California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Court Denies Request To Allow Medi-Cal Pay Cuts While Lawsuit Continues

Last week, the 9th U.S. Circuit Court of Appeals denied California's request to allow proposed Medi-Cal cuts to take effect while a lawsuit involving the cuts is litigated, the Sacramento Business Journal reports.

Medi-Cal is California's Medicaid program (Robertson, Sacramento Business Journal, 3/23).


In October 2011, CMS approved the state's plan to reduce certain Medi-Cal payments by 10%. State officials have projected that the cuts will save $623 million.

According to the Department of Health Care Services, CMS allowed the state to make the 10% reimbursement cut to:

  • A number of providers and outpatient services, including clinics, dentists, laboratories, optometrists and pharmacists; and
  • Freestanding nursing and adult subacute care facilities, as well as other nursing facilities.

In February, U.S. District Court Judge Christina Snyder granted a preliminary injunction to block a 10% cut to Medi-Cal reimbursement rates.

Snyder said the payment cuts could cause irreparable harm (California Healthline, 2/2).

DHCS -- the state agency named in the lawsuit challenging the cuts -- immediately filed a request to halt the injunction until a formal ruling is made on the case.

Response to the Ruling

James Hay -- president of the California Medical Association -- said, "We are pleased with the court's decision, once again." He said, "It is time for the state to stop looking to the Medi-Cal program for their budget problems."

However, Norman Williams -- a DHCS spokesperson -- said the courts' decision was "disappointing but not unexpected."  He added, "California looks forward to the court's consideration of the full merits of the case when it is heard on the appeal" (Sacramento Business Journal, 3/23). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.