Healthcare Business News

High court to hear challenges to Medicaid cuts

By Rebecca Vesely
Posted: January 18, 2011 - 12:01 am ET

The U.S. Supreme Court has agreed to hear arguments on three consolidated California cases that challenge Medicaid provider payment cuts.

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The high court said it would hear one-hour oral arguments on the three cases, most likely in the fall. In all three cases, providers sued the California Department of Health Care Services to halt planned rate cuts that state officials said were necessary amid a severe budget crisis.

The Supreme Court has agreed to hear the merits of the cases through a narrow lens: whether state reductions in Medicaid payments can be challenged under the Constitution's Supremacy Clause.

In one of the cases, Maxwell-Jolly v. Santa Rosa Memorial Hospital, more than a dozen hospitals statewide argued that a planned 10% rate cut would violate the federal clause requiring that states ensure that Medicaid reimbursements are consistent with “efficiency, economy and quality of care.” The 9th U.S. Circuit Court of Appeals in San Francisco sided with the hospitals last May in the state's appeal.

The other two cases are Maxwell-Jolly v. California Pharmacists and Maxwell-Jolly v. Independent Living Center.

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