California Will Comply With Medi-Cal Court Order - Will Restore Medi-Cal Provider Rates This Month

Those providers, including those funded by regional centers, and programs under other departments including independent living centers, providers who serve people who are blind, seniors and others, are struggling to keep their doors open because the State cannot make further payments to them until a State budget is passed and signed into law. Medi-Cal doctors, In-Home Supportive Services (IHSS) workers, and SSI/SSP recipients, however, are being paid.

The State budget delay impact on community organizations, health facilities and providers has reached a major crisis point of meeting payroll, keeping their doors and programs open that have impact on tens of thousands of children and adults with disabilities, mental health needs, seniors, the blind and others.

Regional centers, which fund community-based organizations and providers - including those funded by Medi-Cal, for over 230,000 children and adults with developmental disabilities (including autism, Down syndrome) are being impacting, with one, Westside Regional Center sending out a notice Thursday (September 4th) saying it will run out of money next week.

Judge Snyder’s August 18th Order Seen As "Major Victory" For Medi-Cal Recipients and Providers

Judge Snyder’s temporary order, issued on August 18th, that blocked the 10% Medi-Cal provider rate reduction was seen by advocates as a major victory for Medi-Cal recipients and providers. The judge's order impacts the Medi-Cal rate reductions for Medi-Cal "fee for service" providers including doctors, dentists, pharmacists, adult day-care centers and other providers who provide services to people in the Medi-Cal program.

That August 18th order excludes some hospitals that do not contract with the State and do not provide emergency care. The case number is CV 08-3315 CAS (MANx). (See CDCAN website for copy of the 22 page temporary injunction at www.cdcan.us)

The August 18th temporary order (injunction) by the district court judge was made because she believed there was a likely possibility the lawsuit would win. The case has not yet gone to trial. Two other similar cases were filed this past year: one filed by Medi-Cal providers in State court which is still pending, and another filed by Medi-Cal pharmacies against the State, which was dismissed.

A "contempt hearing" was held on Thursday, August 28th before Judge Snyder because attorneys for the Medicaid Defense Fund felt that the State was not complying with the August 18th court order. The Judge subsequently ordered the State to comply, but that it would be required to restore rates as of August 18, 2008 (the date of the court order), instead of when the rate cut went into effect on July 1, 2008, which advocates, including the attorneys who filed the lawsuit, had hoped.

Medi-Cal Officials Dispute Who Is Covered by Court Order

State Medi-Cal officials, in their papers that they filed with the Judge on September 4, 2008, claimed that the court order (injunction) covers doctors, pharmacies, optometrists, and adult day health centers, but not other Medi-Cal providers.

Attorney Lynn Carman with the Medicaid Defense Fund disputes that claim, which will be the subject of another court hearing before Judge Synder on September 15th. He also said that he believes the State had no intention of complying with the August 18th court order until the contempt hearing was held before the Judge last week.

Suit Filed By Medicaid Defense Fund For Medi-Cal Recipients

The federal lawsuit was filed in the US District Court of the Central District of California (in Los Angeles) by the Medicaid Defense Fund for a number of persons who receive Medi-Cal services and supports and advocacy organizations including the Independent Living Center of Southern California, and also the Gray Panthers and others.

The lawsuit was filed against Sandra Shewry, director of the California Department of Health Care Services, which oversees the Medi-Cal program. That department is under the California Health and Human Services Agency, overseen by Secretary Kim Belshe. The judge's order, while temporary, is still a major setback for the Schwarzenegger Administration.

Medi-Cal Cut Proposed Last January by Governor and Approved by Legislature

Governor Arnold Schwarzenegger last January, as part of his emergency budget proposals, proposed a permanent 10% rate reduction for most Medi-Cal providers, in order to help bridge the enormous budget deficit.

He also proposed at that time other cuts to Medi-Cal, including the permanent elimination of 11 Medi-Cal "optional benefits" - called "optional" because the federal government does not require the states to provide them. However many of those benefits include services, such as dental and podiatry that are considered by advocates as essential basic services for people with disabilities, seniors and others on Medi-Cal.

The Legislature controlled by Democrats, meeting in special session in February, approved the Medi-Cal provider rate cuts, but held off - and then later rejected, the cuts regarding Medi-Cal "optional benefits".

At the same time in February, the Legislature also approved making permanent cuts (called "cost containment measures") to regional centers that fund community-based services to over 230,000 children and adults with developmental disabilities, and cut to the State cost of living money owed to SSI/SSP (Supplemental Security Income/State Supplemental Payment) from June 1, 2008 to October 1, 2008 (the Legislature's different budget proposals, including one approved by Democrats, extends that cut to State cost of living to SSI/SSP through May 31, 2010).

Court Order Complicates Budget Crisis

The court order complicates an already difficult budget crisis for the State which faces a $17.2 billion shortfall (includes $2 billion for reserve).

However all the different budget proposals being considered, including those by the Democrats in their budget plan voted on August 17th and August 29th, budget compromise by the Governor on August 20th, and the Senate Republican budget compromise released last week, all proposed restoring Medi-Cal provider rates. Each of the plans however differed on how and when the rate reductions would be restored, which impacts how much money the State saves in the current budget year.

With the Judge's latest order - and compliance by the State, all the different proposed budgets will need to be adjusted to reflect that, which will make the budget hole even larger to fill.

The California Disability Community Action Network, is a non-partisan link to thousands of Californians with developmental and other disabilities, people with traumatic brain injuries, the Blind, the Deaf, their families, community organizations and providers, direct care, homecare and other workers, and other advocates to provide information on state (and eventually federal), local public policy issues.