On May 5, a coalition of health care providers led by CMA sued the state of California to stop the 10 percent cut in Medi-Cal reimbursements scheduled to take effect on July 1.

The class action lawsuit seeks an immediate injunction to block the reduction in Medi-Cal reimbursement rates. In February, the Legislature approved and the Governor signed into law a total of $1.3 billion in cuts to the Medi-Cal program in an effort to stem the state’s budget crisis.

The lawsuit, filed in Los Angeles County Superior Court, contends that the planned cuts violate state and federal laws which require that Medicaid (Medi-Cal) payments “must be sufficient to enlist enough providers so that services under the (state’s Medicaid) plan are available to recipients at least to the extent that those services are available to the general public.”

According to the complaint, the reimbursement cuts authorized in February were implemented “solely due to state budgetary woes, without regard to the impact on the availability of Medi-Cal services.”  Such cuts are illegal, according to the complaint, and are “being imposed on a system already in crisis, wherein inadequate payment levels have resulted in a scarcity of willing providers, creating serious access hurdles for Medi-Cal beneficiaries.”

California already ranks dead last in the nation when it comes to payments to doctors, hospitals, and other providers who care for Medicaid (Medi-Cal) patients.  According to the Kaiser Family Foundation, California spends $2,701 per Medicaid beneficiary – the lowest rate in the nation.  The national average is $4,662.  With the lawsuit filing, the state has 30 days to file a response to the allegations.  At that point, court will schedule a hearing.

Contact: Ned Wigglesworth, 916/444-5532 or nwigglesworth@cmanet.org.