California health officials seek suspension of injunction against Medi-Cal reimbursement rate reduction

California health officials have asked U.S. District Judge Christina Snyder to suspend an injunction that she issued against a 10% reduction in Medi-Cal reimbursement rates for health care providers, the San Francisco Chronicle reports. Medi-Cal is California's Medicaid program (Egelko, San Francisco Chronicle, 8/27).

In February, California lawmakers and Gov. Arnold Schwarzenegger (R) approved the reduction as part of an effort to address the estimated $15.2 billion state budget deficit. The reduction took effect on July 1. Snyder ordered California to reverse the reduction and issued the injunction on Aug. 18. According to Snyder, California lawmakers did not consider the effect that the reduction would have on quality and access to care for beneficiaries, as required by federal law (Kaiser Daily Health Policy Report, 8/22).

In documents filed with Snyder on Monday, California attorneys wrote that a reversal of the reduction would cost at least $500 million annually and would "only worsen California's already dire financial situation." They also wrote that California would require at least three weeks to reprogram computers to reverse the reduction. According to Stan Rosenstein, chief administrator for Medi-Cal, California lawmakers might eliminate optional services, such as prescription drug and adult dental care coverage, in the event that the injunction remains in effect during an appeal by state attorneys.

On Tuesday, attorney Lynn Carman, who represents pharmacists and Medi-Cal beneficiaries, asked Snyder to hold Sandra Shewry, director of the California Department of Health Care Services, in contempt and appoint a court representative to oversee compliance with the injunction. Snyder has scheduled a hearing for Thursday on that request (San Francisco Chronicle, 8/27).