Clayworth

MEMORANDUM OF OPINION AND ORDER

Medi-Cal providers and beneficiaries challenge the State of California’s impending 5% reduction in the reimbursement rate paid to providers. Plaintiffs contend that the rate reduction violates the Medicaid statute, particularly the quality of care and equal access provisions, and they seek a preliminary injunction preventing defendant Diana Bonta, the Director of the California Department of Health Services, from implementing the rate reduction when it is scheduled- to go into effect on January 1; 2004.

The case presents two sorts of issues. First, the court must decide whether plaintiffs have standing and whether Congress has given them a cause of action, under 42 U.S.C. § 1983 to enforce certain provisions of the Medicaid statute. The court concludes that Medi-Cal beneficiaries have both standing and a cause of action and that Medi-Cal providers have third party standing to assert claims on behalf of beneficiaries concerning fee-for-service rates. However, the court does not find that either beneficiaries or providers have a claim under § 1983 to enforce the provisions in the Medicaid statute relating to managed care plans. Those statutory…