LA COUNTRY HEALTHCARE SYSTEM SUPPORT

February 7, 2003

After months of negotiations, the federal government has reached a decision on how best to provide support for the financially strapped Los Angeles County health care system. The Center for Medicaid and Medicare Services (CMS), working with the Office of Management and Budget (OMB), has agreed to renew a key program for California, as well as provide critical funding while the County works to restructure the system.

This agreement will help the citizens of Los Angeles County breathe a little easier. It was very important that we come up with a solution that helps those in need and at the same time, improves the system. Millions of people rely on the County's health care network. While this is an important first step, we should continue to work to ensure a sustainable system that will be there to provide the care that's needed.

Under the deal reached today, CMS has agreed to renew California's Selective Provider Contracting Program for two more years. This renewal will provide the state with $150 million each year to cover health care costs, $75 million of which will go directly to Los Angeles County. Additionally, the federal government will provide an extra $50 million expressly for LA County in each year, $100 million total, and $50 million owed by the federal government to the California Healthcare Association (CHA), which CHA has pledged to LA County. CMS has also agreed to consider a plan to be submitted by California and LA County that would allow them to keep Medicaid Disproportionate Share Hospital money from hospitals which are closed or reduce services.

Providing accessible, quality health care for Americans is a goal shared by many in Washington, DC. I'm very pleased we were able to work together to achieve a positive result for an extremely difficult problem.