CMA files a petition with the Supreme Court to block the 10 percent physician reimbursement cut September 20, 2013 Medi-Cal Advocacy, Medi-Cal, Medi-Cal Cuts, United States Supreme Court, Access to Care, Medi-Cal Lawsuit 0 The California Medical Association (CMA) filed a petition today asking the United States Supreme Court to review the Ninth Circuit Court of Appeals ruling that cleared the way for the State of California to implement a 10 percent cut to Medi-Cal provider reimbursement rates. Federal law requires that Medi-Cal patients have the same access to physicians and other health care providers as the general insured public. Despite this law, a three judge panel of the Ninth Circuit ruled that the state could move forward with the rate cuts, passed by the Legislature in the spring of 2011. Previously, a district court enjoined the cuts, finding that they would irreparably harm the millions of patients who rely on Medi-Cal for health care. CMA and the other plaintiffs in the case requested a rehearing from the full Ninth Circuit Court of Appeals, which was denied. The brief filed today argues that the Centers for Medicare & Medicaid Services (CMS) did not specify the rules that a state must follow to show that its proposed reimbursement rates are sufficient to meet the standard that was set by the Congress in the Medicaid Act. Congress mandated that each state’s Medicaid program set payment rates that “are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographical area.” Lacking any guidance from CMS, the Ninth Circuit deferred to CMS, who approved the cuts despite the fact that the California Department of Health Care Services (DHCS) did not review cost data with respect to most of the services that would be subjected to rate reduction. Had it done so, CMA believes that the new payment rates for many services would be found to be below a providers’ own costs to provide that care. This case presents a straight forward but important legal question of agency deference that has sharply divided the courts of appeals. In other words, what level of deference must a court give to informal agency interpretations of statutes made outside the context of a formal rulemaking. In this case, the Ninth Circuit Court of Appeals applied Chevron deference, meaning that it deferred to the federal agency ruling without question. Without a full review of the facts, CMA and the other plaintiffs – California Hospital Association, California Dental Association, California Pharmacists Association , National Association of Chain Drug Stores, California Association of Medical Product Suppliers, AIDS Healthcare Foundation and American Medical Response – believe that reducing California's already dismal Medi-Cal rates will force providers out of the program at a time when millions of new patients will be diverted into the Medi-Cal system under the Affordable Care Act (ACA). Despite the fact that no statistical evidence of the effect of a 10 percent cut was presented by DHCS or CMS, the court, in its deferral to the federal agency, has condemned Medi-Cal beneficiaries in the state of California to second-class health care under the ACA. The petition argues that under these circumstances, the U.S. Supreme Court should review this case to determine if the Ninth circuit court was right to defer to CMS or whether CMS should have examined the potential effects of the 10 percent cuts and made a determination with the facts in hand. On August 14, 2013, the California DHCS announced that it would begin implementation of the 10 percent Medi-Cal physician payment rate reduction on January 9, 2014. If these cuts are allowed to stand, access to care will be devastated, not only for the existing Medi-Cal patients, but also the millions of patients that will be newly eligible for Medi-Cal under the Affordable Care Act in 2014. The California Medical Association (CMA) filed a petition today asking the United States Supreme Court to review the Ninth Circuit Court of Appeals ruling that cleared the way for the State of California to implement a 10 percent cut to Medi-Cal provider reimbursement rates. Federal law requires that Medi-Cal patients have the same access to physicians and other health care providers as the general insured public. Despite this law, a three judge panel of the Ninth Circuit ruled that the state could move forward with the rate cuts, passed by the Legislature in the spring of 2011. Previously, a district court enjoined the cuts, finding that they would irreparably harm the millions of patients who rely on Medi-Cal for health care. CMA and the other plaintiffs in the case requested a rehearing from the full Ninth Circuit Court of Appeals, which was denied. The brief filed today argues that the Centers for Medicare & Medicaid Services (CMS) did not specify the rules that a state must follow to show that its proposed reimbursement rates are sufficient to meet the standard that was set by the Congress in the Medicaid Act. Congress mandated that each state’s Medicaid program set payment rates that “are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographical area.” Lacking any guidance from CMS, the Ninth Circuit deferred to CMS, who approved the cuts despite the fact that the California Department of Health Care Services (DHCS) did not review cost data with respect to most of the services that would be subjected to rate reduction. Had it done so, CMA believes that the new payment rates for many services would be found to be below a providers’ own costs to provide that care. This case presents a straight forward but important legal question of agency deference that has sharply divided the courts of appeals. In other words, what level of deference must a court give to informal agency interpretations of statutes made outside the context of a formal rulemaking. In this case, the Ninth Circuit Court of Appeals applied Chevron deference, meaning that it deferred to the federal agency ruling without question. Without a full review of the facts, CMA and the other plaintiffs – California Hospital Association, California Dental Association, California Pharmacists Association , National Association of Chain Drug Stores, California Association of Medical Product Suppliers, AIDS Healthcare Foundation and American Medical Response – believe that reducing California's already dismal Medi-Cal rates will force providers out of the program at a time when millions of new patients will be diverted into the Medi-Cal system under the Affordable Care Act (ACA). Despite the fact that no statistical evidence of the effect of a 10 percent cut was presented by DHCS or CMS, the court, in its deferral to the federal agency, has condemned Medi-Cal beneficiaries in the state of California to second-class health care under the ACA. The petition argues that under these circumstances, the U.S. Supreme Court should review this case to determine if the Ninth circuit court was right to defer to CMS or whether CMS should have examined the potential effects of the 10 percent cuts and made a determination with the facts in hand. On August 14, 2013, the California DHCS announced that it would begin implementation of the 10 percent Medi-Cal physician payment rate reduction on January 9, 2014. If these cuts are allowed to stand, access to care will be devastated, not only for the existing Medi-Cal patients, but also the millions of patients that will be newly eligible for Medi-Cal under the Affordable Care Act in 2014. Comments are closed.
