Judge Trims Time in DHCS/MediCal 10% Fee Ruling

A federal judge has scaled back her order overturning a 10 percent cut in Medi-Cal fees to thousands of doctors and other health professionals.

The ruling spares the state from tens of millions of dollars of reimbursements over seven weeks and requires repayment only for services performed on or after Aug. 18.

U.S. District Judge Christina Snyder of Los Angeles had ruled Aug. 18 that the fee reductions threatened health care for many of Medi-Cal's 6.6 million low-income patients and appeared to violate federal standards for access to high-quality medical services. She ordered state officials to reimburse health care providers dating back to July 1, when the cuts took effect.

But after lawyers for the Medi-Cal program argued that the Constitution shields states from retroactive damage awards, Snyder revised her ruling Aug. 27 to eliminate the back payments and require full fees at pre-July 1 levels only from Aug. 18 onward. The state has asked a federal appeals court to overturn the entire ruling, arguing that federal law does not entitle Medi-Cal providers or patients to challenge fee levels in court.

State lawmakers approved the fee cuts in February, effective with the start of the fiscal year July 1. The Legislature remains in a partisan deadlock over the 2008-09 budget, which has a $17.2 billion deficit.

State officials had estimated that Snyder's original injunction - which covered fees to doctors, dentists, pharmacists, adult day health centers and clinics - would cost California $500 million a year. By that estimate, her Aug. 27 ruling would save the state $65 million. Because the fee reduction also applies to the federal government's 50 percent funding of Medi-Cal, the loss to health care providers would total $130 million.

"It's a blow to providers' ability to take care of the Medi-Cal population ... and a blow to the effort to insure that poor Californians have access to health care," Ned Wigglesworth, spokesman for the California Medical Association, said Wednesday.

Noting that many doctors already shun Medi-Cal because of low fees, Wigglesworth said, "If the state continues to insist on cutting health care during times of budget problems, providers are going to be less willing to participate."

Lynn Carman, lawyer for pharmacists, patients and community organizations that challenged the cuts in Medi-Cal prescription drug fees, said he would ask the appeals court to reinstate Snyder's original ruling and require reimbursement from July 1 onward. He renewed his accusation that state officials are dragging their feet on complying with the injunction, a subject of a hearing scheduled before Snyder on Friday.

Norman Williams, spokesman for the Department of Health Care Services, said the department has told its employees and contractors to "fully comply with the order" unless the judge agrees to suspend the injunction during the state's appeal.