Medicaid Providers Win 3-Year Battle With State

SACRAMENTO (CN) - A federal judge on Friday barred California from reducing payments for certain Medicaid services for developmentally disabled Californians.

Medicaid providers will not have to comply with a policy forcing them to bill for only half a day when they work for less than 65 percent of the workday.

They also will be relieved of the "uniform holiday schedule" that forces them to take off 14 unpaid days a year, U.S. District Judge Morrison England ruled.

The Arc of California and the United Cerebral Palsy Association of San Diego have spent more than three years fighting funding cuts and restrictions for services provided to developmentally disabled people under the federally funded Medicaid program.

Last year, a three-judge panel of the 9th Circuit remanded the case and ruled that England had improperly dismissed the nonprofit organizations' claims under the Medicaid Act.

"California did nothing whatever to study the likely effect of its uniform holiday schedule or half-day billing rule on the 'efficiency, economy, and quality of care' or the availability of service providers, before enacting and implementing those rules," 9th Circuit Judge Marsha Berzon wrote for the court.

In Friday's ruling, England found that two bills enacted by the Legislature violated the Medicaid Act.

One of the bills calls for 14 unpaid holidays every year for which vendors are not reimbursed for many services. The other half-day billing rule prevents regional centers from being reimbursed for a full day of service if a client should leave early for any reason, even of the providers have to maintain a full day slot for that person.

Based on the 9th Circuit's finding that a state must get approval before implementing any policies that affect the payments service providers receive under its plan, England found that California's two payment reductions cannot be enforced.

"Since it is undisputed that no such approval was obtained (a fact both noted in the 9th Circuit opinion and expressly conceded by defendants as undisputed herein), the 9th Circuit's holding makes it plain that the state's rules enacting the half-day billing rule and uniform holiday schedule are invalid," England wrote.

He permanently enjoined the state from implementing the two laws and from making any changes to payments without complying with the Medicaid Act and receiving approval from the Center for Medicaid Services.

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