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Health Care Trumps Budget, Court Tells Calif.

(CN) - The 9th Circuit on Wednesday blocked California from cutting Medi-Cal payments to doctors and hospitals, and slashing the wages of workers providing in-home care for low-income, elderly and disabled residents in a push to balance the state's budget.

In four separate rulings, the federal appeals court sided with health care providers fighting Gov. Arnold Schwarzenegger and the state's attempts to address budget deficit woes by lowering Medi-Cal payments to doctors and hospitals by 5 percent, and cutting the wages of in-home care providers by nearly 20 percent.

"We have repeatedly recognized that individuals' interests in sufficient access to health care trump the state's interest in balancing its budget," Judge Milan Smith, Jr. wrote for the Pasadena-based appellate panel. "We continue to do so here, especially in light of evidence in the record that suggests that reductions on providers' wages and benefits may have an adverse, rather than beneficial, effect on the state's budget."

In a separate ruling, the same panel concluded that "if pharmacies are forced to curtail services or go out of business, existing customers would not have access to other pharmacies, especially since home delivery services would end."

The total reductions would amount to somewhere around $175 million a year, according to estimates by the state.

The court based its rulings on federal law which requires the state to grant low-income citizens equal access to basic health care.

More than 440,000 people in California receive services from more than 360,000 in-home care providers working through the Medi-Cal program In-Home Support Services (IHSS). Relatives are the providers for 62 percent of those receiving in-home care.

A provider is only eligible for payments if they are unable to hold a full-time job because of the demands of providing care.

The state argued that because so many providers are related to their charges, and may live with them, it would be "virtually impossible" to study the costs associated with providing care, thus justifying a 20 percent decrease in wages and benefits.

The 9th Circuit's response: "The state is not ipso facto immunized from challenges to its actions because it had no system in place to make such an assessment."

California also argued that in-home providers failed to show that a wage cut would cause those in need to go without care, but the court took "no position on whether Plaintiffs' may establish irreparable injury to IHSS providers as opposed to IHSS recipients" (original emphasis).

The federal government contributes at least half of the overall cost of Medi-Cal. Under the state's proposed cuts, the state would contribute a maximum of 65 percent of an in-home care provider's wages and benefits for an hourly wage of $10.10, which is $2 less than what most providers receive now.

The governor signed the legislation in February 2009.

The four rulings are California Pharmacists Association v. Maxwell-Jolly (No. 09-55365), Independent Living Center of Southern California v. Maxwell-Jolly (No. 09-55692), California Pharmacists Association et al v. Maxwell-Jolly (No. 09-55532) and Dominguez v. Schwarzenegger (No. 09-16359).

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