Supreme Court to decide if suits can be filed over Medicaid cuts

The Obama administration's decision to approve Medicaid cuts in California isn’t expected to affect a Supreme Court case involving those cuts.

The Supreme Court heard oral arguments earlier this month in Douglas v. Independent Living, which asks whether patients and healthcare providers have the right to sue states over proposed Medicaid cuts.

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Federal law says state Medicaid rates have to be high enough to ensure that patients have access to the care they need. Only the federal government has the explicit legal authority to say whether a state’s proposal would violate that requirement.

The issue before the Supreme Court is whether private parties can take to the courts when they believe a cut would diminish access and the federal government hasn’t made a decision.

But the federal government made that determination Thursday, when the Centers for Medicare and Medicaid Services (CMS) approved the 10 percent reductions proposed by California — the same cuts at issue in the Supreme Court case.

Still, Medicaid experts expect the high court to reach a decision on whether such suits are allowed, even though CMS has now said the California cuts are acceptable.

The question of whether those specific cuts were legal is different from a question about who has the right to sue, said Sara Rosenbaum, a professor of law and health policy at George Washington University.  She said she doesn’t expect the justices to use CMS’ action as a way to avoid reaching the larger issue.

Matt Salo, executive director of the National Association of Medicaid Directors, agreed.

“The question is still a valid one,” he said.

The Supreme Court case has split Democrats. The Obama administration filed a brief supporting California and arguing that the state can’t be sued over its proposal. Several congressional Democrats, however, argued that patients and doctors have a right to sue over cuts they believe are excessive.