By Sam Baker - 10/02/11 10:28 AM EDT
The Supreme Court will hear arguments Monday in a healthcare case that pits states against the federal government — and Democrats against Democrats.
At issue is whether patients and healthcare providers can sue to block states from cutting their Medicaid rates. The suit was filed after California proposed a series of Medicaid cuts, some as high as 10 percent. The Obama administration has taken the state’s side, saying patients and doctors don’t have a right to sue over Medicaid payment rates.
Federal Medicaid law doesn’t expressly include a right to sue over payment levels. But it requires states to keep their payment rates high enough for providers to participate in the program. According to the Justice Department and California, only the federal government has the power to enforce that mandate.
The Democratic leaders, though, say that patients and providers can invoke the Constitution’s supremacy clause to ensure that states are complying with federal law.
The 9th Circuit Court of Appeals ruled on Toby Douglas vs. The Independent Living Center of the United States in California’s favor in 2008 and blocked California from implementing the proposed cuts.
Monday’s arguments come as Congress and the White House are tackling a range of thorny Medicaid issues.
Governors and Medicaid directors have clamored for the repeal of a healthcare reform provision that bars states from cutting their eligibility levels ahead of the program’s expansion in 2014. They’re also strongly opposed to the administration’s proposal to streamline the system for calculating federal Medicaid payments, which states say would saddle them with even more of the program’s costs.