On Thursday, the 9th Circuit Court of Appeals ruled that California can reduce Medi-Cal payments for health care providers by 10%, overturning a lower court decision that blocked the cut, the Sacramento Bee's "Capitol Alert" reports.
Medi-Cal is California's Medicaid program (Yamamura, "Capitol Alert," Sacramento Bee, 12/13).
In October 2011, CMS approved the state's plan to reduce certain Medi-Cal payments by 10%. State officials have projected that the cuts will save $623 million.
According to the Department of Health Care Services, CMS allowed the state to make a 10% reimbursement cut to:
- A number of providers and outpatient services, including clinics, dentists, laboratories, optometrists and pharmacists; and
- Freestanding nursing and adult subacute care facilities, as well as other nursing facilities.
The cuts would be retroactive to June 1, 2011.
In January, U.S. District Court Judge Christina Snyder tentatively blocked the cut, saying it could cause irreparable harm to patients.
In her ruling, Snyder wrote that California's "fiscal crisis does not outweigh the serious irreparable injury plaintiffs would suffer absent the issuance of an injunction" (California Healthline, 1/31).
Details of New Ruling
A three-judge appeals court panel ruled that HHS Secretary Kathleen Sebelius has authority to decide whether California and other states can reduce Medicaid rates while still adhering to program regulations.
The judges wrote, "Congress explicitly granted the Secretary authority to determine whether a state's Medicaid plan complies with federal law" ("Capitol Alert," Sacramento Bee, 12/13).
Reaction to Ruling
Critics of the ruling say that California already provides one of the lowest Medicaid reimbursement rates in the U.S. They argue that the ruling could make it harder for patients to find physicians willing to accept Medi-Cal beneficiares after the program expands enrollment under the Affordable Care Act.