CDCAN REPORT #015-2011: US Supreme Court takes Medi-Cal provider rate cut case

SACRAMENTO, CALIF  (CDCAN) [Updated 01/18/2011 10:20 AM (Pacific Time)] - On what could have sweeping impact across the nation on the rights of people with disabilities, mental health needs, the blind and seniors, the United States Supreme Court announced in Washington, DC that it will hear and review decisions of lower federal courts in three key lawsuits that have blocked California from implementing cuts to Medi-Cal providers and a rollback of the State’s participation in wages for In-Home Supportive Services (IHSS) workers.

Several other cases, including one impacting a lower federal court ruling that blocked the State from implementing a cut in the State’s participation toward IHSS worker wages, are linked to one of the cases that the United States Supreme Court will hear.

The United States Supreme Court granted “cert” or certiorari to hear and review three lawsuits that were consolidated, with one hour allocated for oral argument before the court.  A single page pdf copy of the cert document with the references to the three California Medi-Cal provider cases (that includes the IHSS case) is attached to this CDCAN Report as “2011-01-18 - Medi-Cal Provider Case - Certiorari order.pdf”

The Medicaid Defense Fund, headed by 82 year old attorney Lynn Carman of Novato, said today that he did not expect the court to hear oral argument and issue a decision in these cases until November or December of 2011.

Carman, a longtime respected advocate for the rights of people with disabilities and seniors said that the news today of the United States Supreme Court taking these critical Medi-Cal lawsuits is evidence that “Governor Brown is seeking a license from the Supreme Court for States to violate federal law, in any way the State wishes, with impunity, regardless of how much injury, from violation of federal law, which this may cause. “

With Governor Brown proposing over $12.5 billion in permanent spending cuts – the majority in real reductions to health and human services as part of his 2011-2012 State budget plan, many advocates for people with disabilities, mental health needs and seniors while worried about what the United States Supreme Court will ultimately do.

Advocates however are cautiously optimistic that the high court – even with a conservative majority -  will uphold the lower federal court rulings blocking the Medi-Cal and IHSS provider cuts that the Legislature and Governor enacted in 2008 and 2009 but could not implement due to the lawsuits.

Advocates Fear New Spending Cuts While Supreme Court Takes Up Lawsuits

While the lawsuits are pending before the United States Supreme Court, advocates fear the Governor’s new proposed sweeping cuts to Medi-Cal providers, including proposed elimination of Adult Day Health Centers, Multipurpose Senior Services Program (MSSP), proposed 10% rate reduction to nearly all Medi-Cal providers, over $750 million cut in general fund spending for developmental services – mostly to regional centers, cuts to Healthy Families program (the federally funded state health insurance program for low income children), cuts to CalWORKS, major reductions and caps on many Medi-Cal services and a reduction in SSI/SSP (Supplemental Security Income/State Supplemental Payment) individual grants to the lowest level allowed by the federal government.

United States Supreme Court Eventual Ruling Could Have Huge Impact on Disability and Senior Rights – and Also the California Budget Crisis

What the United States Supreme Court eventually decides could have sweeping impact nationwide on the rights of people with disabilities, mental health needs, seniors and enormous impact on the California State budget.

• In the case of the state participation in IHSS worker wages, passed originally as part of the 2009-2010 State Budget in February 2009, that reduction would go into effect – if the United States Supreme Court rules in favor of the State – on July 1, 2012. 
• The other major cut to IHSS currently blocked by a lower federal court, would have reduced or even eliminated eligibility for services under IHSS based on internal assessment tools (called functional index rankings of tasks and a overall functional index score) was not impacted by today’s announcement because the lower appeals court – the United States 9th Circuit Court of Appeals – has not yet issued a ruling.  That appeals court however is expected now to issue a decision soon – and that case could wind up being consolidated with the other cases now before the United States Supreme Court. 
• In recognition of the delays caused by the lawsuits blocking the IHSS cuts, the Legislature and Governor included in the 2010-2011 State Budget passed last October provisions that delayed implementation of the two major cuts to IHSS until July 1, 2012 unless the United States Supreme Court blocked the reductions.   
• The United States Supreme Court could hear and review the case and decide to uphold (agree with) the lower federal court decisions – which means the temporary orders that blocked the Medi-Cal provider cuts and the cuts in the State’s participation in IHSS worker wages – would be permanent.  However the State could – and in Governor Brown’s current 2011-2012 State Budget proposal intends to propose again – a 10% Medi-Cal provider rate cut – saying that the lower federal court rulings did not prohibit the reductions, only imposed certain requirements in the process that the State had to comply with in order to implement it. 
• The United States Supreme Court could also hear and issue a decision that does a number of other things.

