Facing double-digit Medicaid cuts for many of its revenue streams, California's hospitals have filed suit against both the federal and state governments in order to fight the reductions, reports Bloomberg Businessweek.
The California Hospital Association (CHA) last week filed the suit in federal court in Los Angeles against the U.S. Department of Health & Human Services and the Department of Health Care Services , a state agency that administers Medi-Cal, California's Medicaid program.
The suit claims that the reimbursement reductions--including a 20 percent cut for skilled nursing services rendered at hospitals--violate the U.S. Medicaid Act. The cuts are retroactive to June 1, the start of the fiscal year in California.
"The state has effectively rolled three unlawful cuts and limitations into one, and then cut the rates even further for good measure, all in the name of budgetary savings," lawyers for the CHA said in the complaint.
The Centers for Medicare & Medicaid Services recently approved the reductions, which were expected to save the Medicaid program abut $623 million a year.
Hospitals in California have sued over Medicaid reductions in the past, with a case currently being considered by the U.S. Supreme Court.