The California Medical Association today joins 11 other plaintiffs in a lawsuit against the state of California to stop $237 million in Medicaid cuts scheduled to take effect Jan. 1, 2004.
The lawsuit, to be filed this afternoon in U.S. District Court in Sacramento, alleges the cut violates the federal Social Security Act by reducing the benefits of California's Medicaid program, called Medi-Cal, without assessing how the reductions would affect access to care for about 6.5 million beneficiaries.
"Lawsuits are never the best way to resolve a problem, but we have tried everything else," says CMA Executive Vice President Jack Lewin, M.D. "The only way to prevent a loss of access to the exam room is by going to the courtroom."
This fall, the state Legislature authorized a budget that includes a 5% Medi-Cal cut that reduces provider payments from the state general fund by $115 million. With the federal government matching every $100 with $106, the total drop in Medi-Cal spending is $237 million. The cuts affect reimbursement for physicians, dentists, pharmacy services and some medical equipment, Lewin says.
The suit charges that the reduced rates fail to meet federal standards requiring that provider payments be enough to assure patients have access to medical services equal to those available to the general public. CMA cites 2001 figures from the Medi-Cal Policy Institute showing the number of primary care physicians per capita for Medi-Cal patients already is one-third less than for the general population. For specialists, the number is 50% less, and for surgeons, two-thirds less.
Diana Bontá, director of the California Department of Health Services, is named as the defendant in the suit. The plaintiffs are requesting a preliminary injunction to delay all Medi-Cal cuts until the case is settled. DHS spokesman Ken August says the department has not yet been served with the suit and has no comment at this time.
Attorney Byron Gross says CMA won a similar suit in 1987 against a proposed 10% rate reduction, which the court held to be invalid.
California ranked 42nd out of 50 states in physician reimbursement before the cuts, according to CMA. A 5% reduction would result in a family physician receiving less than $23 for a typical office visit, the doctors' group says.
Three-quarters of physicians in a CMA survey last year said additional cuts to the program would limit the number of Medi-Cal patients they are can see. Some 68% said they would stop seeing new Medi-Cal patients, and 40% said they would stop participating in the program.
CMA says the budget also authorizes equivalent rate reductions to Medi-Cal managed care plans and that doctors have been receiving notices from Medi-Cal HMOs telling them to accept a 5% reduction in their contracted rates or be dropped from the plans.