A federal judge in Los Angeles has blocked a state plan for a 10 percent cut in Medi-Cal reimbursement rates for hospitals and other healthcare providers.
The $623 million cut was aimed at helping the state government cover its budget deficit. It would have hit hospital-based skilled nursing facilities hardest – but outpatient clinics, pharmacies, doctors and therapists would also have taken a hit.
The federal government’s Centers for Medicare and Medicaid Services approved the planned cut after a state study said patient care would be fine.
But L.A. federal judge Christina Snyder has halted the cut for now.
“The state’s fiscal crisis does not outweigh the serious irreparable injury the plaintiffs would suffer absent the issuance of an injunction,” Snyder said during her ruling on Thursday.
Her preliminary injunction comes after the California Hospital Association complained that cutting Medi-Cal reimbursement rates would harm nursing facilities already hurting from previous cuts. The Association also said fewer Medi-Cal patients would get care if the state imposed the 10 percent cut.
State health officials will try to overturn the preliminary injunction.