CMA Petitions Supreme Court To Review 10% Medi-Cal Pay Cut
Medi-Cal is California's Medicaid program (Robeznieks, Modern Healthcare, 9/23).
Background on 10% Cut
In October 2011, CMS approved the state's plan to reduce certain Medi-Cal payments by 10%. The cut will be retroactive to June 1, 2011.
In December 2012, a three-judge panel of the 9th U.S. Circuit Court of Appeals overturned a district court ruling to stop the retroactive 10% cut. Health care providers asked the full 9th Circuit court to review the case. In May, the full circuit court upheld the cut.
Details of Reduction
The cut will start at $917 million for fiscal year 2013-2014 and one year later will increase to $1.4 billion.
H.D. Palmer -- a spokesperson for the California Department of Finance -- noted that payment reductions are up to 10%, rather than a flat 10% cut. He added that if state officials determine that a reduction for a certain provider creates a barrier to care, they have the authority to scale back the cut or withdraw it entirely (California Healthline, 6/6).
Details of Petition
In the filing last week, CMA said that the cut could cause harm to current Medi-Cal beneficiaries, as well as to those who would qualify for the program through an expansion under the Affordable Care Act.
The group argued that:
- The new payment rates will be lower than providers' expenses, which would violate federal law; and
- CMS did not review practice cost data when it approved the proposed cut (Modern Healthcare, 9/23).
In a release, CMA said, "Federal law requires that Medi-Cal patients have the same access to physicians and other health care providers as the general insured public," adding, "[R]educing California's already dismal Medi-Cal rates will force providers out of the program at a time when millions of new patients will be diverted into the Medi-Cal system under the [ACA]" (CMA release, 9/20).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.