Judge Temporarily Blocks 10% Cut in Medi-Cal Fees

California doctors won a preliminary injunction in federal court Thursday that temporarily blocks Gov. George Deukmejian’s 10% cut in Medi-Cal fees to physicians and other health-care providers.

U.S. District Judge Lawrence Karlton granted the injunction without specifically ruling on arguments by the California Medical Assn. that the governor’s $18.7-million budget cut would drop fees so low that Medi-Cal patients would find it harder to get medical treatment.

Karlton said he wants an analysis of the cuts by the U.S. Department of Health and Human Services before making a final decision.

The medical association claimed the ruling is a big victory. It follows a temporary restraining order granted by Karlton on Feb. 13.

The gist of the association’s legal argument is that the governor’s 10% cut violates federal law requiring that the poor who qualify for the program be given “equal access” to medical services available to the general population. The 10% reduction, the association argues, puts even more distance between Medi-Cal and private patients, adding to a two-tier system that the association contends already exists.

‘The Going Rate’

The association argues that the state pays California doctors only about 43 cents for each $1 they could receive from private patients or insurance companies. Its lawyers argue that the state’s failure to pay “the going rate” is a strong incentive for doctors to drop Medi-Cal patients or at least not give them the same level of service other patients receive.

At the hearing, Karlton indicated that he does not entirely buy that argument. The judge said many physicians came from “elitist” backgrounds and simply did not like to treat the poor and find it burdensome to deal with the required paper work.

He also indicated, however, that he does not believe that the fees are high enough to provide an adequate incentive for doctors to treat Medi-Cal patients.

The legal argument by the Deukmejian Administration is that the emergency mid-year cut is necessary to shore up a major deficit in the $5-billion Medi-Cal program and avoid deeper cuts in the future. The governor has promised to fully rescind the cut when the new fiscal year begins July 1.

Walking a line between the two sides, Karlton said he considers warnings of further cuts “terribly serious” and said the safety of the entire Medi-Cal program has to be considered along with the effect of the 10% cut on physicians.

After the hearing, association attorney Catherine I. Hanson challenged the judge’s “elitist” comment, saying, “Physicians have been subsidizing the program for years because the Medi-Cal rates have been consistently, significantly under what reasonable charges are.”

‘It Is Impossible’

Hanson added that the state has cut Medi-Cal so deeply “that it is impossible for physicians to continue to participate and keep their practices solvent.”

Deputy Atty. Gen. Joseph Egan, representing the state Department of Health Services, told reporters that because the 10% cut was limited to the remaining five months of the fiscal year and does not apply to most in-patient services, “we don’t think the cut is going to prevent access to care.”

In a related matter Thursday, the Assembly failed to muster the necessary two-thirds majority to reconsider a bill that would restore the $18.7 million in Medi-Cal cuts ordered by Deukmejian. The bipartisan vote was 53 to 21, one short of the two-thirds required in the 80-member chamber for both reconsideration and passage. The bill, authored by Senate Democratic President Pro Tem David A. Roberti (D-Los Los Angeles), originally failed on a 49-17 vote Monday after passing in the Senate 35 to 1.

Assemblyman Bruce Bronzan (D-Fresno), who handled the measure on the lower house floor, said, “The bill is dead. The governor lobbied against this bill very hard. Now it’s up to the courts to order him to pay the full amount for Medi-Cal.”