Medi-Cal cuts prompt lawsuit

State hospitals sue state over $623 million cut

The California Hospital Association filed a lawsuit in federal district court in Los Angeles against the state of California and the U.S. Department of Health and Human Services in reaction to a recently approved cut in reimbursements to Medi-Cal providers.

On Oct. 27, the Obama administration approved California’s plan to cut 10 percent of reimbursements to clinics, dentists, laboratories, optometrists, pharmacists and nursing services, according to media sources. The cuts are a part of the state’s 2011-12 budget plan signed by Gov. Jerry Brown and estimations project the cuts will save the state $623 million.

The lawsuit claims that cutting the budget for the Medi-Cal insurance program will limit the ability of many of the state’s hospitals to provide quality nursing facilities and would deprive many low-income patients of care. The suit contends patients in rural and underserved areas will likely experience delays in health-care services.