Court: Calif. can cut Medicaid payments

A federal appeals court ruled Thursday that California can move ahead with a 10-percent cut to providers in its Medicaid program, Medi-Cal.

The decision from the U.S. Court of Appeals for the 9th Circuit affirmed the power of the federal Health secretary, Kathleen Sebelius, to weigh in on states' decisions to cut Medicaid rates.

"Congress explicitly granted the Secretary authority to determine whether a State's Medicaid plan complies with federal law," the three-judge panel wrote. 

A spokesman for California Gov. Jerry Brown (D) praised the decision, saying it would allow the state to "continue providing quality care for people on Medi-Cal while saving … millions of dialers in unnecessary costs."

But advocates for Medi-Cal providers and beneficiaries say cuts will hollow out the program by discouraging physicians and other health professionals from taking low-income patients.

The California Medical Association added that the cuts, estimated to save $623 million annually as of last year, are unnecessary now that voters have approved two initiatives to raise revenues.

"Our hope is the state will reconsider," said CMA spokeswoman Molly Weedn. "The state implemented these cuts when it was in much more dire straits than it is now.

it is unclear whether California will allow the provider cut to take effect, or when.

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