CDCAN REPORT #009-2012: Crucial US district court hearing on 20% IHSS cuts set for 1/19 in Oakland

CRUCIAL US DISTRICT COURT HEARING THURSDAY AFTERNOON TO CONSIDER WHETHER TO CONTINUE COURT ORDER BLOCKING 20% IHSS CUTS

Brown Administration Moves Ahead In Filing Appeals Blocking Medi-Cal Provider Cuts in Three Different Lawsuits - Senate Budget Committee Will Hold Overview Informational Hearing on Governor's Proposed Budget Thursday

SACRAMENTO, CA (CDCAN) [Last updated 01/18/2012 06:30 PM] - A federal district court judge in Oakland is scheduled to hold a court hearing Thursday afternoon (January 19th) at 2:00 PM to consider whether or not to issue a more permanent court order that would continue stopping the Brown Administration from taking any steps to implement a 20% across-the-board reduction in service hours that would total over $100 million in cuts in State general fund spending for hundreds of thousands of children and adults with disabilities - including people with developmental disabilities - and seniors who receive In-Home Supportive Services (IHSS).  The reduction would also impact hundreds of thousands of IHSS workers. [CDCAN will issue a report immediately when information is available]

When: January 19, 2012 - Thursday
Time: 2:00 PM
What: Hearing on Request for Preliminary Injunction to Continue Blocking 20% Across-the-board IHSS reductions
Where: Oakland Courthouse (US District Court, Northern District of California)
Oakland City Center, 1301 Clay Street - Courtroom 2 (4th Floor), Oakland, CA 94612

The Judge could grant (or deny) - during or immediately after the court hearing - the request for a preliminary injunction that would continue blocking the State from implementing the 20% IHSS reduction, or she could decide to wait a few days before issuing a ruling.

Judge Issued Temporary Restraining Order December 1 Stopping the Reduction

• US District Court Judge Claudia Wilken issued on December 1st a temporary restraining order that blocked the reduction from taking place until a she decides whether or not to grant a more permanent order - called a preliminary injunction - to stop the cuts from being implemented.  If she grants the preliminary injunction as requested by those filing the lawsuit (IHSS recipients) that would mean the State would still be blocked from implementing the IHSS 20% cuts.  The Judge can do several things including granting the order but making changes to it or she could deny the request entirely and side with the State.
• In issuing the temporary restraining order in December, Judge Wilken had found that the reductions violated federal law and likely would, if implemented, cause immediate significant harm to people with disabilities and seniors in the IHSS program who would be impacted by the cut in service hours.
• She will hear from attorneys representing IHSS recipients and the Brown Administration in the lawsuit "David Oster, et al v. Lightbourne", ("Oster" is an IHSS recipient and "Lightbourne" is Will Lightbourne, the director of the California Department of Social Services, the state agency that oversees statewide the IHSS program).  The case was previously titled "V.L. v.Wagner" ("V.L." was the initials of an IHSS recipient and "Wagner" is the name of the previous director of the Department of Social Services).
• The losing side of the lawsuit is certain to file an appeal to the next highest court - the US 9th Circuit of Appeals.  If the Brown Administration loses, its legal team headed by the California Attorney General's office, is certain to ask that the judge delay or "stay" the preliminary injunction - though it does not seem likely at this point that Judge Wilken would do so.
• The lawsuit was filed by Disability Rights California (DRC), Disability Rights Legal Center, National Senior Citizens Law Center, the National Health Law Program and San Diego attorney Charles Wolfinger on behalf of the IHSS recipients. The union plaintiffs in the lawsuit, which include five SEIU locals and United Domestic Workers-AFSCME, represented by law firm of Altshuler Berzon LLP.

