CDCAN REPORT #005-2012: Federal district court judge issues order Blocking 10% Medi-Cal cut for non-emergency medical transportation providers

FEDERAL DISTRICT COURT JUDGE ISSUES ORDER BLOCKING STATE FROM IMPLEMENTING 10% MEDI-CAL RATE CUT FOR NON-EMERGENCY MEDICAL TRANSPORTATION PROVIDERS

Order Follows 2 Other Preliminary Injunctions Issued December 28th Blocking 10% Medi-Cal Provider Cuts to Pharmacies and Distinct Part Nursing Facilities

SACRAMENTO, CA (CDCAN) [Last updated 01/11/2012 05:00 PM] - A federal district court handed the Brown Administration another legal setback in its efforts to impose Medi-Cal cuts, by issuing yesterday (January 10th) an order that blocks the State from implementation of the 10% Medi-Cal rate reduction to non-emergency medical transportation providers.  The federal judge concluded, in issuing her order, that the federal government's approval of California's request to reduce those provider rates violated federal law because federal officials failed to consider certain critical factors including the impact of the reduction on access to and the quality of those services.  The suit also claimed federal and state governments were in violations of other federal laws. [A copy of the 22 page order in the lawsuit - "California Medical Transportation Association, et al. v. Toby Douglas, et al, Case Number CV 11-9830 CAS (MANx)" is attached to this CDCAN Report titled "2012-01-10 - US DC CACD - CMTA v Douglas - Order granting injunction.pdf"  The document was saved as a pdf document and not as a pdf image which means that people who are blind or sight impaired should be able to read it using a screen reading device]

The Department of Health Care Services indicated it will ask the court to delay implementation of its order (called a "stay") while the State appeals the ruling to the next higher court, the US 9th Circuit Court of Appeals.  The judge, Christina Synder, who issued rulings on December 28th that blocked the State from implementing 10% Medi-Cal rate cuts to pharmacies and to distinct-part nursing facilities, will likely not grant a "stay" or delay of her order to stop implementation of the 10% cut to Medi-Cal non-emergency medical transportation providers.

The order impacts not only hundreds of non-emergency medical transportation providers across the State, but thousands of people with disabilities, mental health needs, the blind, seniors and low income people in the Medi-Cal program who depend on those services, especially in the rural parts of the State.

Judge Says State's Budget Problems Do Not Outweigh Access to Needed Services & Obeying Federal Law

US District Court Judge Christina Synder said that while the court was aware of the State's ongoing budget problems "...the balance of the equities and the public interest strongly favor the issuance of an injunction. In reaching this conclusion, the Court notes that the [US] Ninth Circuit [Court of Appeals] has held that the injury to a state caused by the injunction of one of its statutes does not outweigh the public’s interest in ensuring that state agencies comply with the law and protect [Medi-Cal] beneficiaries’ access to services."

Noting the declarations filed by many transportation providers and by a Medi-Cal recipient, Judge Synder wrote that "...the State’s fiscal crisis does not outweigh the serious irreparable injury plaintiffs [those filing the lawsuit] would suffer absent the issuance of an injunction"
Judge Synder cited a 2008 US 9th Circuit of Appeals ruling that "Where “there is a conflict between financial concerns and preventable human suffering ... the balance of hardships tips decidedly in favor of the latter.”

Third Court Order Blocking 10% Medi-Cal Provider Reduction in 2011-2012 State Budget

• The court order issued yesterday is the third such order by a federal court blocking some of the Medi-Cal provider rate reductions that were passed as part of the 2010-2011 State Budget in March of 2011 in two other separate lawsuits.
• It also follows a recent federal court temporary restraining order issued in November that blocked - at least until a January 19th hearing - the Brown Administration from implementing in any way the 20% across-the-board reduction in service hours for many In-Home Supportive Services (IHSS) recipients and a different lawsuit that forced the State to delay and modify its plan to eliminate Adult Day Health Care as a Medi-Cal benefit in a settlement agreement.
• Several other Medi-Cal related federal lawsuits remain pending - at the federal district court level - or at the US 9th Circuit of Appeals - and also pending a ruling (after an October 3, 2011 hearing) by the US Supreme Court that could have sweeping impact on Medicaid lawsuits across the nation. Governor Brown is hoping for a US Supreme Court decision that will support the State's position that would result in putting a stop on many of the lawsuits that have blocked Medi-Cal related cuts.
• The lawsuit was filed against the head of the California Department of Health Care services - the state agency that oversees the Medi-Cal program, headed by Toby Douglas and Kathleen Sebelius, Secretary of the US Department of Health and Human Services, that administers the Medicaid program nationwide by the California Medical Transportation Association, an association of a trade association of non-emergency medical transportation (NEMT) providers in the State.
• Among those filing the lawsuit was also an individual, Lonny Slocum, a person with disabilities who is a Medi-Cal recipient with significant health difficulties including high blood pressure, congestive heart failure, kidney failure, and chronic obstructive pulmonary disease. Slocum requires dialysis three times per week and uses non-emergency medical transportation for that purpose and for other critical health treatments he requires.

