California's policy for reimbursing out-of-state hospitals that care for California Medicaid patients violates the Constitution, according to Courthouse News Service.
A U.S. district judge ruled in favor of 19 hospitals in Oregon, Nevada and Arizona that filed the suit against the California Department of Health Services. One of the plaintiffs, RenownRegionalMedicalCenter in Reno, N.V., reported more than $11.4 million in uncompensated inpatient care owed to the hospital by DHCS for fiscal year 2013.
DHCS argued the CMS-approved state Medicaid Plan Amendment 15-020, which includes language outlining Medi-Cal reimbursement to neighboring state hospitals, justified the existing reimbursement policy. However, the judge held current policy promoted "discrimination" in rate setting based on a hospital's geographic location
"Because the department continues to reimburse out-of-state hospitals at lower rates than in-state hospitals resulting in out-of-state hospitals being paid less and excludes such hospitals from DHCS payments, the department directly discriminates against out-of-state hospitals," said U.S. district judge Edward Chen.
Due to limited access issues, DHCS often contracts with border hospitals in Nevada, Oregon and Arizona to serve its Medi-Cal population.
DCHS was unable to comment upon the ruling. "[It's] an interim decision in ongoing litigation," DHCS information officer Carol Sloan told State of Reform.