Appellate rejects effort to block Medicaid cuts in California

Stiff Medicaid payment cuts in California are set to move ahead after a federal appellate court rejected the California Medical Association's request for a full en banc reconsideration of its request to block the cuts.

Gov. Jerry Brown's budget, approved by lawmakers, has a Sept. 1 date for the implementation of payment reductions in Medi-Cal, California's Medicaid program. But the California Department of Health Care Services announced Monday that the timeline is still under development in order to give physicians and other providers time to prepare.

In 2011, the state Legislature passed a 10% cut in Medi-Cal reimbursement rates that was later halted by an injunction issued in federal district court. The 9th Circuit threw out that injunction, meaning the drop in Medi-Cal payments—which is estimated to save the state almost half a billion dollars in the coming year—was back on.

The CMA, along with other plaintiffs including national and state health organizations, then asked the U.S. Supreme Court to stay or prohibit the cuts, which the court declined to do.

Groups such as the We Care for California coalition—representing physicians, dentists, hospitals, healthcare workers, health plans, first responders, caregivers and other health providers—have expressed concern that the reimbursement reductions will negatively impact patients and prevent healthcare access. There was a rally last month at the Capitol in Sacramento.

Similarly, the Adult Day Health Care Association has contended that Medi-Cal providers will suffer significant financial losses, forcing them to cut back or eliminate services entirely, leaving Medi-Cal beneficiaries without healthcare. Whether this violates Medicaid's equal access provision—a subject of frequent litigation—has been a question for the courts that, at least for now, has been answered in favor of the states.

“To say the least, this budget is disappointing for those of us who care about providing quality healthcare to the state's neediest and most vulnerable people,” California Medical Association CEO Dustin Corcoran said in a release. “But despite more cuts to healthcare providers and facilities, the We Care for California Coalition is optimistic that in the coming months we will find a way to stop cuts to the Medi-Cal program so everyone in California has access to the care they need.”

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