California providers sue to stop Medicaid cuts

A broad coalition of California providers and Medicaid recipients has filed suit to block a planned 5 percent cut in Medicaid rates scheduled to go into effect March 1.

The group, which includes hospitals, healthcare associations and pharmacies, charges that state legislators violated federal laws by passing the rate cuts, since they never sought federal permission to amend Medi-Cal, nor did they conduct in-depth studies of what impact the cuts would have.

The suit asserts that current reimbursement rates are already so low that too few providers are willing to participate, giving Medicaid patients less access to care available to patients with private health insurance. That's contrary to the requirements of the federal program, the group says.

The 5 percent cut itself is actually a compromise number, as lawmakers originally hoped to make a 10 percent cut as of July 1, 2008. That cut was blocked by legal action and ongoing appeals.

To learn more about the suit:
- read this Modern Healthcare article [1] (reg. req.)

Related Articles:
CA Medicaid payments to hospitals stalled [2]
Coalition protests healthcare cuts in CA [3]
State budget freeze squeezes California providers [4]