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Health Care Providers Sue State of California Over Cuts in Medi-Cal Payments
Date:5/5/2008

Class Action Lawsuit Aims at Preventing 10 Percent Cuts from Taking Effect July 1; Providers Say Cuts Will Reduce Timely Access to Care

SACRAMENTO, Calif., May 5 /PRNewswire-USNewswire/ -- In an effort to ensure that all Californians have continued access to vital health care services, a coalition of health care providers today filed a lawsuit against the state of California to prevent a planned 10 percent cut in Medi-Cal and Denti-Cal payments from taking effect on July 1.

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 cuts are scheduled to take effect July 1 unless the court intervenes. In addition, the June 19 and August Medi-Cal payments to hospitals, pharmacists and adult day health care providers are slated to be delayed. For some providers -- such as rural hospitals and individual caregivers -- the delay in Medi-Cal payments may result in employees not receiving their paychecks and food service, pharmaceutical and other vendors not being paid.

The class action lawsuit seeks an immediate injunction to block the reduction in Medi-Cal payments. The suit was filed jointly by the California Medical Association (CMA); the California Hospital Association (CHA); the California Dental Association (CDA); the California Association for Adult Day Services (CAADS); the American College of Emergency Physicians, State Chapter of California (Cal/ACEP); the California Pharmacists Association (CPhA); and the California Association of Public Hospitals and Health Systems (CAPH).

Cuts Will Reduce Access to Health Care Services

The lawsuit, filed in Los Angeles County Superior Court, contends that the planned payment cuts violate state and federal laws that require that Medicaid (Medi-Cal) payments "must be sufficient to enlist enough providers so that services under the (state's Medicaid) plan are a
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SOURCE California Hospital Association
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