The state's fiscal crisis does not outweigh access to health care, a federal judge said in temporarily blocking state Medi-Cal cuts that rural hospitals say would have endangered skilled nursing care for their elderly and long-term patients.

The ruling by U.S. District Judge Christina Snyder in Los Angeles federal court Dec. 28 puts the brakes on Medi-Cal cuts that were intended to save California up to $623 million by trimming reimbursement rates to care providers by as much as 10 percent.

An earlier round of cuts, also temporarily blocked by the courts, would double the reductions.

Medi-Cal, the state's federal Medicaid program, serves more than 7 million low- income Californians and costs the state more than $41 billion annually.

Snyder said in her ruling there was "substantial evidence that numerous (skilled nursing) providers will reduce their capacity or shutter their doors," adding that the state's budgetary woes do not "outweigh the serious irreparable injury plaintiffs would suffer" if she did not issue a preliminary injunction blocking the cuts.

The California Hospital Association in November sued the state's Department of Health Care Services and the federal Centers for Medicare and Medicaid Services, which approved the cuts in October.

The reimbursement reductions were delayed as Snyder considered the merits of the suit, which argued that the cuts violate federal law guaranteeing Medicaid patients equal access to health care.

Snyder's injunction will keep the state from implementing the cuts while the suit proceeds.

"In the short term, health care members can catch their breath," said Pat Blaisdell, a California Hospital Association vice president, stopping short of declaring victory. "(Hospitals) know this is an ongoing issue," she said. "They're assessing what kind of work they can continue to do."

The Department of Health Care Services said in a written statement that it "strongly disagrees with the court's ruling. We will seek a stay of the order and file an appeal with the 9th Circuit Court of Appeals." The statement said department officials' analysis "showed that the approved reductions will allow California to continue to meet federal standards requiring an adequate level of access to care for beneficiaries."

But Thomas Hayes, chief executive officer of Eastern Plumas Healthcare District in Plumas County, was relieved by the ruling. He said 93 percent of his nearly 60 skilled nursing patients are on Medi-Cal. Hayes anticipated across-the-board pay cuts for district staff as well as the closure of facilities, making it necessary to move patients to hospitals as far away as Susanville and Sacramento if the cuts had been allowed to proceed by the court.

"We've bought a little time," Hayes said. "We are the provider for Medi-Cal in this area. This will allow us to keep patients in the hospital."

© Copyright The Sacramento Bee. All rights reserved.

Call The Bee's Darrell Smith, (916) 321-1040.

• Read more articles by Darrell Smith