Metropolitan News-Enterprise


Monday, July 8, 2013


Page 1


Court Rejects Medi-Cal Cuts for Services Not Provided by M.D.s




State lawmakers improperly stopped funding certain medical services that rural and other specialized health clinics provided to low-income residents under the state’s Medicaid program, the Ninth U.S. Circuit Court of Appeals ruled Friday.

The panel reversed Senior U.S. District Judge Frank Damrell of the Eastern District of California, who held that the clinics had a private right of action to sue over Medi-Cal reimbursements lost under Welfare and Institutions Code Sec. 14131.10, but that the statute was not preempted by federal law. The legislation, adopted during the 2009 budget crisis, allowed the Department of Health Care Services to discontinue funding of services provided at “federally qualified health centers” but not by medical doctors, such as chiropractic care, dental care, optometry, podiatry and speech therapy.

CMS Approval

Damrell ruled in favor of the plaintiffs on the claim that the department was required to obtain approval for amendments to the state Medicaid plan before implementing them. The federal Centers for Medicare and Medicaid Services ultimately gave that approval, but Senior Judge Dorothy W. Nelson, in her opinion Friday for the Ninth Circuit, said only Congress can change the terms of Medicaid coverage, which are now written to mirror the services covered by Medicare.

Nelson explained that while the court was sympathetic to “California’s persistent budget woes,” lawmakers had no right to deprive “under-served communities,” including  migrant workers, homeless people and other poor populations, of services to which they are entitled under the federal Medicaid Act.

 Because Medicare “unambiguously defines the Clinics’ services to include services performed by dentists, podiatrists, optometrists and chiropractors, in addition to services provided by doctors of medicine and osteopathy,” eliminating those services for Medi-Cal recipients “would do violence” to the program, Nelson wrote.

Right to Sue

The judge said the clinics had the right to sue for violation of their federally protected civil rights under 42 U.S.C. Sec. 1983. While the statute is most often invoked to sue for violation of rights guaranteed by the Bill of Rights and the Reconstruction Amendments, Nelson said the health clinics could rely on it for the vindication of their rights under the Medicaid Act

The Ninth Circuit, Nelson explained, had not previously considered whether Congress intended to allow a private right of action to enforce the section of the Medicaid Act at issue, which says a state plan “shall provide for payment for services….furnished by a Federally-qualified health center and services….furnished by a rural health clinic….”

Given the specificity of the language, the judge said, Congress clearly and unambiguously created rights enforceable under Sec. 1983.

No Deference Owed

The judge went on to say that the court was not required to defer to CMS approval of the amendments. The usual rule of judicial deference to administrative decision makers does not apply, Nelson explained, when the decision is contrary to the clear mandate of Congress.

Senior Judge A. Wallace Tashima and Judge Mary H. Murguia joined in the opinion.

The case, California Association of Rural Health Clinics v. Douglas, 10-17574, was one of several challenges health care providers and patients have brought over Medi-Cal cuts. A different Ninth Circuit panel last December upheld a broad 10 percent cut in reimbursements to doctors, hospitals and other providers, and two months ago the Third District Court of Appeal upheld a regulation that prohibits Medi-Cal from paying for more than two visits per month by an outpatient to a community mental health clinic.


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