Civil rights groups file suit over Medi-Cal

Plaintiffs label the low-income insurance program ‘second-class’

OAKLAND >> A coalition of civil rights groups sued the state of California on Wednesday, charging that the state’s Medi-Cal program is a second-class health care plan that isn’t adequately funded.

The lawsuit argued that the 13.5 million Californians covered under Medi-Cal — the majority of whom are Latino — are trapped in “a separate and unequal system of health care” because of bureaucratic red tape and the low reimbursement rates for doctors and hospitals.

“Medi-Cal is supposed to be a lifeline,” said Darin Ranahan, one of the attorneys who filed

the suit. “It ends up being an empty promise.”

The lawsuit underscores a towering dilemma for California, which has used money from the Affordable Care Act to bring millions of additional low-income adults onto Medi-Cal in recent years. Medi-Cal, California’s version of Medicaid, has long reimbursed providers at a much lower rate than what is paid by employer-sponsored health insurance or Medicare, as well as Medicaid programs in most other states, and many doctors refuse to accept Medi-Cal as a result.

With Republicans in Congress promising to repeal Obamacare, California now faces the potential loss of billions of dollars annually in funding. That would put Medi-Cal under increased pressure to cut costs even as advocates are demanding that the state spend more.

The lawsuit was filed Wednesday in Alameda County Superior Court by the Mexican American Legal Defense and Education Fund and the Civil Rights Education Enforcement Center on behalf of four plaintiffs on Medi-Cal who say they’ve had trouble getting care. The lawyers are hoping to certify a class action suit that could represent all Californians on the program — about a third of the state’s population.

State officials on Wednesday denied the allegations in the suit.

The state Department of Health Care Services “has not identified any systemic problems with patient access to services in the Medi-Cal program nor has the federal Centers for Medicare and Medicaid Services identified any issues,” department spokeswoman Carol Sloan said in an email.

The suit is aimed at forcing state officials to increase reimbursement rates and reduce delays in MediCal recipients getting care.

Medi-Cal enrollees “suffer from greater pain, illness, and undiagnosed and untreated serious medical conditions — with significant impact to their overall health — than do their fellow Californians with other insurance,” the lawsuit states.

Latinos make up 54 percent of the people on MediCal, and the lawsuit alleges that the difference between the Medi-Cal system and private insurance companies in California that insure mostly whites amounts to a civil rights violation.

In the past, when MediCal served mostly white people, reimbursement rates were closer to other insurance plans, the plaintiffs allege. But since 2000, the number of Latinos on Medi-Cal has increased from 2.3 million to 7.2 million and payment rates are down 20 percent, the suit says.

“The pattern of disinvestment as Latino representation has grown is extremely suspicious,” Ranahan said at a news conference Wednesday at the Alameda County courthouse.

The lawsuit is the evolution of a complaint the same groups filed with the U.S. Department of Health and Human Services Office for Civil Rights in December 2015. The federal office declined to act on that complaint, so the plaintiffs are bringing it to state court.

One of the plaintiffs, Sacramento resident Esther Castañeda, 56, said she suffered almost a year of debilitating nausea and abdominal pain in 2015 as she struggled to find a surgeon who would perform a critical gall bladder surgery under Medi-Cal. Two surgery appointments were later canceled because the doctors didn’t take her insurance, she said. She ended up having her surgery during a family trip to Mexico — and paying out of pocket — after doctors there told her she couldn’t wait any longer.

“No one should suffer simply for having MediCal,” she said in Spanish, choking back tears.

Stories like Castañeda’s are powerful illustrations of Medi-Cal’s problems, said Janet Coffman, a professor of health policy at UC San Francisco. “The vision of expanding Medi-Cal was to get folks access to what they needed — and to encourage folks to seek care outside of the emergency room,” she said.

Patients shouldn’t have to go to the emergency room or Mexico to get the care they need, Coffman said.

The lawsuit is the latest effort in the long struggle to increase Medi-Cal reimbursement rates, said Anthony Wright, executive director of Health Access, a California consumer advocacy group that is not involved in the legal action. What’s different is the civil rights framing of the lawsuit, he said.

Wright said his biggest concern right now is the Republican effort to repeal the Affordable Care Act and replace it with a health care law that would cut the growth in Medicaid spending across the country.