California State Faces Lawsuit over Medi-Cal Cuts

By Anna Boyd
11:52, May 7th 2008
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California State Faces Lawsuit over Medi-Cal Cuts

A coalition of health care groups and providers filed a lawsuit on Monday seeking to block California from cutting reimbursement rates for Medi-Cal and Denti-Cal providers by 10 percent on July 1.

The $1.3 billion in cuts would put Medi-Cal and Denti-Cal, safety net programs for the state’s poor, on the verge of a “health-care catastrophe,” representatives for the coalition said, according to the San Francisco Chronicle.

Medi-Cal officials say the number of doctors who accept Medi-Cal patients has been decreasing because the reimbursement rate is lower than in any other 49 states and the District of Columbia. “Patients will be left without care. We are facing a series of cuts that are simply unworkable," said Charles Guenther, chief executive of the Eastern Plumas Health Care District.

The cuts were approved by the Legislature and Gov. Arnold Schwarzenegger in February as a way to help reduce a state budget deficit, currently projected at nearly $20 billion.

The lawsuit, filed in state court in Los Angeles, says California has violated state and federal law by failing to ensure that Medi-Cal reimbursement rates are sufficient for beneficiaries to have the same access to services as the general public.

The plaintiffs, including the California Medical Association, the California Hospital Association and the California Association of Public Hospitals and Health Systems and several other organizations, had asked the court for an injunction before the cuts go into effect on July 1.

On the other hand, “the governor fully understands the devastating impact of these cuts, which is why he continues to push for health-care reform and structural budget reform. Together, they will bring stability to Medi-Cal budgeting and ensure that the state never has to make such drastic cuts again,” said Lisa Page, the spokesperson for Mr. Schwarzenegger.

A small group of health-care providers filed a similar lawsuit in late 2003, when Mr. Schwarzenegger's predecessor, Gray Davis, proposed a 5 percent cutback in Medi-Cal reimbursements. The reductions were reversed after a month.



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