Court Allows Challenge |to Medi-Cal Rate Cut

SAN FRANCISCO (CN) - A group of pharmacies and health-care providers can proceed with a lawsuit against the state of California because they proved they would be harmed by proposed changes in Medicaid law, the 9th Circuit ruled.

Independent Living Center of Southern California and other plaintiffs sued to prevent the Department of Health Care Services from implementing a law that would cut their state "Medi-Cal" payments by 10 percent.

The district court had ruled that the plaintiffs had no federal right to the payments. Judge Berzon disagreed and allowed the suit to go forward.

Berzon said the plaintiffs could exercise their rights under the Supremacy Clause, which places the U.S. Constitution above state law.

"For more than a century, federal courts have entertained suits seeking to enjoin state officials from implementing state legislation allegedly pre-empted by federal law," the judge wrote. "A party may seek injunctive relief under the Supremacy Clause, regardless of whether the statute at issue confers any substantive rights on the would-be plaintiffs."

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