Capitol Alert

Supreme Court ruling limits Medi-Cal lawsuits

Cyrelle Andrews of Los Angeles gives Gov. Jerry Brown a thumbs-down as Dave Ragen, president of the SEIU-United Healthcare Workers West, speaks about proposed cuts to Medi-Cal at the “We are Medi-Cal” Day on the west steps of the Capitol in 2013.
Cyrelle Andrews of Los Angeles gives Gov. Jerry Brown a thumbs-down as Dave Ragen, president of the SEIU-United Healthcare Workers West, speaks about proposed cuts to Medi-Cal at the “We are Medi-Cal” Day on the west steps of the Capitol in 2013. Sacramento Bee file

For years, some of the nation’s biggest legal fights over how much government should pay doctors and other health providers to care for the poor played out in California.

But on Tuesday, a U.S. Supreme Court decision in a case stemming from Idaho stood to limit those battles in the future.

In a 5-4 decision, the Supreme Court ruled Medicaid providers cannot sue for an injunction over rate cuts, but should instead bring complaints to the federal Department of Health and Human Services.

The Brown administration praised the ruling limiting the lawsuits. Legal challenges can tie the state up in court and prevent enacting rate cuts – with significant budget implications.

Health care advocates acknowledged the decision will tilt the legal landscape in future disputes against the industry.

Exactly how much is unclear.

Lynn Carman, who represents pharmacists as chief counsel for the Medicaid Defense Fund, said the decision “will make it extremely hard for any beneficiary or provider to be able to force the state” to raise reimbursement rates.

However, Carman and other advocates said providers could still sue under different provisions of the law.

“Preliminary evaluation of the court’s decision shows that as we continue to pursue action around Medicaid rates in California, viable options remain available,” Molly Weedn, a spokeswoman for the California Medical Association, said in an email.

In one of the highest profile rate cases in California, a U.S. District Court judge in 2011 blocked California from imposing a 10 percent reduction in provider rates. A federal appeals court overturned the ruling, but not until late 2012.

In a brief filed in the Idaho case last year, California Attorney General Kamala Harris argued the issue was “exceptionally important” to the state. Legal challenges that precluded California from implementing rate reductions, she said, cost the state more than $1.5 billion since 2008.

Norman Williams, a spokesman for the Department of Health Care Services, said in an email that the department was “pleased that the U.S. Supreme Court has reaffirmed the contractual relationship between states and the federal government for the operation and administration of Medicaid programs.”

Call David Siders, Bee Capitol Bureau, (916) 321-1215. Follow him on Twitter @davidsiders.

Armstrong v. Exceptional Child Center Inc.

Issue: Whether the Supremacy Clause gives Medicaid providers a private right of action to enforce state plans for medical assistance against a state where Congress chose not to create enforceable rights under that statute.

Action: The judgment is reversed and the majority opinion affirms that courts must give federal laws priority when they clash with state laws.

Majority: Scalia, Roberts, Thomas, Breyer and Alito

Dissenting: Sotomayor, Kennedy, Ginsburg, Kagan

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