January 23, 2011
Area(s) of Interest: Advocacy Payor Issues and Reimbursement 

The U.S. Supreme Court announced last week it would review a lower court ruling that blocked the state of California from cutting Medi-Cal physician payments by 10 percent in 2008.

A ruling is not expected until fall, at the earliest, and probably will not come until next year.

The California Medical Association (CMA) responded by calling on state legislators to reject Gov. Jerry Brown's budget proposal to cut Medi-Cal provider rates in 2011-12. CMA's legal team said it was confident the U.S. Supreme Court would ultimately agree that the Medi-Cal provider cuts are illegal under federal law.

"Medi-Cal payment rates for physicians are ridiculously low--among the lowest in the nation for Medicaid--and to cut them further would only serve to force more doctors out of the program and decrease access to care for millions of poor and unemployed Californians," said James Hinsdale, M.D., CMA president. "Regardless of the legal issues involved, slashing Medi-Cal rates is bad public policy that would undermine the state's health care system."

"We are confident that the Supreme Court will get it right and affirm the 9th U.S. Circuit Court of Appeals' ruling, which concluded that California's move to lower Medi-Cal rates violated federal law," said Francisco Silva, CMA's general counsel. "Already, the Centers for Medicare & Medicaid Services has rejected the state's request for the lower rate, and California courts, independent of federal courts, have blocked similar cuts for violating federal law."

It's important to note:

The U.S. Supreme Court has decided to review the appeal of the 9th Circuit ruling only on the question of private right of action, which is the question of whether the federal supremacy clause allows individuals to sue in federal court to enforce the federal Medicaid law.
The Centers for Medicare & Medicaid Services (CMS), the federal agency that administers the two health care programs, has rejected the state's request to allow the lower provider rates. The state has appealed that decision.
In separate cases, state courts ruled last year that the provider cuts can be challenged in state court and that those cuts are illegal.
The U.S. Solicitor General advised the Supreme Court to not grant the cert petition, noting, among other things, courts that looked at this issue previously have affirmed the right of individuals to sue in federal court to validate the supremacy of federal law over inconsistent state law.

 

Contact: Francisco Silva, 916/551-2888 or via email.