California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

U.S. Supreme Court To Review Case on Medi-Cal Payment Cuts

On Tuesday, the U.S. Supreme Court agreed to review whether health care providers and patients have the right to sue California over cuts to Medi-Cal reimbursements, McClatchy/Sacramento Bee reports. Medi-Cal is California's Medicaid program (Doyle, McClatchy/Sacramento Bee, 1/19).

The case that the high court will review consolidates three legal challenges to California's previously proposed reimbursement cuts. The three cases are:

  • Maxwell-Jolly v. California Pharmacists;
  • Maxwell-Jolly v. Independent Living Center; and
  • Maxwell-Jolly v. Santa Rosa Memorial Hospital (Vesely, Modern Healthcare, 1/18).


In 2008, the California Legislature approved a 10% reduction in Medi-Cal reimbursements for dentists, health clinics, pharmacies, physicians and other medical providers (McClatchy/Sacramento Bee, 1/19).

Health care provider groups filed lawsuits against the state, arguing that the lower payment rates would negatively affect Medi-Cal beneficiaries' access to care and conflict with the federal Medicaid Act.

After federal courts blocked the Medi-Cal cuts from taking effect, California appealed the case to the U.S. Supreme Court (Savage/Goldmacher, Los Angeles Times, 1/19).

Attorneys for the state say the proposed Medi-Cal cuts did not violate the law. They also argue that only the federal government has the authority to enforce Medicaid regulations and that health care providers and patients do not have the right to sue a state for allegedly violating federal Medicaid rules (Egelko, San Francisco Chronicle, 1/19).

Implications for California, Other States

The Supreme Court's ruling on the case could have major implications for efforts to address California's budget deficit. Last week, Gov. Jerry Brown (D) released a budget proposal that would reduce Medi-Cal payments to health care providers by 10% to cut program spending by about $719 million in fiscal year 2011-2012.

In addition, the case could have implications for other states seeking to address budget deficits by cutting Medicaid payments. Twenty-two states have joined California in appealing the issue to the Supreme Court (Los Angeles Times, 1/19).


The court is expected to hear oral arguments in the case next fall. A decision is expected in late 2011 or early 2012 (Robertson, Sacramento Business Journal, 1/18).

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