In a statement, CMS officials said they approved the cuts after the California Department of Health Care Services submitted “extensive” data showing the cuts would not harm access to care. State officials said they will continue to monitor beneficiary access (PDF) to essential health services following the cuts.
Hospital officials were unswayed by the monitoring program, saying the cuts would violate the federal Medicaid law that requires states to set rates “sufficient to enlist enough providers so that care and services are available under the (state's Medicaid) plan, at least to the extent that such care and services are available to the general public.”
“Unfortunately, CMS turned a blind eye to these concerns and allowed state officials to move forward with rate cuts,” hospital association President and CEO C. Duane Dauner said in a written statement. “California's hospitals cannot stand by and allow these cuts to take effect.”
The hospital association estimated that the cuts in many cases would be closer to 20%, because they were based on 2008 rates.
The Supreme Court opened its fall term last month with a case in which a California provider made essentially the same arguments against a round of rate cuts implemented in 2008. A decision in that case, Douglas v. Independent Living Center of Southern California, has not yet been issued.