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CHA filed a lawsuit Nov. 24 against the Department of Health Care Services (DHCS) challenging provisions enacted in budget trailer bill ABX4 5, which purports to perpetually freeze reimbursement rates to hospitals for distinct-part skilled-nursing and subacute services to the rates in effect for the 2008-09 rate year. ABX4 5 also applies the 10 percent rate reduction for noncontracted inpatient services to small and rural hospitals, which have been exempted from the 10 percent rate cut since Nov. 1, 2008.
CHA is seeking a preliminary injunction prohibiting DHCS from continuing to implement these changes. CHA argues that the rate freeze and elimination of the small and rural hospital exemption violate provisions of federal Medicaid law requiring a notice and comment process; consideration of efficiency, economy, quality of care and access; and a reasonable relationship between rates and cost. These are substantially the same arguments that have thus far prevailed in the other Medi-Cal rate reduction cases in which CHA is involved.
