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California Judge Temporarily Blocks Medicaid Rates

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California Judge Temporarily Blocks Medicaid Rates

February 3, 2012

A federal trial judge ruled on January 10 against the State of California and has temporarily issued an injunction halting the implementation of a 10-percent cut to certain providers, even though the Centers for Medicare and Medicaid Services had approved the rate reductions in October.

The injunctive relief was filed on December 30, 2011 by the California Medical Association, along with pharmacists, dentists, ambulance service, medical suppliers and DME providers.

The state had adopted a budget cutting rates last spring in an effort to close the state's $26.6 billion budget gap. Judge Snyder of the U.S. District Court for the Central District of California concluded, in a 25-page tentative order, that the approval of CMS cuts likely violate federal law and Administrative Procedures Act requirements because they put Medicaid beneficiaries’ access to care in jeopardy.

In a press release issued by the California Medical Association, the association’s president said, “The court’s tentative ruling is encouraging to those of us practicing medicine. 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 healthcare.”

This is the fourth time that a federal court has temporarily barred the state from implementing Medicaid reimbursement rates to specific providers—all of which also await a decision by the U.S. Supreme Court in Douglas v. Independent Living Center of Southern California to determine the right for providers and beneficiaries to sue the state directly over the cuts.

In the meantime, the previous rulings temporarily barring the cuts favoring California’s Medical Association, Managed Pharmacy Care, and California Medical Transportation Association have been appealed to the Ninth Circuit Court on an expedited basis.

The judge’s ruling is available here.