Group homes sue state over rate freeze

May 5, 2010

By Daniel Weintraub

An association of group homes that care for Californians with developmental disabilities has sued the state to in federal court, arguing that a freeze on reimbursement rates since August of last year violates federal law.

The suit was filed by the California Association of Health Facilities in U.S. District Court, Los Angeles on behalf of 528 group homes serving 3,500 low-income people who are mentally or physically disabled

“This rate freeze has resulted in tremendous financial hardship for hundreds of providers who are caring for the state’s most vulnerable residents, generally in community-based settings,” said Jim Gomez, the group’s president. “These facilities are completely dependent on the Medi-Cal program for their funding and financial survival.”

Filed April 30, the suit argues that California’s 2009 budget package effectively froze Medi-Cal payments at 2008-2009 levels for these facilities. According to the association, the federal government requires the statwe to re-evaluate Medi-Cal payment rates annually.

For the 2009-2010 rate year, beginning Aug.1, 2009, the average Medi-Cal rates would have increased from 1.1 percent to nearly 9 percent, depending on the type of facility.

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