California Hospitals Ask Courts To Halt Cuts

Some California hospitals would take a significant and long-lasting hit from Medi-Cal reimbursement cuts recently approved by CMS, according to the California Hospital Association, which this week filed a petition in federal court to put a temporary halt to those reductions.

CHA’s lawsuit and injunction request are separate from the court action taken earlier this week by the California Medical Association and other provider organizations.

“They’re two entirely different lawsuits,” Jan Emerson-Shea of CHA said. “We have filed a declaration with the court, asking the court to stop certain cuts that were approved by the CMS and were retroactive to June 1. It’s all related to the same set of cuts, but we’re suing based on the hospital cuts.”

Those hospital cuts include a 10% cut to skilled nursing units, which treat people with multiple chronic health care conditions who are sicker than people in nursing homes, Emerson-Shea said.

“It’s actually a much larger cut than 10%,” she said. “It’s 10% off rates from 2008 or 2009, so in many cases those cuts exceed 20%. These units are mostly in rural areas where beds are dedicated to these kinds of patients, and they just can’t handle that kind of cut.”

If those rural units curtail hours or close altogether, that would create an access issue that would violate Medicaid law, Emerson-Shea said.

Norman Williams of the Department of Health Care Services said he can’t comment on litigation, but he did say that the state did its due diligence in making sure access rules were followed.

“The various rate reductions approved by CMS are supported by extensive analyses conducted by DHCS,” Williams said. “The findings showed that the approved reductions will allow California to continue to meet federal standards requiring an adequate level of access to care for beneficiaries.”

Williams said in cases where rate reductions were not supported by analysis, the amount of the reductions was decreased or eliminated. “In addition, DHCS created a first-of-its-kind monitoring plan to ensure that the implementation of the reductions does not threaten adequate access for beneficiaries going forward,” Williams said. “DHCS complied with all federal requirements in proposing the rate reductions.”

Not according to Emerson-Shea.

“At the core,” Emerson-Shea said, “it’s a question of access. Federal Medicaid law is designed to ensure that Medicaid patients [Medi-Cal in California] get the same access to care as the general public. And the state can’t make these kind of cuts simply to balance its budget. They did not follow federal Medicaid law.”

A federal court in Los Angeles is scheduled to hear the case Dec. 19.

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