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U.s. district court judge temporarily blocks medi-cal cuts

A U. S. District Court judge in Los Angeles temporarily blocked implementation of a proposed 10% cut to Medi-Cal payments for doctors, dentists and pharmacies, stating the changes would violate federal laws and reduce the quality of medical care for millions of people, Sacramento Bee reports ( Yamamura/Sanders, Sacramento Bee , 8/20 ) . The state Legislature in February approved $1. 3 billion Medi-Cal reimbursement reduction, which took effect July 1, as part of a proposal by Gov. Arnold Schwarzenegger ( R ) to reduce funds for all state services by 10% in an effort to address an estimated $20 billion budget deficit for fiscal year 2009. Medi-Cal, California's Medicaid program, has about 6. 7 million beneficiaries. Plaintiffs in the lawsuit include California Medical Association, California Hospital Association and California Association of Public Hospitals and Health Systems.

The lawsuit alleged that Medi-Cal reimbursement reduction would violate state and federal laws that require payments to remain adequate to ensure beneficiaries receive same level of access to services as general public. The state approved Medi-Cal reimbursement reduction " solely due to state budgetary woes, without regard to impact on availability " of program, according to lawsuit ( Kaiser Daily Health Policy Report , 5/6 ) . Judge Christina Snyder said that because Medi-Cal accepts federal funding, state must use money to provide quality health care to low-income residents ( Egelko, San Francisco Chronicle , 8/20 ) . Physicians and pharmacists lobbied against fee cuts, saying many would be forced to stop accepting Medi-Cal beneficiaries ( AP/Los Angeles Daily News , 8/19 ) . The ruling restores fee rates for providers who serve Medi-Cal patients. According to San Francisco Chronicle , most hospitals already were exempt from cuts ( San Francisco Chronicle , 8/20 ) . However, ruling excluded some hospitals that do not contract with the state and do not provide emergency care ( Sacramento Bee , 8/20 ) . Snyder ruled that those hospitals hadn't shown that the lower fees would compromise care they provide. The ruling applies to all fees for services provided since July 1.

Reaction Richard Frankenstein, president of CMA, said ruling was the third in five years to assert that " the state of California has put at risk access to health care for millions of Californians by underfunding Medi-Cal program " ( San Francisco Chronicle , 8/20 ) . Anthony Wright, executive director of advocacy group Health Access California, said, " There is no question this is good news. We already have more than half of doctors not taking Medi-Cal patients because of low reimbursement rates, so additional rate cut was going to further reduce access to care for millions of children, parents, seniors and people with disabilities. "

H. D. Palmer, a spokesperson for California Department of Finance, said ruling would cost the state $575 million annually. Schwarzenegger spokesperson Lisa Page said, " We have always said these are difficult but necessary cuts " to close state's $15. 2 billion budget shortfall for FY 2009. Page said the governor's office is reviewing the ruling to determine its next step ( San Francisco Chronicle , 8/20 ) .

Wright noted that ruling means lawmakers must find other ways to generate new revenues, or force Medi-Cal to reduce eligibility or benefits ( Sacramento Bee , 8/20 ) .

Reprinted with kind permission from http: //www. kaisernetwork. org. We can view the entire Kaiser Daily Health Policy Report, search archives, or sign up for email delivery at http: //www. kaisernetwork. org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork. org, a free service of The Henry J. Kaiser Family Foundation.

2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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