Federal Judge Issues Preliminary Injunction To Block Medi-Cal Reimbursement Rate Cuts
CAL/AAEM News Service
pottsbri@yahoo.com
Wed, 14 Jan 2004 05:41:15 -0800 (PST)
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The 11 plaintiffs that joined the CMA in suing the Department of Health Services <http://www.dhs.cahwnet.gov/> included CAL/ACEP who contributed 5000$ to the cost of this lawsuit.
Following a ruling like this, it is very unlikely for the Governor or DHS to move forward with the additional 10% reduction they were planning to force on us next year in addition to the 5% which was stopped.
A few words of appreciation are due here to our colleagues on the CAL/ACEP Board and in the CMA leadership for their proactive vision and action here.
Antoine Kazzi, MD, FAAEM
AAEM Vice President
-----Original Message-----
From: California Healthline [mailto:CALIFORNIAHEALTHLINE@ADVISORY.COM]
Sent: Monday, January 05, 2004 10:51 AM
Federal Judge Issues Preliminary Injunction To Block Medi-Cal Reimbursement Rate Cuts
01/05/2004
Chief U.S. District Judge David Levi on Dec. 23 issued a preliminary injunction that will prevent the implementation of 5% cuts to Medi-Cal <http://www.medi-cal.ca.gov/> reimbursement rates for providers who serve traditional fee-for-service beneficiaries, who make up about half of the program's beneficiaries, the http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/12/24/BUG6L3TEKE1.DTL San Francisco Chronicle reports (Colliver, San Francisco Chronicle, 12/24/03). The California <http://www.cmanet.org/> Medical Association and 11 other plaintiffs representing Medi-Cal providers in November filed the lawsuit to halt the implementation of the rate cut, which was approved by the Legislature as part of the fiscal year 2003-2004 budget to save the state $115 million and help eliminate a $38 billion budget deficit. The lawsuit claims that the reduction violates the federal Social Security Act, which requires that Medicaid reimbursement rates attract enough docto!
rs to
serve the program's beneficiaries, and alleges that the state did not hold a properly noticed public hearing on the rate reductions ( http://www.californiahealthline.org/members/basecontent.asp?contentid=50539&collectionid=3&program=1 California Healthline, 12/17/03). Levi ruled that the rate reductions, which were scheduled to take effect Jan. 1, would violate federal law because a previous ruling by the U.S. 9th Circuit Court of Appeals, which includes California, established that Medi-Cal beneficiaries are entitled to a rate-setting process that is not arbitrary and considers provider costs, quality of services and equal access to medical services (Rabin, <http://www.latimes.com/news/local/la-me-doctors24dec24,1,3473454.story> Los Angeles Times, 12/24/03). The preliminary injunction does not apply to Medi-Cal's managed care plans, whose members account for 51.6% of the program's beneficiaries. Levi ruled that "it is the responsibility of the health plans, not the provide!
rs, to
challenge the cuts affecting those patients," the Chronicle reports. Lynn Carman, an attorney for the independent pharmacists who were represented in the suit, said they are considering whether to file an appeal or a new lawsuit to halt reimbursement cuts for providers who serve managed care beneficiaries (San Francisco Chronicle, 12/24/03).
Ruling Details
"As long as the state wishes to be a part of the Medicaid program, it must meet the requirements of the Medicaid Act," Levi wrote in a 42-page order. He wrote, "In this case, there is no record of considered decision-making," adding that there is no evidence that lawmakers sought a recommendation from the Department <http://www.dhs.cahwnet.gov/> of Health Services "or that any responsible official in state government made a determination" of reimbursement rates that took into account the provisions of the Medicaid Act. Levi said he has seen evidence that there are "serious access problems even under the current rates" and that providers are likely to stop accepting new Medi-Cal beneficiaries or stop serving their existing patients if the rates are reduced. While attorneys for DHS Director Diana Bonta, the defendant in the lawsuit, argued that the state made the cuts because it was "faced with very difficult choices and made the best decision that it could," Levi said that bu!
dget
constraints "are not alone a valid justification for rate setting." Levi said Bonta's attorneys could not demonstrate that the Legislature made the cuts based on data that showed the reductions "could be sustained by providers, in light of their costs, without a loss of quality or equal access for Medi-Cal recipients" (Walsh/Brown, http://www.sacbee.com/content/politics/ca/budget/story/8001980p-8938494c.html Sacramento Bee, 12/24/03).
