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Federal Court Halts Some Medi-Cal Cuts

A federal judge last month blocked California’s plan to cut Medi-Cal provider reimbursement rates to skilled nursing facilities and pharmacies. State officials said they will appeal the decisions.

The two lawsuits were brought by Managed Pharmacy Care and the California Hospital Association.

“We’re pleased by the court decision,” Jan Emerson-Shea of CHA said. “We believe it is the right thing to put the interests of patients first.”

Emerson-Shea said the core of the issue is patient access, and said the Department of Health Care Services’ implementation of these cuts would severely impact mostly-rural hospitals with skilled-nursing units — and that means many Californians would not be able to access important health services. Before the state can make those kinds of reductions, she said, it needs to conduct a study to assess risk to patients.

“We do think the access to care issues are required to be studied,” Emerson-Shea said. “Over a number of years now, we feel the state has been trying to balance the state budget on the backs of patients and their caregivers.”

DHCS officials have a policy of not discussing pending litigation.

The Dec. 28 judicial rulings could be a good sign for other lawsuits challenging the 10% provider reimbursement cuts.

The California Medical Association and a number of provider groups have jointly filed a lawsuit over provider cuts. And a lawsuit by the California Medical Transportation Association, suing on behalf of non-emergency medical transportation service providers, is set for Jan. 9.

Emerson-Shea said she knows of the other lawsuits, but doesn’t know the details of their arguments, or if their odds of success are any better now. “It stands to reason that, if they have similar arguments, that similar rulings might be expected,” she said.

What she does know is that a federal judge agrees with the CHA assessment that some of the state’s Medi-Cal provider rate cuts may be illegal. “These are very serious issues,” Emerson-Shea said. “The state says they’ll appeal. But the good news is, in the meantime, those rate cuts can’t be implemented.”

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Capitol Desk Medi-Cal