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NINTH CIRCUIT
TO HEAR 10% MEDI-CAL CASE JULY 11, 2008 Yesterday,
July 1, 2008, the Emergency Panel of the Ninth Circuit Court of Appeals issued
an emergency order which advances hearing of the appeal of Medi-Cal
beneficiaries and providers from the June 23, 2008 order of the U.S. District
Court, Central District, California, (which denied their motion for preliminary
injunction to stop the 10% cut in payments to Medi-Cal provider and managed care
plans for dates of service on and after July 1, 2008). It
is vitually unprecedented for a federal appeals court to hear and decide an
appeal in a civil case just 16 days after the appeal was filed. Background
Facts On
April 22, 2008, the largest California Independent Living Center, three
Southland pharmacies, three Medi-Cal beneficiaries, and the Gray Panther groups
of Sacramento and San Francisco sued Sandra Shewry, Director of California
Health Care Services, sued in Los Angeles Superior Court to enjoin the Director
from implementing the Legislature's 10% across-the-board cut in payment to Medi-Cal
providers, for dates of services on and after July 1, 2008. On
May 19, 2008, the State defendant removed the case to U.S. District Court,
Central District of California, in Los Angeles. On
June 25, 2008, District Court judge Christina A. Snyder denied plaintiff's
motion for preliminary injunction to stop the 10% cut. On
June 26, 2008, the plaintiff's appealed the denial of preliminary injunction, to
the Ninth Circuit. On
June 27, 2008, the plaintiffs filed Emergency Motion for Emergency Order (1) to
enjoin the 10% cut pending determination of their appeal, or (2) to advance oral
argument to July 3, 2008 or as soon thereafter as humanly possible. Yesterday,
July 1, 2008, the Emergency Panel of the 9th Circuit, consisting of: Circuit
Judges Reinhardt, Berzon and M. Smith issued
an Emergency Order which (1) denied, without prejudice, the request
forrestraining order pendente lite, but (2) ordered oral argument
of the appeal to be advanced to 10 a.m. on July 11, 2008, with the hearing to be
by telephone. Particulars
of the suit Plaintiffs
charge in the suit that the 10% Medi-Cal cut which goes into effect on July 1,
2008, (1) will cause thousands of Medi-Cal recipients to be unable to find
doctors, dentists, and pharmacies willing to serve them, (2) will cause many
deaths among the home-bound Medi-Cal recipients who rely on, and will be
deprived of, home-delivered prescriptions; and (3) will cause thousands of
frail, elderly, disabled recipients of Medi-Cal to be forced into nursing homes
just to be able to survive. Plaintiffs
say in their suit that: -Most
doctors and dentists already do not take Medi-Cal patients because Medi-Cal
payment is too low, so that the new 10% cut will cause thousands more to stop
taking Medi-Cal patients. -Hundreds
of independent pharmacies, --such as the plaintiff Uptown Pharmacy in Los
Angeles who delivers to thousands of elderly home-bound Medi-Cal recipients,
--will be forced out of business, or will have to stop serving Medi-Cal
patients, if this 10% cut goes into effect. Pharmacies
already earn less than 10% net profit, so that the 10% cut would force them to
serve Medi-Cal patients at a loss, for which they will either quit the Medi-Cal
program or, if they continue, will not dispense brands at all, and will not
dispense many of the generic drug prescriptions to Medi-Cal patients, due to the
fact that all brands and nearly half of all generic prescriptions cost the
pharmacy more to acquire and dispense, than what Medi-Cal will pay them under
the 10% rate cut. But
plaintiffs say in their suit that the worst of all is that thousands of Medi-Cal
recipients will either die or be forced into nursing homes or other
institutions, just in order to survive, if this 10% rate cut is not stopped by a
court order. Lynn
S. Carman, Chief Counsel, Medicaid Defense Fund
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