Healthcare Business News

Facing long odds, groups press court on Calif. Medicaid pay cuts

By Andis Robeznieks
Posted: February 13, 2013 - 11:45 am ET

The odds appear to be against the California hospital and medical associations as they seek to stop a 10% Medicaid pay cut from taking effect, but they and their co-plaintiffs are finding support from national and local organizations filing briefs in their defense.

A three-judge panel from the 9th U.S. Circuit Court of Appeals lifted an injunction against the pay cuts called for by Medi-Cal, the state's Medicaid program, on Dec. 13. So, on Jan. 28, the two organizations and their co-plaintiffs/appellees filed a petition to have the case reviewed en banc, meaning by the entire court. The other organizations in the lawsuit are the California Dental Association, California Pharmacists Association, National Association of Chain Drug Stores, California Association of Medical Product Suppliers, AIDS Healthcare Foundation and the emergency transport company, American Medical Response.

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The 9th Circuit is the nation's largest with 28 active judges. For en banc reviews, cases are heard before the chief judge and 10 randomly selected judges. En banc petitions, however, are seldom successful in the district. In 2012, the circuit received 913 petitions, considered 33 and voted to rehear 19. In 2011, it received 826 petitions, considered 28, and reheard 13.

Despite these long odds, several organizations have shown their support by signing on to one of two amicus briefs filed Feb. 7.

One brief was filed by a group of not-for-profit organizations (PDF) including the AARP. The others were the Arizona Center for Disability Law, Arizona Center for Law in the Public Interest, Asian Law Alliance, California Advocates for Nursing Home Reform, Disability Law Center of Alaska, Disability Rights California, Disability Rights Idaho, Disability Rights Legal Center, Hawaii Disability Rights Center, National Senior Citizens Law Center, Nevada Disability Advocacy & Law Center, Public Interest Law Project and Western Center on Law and Poverty.

In their brief, the organizations argued that cutting reimbursement would hurt access to healthcare because, when a provider's costs exceed payment, they opt out of the Medicaid program.

“Rather than analyze up-front the impact of an across-the-board reimbursement cut, California instead proposed that it would monitor for access problems later,” the brief stated. “That ostrich-like approach ignores repeated decisions from this Court recognizing that Medi-Cal rate cuts force healthcare providers to limit the number of new Medi-Cal patients they accept or stop treating them entirely.”

The other brief was filed by the American Hospital Association and eight state hospital associations. The states represented are Alaska, Arizona, Hawaii, Idaho, Montana, Nevada, Oregon and Washington.

In their brief, the associations expressed concern that future CMS reviews of Medicaid rate reductions in their states “will be governed by the circuit's disposition.” They added that hospitals cannot opt out of providing emergency medical treatment to Medicaid patients.

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