State Wins Case to Cut Adult Day Provider Rates

After four similar cases went against the state in the past few months, the Department of Health Care Services won in court late Friday, when a federal judge refused to issue a preliminary injunction against Medi-Cal cutbacks.

The lawsuit, brought by the Adult Day Health Care Association, challenged the department’s plan to cut Medi-Cal provider rates by 10%. Judges in four other cases issued preliminary injunctions halting those cuts, including suits brought by the California Medical Association and the California Hospital Association.

The difference in this case, according to DHCS spokesman Norman Williams, lies in a previous settlement of another case over the state’s adult day health services. That settlement prompted the creation of a replacement program, Community-Based Adult Services, and included an agreement that covered  the lower rates.

“We are pleased with the court’s ruling, which affirms our contention that CBAS reimbursement rates are included in the adult day health care settlement and in our federally approved amendment to the Bridge to Reform waiver,” Williams said. “We will continue to comply with the terms of the agreement and maintain our efforts to ensure appropriate access to CBAS services.”

 Access has been the watchword of the other four lawsuits decided against the state. In this case, Judge Christina Snyder of U.S. District Court (the Central District of California) said that access is less of an issue in this case because of the creation of the CBAS program, in the terms set up by the settlement.

“The Court finds it unlikely that ADHCA will prevail on the merits of its claim concerning beneficiaries’ access to services,” Snyder wrote in her ruling.

The settlement agreement was worked out without input from many ADHC providers, according to Berdj Karapetian, director of ADHCA. Access will get worse, he said, when some of the centers close. 

“We’re extremely disappointed that the judge did not issue an injunction,” Karapetian said. “It will lead to a reduction in access across the state.  Providers will not be able to sustain their operations.”

Karapetian and other potential CBAS providers find themselves in an awkward spot, as one of the few providers not protected from the 10% rate reduction.

“We had hoped to go through the appeal process with the rest of them,” Karapetian said. “Right now, we’re kind of an exception to everyone else.”

Karapetian said his organization is looking into the legal grounds to appeal, and will make a decision about it by next week.

Meanwhile, the original ADHC settlement still has drama of its own. The plaintiffs in that suit, Disability Rights California, recently filed a contempt-of-court motion against the state, accusing DHCS of skirting some of the settlement rules.

The two sides agreed to negotiate that contempt filing, and according to state officials, are near an agreement — sort of a settlement of the settlement.”Many of the parties’ claims of contempt have already been resolved,” Williams said, “and both parties are continuing their work to resolve other outstanding issues.”