U.S. Supreme Court Rejects Suit Over Medicare Provision
The U.S. Supreme Court on Monday declined to hear a lawsuit in which five states sought an injunction to block the collection of state funds by the federal government to help finance the Medicare prescription drug benefit, CQ Today reports (Schuler, CQ Today, 6/19). The attorneys general of Texas, Kentucky, Maine, Missouri and New Jersey in March requested permission to file the lawsuit in the Supreme Court; states can file lawsuits against the federal government with a lower court or with the Supreme Court, which can refuse to hear such cases.
The current lawsuit challenges the "clawback" provision of the Medicare prescription drug benefit. Under the provision, Medicare assumes prescription drug costs for beneficiaries eligible for both Medicaid and Medicare, but states must pay the federal government as much as 90% of the estimated amount that they would have spent for medication costs for dual eligibles under Medicaid (California Healthline, 3/6).
The rate under the clawback provision will decrease to 75% by 2015. According to the lawsuit, the clawback provision amounts to a tax that "infringes on state sovereignty" and "interferes with essential functions of state government" (CQ Today, 6/19).
Attorneys general of 10 other states have filed amicus briefs in support of the five states involved with the lawsuit (Washington Times, 6/20). The Supreme Court declined to hear the lawsuit without comment and referred the case to a lower court (Holland, AP/Louisville Courier-Journal, 6/20).
New Jersey Attorney General Zulima Farber said, "Our position is that this is the first time Congress has expanded its power to include direct taxation of the sovereign states" (Cohen, Newark Star-Ledger, 6/20).
However, Solicitor General Paul Clement wrote in arguments for the Bush administration, "The states cannot establish that the (law) ... will cause them any financial hardship at all" (Washington Times, 6/20). He added, "By contrast, an injunction barring implementation of the (the law) would deprive the Medicare Part D program of an important source of the funding necessary to furnish prescription drugs to" beneficiaries (Newark Star-Ledger, 6/20).
Kentucky Assistant Attorney General David Johnstone said, "We realized it was a long shot for the court to take the case," adding, "In the next couple of days, we'll meet in-house and discuss with the other states involved where we go from here." Johnstone said that each of the 15 states involved likely will have to file separate lawsuits in lower courts.
CMS Administrator Mark McClellan said, "We continue to work to ensure that the millions of people with Medicare and Medicaid will continue to get the drugs they need, at a much lower cost than had been expected, while saving money for states" (Freking, AP/Boston Globe, 6/19).
In related news, UnitedHealth Group officials on Monday said that the company has enrolled 5.7 million Medicare beneficiaries in prescription drug plans, with 4.5 million beneficiaries enrolled in stand-alone plans and 1.2 million enrolled in Medicare Advantage plans, Dow Jones reports. According to UnitedHealth, 3.2 million of the company's 5.7 million Medicare beneficiaries have enrolled in a company stand-alone prescription drug plan branded by AARP.
About 1.1 million of the company's Medicare beneficiaries were automatically enrolled in UnitedHealth prescription drug plans by the federal government, the company said (Dow Jones, 6/19).