Court Overturns Feds' Decision on California's Medicaid Rates

Federal health officials wrongly approved a 10 percent reduction in California's already-low Medi-Cal rates for hospital outpatient services without considering the impact on access to care for more than 13 million low-income residents, a federal appeals court ruled Monday. The court case concerned rates for treatment of Medi-Cal patients who do not require an overnight hospital stay. In July 2008, the state reduced Medi-Cal rates for those outpatient services by 10 percent for a specific eight-month period in 2008-09, then raised them back to their earlier levels eight months later after the federal government withheld approval.