High Court to Consider California Medicaid Cuts

(CN) - The Supreme Court took up on Tuesday an appeal from California's health care services director over an injunction barring him from implementing 10 percent Medicaid reimbursement rate reductions against state hospitals.

The 9th Circuit upheld the injunction against the state official, David Maxwell-Jolly, in an unsigned opinion on May 27, 2010. A three-judge panel for the court in San Francisco found that Santa Rosa Memorial Hospital and the other plaintiffs sufficiently argued that the Medicaid rate reductions violate a federal law that requires states to ensure that Medicaid reimbursements are consistent with "efficiency, economy and quality of care."

The federal appeals panel had found that the state's plan did not reflect a responsible cost study and was rationalized to justify a legislative decision that had already been made.

Without the injunction, hospitals would not be able to recover "unlawfully withheld Medicaid reimbursements in a federal suit for damages due to California's sovereign immunity," the May 27 opinion states.

The high court did not comment on the decision to consolidate the three cases for consideration.

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