Late Tuesday, a Los Angeles Superior Court judge rejected health care providers' petition to block 10% cuts to Medi-Cal reimbursements that took effect July 1, the San Francisco Chronicle reports. Medi-Cal is California's Medicaid program (Colliver, San Francisco Chronicle, 7/31).
Plaintiffs in the suit include the:
- California Dental Association;
- California Hospital Association;
- California Medical Association; and
- Trade groups representing adult care providers, emergency physicians, pharmacists and public health workers.
The groups filed the lawsuit in May (Sacramento Business Journal
, 7/30). Initially, the case was filed in state court, moved to federal court and then returned to state court.
The Medi-Cal reimbursement cuts were approved in February as part of an effort to address the state budget deficit (San Francisco Chronicle
Plaintiffs argued that the payment cuts violate California and federal laws that require state officials to set Medi-Cal reimbursement rates at a level that ensures that beneficiaries have the same access to health care as other people in the area (Rundle, Wall Street Journal, 7/31).
However, Judge William Highberger ruled that "the current relevant law leaves resolution of this question up to the state Legislature and the federal ... branch" (AP/Los Angeles Daily News, 7/30).
To enforce the "equal access provision" of federal law, the court decision urged the plaintiffs to ask HHS to end federal support for Medi-Cal.
Craig Cannizzo, an attorney for the plaintiffs, said that such a "nuclear bomb option" would run counter to the coalition's goal of winning more funding for Medi-Cal.
Cannizzo said, "This fight isn't over in state or federal court." He explained that the next step could be an emergency appeal in federal appellate court (Wall Street Journal, 7/31).
Hospitals, Clinics Face Budget Crunch
Hospitals and clinics statewide are adopting strategies to maintain operations while Medi-Cal reimbursements are frozen, the Ventura County Star reports.
An emergency fund to cover Medi-Cal payments if the state budget has not been approved when the fiscal year begins has been exhausted, putting payments to health care institutions on hold until lawmakers and the governor approve a budget.
A state official said that hospitals received their last Medi-Cal check last week.
Norman Williams -- deputy director for Public Affairs of the state Department of Health Care Services, which administers Medi-Cal -- said that health care clinics will receive their last payment on Aug. 7 (Bakalis, Ventura County Star, 7/31).
The funding crunch is being exacerbated by a delay in other Medi-Cal payments that was approved in February. Reimbursements totaling $454 million that were scheduled to be disbursed in August will be held until September, according to the San Diego Union-Tribune.
Today, the California Health Facilities Financing Authority is scheduled to vote on a proposal that would use half of its $4.2 million administrative fund for short-term loans for rural hospitals and clinics.
Joe DeAnda, a spokesperson for Treasurer Bill Lockyer (D), said that if the plan is approved, it would mark the first time that the authority would use funds to help health care facilities with operational costs. DeAnda said the loans would be due 45 days after a state budget is signed (Mendel, San Diego Union-Tribune, 7/31).
Some clinics are relying on reserves, and others are seeking loans from local banks or health care foundations.
In addition, the California Primary Care Association, which advocates for clinics, has secured about $18.8 million in funds for low-interest loans for clinics (Ventura County Star, 7/31).
Some cuts to Medi-Cal will be needed to address the state budget deficit, but California "can do far better than mindless spending cuts" that could hinder Medi-Cal beneficiaries' access to care, a Riverside Press-Enterprise editorial states.
"The state does not have unlimited funds to spend on Medi-Cal," the editorial states, concluding that "California will not save money by pushing patients into more costly ways of getting health care" (Riverside Press-Enterprise, 7/28).
On Wednesday, KPCC's "KPCC News" reported on the judge's refusal to block Medi-Cal cuts from taking effect (Small, "KPCC News," KPCC, 7/30).