Tag Archives: medicaid

California Can Make Cuts To Medi-Cal Health Care Program

The Ninth Circuit held that California could make cuts to the Medi-Cal Health Care program and vacated all injunctions against California.  The opinion can be accessed here.  As the three-judge panel stated,

Medicaid, as a voluntary program, does not create property rights.

In 2011, plaintiffs (a Medi-Cal beneficiary, 5 pharmacies, a pharmacy organization, an independent living center, and a CA association of independent living centers) sued California and the U.S. Dep’t of Health and Human Services to block the cuts under the Medicaid Act.  The district court granted injunctions against California, blocking the enactment of the cuts.  The Ninth Circuit, on appeal, vacated these injunctions.

The Ninth Circuit stated that Chevron U.S.A v. Natural Resources Defense Council requires deference to Sebelius’ interpretation of California’s amendment to its Medicaid plan – called a state plan amendment.  The Ninth Circuit stated,

Considering all the evidence of Chevron-esque delegation in these cases, we hold that the balance tips to the side of deference – both to the secretary’s implicit interpretation that states are not required to follow any specific methodology in submitting SPAs [state plan amendment] and to its explicit determination that the SPAs at issue comply with federal law.

The decision notes that Medicaid “is a colossal undertaking,” with joint funding from the U.S. government and the states.

Congress explicitly granted the secretary authority to determine whether a state’s Medicaid plan complies with federal law.

The secretary understands the [Medicaid] Act and is especially cognizant of the all-important yet sometimes competing interests of efficiency, economy, quality of care, and beneficiary access.

The Ninth Circuit also concluded that plaintiffs’ claims that California violated the supremacy clause was unlikely to prevail under Douglas v. Independent Living Center (2012).  The Court explained,

Even assuming that the supremacy clause provides a private right of action – the secretary has reasonably determined that the state’s reimbursement rates comply with § 30(A) [of the Medicaid Act].

via Courthouse News Service.

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Medicare: Not a “Fancy Two-Step” Process

A federal judge, Judge Rosemary Collyer, in the District of Columbia Court, ruled in the case Allina Health Servs. v. Sebelius, U.S. Dep’t of Health and Human Servs., 10-cv-1463 (RMC).

In his option, Judge Collyer rebuked the government for arbitrarily changing the Medicare reimbursement formula for hospitals serving low-income patients.

Generally, the DSH (Dep’t of Health and Human Services) calculates payments by using the Medicare Disproportionate Share Hospital Fraction. The basis of this lawsuit arose out of the interpretation of the program “Medicate + Choice.”  Judge Collyer found that by relying on the complex nature of the program, the government executed a “fancy two-step” process whereby the government did not engage in proper rulemaking or even an explanation of the benefits.

In the opinion, Judge Collyer stated:

“The secretary’s pretense in briefing the instant matter – that her current interpretation is entirely consistent with the past – is, as the court explains below, clearly forestalled by Northeast Hospital.”

“[P]atients enrolled in an M+C Plan should be counted in the Medicare fraction or the Medicaid fraction of the DSH patient percentage calculation.”

Consequently, Judge Collyer ruled:

“The court concludes that the secretary’s interpretation of the fractions in the DSH calculation, announced in 2004 and not added to the Code of Federal Regulations until the summer of 2007, was not a ‘logical outgrowth’ of the 2003 NPRM”…. “The rulemaking procedure was flawed due to both the single-minded way the NPRM presented the issue and the fact that the secretary adopted the polar opposite of the original proposal.  Contrary to the secretary’s argument, the comments do not remedy these deficiencies.”

 

via Courthouse News Service.

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Affordable Care Act – Medicaid Expansion

The Court’s decision on the constitutionality of the Medicaid expansion is divided and complicated.  The bottom line is that: (1) Congress acted constitutionally in offering states funds to expand coverage to millions of new individuals; (2) So states can agree to expand coverage in exchange for those new funds; (3) If the state accepts the expansion funds, it must obey by the new rules and expand coverage; (4) but a state can refuse to participate in the expansion without losing all of its Medicaid funds; instead the state will have the option of continue the its current, unexpanded plan as is.

The votes for this outcome are divided among several opinions.

Three Justices – the Chief, Justice Kagan, and Justice Breyer – took the position that depriving a state of all of its Medicaid funding for refusing to agree to the new expansion would exceed Congress’s power under the Spending Clause.  Although Congress may attach conditions to federal funds, they concluded, it may not coerce states into accepting those conditions.  And in this case, taking away all the states’ funds for the entirety of its Medicaid program just because it disagreed with a piece of the program would be coercive.  But the remedy for that constitutional violation is not to declare the expansion unconstitutional – such that even states that want to participate would not have the option.  Instead, the plurality held that the provision of the statute that authorized the Government to cut off all funds for non-compliance with the expansion was unconstitutional.  The result is that states can choose to participate in the expansion, must comply with the conditions attached to the new expansion funds if they take that new money, but states can also choose to continue to participate only in the unexpanded version of the program if they want.

Justices Ginsburg and Sotomayor would have held the entire expansion program constitutional, even the provision threatening to cut off all funding unless states agreed to the expansion.  Their votes created a majority for the proposition that the overall expansion was constitutional, and that states could choose to participate in the expansion and would have to comply with the expansion conditions if they did.

But there was still no majority about what to do about the states that do not want to participate in the expansion – the Chief Justice’s 3-Justice plurality voted to strike down the provision allowing the Government to withhold all funds from states that reject the expansion; Justices Ginsburg and Sotomayor voted to uphold it.

The deadlock was broken by the dissenters.  Justice Scalia – writing on behalf of himself, and Justices Kennedy, Thomas, and Alito – agreed with the Chief’s plurality that the threat to withhold all funds was unconstitutionally coercive.  But they would have held that the consequence is that the entire expansion program should be stricken.  The result would have been that even states that wanted to participate in the program could not.  The plurality’s approach of simply striking down the provision that allowed withholding all funds if the state refused the expansion was, in the dissenters’ view, tantamount to rewriting the statute.

At this point, that meant that there were 2 votes to uphold the expansion in its entirety, 4 votes to strike the entire expansion down, and 3 votes to strike down only the provision withholding all funds for non-compliance with the expansion mandate.  So where does that leave things?

Fortunately (for the sake of clarity at least), Justices Ginsburg and Sotomayor resolved the ambiguity by voting with the plurality on the remedy question.  That is, these Justices voted that if the statute was unconstitutionally coercive, then the remedy would be only to strike down the all-or-nothing sanction.

The consequence was a bottom line of 7 Justices – the Chief, Breyer, Kagan and the four dissenters – finding the expansion unconstitutional.  But a different majority – the Chief, Ginsburg, Breyer, Sotomayor and Kagan – held that the remedy for the violation was to strike down only the provision allowing the federal government to withhold all Medicaid funds unless a state agrees to the expansion.

via Court holds that states have choice whether to join medicaid expansion : SCOTUSblog.

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