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140 Fed.Appx. 677 (9th Cir. 2005)
NCYL joined this class action lawsuit against the California Department of Health Services (DHS) as amicus curiae. Plaintiffs, Medi-Cal providers and beneficiaries, sought injunctive relief from an impending 5% reduction in the reimbursement rate paid to providers. Plaintiffs claimed that this reduction would violate the Medicaid statute’s quality of care and equal access provisions.
In 2003, the district court granted Plaintiffs’ motion for a preliminary injunction. As a threshold matter, the court concluded that beneficiaries have a cause of action under section 1983 to enforce the quality and access provisions found in 42 U.S.C. § 1396a(a)(30)(A) of the Medicaid statute. The court also concluded that providers have third party standing to assert these claims on behalf of beneficiaries. The court then held that the decision to cut fee-for-service rates across the board was arbitrary and violated federal law. In contrast, the court ruled that Medicaid provisions concerning managed care plans cannot be enforced through section 1983 claims. Accordingly, the court issued a preliminary injunction as to the non-managed care, fee-for-service reimbursement rates affected by the impending rate reduction.
NCYL joined as amicus curiae in the Ninth Circuit appeal. Amici urged the Ninth Circuit to affirm the decision of the district court. The brief emphasized the need for private enforcement of Medicaid and the congressional intent that the Social Security Act be enforced through section 1983 claims. It also highlighted Supreme Court decisions upholding the right of individuals to enforce Medicaid provisions through section 1983.
On August 2, 2005, the Ninth Circuit reversed the district court. In an unpublished opinion, the Court noted that the legal issue presented in this appeal had been resolved by its decision in Sanchez v. Johnson (also filed on August 2). The Sanchez plaintiffs had alleged that California was violating § 1396a(a)(30)(A) of the Medicaid statute by paying lower wages to community-based service providers than to the employees of state institutions. A unanimous three judge panel concluded that § 30(A) does not create enforceable rights under § 1983. This decision is consistent with the emergence of a highly specific provision-by-provision review by the courts for testing the enforceability of the Medicaid statute under section 1983.
Counsel: Jane Perkins, National Health Law Program; AARP; Service Employees International Union; Voices for America’s Children; National Senior Citizens Law Center; Patrick Gardner, National Center for Youth Law.
Updated Dec. 20, 2005
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