20% Cut Part of the 2011-2012 State Budget "Trigger Cuts"

• The 20% across-the-board cut in IHSS hours amounting to a reduction of over $100 million in State general fund spending in the remaining months of the 2011-2012 State Budget year (and continue into the following budget year) was scheduled to go into effect on January 1, 2012 but never was implemented due to the temporary restraining order that was issued in December.  The 20% reduction did include several exemptions to the cut for certain eligible persons in the IHSS program.
• The reduction was part of the $1 billion in "trigger cuts" that were part of the 2011-2012 State Budget that was pulled because the State's revenues fell significantly below what was budgeted last June.
• Among the other state budget "trigger cuts" included $100 million reduction in state general fund spending to the developmental services budget for the 2011-2012 State budget year that ends June 30, 2012 - with another $100 million covering the 2012-2013 State Budget year.
• The 20% across-the-board reduction is in addition to other cuts and major changes to the IHSS program Governor Brown proposed as part of his 2012-2013 State Budget.

Other Legal News Impacting Medi-Cal Reductions

• Meanwhile, the Brown Administration, battling 3 different lawsuits that have - for now - blocked implementation of some of the 10% Medi-Cal provider reductions for pharmacies, distinct part nursing facilities and non-emergency medical transportation providers that were part of the 2011-2012 State Budget -  has filed appeals last week in all 3 cases, requesting that the next higher court - the US 9th Circuit Court of Appeals overturn the lower court orders and allow the State to implement the cuts.
• The California Attorney General’s office, representing the Brown Administration, on January 17th, filed emergency motions requesting that implementation of the federal district court orders blocking the Medi-Cal 10% cuts in the nursing facility and pharmacy cases be delayed (called a "stay") until the issues are heard before and decided by the US 9th Circuit Court of Appeal.  The Department of Health Care Services indicated that the Attorney General's office will file an emergency motion in the non-emergency medical transportation lawsuit very soon.
• The Department of Health Care Services reported that it sent a letter on January 17th, and copies of the federal district court orders in the three recent Medi-Cal provider rate cases, to the US Supreme Court to consider in its decision in the Medi-Cal lawsuits - including Independent Living Center of Southern California v. Douglas. The high court heard those cases - which are linked a another case dealing with IHSS worker wages (that blocked a 2009 State Budget reduction rolling back State participation for those wages) on October 3, 2011 and is expected to hand down a decision on the cases sometime before June this year.  A decision by the US Supreme Court in those cases - depending on how broadly or narrowly it decides - could have sweeping landmark impact on current and future Medicaid related cases across the nation.
• As previously reported US District Court Judge Christina Snyder on December 28th and on January 10th this year issued court orders - called preliminary injunctions - that stopped the Brown Administration from implementing retroactively to June 1, 2011, Medi-Cal rate reductions of up to 10% for pharmacy providers (Managed Pharmacy Care v. Douglas, et al), non-emergency medical transportation providers (California Medical Transportation Association v. Douglas et al) and for distinct part/nursing facilities (California Hospital Association v. Douglas).  [CDCAN Note: "Douglas" refers to "Toby Douglas", director of the Department of Health Care Services, the state agency that oversees California's Medicaid Program (called "Medi-Cal"). Kathleen Sebelius, Secretary of the US Department of Health and Human Services - the federal agency that is responsible for the Medicare and Medicaid programs nationwide - was also named in all three lawsuits].
• A separate lawsuit filed in November by the California Medical Association, with the California Dental Association and other groups to stop implementation of the Medi-Cal provider reduction of up to 10% for doctors, is scheduled to be heard in federal district court before the end of this month.

Senate Budget Committee Will Hear Overview of Governor's Proposed 2012-2013 Budget Thursday

