UPDATED AT 9:06 AM ON MARCH 4
The appeals court panel upheld lower court injunctions blocking the rate reductions until a full trial on the merits of the case could be held. The Medi-Cal case was brought by the California Pharmacists Association and a long list of other plaintiffs. The case challenging reductions in the wages of in-home care workers was brought by a woman who uses in-home care and the Service Employees International Union, which represents the workers.
The panel did not say that the state could never reduce reimbursement rates. But because the programs are partially funded by the federal government, the state must follow federal rules for managing the services. One of those rules states that Medi-Cal reimbursement rates must be high enough to ensure that care and services available under the plan are available to the same extent that such services are available to the general population. This is known as the “equal access to care” provision.
The state argued in its defense that some of the services at issue are not available at all to the general population because they are designed for the low-income people. But the court found that the state still had a responsibility to determine if the rate cuts would reduce access to care before implementing them.
Writing for a three-judge panel, Judge Milan D. Smith scolded the state for its repeated attempts to cut Medi-Cal rates without sufficient study.
“We have now handed down multiple decisions instructing the State on (its) procedural requirements,” Smith wrote. “We trust that the State now understands” that in order for it to comply with those requirements, it must rely on “responsible cost studies” that provide reliable data on which to base its reimbursement rates. The court in the past has also ordered the state to study the impact of the proposed rate changes before setting the rates. In this case, the court found, “the state did neither.”
California’s reimbursement rates for Medi-Cal are already below average among larger states and the state’s cost per person in the program is among the lowest in the nation.
Gov. Arnold Schwarzenegger’s office said the state will appeal the ruling.
See the court’s opinions and memoranda here.
Note: An earlier version of this item incompletely identified the plaintiffs in the case involving in-home care.