LOS ANGELES--On Tuesday, a California Superior Court judge failed to stop an across-the-board 10 percent Medi-Cal cut for services provided after July 1.

The Alliance for Patient Choice, a coalition of more than 100 health care provider organizations in the state--including the California Medical Association, the California Hospital Association and the California Pharmacists Association--had asked for a preliminary injunction against the Medicaid reimbursement reductions, which were enacted in February as part of a plan to prevent a $17 billion state budget shortfall.

While the court found the cuts did present “a substantial showing of actual harm which will likely occur as a consequence of the reimbursement reductions,” Superior Court Judge William F. Highberger rejected the argument that the reduction violated state and federal law because it would deny equal access to services for Medi-Cal beneficiaries.

He also ruled that CMS' approval before the rate cuts were implemented was not necessary. The providers had argued that the cuts were invalid because they required the approval of CMS, and the state's Department of Health Services had not sought that approval or conducted an analysis of the payment reductions' impact on access.

The Medi-Cal program provides health services to approximately 6.6 million low-income Californians.

According to a July 30 update from the California Association of Medical Product Suppliers, the health care providers who brought the lawsuit described the decision as “an enormous setback for the health and lives of the millions of Californians who rely on the state's safety net.”

CAMPS said the coalition of providers is considering filing an emergency appeal with the second district appellate court in Los Angeles.

In more bad news for the state's Medicaid program, the association said in its update, “There is no real progress in Sacramento on a budget solution."

Earlier this year, the California Senate had voted to reduce the Medi-Cal cut to 5 percent, and the state Assembly eliminated it altogether. But for either alternative to supercede the 10 percent cut, it must be part of the final state budget, which sits at an impasse.

Summer Medi-Cal payments were already scheduled to be delayed, and with the budget on hold, providers might have to wait until September for another payment, CAMPS Executive Director Bob Achermann told HomeCare in June.

"Without a budget being adopted and signed there will be no Medi-Cal payments," CAMPS said last week, adding that a budget solution "provides real opportunity for the 10 percent cut to be eliminated.”