Update on Medi-Cal Lawsuit

Federal judge blocks Medi-Cal, Denti-Cal rate cut

The 10 percent rate cut currently in effect for Medi-Cal and Denti-Cal providers continues to be the focus of significant legal activity, the most outstanding of which occurred Aug. 18 when a federal judge blocked the cut and said the state’s cost-saving measures violate federal law, forcing the state to begin processing Medi-Cal and Denti-Cal claims at 100 percent.

U.S. District Judge Christina Snyder of Los Angeles ruled the state failed to demonstrate that the rate reductions are consistent with efficiency, economy, quality of care and equality of access to care required under federal law. Snyder acknowledged California’s $17.2 billion deficit, unresolved budget and deadlocked Legislature. However, she said, the state has accepted federal funds for Medi-Cal and is bound to use them to provide quality health care to low-income residents.

The state reported on Sept. 5 that it is processing claims at 100 percent, the amount before the 10 percent cut, for physicians, pharmacies and Adult Day Health Care professionals. The state began processing dental claims at 100 percent as of Sept. 9 or 10, but said it will take until Oct. 2 to reprogram computers to reprocess claims back to Aug. 18, the date of Snyder’s decision.

State officials quickly moved to file an appeal to Snyder’s decision, contending her ruling would cost California $575 million a year. In addition to the appeal, the state Department of Health Care Services requested a stay of the federal decision, which would leave the 10 percent rate reduction in effect until the court rules on the state’s appeal. The request for a stay is scheduled for a hearing on Sept. 15.

The state also filed a motion to alter or amend and clarify the federal order, which will be heard on Sept. 15 as well. The state is seeking to clarify several aspects of Snyder’s decision, including the portion of the order addressing retroactivity to July 1.

The state’s actions are the latest in a multi-case scenario in which several health care organizations, including CDA, are trying to stop the 10 percent Medi-Cal and Denti-Cal reimbursement rate cut that began July 1. The cut was approved by the Legislature in an emergency budget session earlier this year.

“In addition to our continued participation in the health care coalition case under way in Los Angeles Superior Court, CDA has filed a motion to intervene in the federal case as it progresses through the appeal,” said CDA General Counsel Alison Sandman“We are encouraged by the District Court’s ruling that the state is violating federal law with the Medi-Cal rate reduction and remain cautiously optimistic. We will know more after the hearing on Sept. 15.”

Meanwhile, as September began, the governor and Legislature continued to be in a stalemate over the state budget, one that appeared likely to become the longest in California history.

“Along with its legal efforts, CDA continues to advocate strongly for the restoration of Denti-Cal rates through the budget, and for maintaining adult dental benefits rather than eliminating them as the governor proposed in January,” said Dean Chalios, CDA’s vice president of Public Policy. “So far we have been pleased that no legislative body has endorsed either permanent rate cuts or the elimination of adult dental benefits. However, in a serious budget crisis such as this, things can change quickly; and legislative deals can be struck unexpectedly and out of the public eye, so we must remain vigilant.”

Update on Medi-Cal Lawsuit

(Sacramento, CA - August 27, 2008) Last week we reported in a Special Executive Bulletin that a federal district court issued a preliminary injunction to halt the 10% rate reduction for Medi-Cal/Denti-Cal payments. Yesterday, the Department of Health Care Services filed an appeal with the Ninth Circuit Court of Appeals. The Department has also requested the district court judge issue a stay of the injunction pending the appeal. The request for a stay is scheduled for a hearing on September 15th.

Please direct all media inquiries to Regina Collins, CDA vice president of Marketing & Communications, at 916.554.5317. If you have questions about the lawsuit, please contact Alison Sandman, CDA general counsel, at 916.554.4910.

Court Grants Injuction to Stop Medi-Cal/Denti-Cal Rate Reductions

(Sacramento, CA - August 20, 2008) Great news! Late yesterday, the federal court issued an order granting the preliminary injunction to stop the Medi-Cal/Denti-Cal rate reductions as to all providers under the Medi-Cal fee-for-service program, including dentists, physicians, pharmacies, adult day health care centers, clinics, optometrists, and other providers. As we reported at the end of last month, we were awaiting a ruling in the pending federal court case. This case was filed by pharmacists, but is similar to the state court case in which CDA is a plaintiff. Although the named plaintiffs in the federal case are independent pharmacies, the judge admitted evidence regarding all provider categories, not just pharmacies. The federal court concluded that the State failed to demonstrate that the rate reductions are consistent with efficiency, economy, quality of care, and equality of access to care, which is required under federal law. The court also concluded that the evidence established Medi-Cal patients will be irreparably harmed by the rate reductions. The injunction is retroactive to July 1, 2008.

At this point in time, it is unclear whether the Department of Health Services will appeal the ruling. We will continue to keep you apprised of any developments.

CDA Joins Lawsuit to Reverse Proposed Medi-Cal Cuts

(Sacramento, CA - May 5, 2008) In February, the Legislature approved and the Governor signed into law a total of $1.3 billion in cuts to the Medi-Cal and Denti-Cal program in an effort to stem the state’s budget crisis. CDA has joined six other health care organizations in a class action lawsuit, filed this morning, seeking an immediate injunction to block these cuts.

Please direct all media inquiries to Regina Collins, CDA vice president of Marketing & Communications, at 916.554.5317. If you have questions about the lawsuit, please contact Alison Sandman, CDA general counsel, at 916.554.4910.