TEXT OF JUDGE'S ORDER

The following is Judge Synder's order:

In accordance with the foregoing, the Court hereby GRANTS plaintiffs’ motion for a preliminary injunction.
IT IS HEREBY ORDERED as follows:

Defendant Toby Douglas, Director of the California Department of Health Care Services, his employees, his agents, and others acting in concert with him shall be, and hereby are, enjoined and restrained from violating federal law by implementing or otherwise applying the reduction on Medi-Cal reimbursement for non-emergency medical transportation services on or after June 1, 2011, pursuant to Assembly Bill 97 enacted by the California Legislature in March 2011, as codified at California Welfare and Institutions Code § 14105.192, or to any other degree reducing current Medi-Cal rates for NEMT [Non-emergency medical transportation] services.

IT IS HEREBY FURTHER ORDERED that, consistent with the foregoing, the October 27, 2011 decision by Defendant Kathleen Sebelius, Secretary of the Department of the United States Department of Health and Human Services, approving the Medi-Cal reimbursement reduction codified at Welfare and Institutions Code § 14105.192, is hereby stayed.

Dated: January 10, 2011
CHRISTINA A. SNYDER
UNITED STATES DISTRICT JUDGE

SUMMARY OF TIMELINE OF MEDI-CAL PROVIDER CUTS

• January 10, 2011 - Governor Brown proposes (as part of his 2011-2012 State Budget) some temporary revenue increases and also sweeping major spending reductions, including additional Medi-Cal provider rate reductions of up to 10% for many providers including non-emergency medical transportation providers.
• March 25, 2011 - Governor Brown. signed into law AB 97 the health budget related bill that was part of the 2011-2012 State Budget (the main budget bill and additional budget related bills were passed later in late June). AB 97 enacted significant reductions for many services provided under the Medi-Cal program, including additional payment reductions of up to 10% for many Medi-Cal providers, retroactive to June 1, 2011.
• June 30, 2011 - The Department of Health Care Services submitted to the federal government seeking approval, the official request to implement the Medi-Cal provider reductions contained in a proposed State Plan Amendment (SPA 11-0090 to the State's Medicaid State Plan.
• September 27, 2011 - the federal agency responsible nationwide for the Medicare and Medicaid programs - the Centers for Medicare and Medicaid Services (CMS) under the US Department of Health and Human Services, issued a letter to the Department of Health Care Services requesting additional information concerning the proposed Medi-Cal rate reduction. This Request for Additional Information (“RAI”) focused on the impact of the rate reduction on access to services. The Department of Health Care Services responded with an “Access Analysis” and a plan for monitoring access.
• October 27, 2011 - in a letter from the federal agency, approved the State's request to reduce Medi-Cal provider rates as contained in the State Plan Amendment (SPA 11-0090).
• December 8, 2011 - plaintiffs (those who filed the lawsuit) filed a motion asking the federal district court to issue an order (called a "preliminary injunction") to block the 10% reduction for Medi-Cal non-emergency medical transportation providers.
• December 28, 2011 - Judge Synder issued separate orders in two separate lawsuits that blocked the State from implementing the 10% Medi-Cal rate cuts for pharmacies and for distinct part nursing facilities.
• January 9, 2012 - The federal district court heard oral arguments by attorneys representing the non-emergency medical transportation providers and the Medi-Cal recipient and also from the State and federal governments.
• January 10, 2012 - Judge issues order blocking Brown Administration - and the federal government - from implementing the 10% rate reduction for non-emergency medical transportation providers.  The Brown Administration said in response that it would appeal the court's order to the US 9th Circuit Court of Appeals.

File Attachments: 

2012-01-10 - US DC CACD - CMTA v Douglas - Order granting injunction.pdf (88.41 KB)