Reaction
The decision is "a victory" for patient advocates and professional organizations representing physicians, dentists and pharmacists, the Times reports. Dr. Jack Lewin, chief executive of the California Medical Association <http://www.cmanet.org/> , said the decision will "prevent further erosion of access to care for our most vulnerable patients" (Los Angeles Times, 12/24/03). Although the plaintiffs had sought an injunction that would prevent cuts for all Medi-Cal beneficiaries, Craig Cannizzo, an attorney for the physicians in the suit, said, "I view [the decision] as a complete victory because it's going to be a very serious obstacle to the administration's proposal to consider further rate reductions." Former Gov. Gray Davis (D) initiated the 5% reductions, but Gov. Arnold Schwarzenegger (R) has proposed http://www.californiahealthline.org/members/basecontent.asp?contentid=50507&collectionid=3&program=1 an additional 10% reduction to Medi-Cal reimbursement rates. DHS spok!
esperson
Robert Miller said it was "much too early to say" what the ruling's implications are and what actions the department can take in response (San Francisco Chronicle, 12/24/03).
Brian Potts
Managing Editor, CAL/AAEM News Service
MS-IV, UC-Irvine
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<DIV><FONT size=2>
<P>The 11 plaintiffs that joined the CMA in suing the Department of Health Services <</FONT><A href="http://www.dhs.cahwnet.gov/"><U><FONT color=#0000ff size=2>http://www.dhs.cahwnet.gov/</U></FONT></A><FONT size=2>> included CAL/ACEP who contributed 5000$ to the cost of this lawsuit. </P>
<P></P>
<P>Following a ruling like this, it is very unlikely for the Governor or DHS to move forward with the additional 10% reduction they were planning to force on us next year in addition to the 5% which was stopped. </P>
<P></P>
<P>A few words of appreciation are due here to our colleagues on the CAL/ACEP Board and in the CMA leadership for their proactive vision and action here.</P>
<P></P>
<P>Antoine Kazzi, MD, FAAEM</P>
<P>AAEM Vice President</P>
<P></P>
<P> </P>
<P>-----Original Message-----</P>
<P>From: California Healthline [</FONT><A href="mailto:CALIFORNIAHEALTHLINE@ADVISORY.COM"><U><FONT color=#0000ff size=2>mailto:CALIFORNIAHEALTHLINE@ADVISORY.COM</U></FONT></A><FONT size=2>] </P>
<P>Sent: Monday, January 05, 2004 10:51 AM</P>
<P>Federal Judge Issues Preliminary Injunction To Block Medi-Cal Reimbursement Rate Cuts </P>
<P>01/05/2004 </P>
<P>Chief U.S. District Judge David Levi on Dec. 23 issued a preliminary injunction that will prevent the implementation of 5% cuts to Medi-Cal <</FONT><A href="http://www.medi-cal.ca.gov/"><U><FONT color=#0000ff size=2>http://www.medi-cal.ca.gov/</U></FONT></A><FONT size=2>> reimbursement rates for providers who serve traditional fee-for-service beneficiaries, who make up about half of the program's beneficiaries, the </FONT><A href="http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/"><U><FONT color=#0000ff size=2><A href="http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/12/24/BUG6L3TEKE1.DTL">http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/</U></FONT></A><FONT size=2>12/24/BUG6L3TEKE1.DTL</A> San Francisco Chronicle reports (Colliver, San Francisco Chronicle, 12/24/03). The California <</FONT><A href="http://www.cmanet.org/"><U><FONT color=#0000ff size=2>http://www.cmanet.org/</U></FONT></A><FONT siz!
e=2>>
Medical Association and 11 other plaintiffs representing Medi-Cal providers in November filed the lawsuit to halt the implementation of the rate cut, which was approved by the Legislature as part of the fiscal year 2003-2004 budget to save the state $115 million and help eliminate a $38 billion budget deficit. The lawsuit claims that the reduction violates the federal Social Security Act, which requires that Medicaid reimbursement rates attract enough doctors to serve the program's beneficiaries, and alleges that the state did not hold a properly noticed public hearing on the rate reductions ( </FONT><A href="http://www.californiahealthline.org/members/basecontent.asp?contentid=5"><U><FONT color=#0000ff size=2><A href="http://www.californiahealthline.org/members/basecontent.asp?contentid=50539&collectionid=3&program=1">http://www.californiahealthline.org/members/basecontent.asp?contentid=5</U></FONT></A><FONT size=2>0539&collectionid=3&program=1</A> Californ!
