Court: State can cut Medicaid payments

After more than a year-long battle, a federal appeals court has ruled that California can cut payments to providers participating in its Medicaid program, the Los Angeles Times reported.

The state had been blocked from making 10 percent rate cuts to providers that were supposed to have taken effect in 2011, but hospitals, medical groups and other provider interests sued to block its implementation.

The 9th Circuit Court of Appeals agreed unanimously that providers would have to defer to the U.S. Department of Health & Human Services on the cuts, according to the San Francisco Chronicle. The HHS had ruled in October that the rate cuts would not affect the care provided to enrollees in California's Medicaid program, Medi-Cal.

However, the court's decision could have a ripple effect on other states planning to expand their Medicaid programs in the wake of the Affordable Care Act.

"If this decision stands it will not only destroy the Medicaid program in California, but it will destroy the Obamacare program for millions of Americans who are now being shoved into the Medicaid program under the Affordable Care Act," said Lynn S. Carman, an attorney representing the pharmacies. "They will not be able to obtain quality healthcare or access to services because providers cannot provide services at less than what it costs to furnish them."

The ruling is retroactive to payments made on and after June 1, 2011. It is expected to save California about $50 million a month, according to the LA Times.

For more:
- read the Los Angeles Times article
- read the San Francisco Chronicle article