Metropolitan News-Enterprise


Tuesday, May 28, 2013


Page 1


Ninth Circuit Declines to Reconsider Ruling on Medi-Cal Cuts


From Staff and Wire Service Reports


The Ninth U.S. Circuit Court of Appeals on Friday declined to grant rehearing to California doctors, pharmacists and hospitals seeking to undo the state’s 10 percent provider rate cut for treating the poor.

The panel left standing its ruling of Dec. 12, in which it reversed orders granting preliminary injunctions, in 11 consolidated cases, that would have barred the cuts from taking effect while the court considered whether to make the injunctions permanent. The court also said that none of its 27 active judges had asked for a vote on hearing the case en banc.

Health providers vowed they will continue to press lawmakers to restore the 10 percent reimbursement rate cut to the state’s Medicaid program, known as Medi-Cal.

“While we are not surprised by the 9th Circuit Court ruling, we are certainly disappointed, as the 10 percent cut to Medi-Cal will have devastating effects on California’s poorest and most vulnerable patients,” said Paul Phinney, president of the California Medical Association, in a statement.

Affordable Care Act

Phinney said the state needs competitive Medi-Cal payments as the state prepares to get millions of Californians health coverage under the Affordable Care Act. The association, which represents 35,000 doctors, says ongoing cuts have left doctors with little option but to stop taking qualified patients because the reimbursements do not meet the cost of overhead and supplies to treat them.

“Reversal of these cuts is a California priority,” said Duane Dauner, president of the California Hospital Association, in a statement.

Friday’s decision cements a budget victory for Brown, who has vowed to hold the line on spending. The administration had estimated the two-year savings from the cut would be $508.9 million but will revise the figure because the state assumed the decision would not be made until August, said H.D. Palmer, the governor’s finance spokesman.

At the time lawmakers passed the cut, the reduction was projected to save the state some $330 million a year.

U.S. District Judge Christina A. Snyder of the Central District of California had held that the plaintiffs were likely to prevail on their claims that the cuts violated the Supremacy Clause of the U.S. Constitution and that the procedure used by the Department of Health and Human Services in approving them violated the Administrative Procedure Acts. The judge also said that some of the plaintiffs were likely to show that they had been deprived of their property without just compensation.

Insufficiently Deferential

But Ninth Circuit Senior Judge Stephen A. Trott, joined by Senior Judge Andrew J. Kleinfeld and Judge M. Margaret McKeown, said Snyder’s ruling was insufficiently deferential to the judgment of Secretary Kathleen Sebelius on a matter committed to her discretion, and that the Takings Clause did not apply because Medicaid is a voluntary program that confers no property rights on providers.

Trott explained that the relevant statute does not, contrary to the district judge’s conclusion, require cost studies as a prerequisite to reducing provider rates in every case. A prior Ninth Circuit decision suggesting that such studies were always necessary does not control because that case did not involve the exercise of administrative judgment by HHS, Trott said. 

It’s unclear if health providers will find success in reversing the cut this legislative cycle. Doctors and hospitals sponsored SB640 by Sen. Ricardo Lara, D-Bell Gardens, a bill that would restore the 10 percent rate cut, but the bill stalled in committee Thursday as the deadline nears for passing bills out of their houses of origin.

Another bill, AB900, by Assemblyman Luis Alejo, D-Watsonville, advanced in the Assembly last week only after Medi-Cal restoration was limited to skilled nursing facilities.

The case is Managed Pharmacy Care v. Sebelius, 12-55068.


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