Keeping Up With DHCS Lawsuits

by David Gorn

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The Department of Health Care Services may need an abacus to keep track of all of the lawsuits being levied against it.

A ruling is expected as early as today in a lawsuit brought against DHCS by the California Primary Care Association and several other providers.

The CPCA hopes a federal judge will grant a temporary restraining order to halt a lower reimbursement rate for adult day health services in the recently launched Community Based Adult Services program.

A full hearing on the case is expected in about two weeks, when the CPCA will argue for a preliminary injunction to stop the rate reduction.

In a similar case, the Adult Day Health Care Association has already had its federal judiciary hearing to block a 10% provider rate cut. A preliminary injunction ruling is due any day now, according to Berdj Karapetian of the ADHCA.

Preliminary injunctions have been granted by federal judges in four other cases challenging the 10% Medi-Cal provider rate cut.

Those four lawsuits were brought by hospital, pharmacy, emergency transportation and provider groups, including the California Medical Association and the California Hospital Association.

Another preliminary injunction halted a provider reimbursement rate freeze for some disability services.

The U.S. Supreme Court recently sent a case against DHCS back to California courts. That case addresses whether individuals can sue states over federal Medicaid requirements, in the same way that businesses can sue states over consumer protection laws.

The latest lawsuit, the one filed by CPCA that seeks a temporary restraining order before its federal hearing, challenges a reduction in adult day health reimbursement rates. Previously, under the Adult Day Health Care program, federally qualified health centers were paid at a prospective payment system rate -- basically a higher fee-for-service rate. Now DHCS wants that rate to match the one it worked out in settlement of yet another lawsuit, the Disability Rights California settlement that prompted creation of the CBAS program to replace the ADHC program.

It's a lot to follow. But that doesn't make the claims any less valid, according to Sean South of the CPCA.

"The merits of the case are strong. And it was a necessary step," South said. "The lawsuit was filed because of the way the department wanted to reimburse under the CBAS system, and the folks that are affected play a pretty significant role [in California's safety net requirement]."

DHCS officials, as a policy rule, do not comment on ongoing litigation, but DHCS did issue a written response:

"Community-Based Adult Services reimbursement rates are included in the terms of the Adult Day Health Care settlement, which was approved by a federal district court judge," the DHCS statement said. "Additionally, the rates are included in the amendment to our Bridge to Reform waiver, which was recently approved by the federal Centers for Medicare and Medicaid Services."

If CPCA and related providers don't get their temporary restraining order, they would need to receive the lower rate until the preliminary injunction hearing in two weeks.


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