Fed­eral block

Judge stops Cal­i­for­nia Medi­care rate cuts

Modern Healthcare - - REGIONAL NEWS - Joe Carl­son

Afed­eral judge in Cal­i­for­nia has taken the ex­tra­or­di­nary step of block­ing siz­able re­duc­tions in Med­i­caid rates to the state’s hos­pi­tal-based skilled-nurs­ing units, con­clud­ing that state and fed­eral of­fi­cials likely re­lied on un­rea­son­able pro­jec­tions and faulty rea­son­ing about how the cuts would af­fect frail pa­tients.

U.S. District Judge Christina Snyder in Los An­ge­les im­posed a pre­lim­i­nary in­junc­tion on the 2011 rate cuts for acute skilled­nurs­ing care, which would have rolled back rates to 10% be­low what the hos­pi­tal-based units re­ceived in 2008-09, the opinion said. State of­fi­cials said they would ap­peal the in­junc­tion and seek a stay pend­ing the out­come of the ap­peal.

The Cal­i­for­nia


As­so­ci­a­tion ar­gued cuts that se­vere would cause the clo­sure of some hos­pi­tal-based skilled-nurs­ing units, while oth­ers para­dox­i­cally would be man­dated to re­main open while los­ing money be­cause of le­gal pro­hi­bi­tions on clos­ing units with pa­tients still in them, amount­ing to a state “tak­ing” of hos­pi­tal ser­vices.

Cal­i­for­nia Health Care Ser­vices Di­rec­tor Toby Dou­glas and HHS Sec­re­tary Kath­leen Se­be­lius re­sponded that pa­tients are free to use free­stand­ing skilled-nurs­ing fa­cil­i­ties rather than units lo­cated in­side acute-care hos­pi­tals, which they said of­fer equiv­a­lent ser­vices and will re­main plen­ti­ful. The of­fi­cials also re­jected the tak­ings ar­gu­ment be­cause Med­i­caid is a vol­un­tary pro­gram for health­care providers.

Snyder re­jected Dou­glas’ and Se­be­lius’ rea­son­ing on both counts, rul­ing that the as­soci- ation was likely to pre­vail at trial in its ar­gu­ment that hos­pi­tal-based skilled nurs­ing is a dis­tinct ser­vice that will be ir­repara­bly harmed by rates set 10% lower than what was en­acted three years ago.

Fur­ther­more, Snyder ruled that the hos­pi­tal as­so­ci­a­tion was likely to win its ar­gu­ment that state and fed­eral of­fi­cials re­lied on an ar­bi­trary and capri­cious anal­y­sis in con­clud­ing the mar­ket would con­tinue to of­fer enough acute skilled-nurs­ing care to meet fu­ture de­mand un­der the low­ered rates. Fi­nally, the judge re­jected state of­fi­cials’ as­ser­tions that a mon­i­tor­ing pro­gram for qual­ity and ac­cess would safe­guard the pub­lic be­cause the pro­gram would re­quire ac­tual harm to oc­cur be­fore mak­ing any reme­dies.

“The state’s fis­cal cri­sis does not out­weigh the se­ri­ous ir­repara­ble in­jury plain­tiffs would suf­fer ab­sent the is­suance of an in­junc­tion,” Snyder wrote. Snyder has not yet set a trial date for the case.

Snyder also im­posed a sim­i­lar pre­lim­i­nary in­junc­tion re­gard­ing 10% cuts in phar­macy and man­aged-care ser­vices.

State of­fi­cials said they would also ap­peal that rul­ing.

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