Court Rules Against State Cuts to Medi-Cal Rates, IHSS Wages
On Wednesday, the Ninth U.S. Circuit Court of Appeals issued four rulings that upheld previous court decisions blocking state budget cuts to Medi-Cal reimbursement rates and wages for In-Home Supportive Services workers, the Sacramento Bee's "Capitol Alert" reports.
Medi-Cal is California's Medicaid program.
Gov. Arnold Schwarzenegger (R) and state lawmakers included the cuts in various budget packages during the past two years. However, temporary injunctions prevented them from taking effect (Yamamura, "Capitol Alert," Sacramento Bee, 3/3).
The scheduled cuts would have reduced Medi-Cal payments by 5% to adult day health care providers, hospitals and pharmacists. The Department of Finance estimates that the move would have reduced state spending by $117 million during the current fiscal year.
Another cut would have reduced the state's contribution to IHSS worker wages by $2 per hour. Officials estimate that this move would have lowered state spending by $79 million during this fiscal year (Lin, AP/Ventura County Star, 3/3).
Previously, the court ruled that the federal Medicaid Act requires the Department of Health Care Services to set payment rates at levels that cover reasonable costs of care.
In its Wednesday decision, the appeals court ruled that California did not conduct sufficient analyses to evaluate the potential impact of the cuts, as required under the Medicaid Act.
Observers say the decision could set a legal precedent that would inhibit state lawmakers from pursuing similar proposals to reduce the state's current budget shortfall ("Capitol Alert," Sacramento Bee, 3/3).
H.D. Palmer, spokesperson for the Finance Department, said the decision would not affect California's current deficit because the governor's budget proposal did not include estimated spending reductions from the cuts (AP/Ventura County Star, 3/3).
Following the ruling, Schwarzenegger spokesperson Rachel Arrezola noted that the governor already has an appeal to a similar case pending in the U.S. Supreme Court (Egelko, San Francisco Chronicle, 3/4).The governor also has asked California's congressional delegation to push for a change to federal law to provide states with greater authority to reduce health care payments ("Capitol Alert," Sacramento Bee, 3/3). 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.