With states around the country preparing to implement large cuts in Medicaid budgets, interest groups representing thousands of U.S. hospitals have filed briefs with the U.S. Supreme Court arguing that healthcare providers should be able to challenge indiscriminate rate cuts through lawsuits.
Provider associations weigh in on Calif. Medicaid case
The Supreme Court has agreed to hear three consolidated lawsuits on its first day of oral arguments for the fall term, Oct. 3. In those cases, three healthcare providers allege that California’s 10% rate cuts in Medi-Cal in 2008 violate the terms of the Medicaid Act, which guarantees that Medicaid recipients have access to the same level of care as the general population.
The providers—a hospital, a nursing home and a group of pharmacists—argue that by cutting rates, fewer facilities and doctors will accept Medicaid patients, who then seek care in crowded hospital emergency rooms. They say the Supremacy Clause of the U.S. Constitution ought to give federal laws like the Medicaid Act primacy over state budget policies, especially when states ignore administrative rulings, as California did when the CMS rejected the proposed rate reductions.
The Obama administration has sided with California lawmakers in the case, saying that the Supremacy Clause does not have a “private right of action” under which individual groups can bring lawsuits for alleged violations, no matter how well-reasoned their arguments.
On Friday, providers with 10 healthcare provider trade associations—including the American Hospital Association, the Federation of American Hospitals, and the National Association of Public Hospitals and Health Systems—filed their joint, 48-page friend-of-the-court brief (PDF) in the case.
“A decision in favor of (California lawmakers) would allow not only California, but all states, to defy federal law with virtual impunity,” the hospitals’ joint brief says. “Where, as here, the state disregards the requirements of Medicaid, it is the nation’s most vulnerable citizens, including millions of seniors, children, pregnant women and people with disabilities, who will suffer most.”
The three cases that will be argued on Oct. 3 are 09-958, 09-1158 and 10-283. The California Department of Healthcare Services is the petitioner in each case.
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