Doctors and dentists say Brown's budget misuses tobacco tax funds

Groups representing California's doctors and dentists joined with Planned Parenthood Wednesday to call on Gov. Brown to use most of the revenue from the new statewide tobacco tax to increase reimbursement rates for Medi-Cal providers.

The California Medical Association, the California Dental Association and Planned Parenthood of California say that's the intention of Prop. 56, the measure approved by voters last November. Their statement comes one day before Brown is due to release his revised budget proposal.

The budget Brown released in January set aside the new tobacco tax funds to help pay for general Medi-Cal funding, not to increase how much doctors and dentists are paid. The governor said the money was needed to shore up an anticipated shortfall created by the addition of new Medi-Cal enrollees.

Brown's plan is "completely inconsistent with the letter of the law of the initiative and the intent," says Francisco Silva, general counsel and senior vice president of the California Medical Association. The Association was one of the organizations that wrote Prop. 56.

The Brown administration did not respond to a request for comment. It has previously argued that the governor's plan would strengthen the overall Medi-Cal program.

Prop. 56, which hiked the tobacco tax by $2 a pack on April 1, says 82 percent of the new revenue should be used to "improve payments for all health care." That means it's supposed to be utilized to increase Medi-Cal reimbursement rates, says Silva.

California has among the lowest reimbursement rates in the U.S., and Prop. 56 was designed to entice more providers to accept Medi-Cal patients, he says.

The state legislative analyst projected that the new tax will raise between $1 billion and $1.4 billion in its first year.