California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Industry Groups Support Lawsuit Challenging Medi-Cal Reductions

On Friday, a number of health care organizations filed amicus briefs with the U.S. Supreme Court arguing that health care providers should be able to legally challenge Medicaid rate cuts, Modern Healthcare reports (Carlson, Modern Healthcare, 8/6).


In 2008 and 2009, the California Legislature passed laws that cut reimbursements to Medi-Cal, the state's Medicaid program.

Health care providers and Medi-Cal beneficiaries challenged the cuts in court, arguing that the payment cuts violated federal law that says Medicaid rates must be "sufficient to enlist enough providers" so beneficiaries can access care to the same extent as the general population in a particular area.

The U.S. Court of Appeals for the Ninth Circuit ruled California's reimbursement cuts violated federal Medicaid law and compromised beneficiaries' access to "much-needed medical care."

California appealed the case to the U.S. Supreme Court (California Healthline, 5/31).

Details of the Amicus Briefs

On Friday, 10 health care provider groups -- including the American Hospital Association and the Federation of American Hospitals -- filed a friend-of-the-court brief supporting the right of health care providers to file lawsuits challenging rate reductions (Modern Healthcare, 8/6).

The brief states that if the high court rules in favor of California, it would "allow not only California, but all states, to defy federal law with virtual impunity" (AHA News, 8/5).

Meanwhile, four pharmacy groups also recently filed an amicus brief saying health care providers have a right to sue because state cuts are inconsistent with federal Medicaid law.

The groups are the:

  • National Alliance of State Pharmacy Associations;
  • National Association of Chain Drug Stores;
  • National Community Pharmacists Association; and
  • American Pharmacists Association.

About 22 states have field amicus briefs supporting California, saying states must be able to enact cuts to manage their budgets without the threat of lawsuits (Pecquet, "Healthwatch," The Hill, 8/5). The Obama administration also has filed a brief saying federal law does not allow Medicaid beneficiaries or health care providers to sue states over cuts to Medicaid reimbursements (California Healthline, 5/31).

Next Up

The Supreme Court will hear oral arguments on the case on Oct. 3 (Modern Healthcare, 8/6).

The court is expected to issue a ruling by early 2012 (AHA News, 8/5).

For additional coverage of the upcoming Supreme Court hearing, see this previous Feature article.

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