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Lawsuit Seeks Halt in Planned Cuts To Medi-Cal

By Angela Rowen, Special to the Planet
Thursday May 22, 2008 - 09:38:00 AM

More than 6.5 million elderly, disabled and low-income people statewide—about 774,000 in the Bay Area—will soon have an even tougher time finding doctors, dentists and pharmacists who will provide care for them, unless a coalition of healthcare pro-viders and recipients are successful in a motion filed last week in Los Angeles Superior Court to block the state’s planned 10 percent cut in Medi-Cal payments.  

The lawsuit seeks to halt the $1.3 million in reductions that were approved by the legislature and signed into law by the governor in February. The legislation, slated to go into effect July 1, will reduce the amount of money pharmacists and doctors get for treating Medi-Cal patients, who already struggle to obtain adequate health care because state reimbursements to providers do not cover the costs of medical care. 

“The number of doctors who accept Medi-Cal has been declining over the years,” said Michael Lyons of the Gray Panthers of San Francisco. “With these cuts, it will be even more difficult for people to find general practitioners and specialists.” 

Lyons added that California’s reimbursement rate is among the lowest in the country. “A very bad situation is about to get worse,” he said. 

The lawsuit also seeks to block the state’s plan to delay by four months the monthly cost-of-living adjustments to recipients of Social Security Income (SSI). 

Mark Beckwith, 50, is a Berkeley resident who has a form of muscular dystrophy that requires him to be in a wheelchair. He can only use a total of three fingers on his hands, and requires around-the-clock medical attendance. He said any further cuts to his SSI checks would be devastating. “It’s hard enough to live on $870 a month,” he said. 

Beckwith added that the state’s cuts will be more costly in the long run. “People who don’t receive the proper care will end up in the emergency room … or in institutions, which cause five times as much. They don’t care about it this year, but what about next year? The chickens will come home to roost.” 

In the lawsuit, plaintiff attorney Lynn Carman argues that the SSI cost-of-living adjustment (COLA) reductions and the slashes in funds to Medi-Cal providers constitute a violation of the Americans with Disabilities Act, which compels the state to integrate disabled people into the general community by helping them live independently, a mandate that was upheld by the Supreme Court in the 1999 Olmstead decision.  

Carman argues that without adequate healthcare or SSI benefits thousands of disabled people will be forced into institutions. 

Carman said The Independent Living Center of Southern California, the largest such facility in the state, might be forced to close, possibly driving hundreds of people into nursing homes. 

The lawsuit also argues that the cuts would cause the closure of hundreds of pharmacies, including Uptown Pharmacy in Los Angeles, which delivers drugs to thousands of elderly home-bound Medi-Cal recipients. 

The lawsuit says pharmacies already earn less than 10 percent net profit. The state itself acknowledges the crisis, finding in a recent report on drug costs that pharmacies would not be able to make enough money to dispense drugs to all who need it if a 10 percent cut were put into effect. Carman called the contradiction “insanity.”  

Lisa Page, spokesperson for Gov. Arnold Schwarzenegger, said the governor recognizes the “devastating impact” of the cuts: “That’s why he’s pushing for comprehensive health care reform and structural budget reform.” 

Page told the Planet that the governor’s structural budget reform proposal calls for the establishment of a savings account—a so-called rainy day fund—to cover programs that are threatened when the economy slows. The governor has also proposed bringing in $4 million in new matching federal money to expand coverage and boost Medi-Cal reimbursement rates. 

“These reforms will bring stability to Medi-Cal budgeting and ensure the state never has to make such drastic cuts again,” Page said. 

Tony Cava, spokesman for the Department of Healthcare services, said, “We understand the impact of these cuts but given the state’s fiscal crisis, and Medi-Cal being the second largest program, cuts had to be made.”  

He told the Planet that the state chose the least painful alternative. “It was either reduce eligibility or reimbursements. We chose to cut reimbursements. Everyone who is covered now will continue to get benefits.” 

The court is scheduled to consider the motion for injunction on June 5.