Lawsuit Challenging Medi-Cal Cuts First on High Court’s Agenda
When the U.S. Supreme Court convenes for its 2011-2012 term on Oct. 3, the first item on the justices' agenda will be arguments in a lawsuit arguing that Medicaid beneficiaries should be allowed to sue states that make cuts to the program, CQ Weekly reports.
The case is particularly significant because the outcome could affect the scheduled expansion of MedicaidÂ in 2014 under the federal health reform law (Barbash, CQ Weekly, 9/26).
Background on Case
The case stems from cuts in reimbursements that 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 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 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.
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."
Issues Surrounding Case
According to CQ Weekly, the main issue before the high court will be whether private parties have the legal standing to challenge reimbursement rate cuts under the supremacy clause.
For decades, Congress has declined to authorize or prohibitÂ private rights of action or prohibit them and instead left it up to private courts to decide on a case-by-case basis whether such suits are appropriate, CQ Weekly reports.
A brief filed by California and 30 other defendant states expressed concern about a system of "enforcement by potentially millions of private litigants and court injunctions." According to CQ Weekly, health care providers fear a high court ruling that does not give themÂ anyÂ way to enforce adequate Medicaid payment rates under law.
Thomas Scully, a former CMS administrator, said, "It's very dangerous to allow states to just keep cutting Medicaid services," adding that health care providers have no other recourse against such cuts than through individual lawsuits.
In a court brief supporting the plaintiffs, several former HHS officials also noted that without meaningful enforcement, "states would have little incentive to reimburse providers at mainstream rates, and providers would in turn have little incentive to treat Medicaid beneficiaries" (CQ Weekly, 9/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.