Judge halts Medicaid hospital pay freeze in California

NEWS IN BRIEF — Posted March 21, 2011

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A federal judge temporarily has blocked a planned Medicaid payment rate freeze for California hospitals until after a lawsuit filed against the freeze is settled.

The California Legislature in October 2010 froze inpatient Medicaid payment rates for hospitals to save state funds and restructure Medi-Cal, the state's Medicaid system. The freeze applied to contracted and noncontracted hospitals and was set to take effect Feb. 1.

The California Hospital Assn. sued the California Dept. of Health Care Services to stop the freeze, claiming the move violated federal law. The hospital association received a restraining order that halted the freeze's implementation.

On March 4, Judge Frank C. Damrell Jr. of the U.S. District Court for the Eastern District of California granted the hospital association's motion for an injunction against the state. He banned enforcement of the freeze until after the lawsuit is decided or an agreement is reached by both parties.

Note: This item originally appeared at

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