Federal Court Blocks Illegal Medi-Cal Cuts
[Posted 12/24/03]

U.S. District Judge David Levi on Tuesday granted a preliminary injunction in the lawsuit filed by CMA and other plaintiffs to stop the 5 percent Medi-Cal rate cut that was set to go into effect on January 1.

In granting the preliminary injunction, Judge Levi said that the state of California failed to consider how the hundreds of millions in cuts would affect access to care for poor, disabled, elderly and children whose health care is provided by Medi-Cal.

“This is excellent news,” said CMA CEO Jack Lewin, M.D. “Going forward, this ruling seems to thwart the current administration's additional 10 percent proposed reductions as well. The judge's decision will prevent further erosion of access to care for our most vulnerable patients.”

“Because the state failed to consider the effect of a rate reduction on beneficiaries' equal access to quality medical services, in view of provider costs, the pending rate reduction is arbitrary and cannot stand,” wrote Judge Levi in his 42-page ruling.

“I certainly view the decision as a very substantial victory, and it's going to be a very serious obstacle to the administration's proposal to consider further rate reductions,” said Craig Cannizzo, attorney with Hooper, Lundy & Bookman, Inc., of San Francisco, which filed the lawsuit on behalf of CMA and multiple other plaintiffs representing patients, dentists, pharmacists and other providers.

The judge also ruled that cuts already made against Medi-Cal managed care plans would have to be addressed separately. Attorneys for CMA and its co-plaintiffs are still reviewing what the ruling means for Medi-Cal managed care plans. Medi-Cal managed care accounts for about half of all Medi-Cal recipients.

In launching the legal challenge Nov. 7, CMA and other plaintiffs cited the Social Security Act, which says that a state plan for medical assistance (Medi-Cal in California) must assure that payments are “consistent with … economy and quality of care,” and are sufficient to enlist enough providers so that services are available at a level equal to those available to the general public. According to the lawsuit, the number of primary care physicians per capita for Medi-Cal patients was one-third less than for the general population using 2001 figures from the Medi-Cal Policy Institute. The figure for specialists is 50 percent less than for the general population; and for surgeons – it is two thirds less. Further cuts would have made the disparities larger.

About 6.5 million people are eligible for Medi-Cal in any given month. California ranks in the bottom 10 of the 50 states for reimbursement for Medi-Cal patient care.