The appeals court has sent the case back to the district court for further proceedings, according to the report. The 9th Circuit ruled the district court “abused its discretion” and “erroneously” interpreted the law to require procedural requirements such as cost studies before Medicaid cuts could be enacted.
In 2008 and 2009, the California legislature passed three statutes that changed the state’s Medicaid plan by reducing Medicaid payments by 10 percent to hospitals, physicians and other healthcare providers. In response, Santa Rosa (Calif.) Memorial Hospital, St. Helena (Calif.) Hospital and more than 10 other hospitals sued the state, alleging the state illegally drained funds from its Medicaid program solely to reduce its budget deficit, according to the report.
In Santa Rosa Memorial Hospital et al. v. Toby Douglas, Director of the California Department of Health Care Services, the district court previously held the hospitals demonstrated a likelihood of succeeding on the merits of their claim about the legality of the 2008 rate reductions on the grounds that the health department was required to consider cost studies and specific factors when making Medicaid payment changes.
The 9th Circuit ordered preliminary injunctions in which California could not implement the new Medicaid proposals. However, since the case was filed, the state repealed the rate reductions, and CMS approved rate reductions for a specific time period preceding the repeal date, according to the report. In 2012, the U.S. Supreme Court issued a ruling remanding the case back to the 9th Circuit.
More Articles on California Medicaid Payments:
California Hospitals to Get More Than $10B Under New Medicaid Law
Moody’s: Medicaid Provider Fee Extension Benefits California Hospitals
Committee Approves Medicaid Provider Fee for California Hospitals
