A federal judge late last month blocked California’s move to cut Medicaid reimbursements by 10%.

Medi-Cal, Medicaid reimbursements, reimbursement rate cut, U.S. District Court judge Christina Snyder, Medicaid program, reimbursement cut, California Medical Association, Health and Human Services, Kathleen Sebelius, Center for Medicare and Medicaid Services, rate reductions, California Department of Health Care Services

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Judge puts stop to cuts in Medi-Cal

January 16th, 2012

LOS ANGELES – A federal judge late last month blocked California’s move to cut Medicaid reimbursements by 10%.

U.S. District Court judge Christina Snyder issued preliminary injunctions in separate cases brought by pharmacies and hospital-based nursing facilities that were seeking to fend off the reimbursement rate cut by Medi-Cal, the state's Medicaid program.

In a 22-page ruling Snyder said that although California is in the midst of a fiscal crisis, that does not override the harm that might come to patients who are denied care.

California health care officials have estimated that the 10% reduction in reimbursement rates under Medi-Cal could save the state $623 million.

Meanwhile, a separate lawsuit by the California Medical Association that also seeks to strike down the reimbursement cut is pending before Snyder. A hearing on the case is expected later this month.

In agreeing to block the cuts, Snyder says she found no evidence that U.S. Secretary of Health and Human Services Kathleen Sebelius reviewed cost data before submitting California’s plan to the Center for Medicare and Medicaid Services.

“Instead, the language of [the state law] makes clear that the only reason for imposing the rate reductions was California’s ongoing fiscal emergency,” Snyder wrote, citing an earlier ruling by the 9th Circuit Court of Appeals that Medicaid rate reductions cannot be based only on state budget concerns.

She also noted that the plaintiffs would likely succeed on their claims and face irreparable harm by the rate reductions.

The proposed Medi-Cal cuts are among many drastic measures being used to close the state’s massive budget deficit. Since being approved by Sebelius in October, the reductions have drawn protests from doctors, dentists, hospitals and pharmacists who provide care for patients in Medi-Cal, one of the lowest-paying Medicaid programs in the nation.

The California Department of Health Care Services has said that the cuts would not harm patients and cited its creation of a monitoring plan to ensure that the reductions do not threaten adequate access for beneficiaries. Snyder, however, was not convinced that the plan would work.

“The court believes that the monitoring plan, at best, presents a potential remedy after an access or quality problem has been detected,” she said.