Medi-Cal cut to hospi­tals was il­le­gal, court rules

The state and fed­eral govern­ment may have to pay back hun­dreds of mil­lions of dol­lars.

Los Angeles Times - - CITY & STATE - By Maura Dolan maura.dolan@la­ Twit­ter: @mau­radolan

A U.S. ap­peals court de­cided Monday that the fed­eral govern­ment wrongly ap­proved Cal­i­for­nia’s re­quest to tem­po­rar­ily cut Medi-Cal re­im­burse­ment by 10% dur- ing the re­ces­sion for hos­pi­tal out­pa­tient care.

The rul­ing by a three­judge panel of the U.S. 9th Cir­cuit Court of Ap­peals said the fed­eral govern­ment can ap­prove such cuts only if ev­i­dence shows that the re­cip­i­ents of aid will have ac­cess to the same ser­vices as the gen­eral pop­u­la­tion.

Cal­i­for­nia, strug­gling with a bud­get cri­sis, im­posed the cut­back for eight months, from July 2008 through Fe­bru­ary 2009.

If the rul­ing stands, the state and the fed­eral govern­ment will have to pay back Cal­i­for­nia hospi­tals hun­dreds of mil­lions of dol­lars, said Robert Leven­thal, who rep­re­sented more than 50 Cal­i­for­nia hospi­tals in the chal­lenge.

Be­fore cuts can be made, fed­eral law re­quires a show­ing of ev­i­dence that ben­e­fi­cia­ries will have ac­cess to care “at least to the ex­tent that such care and ser­vices are avail­able to the gen­eral pop­u­la­tion in the ge­o­graphic area,’’ the 9th Cir­cuit said, cit­ing a pro­vi­sion in fed­eral law.

Leven­thal said pre­vi­ous chal­lenges to the Medi-Cal cuts re­lied on dif­fer­ent le­gal the­o­ries.

Monday’s rul­ing “will have a ma­jor im­pact on Medi-Cal rates and hope­fully bring them up,” he said.

“They are the low­est or next to the low­est in all 50 states for hos­pi­tal out­pa­tient ser­vices,” Leven­thal said.

He also said the rul­ing could be used in fu­ture chal­lenges in­volv­ing Medi-Cal.

It is “im­pos­si­ble” for the govern­ment to show that rate cuts would leave re­cip­i­ents with the same ac­cess to care as the gen­eral pub­lic, Leven­thal ar­gued.

“It’s clear that the rates aren’t struc­tured to pro­vide the same ac­cess to care,” he said.

Jef­frey Eric Sand­berg, who ar­gued the case for the U.S. Depart­ment of Jus­tice, re­ferred ques­tions to the depart­ment’s pub­lic in­for­ma­tion of­fice.

A depart­ment spokesper­son did not re­spond to a re­quest for com­ment.

The govern­ment could ask the panel to re­con­sider the de­ci­sion, re­quest a larger 9th Cir­cuit panel to weigh in or ap­peal to the U.S. Supreme Court.

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