Sept. 30, 2008 — With the California State budget 85 days late, legislators finally came to an agreement on Sept. 23, much to the relief of many state medical institutions. The lack of a state budget had an effect locally, on clinics like Northeastern Rural Health.

“It has been rough, but we made it through,” said NRHC CEO Al Gugenberger.

Gugenberger is referring to what has been a common problem for many MediCal accepting facilities for the past 85 days, who have been in the predicament of finding ways to pay the bills when government money for MediCal patients has just not been coming in.

The California state budget proposal is due on July 1 every year, but this year, California missed the deadline by a record 85 days, costing hundreds of jobs and pay cuts along the way.

“That was the biggest loss for us,” said Gugenberger, referring to the 19 employees that NRHC was forced to lay off in August in response to the lack of federal funds.

Gugenberger said NRHC did not have it quite as bad as many other state institutions, which sometimes had to not only lay off employees, but also were forced to ask current employees to keep working without a paycheck.

“We dipped into a credit line that we keep as a safety net, just in case something like this happens,” said Gugenberger.

“We were very grateful to have it, and thankfully, we made every payroll.”

Without MediCal funds rolling in, Gugenberger said it was the clinic’s vendors who suffered a large portion of the blow as well.

“Without the budget passed, we were not able to pay our vendors,” said Gugenberger.

Gugenberger said Physicians Sales and Service, a nationwide medical supply company that many hospitals and clinics use, has been able to basically let California facilities keep a running tab until the budget was passed.

According to the Web site ebudget.ca.gov, Governor Schwarzenegger signed off on a $143 billion budget last week.

“We were lucky,” said Gugenberger.

”We certainly did not have it as bad as others, but it was tough. We are very happy to see the budget finally make it through, and I think our vendors will be a lot happier as well.”

Gugenberger said the clinic should receive a reimbursement check for the last 85 days by mid-week.