California Medi-Cal providers recently received checks totaling $25.8 million as retroactive payment for claims processed between July 1, 2008 and August 18, 2008.
In February 2008, a 10-percent Medi-Cal provider cut was proposed by the Schwarzenegger administration and agreed to by the state Legislature in an emergency budget session as part of efforts to address a $15 billion budget shortfall. The 10-percent cut took effect July 1, 2008.
The California Medical Association filed a federal lawsuit in May 2008 to stop the unlawful cuts. On August 18, 2008, six weeks after the cuts took effect, a federal court issued an injunction ordering the state of California to reverse the 10-percent cut, finding that the cuts would irreparably harm access to health care for nearly 7 million Californians. Unfortunately, at the time the injunction was not retroactive to Medi-Cal services provided between July 1, 2008, and August 18, 2008.
In January 2010, a federal court ruled that the state was obligated to make retroactive payments to providers for claims processed at the lower rates between July 1, 2008, and August 18, 2008. Most physicians impacted by these cuts received checks in April of this year. The checks were not, however, accompanied by a letter of explanation.