U.S. appellate court weighs legality of Medi-Cal cuts

Doctors say it's getting harder to keep practices afloat while seeing Medicaid patients.

By Tanya Albert, AMNews staff. Aug. 2, 2004.

The 9th U.S. Circuit Court of Appeals is set to consider a Medicaid physician reimbursement case that has garnered nationwide attention. The panel will decide whether to uphold a preliminary injunction that stopped California from slicing 5% from Medicaid fee-for-service payments to doctors and others.

Medicaid reimbursement in most states lags far behind Medicare and private insurance pay. Many state governments, faced with financial problems during the recession, have cut physician reimbursement further. But doctors in a few states are fighting back in court, and others could follow their lead, depending on the outcome.

In the California case, a lower court in 2003 said the California Medical Assn. and other associations that sued the state showed that there was a good chance that citizens enrolled in California Medicaid would be hurt if already-low physician payments were further reduced by the cut, which was scheduled to go into effect Jan. 1, 2004.

Data the groups presented in court showed that lower reimbursement causes physicians to no longer treat patients in the program, known as Medi-Cal. This limits access to care and increases the time patients must wait for appointments. It also harms continuity of care, especially preventive services. These problems hit children with chronic conditions the hardest, the groups said.

"It's very clear that this action has given a clear message of the concern of the underfunding of Medi-Cal," said Jack Lewin, MD, CMA's chief executive officer.