Medi-Cal Cuts Face Another Preliminary Injunction

The Department of Health Care Services has been on the losing end so far of four court cases over the 10% cut in Medi-Cal provider rates. In each of the four cases, preliminary injunctions were granted to halt the cuts from specific provider groups, such as emergency transport, hospitals, pharmacies, physicians and dentists.

Now it’s adult day service providers’ turn for a judicial ruling.

A decision is expected today from federal judge Christina Snyder on a request for another preliminary injunction. This one is from adult day health providers who worked under the Adult Day Health Care program before it was terminated and replaced by the Community Based Adult Services program, or CBAS.

“We are told [Judge Snyder] will announce on Monday whether she’s granting the injunction,” said Berdj Karapetian of the Adult Day Health Care Association. “We’re hopeful, because it would be consistent with all of the previous decisions.”

DHCS officials declined to comment on pending litigation.

The ADHC/CBAS providers filed their lawsuit later than the others, Karapetian said, because ADHC itself was up in the air. It was slated for elimination as a Medi-Cal benefit a number of times — first in September of 2011, then in December, and February of 2012. It was finally eliminated as a benefit on Mar. 31. The CBAS replacement program started Apr. 1.

“We were in the process of elimination back in November,” Karapetian said, “when the DHCS announced it was going forward with the 10% provider cuts. We didn’t even know if we were going to be around.”

So adult day service providers filed later than others.

Here’s where it gets a little complicated: What kept adult day centers alive long enough to file a lawsuit over the 10% cuts was the settlement of yet another lawsuit (one filed by Disability Rights California), which prompted creation of the CBAS program.

Ironically, Karapetian said, one of the state’s arguments is that rates were set, at the 10% lower rate, in the settlement of the DRC lawsuit.

“The state is trying to argue that the rate was in the settlement, that the agreement sets the new rate,” Karapetian said. “But providers were never party to the lawsuit, or to the settlement.”

The 10% provider rate cut, he said, can’t be absorbed by CBAS centers.

Getting the preliminary injunction “would mean the ability to stay open and providing access to beneficiaries,” Karapetian said. “This 10% cut has had a drastic impact on our ability to stay in business. We just don’t have enough reserves to last long with that kind of cut.”
At a time when the state has shifted 32,000 of the 40,000 beneficiaries out of ADHC and into CBAS, health care officials are going to need as many of those centers as possible to stay open, just to provide access, Karapetian said.

“If there is no injunction, a good number of centers will have to close their doors. That would make an access problem, it will be a very serious access issue to beneficiaries,” Karapetian said. “We’ve lost already several centers in [Los Angeles] county. This will definitely impact the rest of them.”

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