California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Supreme Court To Start Session With California Medicaid Case

On Monday, the U.S. Supreme Court begins its new term by hearing oral arguments in a California lawsuit that will determine whether Medicaid beneficiaries can sue states that make provider cuts, The Hill's "Healthwatch" reports (Baker, "Healthwatch," The Hill, 10/2).


The case stems from reimbursement cuts the California Legislature approved in 2008 and 2009 to Medi-Cal, the state's Medicaid program.

Health care providers and Medi-Cal beneficiaries challenged the changes 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 9th U.S. Circuit Court of Appeals in San Francisco ruled that beneficiaries could sue under the U.S. Constitution's supremacy clause, which lets federal law take precedence over state law. California appealed to the U.S. Supreme Court. The case before the high court is a consolidated set of three separate lawsuits on the issue that had been filed by providers and beneficiaries.

In May, the Obama administration argued in support of California, saying that no federal law allows individuals to sue states to enforce the standard that Medicaid rates must be "sufficient to enlist enough providers."

Possible Effect on Health Reform Law

The case is particularly significant because the outcome could affect the federal health reform law's expansion of Medicaid (California Healthline, 9/27).

Lloyd Bookman, founding partner with law firm Hooper, Lundy and Bookman, said, "If this case comes out adversely and states are allowed to cut rates without fear of provider lawsuits, that could have an impact on the mechanisms of the [reform law] because ... [it] depends on many millions of people enrolled in state Medicaid programs" (Carlson, Modern Healthcare, 10/2).

Supreme Court Expected To Rule on Health Reform Law

In related news, many health care analysts expect the high court to rule on the constitutionality of the federal health reform law this session, Reuters reports (Vicini, Reuters, 10/2).

Last week, the Obama administration last week filed a formal request asking the U.S. Supreme Court to review a decision by a three-judge panel of the 11th Circuit Court of Appeals that declared the individual mandate in the law unconstitutional. In August, the panel reviewed the multistate lawsuit against the health reform law and became the first appellate court to rule against any part of the law. However, the court upheld the remainder of the overhaul.

The plaintiffs in the case -- 26 states and the National Federation of Independent Business -- on Wednesday also requested that the high court review the case and said the entire law should be struck down. NFIB said the panel's ruling creates uncertainty for businesses regarding the overhaul's costs and requirements.

The Supreme Court is not required to hear the case. However, disparate rulings in three separate appellate courts and the petitions from both sides of the lawsuit make it all but certain the court will accept the case, according to analysts (California Healthline, 9/29).

Predictions About Case

After all briefs have been filed for the case by late October, the high court could begin hearing arguments by February or March 2012

Analysts expect a ruling by the end of June, at the height of the 2012 presidential election, according to Reuters. Although a ruling in favor of the law would be a political victory for President Obama, it still would bring the overhaul -- unpopular with many U.S. residents -- to the forefront of the debate.

Legal experts are unsure how SCOTUS could rule on the reform law. Some have said that Chief Justice John Roberts and Justice Anthony Kennedy could cast the deciding votes on the case (Reuters, 10/2).

Broadcast Coverage

Headlines and links to broadcast coverage of the Medi-Cal case before the Supreme Court are below:

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