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May 06, 2008

California health care workers sue state over pay-cut plan

A coalition of health care groups sued the state Monday to prevent pay cuts to doctors, dentists, pharmacists and others who treat the poor, elderly and disabled.

The lawsuit filed in Los Angeles County Superior Court on behalf of California health care providers seeks an injunction to halt 10 percent cuts to Medi-Cal and Denti-Cal reimbursements scheduled to take effect July 1.

"These specific cuts strike at the core of the safety net," said Erica Murray, vice president of the California Association of Public Hospitals and Health Systems. "These are the trauma centers, the burn units, the places where people go not only when they don't have insurance or they have Medi-Cal, but if they have an automobile accident, their house burns down or another tragic event."

The state Legislature approved the cuts in February as part of Gov. Arnold Schwarzenegger's plan to trim a $16 billion budget deficit. Health care providers objected and said reimbursements already fell short of their costs for treating 6.7 million Medi-Cal patients.

The governor's office projected in January that the program would cost $36 billion, including $13.6 billion from the state's general fund, but health care associations expect those numbers to grow by the time a budget is passed. Most of the program is paid for by the federal government.

"The governor fully understands the devastating impact of these cuts which is why he continues to push for comprehensive health care reform and structural budget reform," said Lisa Page, a spokeswoman for Schwarzenegger.

The coalition, which is seeking class-action status, is optimistic it will prevail in its case against the Department of Health Care Services, said attorney Craig Cannizzo. He said lawmakers need to understand that Medi-Cal is not "a pot of money that they can steal from any time."

A similar lawsuit five years ago halted a 5 percent Medi-Cal cut proposed by Gov. Gray Davis.

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Posted by healthinsurance at May 6, 2008 12:15 PM