Health Care Providers’ Lawsuit Aims To Halt Medi-Cal Pay Cuts
On Monday, a coalition of health care groups and providers filed a lawsuit that seeks to block California from reducing reimbursement rates for Medi-Cal and Denti-Cal providers by 10% on July 1, the San Francisco Chronicle reports. Medi-Cal is California's Medicaid program, and Denti-Cal is the branch of the program that provides dental care (Fernandez, San Francisco Chronicle, 5/6).
Officials said the $1.3 billion in cuts, including more than $500 million in federal matching funds, would push more physicians to stop participating in Medi-Cal, which has more than six million beneficiaries.
The cuts were approved by the Legislature and Gov. Arnold Schwarzenegger (R) in February as a way to help reduce a state budget deficit, currently projected at nearly $20 billion (Robertson, Sacramento Business Journal, 5/5).
The Los Angeles Daily Journal reports that this is the second lawsuit challenging the Medi-Cal reimbursement cuts, coming after a case filed by a group of independent pharmacists and advocates for people with disabilities last month (George, Los Angeles Daily Journal, 5/6).
The lawsuit, filed in Los Angeles County Superior Court, seeks an immediate injunction to stop the Department of Health Care Services from implementing the funding cuts. DHCS administers Medi-Cal (Hines, Riverside Press-Enterprise, 5/5).
The suit also claims that the state did not receive approval from HHS to make the rate reductions (Vesely, Modern Healthcare, 5/5).
The lawsuit also claims the cuts would violate state and federal laws that say the payments to Medicaid providers must be sufficient to attract providers and ensure services are as accessible to Medi-Cal beneficiaries as they are to the general public.
According to the Business Journal, the suit argues that the funding cuts could have ramifications for all Californians by:
- Triggering increases in private health insurance costs for employers and other California residents;
- Cutting revenue for counties; and
- Pushing more patients to use emergency departments for preventive care (Sacramento Business Journal, 5/5).
The suit also alleges that DHCS officials have not performed mandated annual reviews of Medi-Cal provider rates for at least 15 years. Plaintiffs said the state already has the lowest reimbursement rates in the nation (Riverside Press-Enterprise, 5/5).
Coalition members that filed the suit include the:
- California Association for Adult Day Services;
- California Association of Public Hospitals and Health Systems;
- California chapter of the American College of Emergency Physicians;
- California Dental Association;
- California Hospital Association;
- California Medical Association; and
- California Pharmacists Association (Sacramento Business Journal, 5/5).
Plaintiffs' attorney Craig Cannizzo said the coalition will seek an injunction by filing declarations from individual patients, doctors and other providers who will testify about current problems and what would happen if the cuts went through (Rundle, Wall Street Journal, 5/6).
Cannizzo added that the coalition is seeking class-action status and is optimistic it will prevail (Mohajer, AP/Los Angeles Daily News, 5/5).
The case is California Medical Association v. Sandra Shewry (Los Angeles Daily Journal, 5/6). Shewry is the director of DHCS (California Healthline, 3/28).
Lisa Page, spokesperson for Schwarzenegger, said, "The governor fully understands the devastating impact of these cuts, which is why he continues to push for comprehensive health care reform and structural budget reform" (San Francisco Chronicle, 5/6).
Norm Williams, spokesperson for DHCS, said that as difficult and unwelcome as the 10% cuts might be for health care providers, the Medi-Cal program "can't be exempt from the solution" to the state budget deficit (Lin, Sacramento Bee, 5/6).
In 2003, a smaller group of providers sued the federal government when former Gov. Gray Davis (D) proposed 5% cuts in Medi-Cal reimbursements. The cuts were reversed after a month (Wall Street Journal, 5/6).
The court granted the injunction because it said the Medi-Cal program could not survive a cut in services, according to Cannizzo (Sacramento Business Journal, 5/5).
Three broadcast programs recently reported on the suit. Summaries appear below.
- Capital Public Radio's "KXJZ News": The segment includes comments from Cannizzo (Russ, "KXJZ News," Capital Public Radio, 5/6).
- KPBS' "KPBS News": The segment includes comments from Paul Lofholm, president of the California Pharmacists Association (Goldberg, "KPBS News," KPBS, 5/6).
- KQED's "Forum": The second half hour of Tuesday's program was scheduled to include a discussion with Christopher Perrone, a senior program officer with the California HealthCare Foundation Market and Policy Monitor program, and Elliot Lepler -- a pediatrician with the Palo Alto Foundation Medical Group, former president of the Santa Clara County Medical Association and former chair of the California Medical Association Political Action Committee -- about the suit ("Forum" Web site, 5/6).
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