States win Med­i­caid rate rul­ing

Supreme Court de­cides health­care providers can’t go to court to chal­lenge cut­backs in pay­ments.

Los Angeles Times - - THE STATE - By David G. Sav­age david.sav­age@la­times.com Twit­ter: @david­sav­age Times staff writer Chris Mege­rian, in Sacra­mento, con­trib­uted to this re­port.

WASH­ING­TON — The Supreme Court dealt a de­feat Tues­day to doc­tors, den­tists and phar­ma­cists who treat low-in­come pa­tients, rul­ing they may not go to court to chal­lenge cut­backs in Med­i­caid pay­ments in Cal­i­for­nia and other states.

In a 5-4 de­ci­sion, the jus­tices ruled th­ese re­im­burse­ment rates are to be set by state law­mak­ers and fed­eral health of­fi­cials, not by judges.

Though the case stemmed from an Idaho law­suit, the is­sue has weighed heav­ily in Cal­i­for­nia.

The Leg­is­la­ture, fac­ing a bud­get cri­sis, adopted a se­ries of Med­i­caid spend­ing cuts from 2008 to 2012. But re­peat­edly, fed­eral judges in San Fran­cisco in­ter­vened to de­lay or block the cuts to Medi-Cal, the state’s name for the joint fed­eral-state pro­gram. Doc­tors and other med­i­cal providers had sued, say­ing the cut­backs would de­prive poor peo­ple of their right to de­cent health­care.

On Tues­day, Jus­tice An­tonin Scalia said judges lacked the author­ity to in­ter­vene in th­ese bud­get bat­tles.

“We hold that Med­i­caid providers have no right to seek in­junc­tive re­lief ” in court, he said, speak­ing in the court­room. “The sole rem­edy Congress pro­vided for a state’s fail­ure to com­ply with Med­i­caid’s re­quire­ments is the with­hold­ing of Med­i­caid funds by the sec­re­tary of Health and Hu­man Ser­vices” in Wash­ing­ton.

Ad­vo­cates for a strong Med­i­caid pro­gram were dis­mayed. “This is a mo­men­tous de­ci­sion,” said Ti­mothy Jost, a law pro­fes­sor at Wash­ing­ton & Lee Uni­ver­sity. He said it sug­gests providers and pa­tients ef­fec­tively have no legal rem­edy if fund­ing is slashed.

“It’s a dis­as­ter,” said Lynn Car­man, a San Fran­cisco lawyer who rep­re­sented Cal­i­for­nia phar­ma­cists and suc­ceeded in block­ing sev­eral planned cut­backs in re­im­burse­ment rates. This “per­mits state of­fi­cials to vi­o­late fed­eral law with im­punity.”

Lawyers for the Amer­i­can Med­i­cal Assn. said the fed­eral agency was a “pa­per tiger” and would not cut off funds to states that slashed their spend­ing.

“To­day’s rul­ing shuts off a prac­ti­cal path of re­lief when states break trust with Med­i­caid’s prom­ise to pro­vide the poor­est Amer­i­cans with equal ac­cess to med­i­cal care,” said Dr. Robert M. Wah, AMA’s pres­i­dent.

The rul­ing is a victory for Cal­i­for­nia of­fi­cials and bud­get plan­ners. State Atty. Gen. Ka­mala D. Har­ris had urged the court to block pri­vate law­suits over Med­i­caid. They “have im­prop­erly dis­rupted Cal­i­for­nia’s abil­ity to man­age its $90-bil­lion Med­i­caid pro­gram,” she said in a friend-of the-court brief. And they “have cost the state more than $1.5 bil­lion” when spend­ing cuts were de­layed or blocked, she said.

Tues­day’s rul­ing re­flects a shift in the law that was decades in the mak­ing. When Congress passed ma­jor spend­ing laws in the 1960s to fund ed­u­ca­tion, health­care and ser­vices for the poor and dis­abled, the money was to flow through the states. It was “a bar­gain,” Scalia ex­plained Tues­day. States re­ceived the money as long as they abided by the fed­eral rules.

Within a few years, when prob­lems arose, ad­vo­cates went to court, con­tend­ing states, schools or other fa­cil­i­ties had failed to pro­vide the promised ser­vices. Some­times, they ac­cused the state of vi­o­lat­ing the rights of the stu­dents or pa­tients. Judges then played the ma­jor role in de­cid­ing the scope of th­ese fed­eral laws.

But a more con­ser­va­tive Supreme Court has slowly re­treated from the view that fed­eral judges could set the terms of th­ese spend­ing laws.

The lib­eral-lean­ing 9th Cir­cuit Court of Ap­peals in San Fran­cisco had held fast to the ear­lier view. It cited a pro­vi­sion in the Med­i­caid Act that said states must en­sure its pay­ments are “con­sis­tent with ef­fi­ciency, econ­omy and a qual­ity of care” and are “suf­fi­cient to en­list enough providers” to serve the lo­cal pop­u­la­tion.

Its judges re­lied on this pro­vi­sion to de­lay Cal­i­for­nia’s pro­posed cut­backs. In an Idaho case, they said the state was not pro­vid­ing enough money to pay for in­home nurs­ing care for low­in­come peo­ple. This fail­ure was said to vi­o­late the Con­sti­tu­tion’s pro­vi­sion that makes fed­eral law supreme.

In re­vers­ing the 9th Cir­cuit, Scalia said nei­ther the Con­sti­tu­tion nor the Med­i­caid Act au­tho­rized judges to veto Idaho’s pay­ment rates. If the providers or their pa­tients are un­happy with th­ese rates, “their re­lief must be sought ini­tially through the [Health and Hu­man Ser­vices] sec­re­tary rather than through the courts,” he said.

Chief Jus­tice John G. Roberts and Jus­tices Clarence Thomas and Sa­muel Al­ito agreed with his opin­ion in Arm­strong vs. Ex­cep­tional Child Cen­ter.

Jus­tice Stephen G. Breyer, who usu­ally votes with the lib­eral bloc, cast the key fifth vote to form the ma­jor­ity.

He said Congress had “de­cided to vest broad dis­cre­tion” in the fed­eral health agency to man­age the Med­i­caid pro­gram, and it “in­tended to fore­close” pri­vate law­suits.

In dis­sent, Jus­tice So­nia So­tomayor said that “since the ear­li­est days of the Repub­lic,” it has been un­der­stood that fed­eral judges can en­force fed­eral law.

“The court’s er­ror to­day has very real con­se­quences,” she wrote. It will al­low states to “set re­im­burse­ment rates so low that providers [are] un­will­ing to fur­nish a cov­ered ser­vice for those who need it.”

Jus­tices An­thony Kennedy, Ruth Bader Gins­burg and Elena Ka­gan joined in her dis­sent.

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