Arguing that the governor and the legislature have ignored the impact of 10-percent cuts to California's Medi-Cal budget, the California Medical Association and six other healthcare-related associations filed suit in the Los Angeles County Superior Court against the state on May 5, seeking to halt the cuts from taking effect July 1.

"Before the July 1 deadline, what we intend to do is ask the court to issue a preliminary injunction against the 10-percent reduction," says Lloyd Bookman, a principal attorney with Hooper, Lundy & Bookman, which filed the suit. The attorneys will file preliminary injunction papers before the new budget goes into effect, but probably not for "a number of weeks," he says. The lawsuit has not yet been certified as a class action, but it is still possible for the group to acquire a preliminary injunction, Bookman adds.

According to a statement from the association coalition, the suit contends that the Medi-Cal cuts would violate state and federal law, including a federal requirement that Medicaid payments "must be sufficient to enlist enough providers so that services under the [Medicaid] plan are available to recipients at least to the extent that those services are available to the general public."

Led by the CMA, the coalition also includes the California Hospital Association, the California Dental Association, the California Association for Adult Day Services, the California chapter of the American College of Emergency Physicians, the California Pharmacists Association, and the California Association of Public Hospitals and Health Systems.

Doctors associated with the CMA have long held that Medi-Cal patients' access to care is crumbling as its reimbursements decrease. Further cutbacks may force some doctors to cease taking new Medi-Cal patients, or to stop seeing them entirely.

California pays less than any state in the nation for Medicaid patients, the coalition says in a statement. The state spends $2,701 for each Medi-Cal beneficiary, compared to a national average of $4,662, the statement says, citing Kaiser Family Foundation data.

According to a Riverside County Medical Association March membership survey, as many as 16 percent of the 227 doctors polled said they will stop accepting Medi-Cal patients if the cuts are successful, while another 16 percent said they will not accept new Medi-Cal patients. Sixty-three percent already do not accept Medi-Cal patients.

Other coalition members fear they will be harmed by patients migrating
to stressed facilities. "When there are cuts to Medi-Cal reimbursement, private providers are less likely to be willing or able to serve those patients," says Melissa Stafford Jones, CEO of CAPH. "We
see an increase in the need and the demand for the services that public hospitals provide, and that is very challenging, since generally [they] are paid about 50 cents on the dollar for their care to Medi-Cal patients," she says.

Jones estimates that two-thirds of public hospitals' patient base is comprised of Medi-Cal or uninsured patients, with that proportion rising to 80 percent for some hospitals. Public hospitals make up about 6 percent of hospitals in the state and train about half of its physicians.

The cuts to Medi-Cal may compound other reductions that public hospitals might face. Although it has not been approved yet by the legislature, the governor's budget proposes $54 million cuts to the public hospitals' Safety Net Care Pool, which supports services for the uninsured. "Public hospitals cannot sustain this cut to the pool without it impacting services, and without some services having to be eliminated," says Jones.