Wednesday, August 20, 2008

A State Without a Budget: Day 51 FEDERAL DISTRICT COURT JUDGE ORDERS HALT TO MEDI-CAL PROVIDER CUT: Caution Light on Schwarzenegger Attempt to Balance Budget on Back of Californians Who Need Medical Care

• Another Lawsuit Planned To Force State To Pay Vendors During Period of No Budget
• Judge's Order Is Effective Until Lawsuit Filed By Medicaid Defense Fund on Behalf of Medi-Cal Recipients Goes Is Decided


By Marty D. Omoto Director/Organizer - California Disability Community Action Network in California Progress Report

20 August -- In a major victory for Medi-Cal recipients and providers, US District Court Judge Christina A. Synder issued a temporary order Tuesday (August 19) to temporarily half the 10% Medi-Cal provider rate reduction that went into effect July 1. 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. The order reverses the 10% cut to those Medi-Cal providers for dates of services provided on or after July 1, 2008.

The order excludes some hospitals who do not contract with the State and do not provide emergency care.

The case number is CV 08-3315 CAS (MANx). Visit the CDCAN website for copy of the 22 page temporary injunction .

The case 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.

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.

Temporary Order Made Because Judge Believes Suit Could Win

The temporary order by the district court judge was made because he believed there was a possibility the lawsuit could have a chance of prevailing. The case has not yet gone to trial, but the judge's order - which the plaintiffs (those who filed the lawsuit) requested, would halt the provider rate cut for most of the Medi-Cal providers impacted.

The temporary court order means that the State reduction of close to $600 million in State general funds would have to be - at least for now - restored back to the Medi-Cal program to pay providers. It is not clear yet how the State will comply with the order with no State budget in place.

Medicaid Defense Fund Will File Another Suit To Order State To Pay Other Vendors

Lynn Carman, the chief counsel of the Medicaid Defense Fund which filed the suit, said he was very pleased by the Judge's order and plans on looking at further legal action to force the Governor and other state officials to make payments to State vendors that it has stopped making since the budget stalemate began 50 days ago. Those vendors include community organizations who provide critical services to people with disabilities, mental health needs, seniors and low income families who are facing closure, reduction in services because the State cannot reimburse them until a State Budget is in place.

Carman said he would file a new suit in Sacramento Superior Court to obtain a "writ of mandamus" which is legal action that would order, if the Judge approves, the Governor, Controller and State Treasurer to "pay all claims for goods and services furnished to or on behalf of the State" during the periods when there is no State budget.

The Medicaid Defense Fund had filed a similar "writ of mandamus" in Los Angeles about two weeks ago, but that request was denied last week,

Governor Had Proposed Permanent 10% Medi-Cal Provider Rate Cut

The Governor proposed in January a 10% permanent rate reduction for most Medi-Cal providers as part of his emergency budget legislation, which the Legislature approved in February, to take effect July 1.

Other proposals by the Governor cutting Medi-Cal services, including permanent elimination of 11 Medi-Cal "optional benefits" were also made in January, but rejected by the Legislature in June. However until a State Budget is passed and signed into law, no cut or other proposal is completely off the table.

Many Provider Rate Cuts Restored by Budget Committees In June As Part of Budget Stalled In Legislature

Many of those provider rate reductions were reversed by the Senate and Assembly budget committees in June, but that action, along with others, are part of the State budget proposal that has been stalled for the past 50 days.

Over 6.5 million children and adults are enrolled in the Medi-Cal program, including over 1.6 million children and adults with disabilities, the blind and low income seniors. The program is matched by state funds and federal Medicaid funds.

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.

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