ia
Healthline, 12/17/03). Levi ruled that the rate reductions, which were scheduled to take effect Jan. 1, would violate federal law because a previous ruling by the U.S. 9th Circuit Court of Appeals, which includes California, established that Medi-Cal beneficiaries are entitled to a rate-setting process that is not arbitrary and considers provider costs, quality of services and equal access to medical services (Rabin, <</FONT><A href="http://www.latimes.com/news/local/la-me-doctors24dec24,1,3473454.story"><U><FONT color=#0000ff size=2>http://www.latimes.com/news/local/la-me-doctors24dec24,1,3473454.story</U></FONT></A><FONT size=2>> Los Angeles Times, 12/24/03). The preliminary injunction does not apply to Medi-Cal's managed care plans, whose members account for 51.6% of the program's beneficiaries. Levi ruled that "it is the responsibility of the health plans, not the providers, to challenge the cuts affecting those patients," the Chronicle reports. Lynn Carman, an at!
torney
for the independent pharmacists who were represented in the suit, said they are considering whether to file an appeal or a new lawsuit to halt reimbursement cuts for providers who serve managed care beneficiaries (San Francisco Chronicle, 12/24/03). </P>
<P>Ruling Details </P>
<P>"As long as the state wishes to be a part of the Medicaid program, it must meet the requirements of the Medicaid Act," Levi wrote in a 42-page order. He wrote, "In this case, there is no record of considered decision-making," adding that there is no evidence that lawmakers sought a recommendation from the Department <</FONT><A href="http://www.dhs.cahwnet.gov/"><U><FONT color=#0000ff size=2>http://www.dhs.cahwnet.gov/</U></FONT></A><FONT size=2>> of Health Services "or that any responsible official in state government made a determination" of reimbursement rates that took into account the provisions of the Medicaid Act. Levi said he has seen evidence that there are "serious access problems even under the current rates" and that providers are likely to stop accepting new Medi-Cal beneficiaries or stop serving their existing patients if the rates are reduced. While attorneys for DHS Director Diana Bonta, the defendant in the lawsuit, argued that the state made the cut!
s because
it was "faced with very difficult choices and made the best decision that it could," Levi said that budget constraints "are not alone a valid justification for rate setting." Levi said Bonta's attorneys could not demonstrate that the Legislature made the cuts based on data that showed the reductions "could be sustained by providers, in light of their costs, without a loss of quality or equal access for Medi-Cal recipients" (Walsh/Brown, </FONT><A href="http://www.sacbee.com/content/politics/ca/budget/story/8001980p-8938494"><U><FONT color=#0000ff size=2><A href="http://www.sacbee.com/content/politics/ca/budget/story/8001980p-8938494c.html">http://www.sacbee.com/content/politics/ca/budget/story/8001980p-8938494</U></FONT></A><FONT size=2>c.html</A> Sacramento Bee, 12/24/03). </P>
<P>Reaction </P>
<P>The decision is "a victory" for patient advocates and professional organizations representing physicians, dentists and pharmacists, the Times reports. Dr. Jack Lewin, chief executive of the California Medical Association <</FONT><A href="http://www.cmanet.org/"><U><FONT color=#0000ff size=2>http://www.cmanet.org/</U></FONT></A><FONT size=2>> , said the decision will "prevent further erosion of access to care for our most vulnerable patients" (Los Angeles Times, 12/24/03). Although the plaintiffs had sought an injunction that would prevent cuts for all Medi-Cal beneficiaries, Craig Cannizzo, an attorney for the physicians in the suit, said, "I view [the decision] as a complete victory because it's going to be a very serious obstacle to the administration's proposal to consider further rate reductions." Former Gov. Gray Davis (D) initiated the 5% reductions, but Gov. Arnold Schwarzenegger (R) has proposed </FONT><A
href="http://www.californiahealthline.org/members/basecontent.asp?contentid=5"><U><FONT color=#0000ff size=2><A href="http://www.californiahealthline.org/members/basecontent.asp?contentid=50507&collectionid=3&program=1">http://www.californiahealthline.org/members/basecontent.asp?contentid=5</U></FONT></A><FONT size=2>0507&collectionid=3&program=1</A> an additional 10% reduction to Medi-Cal reimbursement rates. DHS spokesperson Robert Miller said it was "much too early to say" what the ruling's implications are and what actions the department can take in response (San Francisco Chronicle, 12/24/03).</P></FONT></DIV><BR><BR><STRONG>Brian Potts <BR>Managing Editor, CAL/AAEM News Service</STRONG> <BR>MS-IV, UC-Irvine<p><hr SIZE=1>
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