Healthcare fight shifts to high court

By Sam Baker - 10/03/11 07:24 AM ET

It’s not the individual mandate, but the Supreme Court is set to hear arguments this week in another big healthcare case.

The court will hear oral arguments Monday in Douglas v. Independent Living Center, a case that asks whether Medicaid patients and providers can sue over states’ cuts in Medicaid payment rates. Federal Medicaid law doesn’t expressly grant a right to sue, but the 9th Circuit Court of Appeals ruled in 2008 that patients and providers can sue to block cuts they believe would violate federal requirements.

The case has split Democrats in Washington: the Obama administration says states — in this case, California — should be able to make cuts without the threat of a legal challenge. But several powerful Democratic leaders in Congress have filed a brief supporting the right to sue, saying that Congress intended to keep the courts open as a way to ensure that states meet their legal obligation to keep providers in the Medicaid program.

Meanwhile, the Supreme Court and legal experts are still sorting through the ins and outs of last week’s flurry of petitions asking for a hearing in the 26-state challenge to healthcare reform law’s individual mandate. Both the federal government and the mandate’s challengers — the states and the National Federation of Independent Business — asked the high court to take the case last week.

It’s likely to do so, but which specific petitions the court agrees to hear remains an open question. The Justice Department asked the court to reverse a ruling that the coverage mandate is unconstitutional, while NFIB asked it to overturn part of the lower court’s decision that said the mandate can be struck down on its own, without invalidating the rest of the law. And the states want the Supreme Court to consider whether the healthcare law’s Medicaid expansion is unconstitutional, a point they lost in the lower court’s proceedings.

Outside the legal arena, stakeholders are anxiously awaiting an Institute of Medicine report on essential health benefits, which the IOM is slated to release Friday. HHS will use the report to help define the package of essential benefits that all healthcare plans will have to offer beginning in 2014, though the IOM is focused on the process that private insurers use to define their benefit packages rather than on making specific recommendations.

And America’s Health Insurance Plans is holding another big conference in Washington, this time focused on state issues. The conference runs Thursday and Friday.