California can't slash its Medicaid payments to hospitals despite getting the go-ahead from the Obama administration, a federal judge ruled Wednesday.
Los Angeles-based Judge Christina Snyder granted an order stopping cuts of more than 20 percent for skilled nursing services provided by hospitals, Bloomberg reported.
"The state's fiscal crisis does not outweigh the serious irreparable injury the plaintiffs would suffer absent the issuance of an injunction," Snyder wrote.
California said it will appeal the decision.
The ruling comes after the Obama administration approved California's request for massive cuts earlier this year. The cuts would help Gov. Jerry Brown shore up the state's dismal finances but could jeopardize President Obama's healthcare reform law, which expands Medicaid to 15 million low-income Americans.