Health Care for Millions of Californians Still at Risk

Health Care for Millions of Californians Still at Risk
Court Rules Medi-Cal Cuts Harm Access to Health Care; Denies Preliminary Injunction on Narrow Procedural Grounds

LOS ANGELES - A state court in Los Angeles today failed to stop deep cuts in reimbursement rates to health care providers in the state Medi-Cal/Denti-Cal program which took effect on July 1. While the court found that these cuts would irreparably harm the access to health care of nearly 7 million Californians, it denied the preliminary injunction motion of health care providers on the grounds that the state court lacked the authority to enforce the federal law in state court. The health care providers who brought the lawsuit described the decision as an enormous setback for the health and lives of the millions of Californians who rely on the state's safety net.

"The court recognized the dramatic impacts the Medi-Cal cuts will have on Medi-Cal beneficiaries and the state's health care system, but ruled on narrow procedural grounds that it could not grant relief to the millions of Californians' whose health care will be impacted adversely by these cuts," said Craig Cannizzo, the attorney for the coalition of health care providers who brought the suit.

In addition to finding that "[P]etitioners have presented a substantial showing of actual harm which will likely occur as a consequence of the reimbursement reductions," the court found that health care providers did "demonstrate the importance of equal access to health care to call residents of California, including those covered by Medi-Cal as well as the many and increasing number of uninsured California residents whose access problems are presumably even greater than those of Medi-Cal participants."

With this motion for preliminary injunction denied, health care providers are considering all options, including filing an emergency appeal with the second district appellate court in Los Angeles. Additional cases are pending in other courts which also are seeking to stop the Medi-Cal cuts.

"This is a terrible blow to Medi-Cal providers across the state," said Lynn Rolston, chief executive officer for the California Pharmacists Association. "Some pharmacists have already begun turning away patients as they are losing $10, $20, $30 or more on nearly every prescription filled. With this lawsuit set back, I imagine that more and more pharmacists will have to make tough decisions regarding how they conduct business. We have received reports from pharmacists all over the state who have indicated that soon they will have to turn away patients, cut hours, stop accepting new patients and is some extreme case have to close their doors altogether. Any way you look at it, patients will suffer irreparably."

In an emergency budget session in early 2008, the state legislature and governor agreed to a 10 percent cut to reimbursement rates for Medi-Cal providers to take effect July 1. Health care providers filed this lawsuit in May, alleging that the state had failed to set Medi-Cal reimbursement rates at a level that ensures access to health care for Californians on Medi-Cal, in violation of state law. A key committee of the Legislature recently recommended reducing the cuts to reimbursement rates, but that reversal won't take effect unless and until the full Legislature and Governor pass a budget with those changes.

"This is the fourth court in five years to find that the state of California has put at risk the access to health care for millions of Californians by underfunding the Medi-Cal program," Dr. Richard Frankenstein, MD, president of the California Medical Association. "We are hopeful that should the courts be unable for technical procedural reasons to grant some relief to millions of Californians who rely on Medi-Cal for their health care needs, the governor and legislature will act to do so."

Reaction from health care providers and patient groups:

C. Duane Dauner, president and CEO of the California Hospital Association: "The decision by the court to allow the Medi-Cal payment cuts to proceed puts all Californians at risk. These cuts are likely to result in more patients seeking care in already overcrowded and overburdened emergency rooms, which will mean longer wait times and higher costs for everyone. Patients are the real losers in this decision."

Brian Scott, DDS, president of the California Dental Association: "This ruling is an unfortunate setback for Denti-Cal patients in California. However, CDA remains committed to working with the legislature to assure adequate funding for the Denti-Cal program."

Lydia Missaelides, executive director of the California Association for Adult Day Services: "The court's ruling is hurtful. As more adult day health care centers close due to the state's cut to Medi-Cal reimbursements, Medi- Cal participants will end up in nursing homes, emergency rooms, or worse - die."

Tom Porter, AARP California State Director: "AARP is extremely disappointed with this ruling. These cuts will further erode medical services, putting the health of millions of Californians at risk. AARP strongly believes that the state budget should not be balanced on the backs of our state's most vulnerable citizens."

Jeffrey Luther, MD, president of the California Academy of Family Physicians: "Family physicians see daily how our patients are suffering the effects of the Medi-Cal cuts. We will continue working closely with our elected leaders to find a better way forward. For now, patients unable to find physicians to care for them are delaying much needed care or turning to already overcrowded emergency rooms where care is considerably more expensive."

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