "when the decisions were made."

In a separate letter to Health and Human Services Secretary Kim Belshe, CNA legislative director Donna Gerber wrote, "Registered nurses across California will be shocked when they find out that not only did the administration illegally stop implementation of the regulation; it transferred the money for funding the ratio regulation to the hospitals in the form of a rate increase with absolutely no public oversight."

While it is unknown which hospitals received direct payments for implementing the 1:5 ratio, as of December 2003 229 California hospitals had direct Medi-Cal contracts with the state, according to the California Medical Assistance Commission (CMAC). Many other hospitals receive reimbursements through the Medi-Cal managed care program.

CNA today said that any hospitals that received the funding, yet failed to protect their patients by providing 1:5 staffing in general medical units, should provide a public accounting of exactly how they spent those public dollars.

No 'Unfunded Mandate'

In addition to the questions associated with the budget payments, the documents, obtained from the state Fiscal Forecasting and Data Management Branch, "should bring to a permanent end any claims by the hospital industry that the safe staffing ratios are a so-called unfunded mandate," said DeMoro.

In fiscal year 2004-2005 alone, the state provided a total of $156.7 million through Medi-Cal for costs of implementing ratios hospital wide, in addition to $55.3 million allocated in fiscal year 2003-2004. Further, the governor's budget for 2005-2006 proposes another $176.5 million. The ratios went into effect in January, 2004.

Some in the hospital industry have claimed that they can not comply with the safe staffing law due to the costs, "facts" cited by the governor in his illegal emergency regulation and by the administration and the hospital industry in the recent court case.

Yet in addition to the aggregate $212 million paid to hospitals the past two years for implementing ratios, and the additional $176.5 million proposed for '05-'06.

California hospitals reported $11.7 billion in profits from 2001 through 2003, and have spent billions on mergers and information technology programs.

Website: http://www.calnurses.org/