Clinics Fight California Over Medicaid Rates

SAN FRANCISCO (CN) - Health care clinics sued the state health care department for its plan to reimburse them for services at less than the federally mandated rate.

Lead plaintiff California Primary Care Association sued the California Department Health Care Services and its director Toby Douglas, in Federal Court.

Joining as plaintiffs are the Gardner Family Health Network, Lifelong Medical Care, and Santa Rosa Community Health Centers.

The clinics claim the state plans to reimburse federally qualified health centers (FQHC) at the same rate it pays other Medi-Cal providers, which is less than half the rate required by federal law.

State agencies are required to reimburse health centers at a per-visit rate, at cost.

The clinics provide care to underserved populations, including the poor, uninsured, homeless, migrant farmworkers, immigrants and minorities. They are required to treat any patient, regardless of ability to pay, under Medicaid law.

Specifically at issue is adult day health care (CBAS), a community-based program to help elderly people and adults with disabilities to maintain independence.

The clinics say lawmakers have chipped away at the program since 2009, to try to control California's budget crisis: Assembly Bill 97 eliminated it entirely as a Medi-Cal benefit in 2011.

The state then received approval to cut the program, under a waiver from the U.S. Department of Health and Human Services' Medicare and Medicaid department.

Before AB 97 could be implemented, however, plaintiffs in Darling v. Douglas entered into an agreement with the Department of Health Care Services to form the Community-Based Adult Services program. As part of the settlement, the agency agreed to secure an amendment to its federal waiver ensuring no caps on its adult services program and standard reimbursement for providers. The waiver was approved by the federal government on March 30 this year.

The plaintiffs claim that since then the agency has made it clear that federally qualified health centers would not be reimbursed at the same per-visit rate as other Medi-Cal providers.

According to the complaint, Medicaid law requires that federally qualified health centers be reimbursed on a per-visit rate if they offer ambulatory services. The plaintiffs say the terms of the state's federal waiver, anything not expressly waived is still required under federal law.

"Since the [per-visit] reimbursement provisions have not been expressly waived, they continue to apply" to federally qualified community based adult services, the clinics say.

Federal law requires that federally qualified health centers "proactively seek appropriate reimbursement for their costs in providing health services to Medicaid beneficiaries, and mandates action on the part of the states, i.e., that the states must reimburse FQHCs for services provided to Medicaid patients," the complaint states.

The controversy between the clinics and the state creates a continuing adverse economic impact that requires declaratory relief and an injunction, the plaintiffs say. "Some FQHCs that are the only Medicaid providers of CBAS services in their county or their immediate area will have to discontinue providing CBAS services immediately," according to the complaint.

"Plaintiffs seek a mandatory injunction that requires the Department of Health Care Services to reimburse FQHCs CBAS services to eligible Medi-Cal patients" at the standard per-visit rate."

Director Douglas should be ordered to take all necessary steps to comply with Medicaid law, and his failure to do so harms the plaintiffs, the clinics say.

"Defendant Douglas has no legitimate, cognizable defense to their failure and the failure of the Department of Health Care Services to comply with the requirements of [Medicaid law] to reimburse FQHCs for CBAS services" at the per-visit rate, according to the complaint.

The clinics are represented by Kathryn Doi and John Fischer, with Murphy Austin Adams and Schoenfeld, of Sacramento.

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