U.S. Supreme Court hears arguments on California Medicaid dispute
The Supreme Court began a new term Monday by refereeing a major healthcare dispute to decide whether cash-strapped states like California can cut their Medicaid payments to doctors and hospitals who serve low-income patients.
The justices sounded closely split over whether lower courts can block states from reducing what they will pay for healthcare for poor patients.
Lawyers for California and the Obama administration urged the court to rule that Medicaid is a “voluntary” effort to provide medical care for the poor and that disputes over funding should be resolved by healthcare officials in Sacramento and Washington, not by federal judges in San Francisco.
This “cries out for an administrative review,” not an order from a judge blocking the state’s action, deputy California Atty. Gen. Karin Schwartz told the justices.
Over the past three years, the California Legislature has passed a series of funding cuts for the Medi-Cal program, but healthcare providers have sued and won judges' orders stopping the cuts from taking effect.
Chief Justice John G. Roberts Jr. said he agreed with the state’s view, since Congress had not given private parties a right to sue under the Medicaid Act.
But Justices Ruth Bader Ginsburg and Elena Kagan spoke up for the medical providers who sued. They said California was seeking to cut its reimbursements even before the state had cleared the move with federal Medicaid officials in Washington.
Ginsburg said there is no effective way to enforce the Medicaid Act if patients and providers cannot go to court when spending is slashed.
Though the justices sounded divided, several of them showed interest in a middle-ground position. They said judges could be given the authority to temporarily block proposed state cutbacks in Medicaid spending, but these orders would last only until Medicaid officials in Washington could review the cuts.
The opening argument took place on the morning the justices denied review of more than 1,000 appeals that were filed in recent months. The chief justice began the session by marking the 25th anniversary of Justice Antonin Scalia hearing his first case.
“The place has never been the same since,” Roberts said to a smiling Scalia.
-- David G. Savage in Washington
Photo: The U.S. Supreme Court building in Washington. Credit: Karen Bleier / AFP/Getty Images