Maxwell-Jolly

MEMORANDUM AND ORDER

This matter is before the court on plaintiff California Hospital Association’s (“plaintiff’ or “CHA”) motion for preliminary injunction. CHA seeks an order enjoining defendants, California Department of Health Care Services (“DHCS”) and the Director thereof (sometimes collectively, “defendants”), from continuing to implement California Welfare & Institutions Code § 14105.281 (“Section 14105.281”). Section 14105.281, adopted by the California Legislature in October 2010, freezes the rates at which California reimburses hospitals providing inpatient Medi-Cal services to the lesser of the rates paid on January 1, 2010 or July 1, 2010 (sometimes referred to generally herein as the “Rate Freeze”).

Plaintiff contends that it is likely to succeed on the merits of this case for several alternative reasons: (1) the implementation of the Rate Freeze violates the Contract Clauses of the United States and California Constitutions; CHA contends that the “Rate Freeze will prevent impacted hospitals from receiving any increased reimbursement ... they otherwise would have been entitled to ... under their contracts with the [DHCS] or, in the case of non-contract hospitals,…