Hospitals Seek Recalculation of Medi-Cal Rate

     SAN FRANCISCO (CN) – The California Hospital Association, on behalf of its member hospitals, filed a lawsuit against the state Department of Health Service, claiming the state improperly calculated Medi-Cal reimbursement rates in order to artificially reduce the amount owed hospitals and other participating health-care providers.

     Before July 31, 1995, the state based its reimbursement rate on the lesser of the facility’s costs or the prospective class median rate, the lawsuit claims. In September 1995, the state changed the method of calculating the median reimbursement rate by excluding participating providers whose Medi-Cal patient days accounted for less than 20 percent of their total patient days.
     The department provided “no explanation, basis or findings to support this proposed change,” the association claims in Superior Court.
     It seeks a mandate requiring the state to comply with federal and state law, and an injunction preventing the department from applying its 20 percent exclusion method.

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