• As previously reported last week by CDCAN, a general overview of Governor Brown's proposed 2012-2013 State Budget that calls for over $4 billion in new spending cuts, will be heard in two informational hearings by the California Legislature - one on Thursday (January 19th) and the second on January 31st.
• The full Senate Budget and Fiscal Review Committee will hold the first informational hearing on the budget, set for January 19th, Thursday morning, immediately following adjournment of the State Senate floor session and a brief Senate Appropriations Committee hearing, at the State Capitol in Room 4203.
• That hearing will be followed on January 31st, Tuesday morning at 10:00 by the full Assembly Budget Committee is at the State Capitol in Room 4202.  Both informational hearings will be televised and webstreamed live via CalChannel (go to www.calchannel.com for live video stream or check your local cable listing for television schedule).
• Officials from the Governor's Department of Finance and from the Legislative Analyst Office - the non-partisan agency that analyzes and review budget issues for the Legislature - will be on hand for both hearings to provide general information about the Governor's proposed budget.  No action will be taken - and likely no time allocated for any public testimony. While no action will be taken at these two hearings, the information provided could be important in clarifying some of the Governor's budget assumptions and numbers that in turn could impact specific proposals, including specific proposed budget reductions.
• The two informational hearings signals the start of what will be a long legislative budget process that the Governor and legislative leaders hope will result in a budget by July 1st.
• The scheduled informational hearing dates later this month of the full budget committees is a return to the more normal deliberative and slower budget process - unlike the past several years where the Legislature took up budget issues on a fast track including passing an early State budget in February 2009, and several key budget trailer bills - and an attempt to pass an early budget in March 2011.
• Barring a surprise, both the State Senate and Assembly will likely begin holding budget subcommittee hearings - where specific proposals by the Governor are heard, with public testimony taken and some actions taken beginning sometime in late February through early June.

Governor Proposes Over $4 Billion In New Spending Cuts - and $7 Billion In New Temporary Taxes

• As reported by CDCAN on January 5th, Governor Jerry Brown released his proposed 2012-2013 State Budget plan January 5th that calls for over $4 billion in additional massive spending cuts and nearly $7 billion in new revenues from temporary tax increases on the state's wealthiest taxpayers and a one-half percent increase in the state's sales tax, to close what the Governor said is a projected $9.2 billion budget deficit. The Governor's plan however hinges on putting the issue of his proposed temporary tax increases on the November 2012 via petition, for voter approval.
• Over $2 billion of the total $4 billion in new cuts will come from health and human services, with reductions there largely centered on four major programs - CalWORKS and child care, Medi-Cal, In-Home Supportive Services and developmental services. Major and dramatic changes proposed by the Governor will also impact other areas, including proposals to replace the Department of Mental Health with a new Department of State Hospital which was previously brought up last May; the proposed elimination of the 11 Caregiver Resource Centers, and a proposal calling for the elimination of the Managed Risk Medical Insurance Board.
• The new proposed reductions appear to be addition to the $1 billion in spending cuts announced in mid-December by the Governor when he also announced that the 2011-2012 State Budget "trigger cuts" would be pulled because projected revenues fell below what was budgeted. However the Governor's budget summary totals do not appear to reflect those reductions, though the narrative and specific details from department estimates do.

CDCAN SUMMARY OF BUDGET HEARINGS

The following is complete list of budget related hearings scheduled to date (as of Wednesday evening, January 18th).  There are no budget subcommittee hearings scheduled yet.

JANUARY 19, 2012 - THURSDAY

WHO: SENATE BUDGET AND FISCAL REVIEW COMMITTEE
WHAT: General Overview of Governor's Proposed 2012-2013 State Budget (by Governor's Department of Finance and Legislative Analyst Office)
TIME: Meets immediately after adjournment of a brief Senate Appropriations Committee hearing, which meets when the Senate floor session, which convenes at 09:00 AM, adjourns. 
WHERE: State Capitol - Room 4203
TELEVISED: Yes - on CalChannel (also streamed live via www.calchannel.com )
PUBLIC TESTIMONY: No (testimony will be taken during budget subcommittee hearings)
CDCAN COMMENT: Senate Budget Committee staff say this hearing should last about 2 hours.
PRIORITY: HIGH

JANUARY 31, 2012 - TUESDAY

WHO: ASSEMBLY BUDGET COMMITTEE
WHAT: General Overview of Governor's Proposed 2012-2013 State Budget (by Governor's Department of Finance and Legislative Analyst Office)
TIME: 10:00 AM . 
WHERE: State Capitol - Room 4202
TELEVISED: Yes - on CalChannel (also streamed live via www.calchannel.com )
PUBLIC TESTIMONY: Not likely.  (Testimony will be taken during budget subcommittee hearings)
PRIORITY: HIGH