Last week, the Ninth U.S. Circuit Court of Appeals blocked California’s five percent cut to Medi-Cal payments for hospitals. (Source)
In July 2008, federal law authorized that Medi-Cal payments be reduced by 10 percent. The courts blocked the cuts for doctors, dentists, pharmacies, and other providers, with the exception of hospitals. The law recently expired, and a five percent cut went in effect. The purpose of the cut was to save California taxpayers about $80 million annually. The San Francisco Chronicle reports that over 90 California hospitals have shut down since 1996 because that state’s reimbursements by the federal government have been one of the lowest in the country.
As California faces serious budget woes, it seems health care providers are among the first negatively impacted by budget cuts. Lloyd Bookman, a lawyer for the California Hospital Association told the Chronicle that “If hospitals are required to lose substantial money treating Medi-Cal patients, it affects their ability to treat other patients as well.”
