A federal judge has ordered a temporary halt in the state's 10 percent cut in Medi-Cal reimbursement rates, improving access to care for 6.5 million low-income patients but throwing a new wrench in already difficult state budget negotiations.
The U.S. District Court decision forces the state to reimburse most Medi-Cal providers at rates prior to the 10 percent cut, which lawmakers and Gov. Arnold Schwarzenegger made effective July 1 as a cost-cutting measure to help resolve a $15.2 billion budget shortfall this year.
The move effects reimbursement rates the state pays to doctors, dentists, pharmacists, adult day-care centers and other providers who serve Medi-Cal patients. It excludes some hospitals who do not contract with the state and do not provide emergency care.
"There's no question this is good news," said Anthony Wright, executive director of Health Access California, a consumer advocacy group. "We already have more than half of doctors not taking Medi-Cal patients because of already low reimbursement rates, so the additional rate cut was going to further reduce access to care for millions of children, parents, seniors and people with disabilities."
But the injunction comes as lawmakers remain sharply divided on a budget solution because they cannot agree whether to bridge the spending gap with new taxes, borrowing or spending cuts. If the state ultimately loses the Medi-Cal reimbursement case, it could face an additional $575 million hole on top of the $15.2 billion deficit, according to Department of Finance spokesman H.D. Palmer.
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