Supreme Court Opens Term with California Medicaid Rate Cuts Case
The Supreme Court opened its 2011-2012 term yesterday with oral arguments in the healthcare case Toby Douglas, Director, California Department of Health Care Services v. Independent Living Center of Southern California, Inc., et al. The Supreme Court consolidated and granted certiorari in three cases to address whether the Constitution’s Supremacy Clause gives Medicaid providers and beneficiaries a cause of action to challenge a state law reducing Medicaid reimbursement rates.
The suit was filed in response to California’s proposed Medicaid rate cuts of up to 10%. Providers and beneficiaries challenged the cuts, arguing that the cuts violated federal law. Federal law requires states that accept Medicaid funding to adopt a plan to assure that Medicaid rates are “sufficient to enlist enough providers” so that Medicaid beneficiaries can access care to the same extent as “the general population in the geographic area.” The Ninth Circuit Court of Appeals held that the rate cuts violated federal law and threatened access to “much-needed medical care.” The Ninth Circuit found that private parties could sue under the Supremacy Clause, which makes federal law “the supreme law of the land.” California appealed the case to the Supreme Court, which heard oral arguments yesterday.