State budget in limbo puts treatment centers in financial bind
By Michelle Knight knight@theacorn.com

Kiana Bahadoran worries what will become of the clients if she closes the doors to her adult day healthcare facility: the elderly woman with dementia who can't feed herself and needs help walking- the Agoura Hills man whose arthritic body makes it almost impossible for him to care for himself at home.

These are among about 75 people with physical and mental disabilities who receive medical and therapeutic treatment on an average day at Advanced Adult Day Health Care Center, one of six such facilities in Ventura County.

The center is also one of 340 that the state has not paid since July 13, when the Department of Health Care Services suspended MediCal payments to vendors and contractors until the state budget is resolved.

Legislators have failed to agree on a budget since June.

"It's so sad. I don't want to close up; I feel like I'm fighting with Arnold," said Bahadoran, who with a business partner owns and operates the facility. "What am I suppose to tell them- 'Sorry, go home; closed as of today'?"

Tony Cava, spokesperson for the Department of Health Care Services, said in July they depleted a $2-billion reserve fund set up to pay providers when problems with the budget occur. The stalemate in Sacramento is also affecting payments to medical clinics, home healthcare agencies, nursing and convalescent homes, he said.

As of Aug. 9, the department owes about $800 million in Medi-Cal reimbursement; add to that another $200 million or so for every week that goes by without a budget, Cava said.

Although the department is looking into a loan program after fielding requests from hundreds of Medi-Cal providers, that's only a short-term answer, he said.

"Our response to that is a state budget is needed," Cava said. "My recommendation to them is contact your legislators and demand a state budget."

Lydia Missaelides, a spokesperson for the 140-member California Association for Adult Day Services, said centers across the state are being affected to different degrees. Ones affiliated with larger organizations, such as hospitals, may have a cushion of reserve money to fall back on. Others, so called free-standing facilities, do not. They don't make enough of a profit to keep a reserve account on hand; Medi-Cal reimbursements cover expenses and not much else, she said.

It's the calls from these centers, about 200 across the state, that are starting to trickle into Missaelides' office, saying they're heading into a financial vise grip and may have to close if they aren't paid soon, she said.

"They're scrambling," Missaelides said. "We do have programs (that are) really stressed." To keep the doors open, many operators are taking out emergency loans, additional mortgages on their homes or borrowing money from friends and family, Missaelides said.

But the longer the budget stalemate goes on, the more centers we will see head into crisis mode, she added.

Bahadoran said with two mortgages already against her Granada Hills home, she doubts she's eligible for a third. She recently applied for a $100,000 emergency business loan with a bank. Even if the loan is approved, the money will cover expenses for only a couple of weeks.

"I don't know how long the senate will take to pass the budget, but we have to stay on our feet until then," Bahadoran said. "It's really unfair to be punished liked this."

Adult Day Health Care Centers have pricey payrolls- they are staffed with medical and mental health professionals, including nurses, social workers, occupational, physical and speech therapists, a pharmacist, psychologist or psychiatrist and a registered dietician.

Andrei Nikiforov, an administrator at Millennium Care Adult Day Health Care Center, also in Simi Valley, said payroll alone costs them $30,000 to $40,000 every couple of weeks. Add in the cost of rent, gasoline for seven vehicles, feeding clients and other overhead expenses and a protracted budget debate could force his doors shut too.

"We don't know how we're going to pay our payroll or any other expenses," Nikiforov said.

Asked how long the fiveyear-old center could stay open without Medi-Cal money, Nikiforov said, "I don't want to even think about it. I just hope we get budget signed. . . . Otherwise, I don't know; we'll have to close. People are not going to work for free."

And county government's hands are tied because county funds aren't involved, said Mark Lunn, spokesperson for Ventura County Supervisor Peter Foy.

"I feel bad for these folks," Lunn said. "It is a concern- taking care of our fellow human beings is big deal. I hope they pass that budget soon."