On Monday, January 30, 2012, a federal court judge issued a preliminary ruling that tentatively favors blocking California from moving forward with a 10 percent cut to the Medi-cal reimbursement rate.
The California Medical Association (CMA), California Dental Association (CDA), California Pharmacists Association (CPhA), National Association of Chain Drug Stores, National Community Pharmacists Association, AIDS Healthcare Foundation, American Medical Response and the California Association of Medical Product Suppliers filed the lawsuit against the U.S. Department of Health and Human Services and the California Department of Health Care Services in November 2011. The organizations believed that if the cuts went through, access to care for Medi-Cal patients would be eroded or cut off completely.
CMA President James T. Hay, M.D., applauded the court’s ruling: “The state’s repeated attempt to slash Medi-Cal reimbursement rates is a short-sighted solution that balances the budget on the backs of the poorest and most vulnerable Californians. Rather, we need to be addressing long-term solutions relative to the cost of health care. Access to care is crucial for prevention and treatment; the court’s tentative decision today to block the Medi-Cal cuts means that those patients will still have access to health care.”
Last spring, the California Legislature passed and Governor Jerry Brown signed Assembly Bill 97, which included the 10 percent reimbursement rate cut for physicians, hospitals, dentists, pharmacists and other Medi-Cal providers. Federal approval was required before the state could implement its proposed cuts.
The Centers for Medicare & Medicaid Services (CMS) gave its approval for the cuts in December 2011. CMA believes that the information supplied by the state to CMS did not measure whether and how patients' access to care would be impacted or otherwise take into consideration, as required by law, the costs to provide the care.
Because California’s Medi-Cal rates are already extremely low and many prescription medications are reimbursed at breakeven rates, many providers cannot afford to participate. Kaiser State Health Facts lists California as the lowest reimbursed state in the nation.
U.S. District Court Judge Christina Snyder issued a 25-page tentative order, wherein she favored the plaintiffs’ request for a preliminary injunction. A final order, if consistent with her tentative ruling, will enjoin the cuts and is expected in the near future.
CMA, CPhA and CDA successfully sued in the past to enjoin prior Medi-Cal cuts and expect to once again demonstrate that federal law, which ensures that Medi-Cal patients have equal access to health care, was not followed.
Contact: Michelle Rubalcava, (916) 551-2543 or mrubalcava@cmanet.org.