A federal judge has granted a temporary injunction to California hospitals, prohibiting the state from implementing a planned inpatient Medicaid rate freeze.
Judge halts Calif. Medicaid rate freeze
Last October, the California Legislature froze the rate at which hospitals are reimbursed for inpatient Medicaid services (called Medi-Cal in the state) to rates paid either in January or July of 2010, whichever was less. The freeze applied to both contracted and noncontracted hospitals.
The California Hospital Association sued the state Department of Health Care Services, arguing that the rate freeze violates federal law because the state did not receive prior federal approval to implement it, among other arguments. The freeze was estimated to save the state $84.5 million.
Meanwhile, the state contends that the freeze is necessary to facilitate the development of a more-efficient Medi-Cal reimbursement system. Oral arguments were heard on Feb. 25.
In his 61-page decision, U.S. District Judge Frank Damrell in Sacramento halted the rate freeze until the lawsuit is decided on its merits or the two parties can reach an agreement.
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