California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Judge Tentatively Blocks 10% Cut to Medi-Cal Reimbursement Rates

On Monday, U.S. District Court Judge Christina Snyder tentatively blocked a 10% cut to Medi-Cal reimbursement rates, saying the cuts could cause irreparable harm, the AP/Sacramento Bee reports. Medi-Cal is California's Medicaid program.

Snyder's tentative ruling stems from a lawsuit challenging the Medi-Cal payment cuts filed by a number of health care organizations, including the California Medical Association, the California Dental Association and the California Pharmacists Association (AP/Sacramento Bee, 1/30).


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 a 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.

The cuts would be retroactive to June 1, 2011.

Heath care providers and patient advocates have argued that the cuts would cause more health care providers to stop treating Medi-Cal beneficiaries.

They also have said that the Obama administration could be jeopardizing the federal health reform law because the Medi-Cal system will be ill prepared to handle the large number of low-income patients who will become newly eligible for coverage (California Healthline, 11/22/11).

In December 2011, Snyder blocked Medi-Cal reimbursement cuts to hospital-based skilled nursing care, pharmacy and managed care services (California Healthline, 1/4).

Details of the Ruling

Snyder's latest ruling tentatively blocks California from reducing Medi-Cal reimbursements to physicians, dentists, emergency medical workers and other health care providers while the lawsuit continues (Yamamura, "Capitol Alert," Sacramento Bee, 1/30).

In her ruling, Snyder wrote that California's "fiscal crisis does not outweigh the serious irreparable injury plaintiffs would suffer absent the issuance of an injunction" (AP/Sacramento Bee, 1/30).


In a statement, James Hay -- president of the California Medical Association -- said, "The state's repeated attempt to slash Medi-Cal reimbursement rates is a short-sighted solution that balances the budget on the backs of the poorest and most vulnerable Californians" (Mieszkowski, Bay Citizen, 1/31).

H.D. Palmer, a spokesperson for the state Department of Finance, said if Snyder blocks the cuts permanently, the state will need to cut spending elsewhere (Megerian, "PolitiCal," Los Angeles Times, 1/30).

Norman Williams -- a spokesperson for the state Department of Health Care Services -- said he could not comment on the case, but he added that DHCS research has shown that the state would continue to meet federal standards on access to care for Medi-Cal beneficiaries if the 10% cuts go through ("Capitol Alert," Sacramento Bee, 1/30).

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