U.S. District Judge Amends Medi-Cal Reimbursement Rate Reduction Repayment; Only Requires Repayments For Services After Aug. 18

Main Category: Medicare / Medicaid / SCHIP
Article Date: 05 Sep 2008 - 8:00 PDT

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U.S. District Judge Christina Snyder has amended her order reversing a 10% reduction in Medi-Cal reimbursement rates for health care providers to require repayment only for services performed on or after Aug. 18, which effectively "spares the state from tens of millions of dollars" in reimbursements, the San Francisco Chronicle reports (Egelko, San Francisco Chronicle, 9/4).

In February, California lawmakers and Gov. Arnold Schwarzenegger (R) approved the reduction as part of an effort to address the estimated $15.2 billion state budget deficit. The reduction took effect on July 1. Snyder on Aug. 18 issued an injunction requiring California to reverse the reduction. According to Snyder, California lawmakers did not consider the effect that the reduction would have on quality and access to care for beneficiaries, as required by federal law (Kaiser Daily Health Policy Report, 8/27). State officials had estimated that the original injunction would cost the state $500 million annually. Under the amended ruling, the state would save an estimated $65 million and the loss to health care providers would total $130 million, according to the Chronicle.

Lynn Carman, a lawyer for pharmacists, patients and community organizations that challenged the cuts, said he would ask the appeals court to enforce Snyder's original ruling that would have required reimbursement of services from July 1 onward. Norman Williams, spokesperson for the state Department of Health Care Services, said the department has told its workers and contractors to "fully comply with the order" unless Snyder agrees to suspend the injunction during the state's appeal of the decision (San Francisco Chronicle, 9/4).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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