Calif. Hospitals Sue State Over Cuts To Medicaid Program

The California Hospital Association is suing the state to block a proposed 10 percent reduction in reimbursements for healthcare providers who treated low-income patients covered by the state's Medi-Cal plan, the Los Angeles Times reports.

Cuts to provider payments "will threaten the ability of many hospitals to continue operating skilled nursing facilities," the association said in its lawsuit. As a result, patients could face a reduced access to healthcare, the lawsuit alleged. Other medical providers such as physicians, pharmacists and optometrists were also targeted for cuts.

The 10 percent cuts are part of the 2011-2012 state budget signed by Gov Jerry Brown and are retroactive to June 1, according to the Times. The federal government approved the reductions last week.

A spokesman for the California Department of Health Care Services told the Times that the cuts could be implemented "while still maintaining sufficient access for Medi-Cal beneficiaries.