California Medi-Cal Cuts Remain in Effect

LOS ANGELES–On Tuesday, a California Superior Court judge
failed to stop an across-the-board 10 percent Medi-Cal cut for
services provided after July 1.

The Alliance for Patient Choice, a coalition of more than 100
health care provider organizations in the state–including the
California Medical Association, the California Hospital Association
and the California Pharmacists Association–had asked for a
preliminary injunction against the Medicaid reimbursement
reductions, which were enacted in February as part of a plan to
prevent a $17 billion state budget shortfall.

While the court found the cuts did present “a substantial
showing of actual harm which will likely occur as a consequence of
the reimbursement reductions,” Superior Court Judge William
F. Highberger rejected the argument that the reduction violated
state and federal law because it would deny equal access to
services for Medi-Cal beneficiaries.

He also ruled that CMS’ approval before the rate cuts were
implemented was not necessary. The providers had argued that the
cuts were invalid because they required the approval of CMS, and
the state’s Department of Health Services had not sought that
approval or conducted an analysis of the payment reductions’ impact
on access.

The Medi-Cal program provides health services to approximately
6.6 million low-income Californians.

According to a July 30 update from the California Association of
Medical Product Suppliers, the health care providers who brought
the lawsuit described the decision as “an enormous setback
for the health and lives of the millions of Californians who rely
on the state’s safety net.”

CAMPS said the coalition of providers is considering filing an
emergency appeal with the second district appellate court in Los
Angeles.

In more bad news for the state’s Medicaid program, the
association said in its update, “There is no real progress in
Sacramento on a budget solution.”

Earlier this year, the California Senate had voted to reduce the
Medi-Cal cut to 5 percent, and the state Assembly eliminated it
altogether. But for either alternative to supercede the 10 percent
cut, it must be part of the final state budget, which sits at an
impasse.

Summer Medi-Cal payments were already scheduled to be delayed,
and with the budget on hold, providers might have to wait until
September for another payment, CAMPS Executive Director Bob
Achermann told HomeCare in June.

“Without a budget being adopted and signed there will be no
Medi-Cal payments,” CAMPS said last week, adding that a budget
solution “provides real opportunity for the 10 percent cut to be
eliminated.”