Efforts To Increase Medi-Cal Rates Continue, Despite SCOTUS Ruling

California providers will continue efforts to increase Medi-Cal reimbursement rates, despite this week's U.S. Supreme Court ruling limiting lawsuits against state Medicaid agencies over low rates, the Sacramento Business Journal reports.

Medi-Cal is California's Medicaid program (Robertson, Sacramento Business Journal, 4/1).

Background on SCOTUS Ruling

The high court's ruling in the case, Armstrong v. Exceptional Child Center, reversed a lower court ruling that ordered Idaho to increase its Medicaid reimbursement rates. Providers in Idaho originally sued the state in 2009, alleging that it was illegally keeping Medicaid reimbursement rates at levels set in 2006 despite data showing that the cost of providing medical services had increased. A federal judge sided with the providers, and the decision was affirmed by the 9th U.S. Circuit Court of Appeals. Idaho's Medicaid officials appealed the ruling to the Supreme Court.

The providers in the case argued that the courts are an important venue for challenging low reimbursement rates, which they claim can lead to less access to care for Medicaid beneficiaries because many providers are not willing to participate in the program. However, some states argued that Congress has not authorized such legal challenges.

On Tuesday, the U.S. Supreme Court in a 5-4 decision ruled that such legal challenges are not permitted under the U.S. Constitution's supremacy clause, which states that federal laws supersede conflicting state statutes.

Justice Antonin Scalia wrote for the majority that the supremacy clause "instructs courts what to do when state and federal law clash but is silent regarding who may enforce federal laws in court." He added that providers have the option of asking the federal government to intervene in their stead.

The ruling could limit future Medi-Cal lawsuits (California Healthline, 4/1).

Details of Calif. Providers' Efforts

California Hospital Association spokesperson Jan Emerson-Shea said, "The court decision is disappointing, but not directly related to our legislation and continued efforts to find some solution to the problem," adding, "We are looking at a variety of options" to increase Medi-Cal rates.

This month, committees in the state Assembly and Senate will consider separate bills (AB 366, SB 243) aimed at addressing low Medi-Cal reimbursement rates, according to the Business Journal (Sacramento Business Journal, 4/1).

The bills would:

• Align Medi-Cal reimbursement rates with those under Medicare;
• Increase rates for services under Medi-Cal managed-care plans;
• Increase reimbursements for certain inpatient services by an undetermined percentage for the 2015-2016 year; and
• Prevent payment reductions for services provided on or after June 1, 2011, as required under current law (AB 366/SB 243, 2/17).

The Assembly Health Committee is set to consider AB 366 on April 14, and the Senate Health Committee will hold a hearing on SB 243 on April 22 (Sacramento Business Journal, 4/1).