Court blocks Medicaid cuts approved by Obama administration

A federal judge in California has temporarily blocked a 10 percent cut to California's Medicaid rates that the Obama administration approved in October.

California adopted a budget slashing the payment rates for doctors, pharmacists and other healthcare providers last spring in an effort to close the state's $26.6 billion budget hole, the largest in the nation. But Judge Christina Snyder concluded in a 25-page tentative order Monday that the cuts violate federal law because they put Medicaid beneficiaries' access to care in jeopardy; a final ruling enjoining the cuts is expected shortly.

A wide array of California healthcare groups immediately applauded the judge's decision.

"The court's tentative ruling is encouraging to those of us practicing medicine," James Hay, president of the California Medical Association, said in a statement. "The state's repeated attempt to slash Medi-Cal reimbursement rates is a short-sighted solution that balances the budget on the backs of the poorest and most vulnerable Californians. Rather, we need to be addressing long-term solutions relative to the cost of healthcare."