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Calif. Medi-Cal Officials May Cut Medicaid Provider Rates

Appeals to HHS and Supreme Court are pending

Pharmacist Odette Leonelli of Redondo Beach, Calif., says she will go out of business if the federal government doesn't stop California Medi-Cal officials from cutting Medicaid provider rates. Medi-Cal is the state's Medicaid program.

See also: State governments face budget deficit crisis.

<p>'I have an obligation to serve. But I can't lose any more money.' — Odette Leonelli<br> </p>

Three years ago, California lawmakers cut payments 10 percent to Medi-Cal providers, including adult day care providers, hospitals, doctors, dentists and pharmacists like Leonelli. That put her business in peril, she said. "I truly believe I have an obligation to serve the community. But I can't lose any more money. I'll be forced to close up shop."

AARP fought the cuts in the state legislature, in the courts and most recently before the U.S. Department of Health and Human Services.

HHS rejected California's planned cuts, but state health officials, who declined to comment, have appealed to a federal administrator. AARP Foundation Litigation attorneys have joined the effort to stop the cuts. A separate lawsuit filed by providers and recipients about a new round of Medi-Cal cuts is pending before the U.S. Supreme Court.

Some 7 million California residents depend on the state Medi-Cal program, up 17 percent in the past year. They constitute the most vulnerable sector of the population, according to AARP. Medicaid offers a critical safety net, especially for those ages 50 to 64 not yet eligible for Medicare. "A number of efforts to close the budget gap, including the Medi-Cal cuts, disproportionately affect older and lower-income people," said Barbara Jones, an attorney with the AARP Foundation. More than 50 percent of Leonelli's customers, for instance, are over age 50.

Studies show that lack of access to preventive and other health care is the third-leading cause of death for adults between ages 55 and 64. The outcome of the case, Jones argued, will send a strong signal to other states.

While the appeals to HHS and the Supreme Court are pending, Medi-Cal cuts totaling several hundred millions of dollars have been delayed. Further, Gov. Jerry Brown, D, who defended the state's position when he was attorney general, has proposed additional program cuts of $709 million, roughly 10 percent of the budget. The Obama administration's Justice Department opposed the state's request for a hearing.

What it means to you: Tell your state legislator if proposed budget cuts adversely affect you.

Emily Sachar is a journalist and author based in Brooklyn, N.Y.

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