Foes try new tack against Prop. 56
Tobacco firms’ ad alleges a lack of oversight.
SACRAMENTO — Tobacco companies have unveiled a new claim in their campaign against the $2per-pack increase in cigarette taxes on the November ballot.
In a television advertisement that debuted over the weekend, the No on Proposition 56 campaign contends that the doctors and health insurance groups financing the initiative wrote it to avoid external oversight over the money going to lowincome patient care.
“They even exempted themselves from the new audit requirements,” the ad states. “They can use the new revenue to enrich their top executives, and there’s no requirement to treat even one more patient.”
The claim rests on a part of the Proposition 56 initiative that creates new auditing rules to govern where the new tax money would go. But it ignores the litany of state and federal auditing requirements to which Medi-Cal, the state’s low-income health program, already is subject.
First, here’s a little background about how the money from Proposition 56 would get spent. Assuming fewer people use tobacco because of the tax increase, the tax would raise about $1.27 billion next year, according to an estimate from the Legislative Analyst’s Office.
Of that amount, $710 million — about 56% — would go to Medi-Cal, primarily to increase the payments doctors and other healthcare providers receive when they treat patients. The remaining dollars go to back-filling current state and local sales taxes and other programs because fewer people will buy cigarettes, as well as to doctor and dentist training and anti-tobacco efforts. The initiative kicks in $400,000 a year to audit the agencies getting the money.
Beth Miller, spokeswoman for the No on 56 campaign, said opponents like the fact that state and local agencies will be audited if the measure passes, but the provisions don’t go far enough. “It would have been nice to have those audit requirements also apply to those end users, so to speak: the hospitals, the insurance companies and the doctors,” Miller said.
Medi-Cal providers, however, get audited all the time. The state’s Department of Health Care Services does internal audits and investigations through an entire department of about 700 employees and a $50-million budget dedicated to reviewing the programs under its jurisdiction, including looking at the financial records of Medi-Cal providers.
Beyond that, the California State Auditor has issued at least two wide-ranging audits involving Medi-Cal providers in the last five years on the state’s oversight of managed-care plans. And the federal Department of Health and Human Services’ office of inspector general also audits programs and providers that receive federal dollars for low-income patients. One recent federal audit of California that examined pediatric dental providers happened last May.
Miller contended that the audits required under Proposition 56 are more transparent than the existing state and federal programs.
Mike Roth, spokesman for the Yes on 56 campaign, said the initiative has plenty of safeguards to ensure the tax money is spent wisely, including auditing provisions.
“This is another desperate and deceitful red herring from tobacco companies, and it takes the cake as far as their flagrant lies about Proposition 56,” Roth said.