California Hospitals Sue to Stop MediCal Rate Cuts - November 8, 2011

The California Hospital Association, comprising more than 450 hospitals, has filed a lawsuit to stop the 10 percent reduction to the MediCal program that was approved by the Centers for Medicare & Medicaid Services (CMS) on Oct. 27. The California Hospital Association notes that these cuts are of “historic magnitude” and have voiced their displeasure with CMS’ decision to support them. The payment cuts, which some argue would exceed 20 percent, are currently the subject of the Supreme Court case, Douglas v. Independent Living. The question before the Supreme Court is whether or not Medicaid providers and beneficiaries can challenge cuts in court. The court heard oral arguments in early October, and a decision is expected in early 2012.