What the United States Supreme Court Will Hear and Review

The United States Supreme Court will hear and review decisions of the United States 9th Circuit Court of Appeals – which upheld lower federal district court rulings that blocked several different Medi-Cal provider rate reductions implemented in 2008 and early 2009, and a rollback of the State’s participation in IHSS worker wages that was scheduled to go into effect July 1, 2009 in three different cases:

CASE  #1:  Maxwell-Jolly v. Independent Living Center of Southern California, Inc., et al., (Supreme Court No. 09-958) (or “ILC I”)

• This case involved a ruling by US District Court in Los Angeles in August and November 2008 that blocked the State from implementing the 10% cut in Medicaid provider payments passed as part of the 2007-2008 State Budget ( in AB 5)
• Lead counsel (lawyers) for plaintiffs (for those who filed the lawsuit to stop the cut): Lynn S. Carman of the Medicaid Defense Fund (415-927-4023, and Rochelle Bobroff of National Senior Citizens Law Center in Washington, D.C., 202-289-69776, cell 202-372-5446)].

CASE #2: Maxwell-Jolly v. California Pharmacists Association, et al., (Supreme Court No. 09-1158)

• Lead counsel (lawyers) for plaintiffs (for those who filed the lawsuit to stop the cut):  Craig Cannizzo of Hooper Lundy Bookman in San Francisco, 415-875-8511)]. 
• Note: this case includes 4 different decisions by the US 9th Circuit of Appeals that upheld (sustained) lower federal district court rulings in four other lawsuits that stopped several different reductions (different from the cut in Case #1)  from taking place impacting Medi-Cal providers and IHSS providers:  1).  “Independent  Living Center of Southern California, Inc. et al. v. Maxwell-Jolly”; (also known as “ILC II”)  which blocked the State from implementing a 5% Medi-Cal provider rate cut as provided for in AB 1183 [Counsels: Lynn S.  Carman of Medicaid Defense Fund, 415-927-4023 and Rochelle Bobroff, of National Senior Citizens Law Center 202-289-6972, ext. 214, or cell 292-372-5446];   2).  “California Pharmacists Association,  et al. v. Maxwell Jolly”, (also known as "CPHA I"), that blocked the State from implementing the same 5% Medi-Cal provider rate cut for adult day health centers as provided for in AB 1183  (lead counsel is Craig Cannizzo, above);   3).  In the same case, “California Pharmacists Association, et al. v. Maxell-Jolly”, (this case might be referred to as “CPHA II”)overruled the lower federal district court’s ruling that did not stop the 5% Medi-Cal provider rate cut for the California Hospital Association and instead issued a decision that blocked the reduction.  (Lead counsel is Craig Cannizzo, above.); and 4).  Lydia Dominguez et al. v. Schwarzenegger, that blocked the State from implementing reduction in the State’s participation toward IHSS worker wages effective July 1, 2009  (Lead counsel or lawyers for plaintiffs is Stacey M. Leyton of Altshuler Berzon, 415-421-7151)

CASE #3:  “Maxwell-Jolly v. Santa Rosa Memorial Hospital”, (Supreme Court No., 10-282)

• This case involves a preliminary injunction (temporary order from lower federal court blocking the Medi-Cal provider cut) against a hospital.
• Information about the lead counsels for the plaintiffs (those filing the lawsuit) was not available.

NEXT STEPS

• As mentioned earlier, the US Supreme Court will likely hear and issue a decision about these cases – consolidated into one – probably sometime during November – December of 2011. 
• Current State budget proposals by Governor Jerry Brown to reduce Medi-Cal provider rates to the same providers impacted in the lawsuits before the US Supreme Court, can still be considered and even passed by the Legislature because the State is claiming the lower court rulings blocked the State from implementing those cuts because it failed to do certain procedural things before enacting the reduction.  The Governor’s Department of Finance said, when the Governor’s 2011-2012 State Budget plan was released on January 10, 2011, that it intends to follow the lower federal court’s ruling in going forward with these new reduction proposals. 
• The US 9th Circuit Court of Appeals still has to issue a decision regarding the IHSS reduction that would reduce or eliminate eligibility for all services under IHSS based on one’s functional index ranking in tasks and one’s overall functional index score (these are internal assessment tools used by counties).  This cut was meant to go into effect November 1, 2009, (passed as part of the 2009-2010 State Budget as revised in July 2009) but was blocked in October 2009 by a federal district court judge in Oakland.  The State appealed the ruling to the US 9th Circuit Court of Appeals.  Whatever the US Circuit Court of Appeals decides, it will almost be certain to be appealed to the US Supreme Court and likely consolidated (included) with the other three cases it will review and hear later this year.

File Attachments: 

2011-01-18 - Medi-Cal Provider case - Certiorari order.pdf