By Rochelle Bobroff, Directing Attorney, Herbert Semmel Federal Rights Project, National Senior Citizens Law Center
The Supreme Court’s 5-4 decision in Douglas v. Independent Living Center, a case challenging California’s cuts in Medicaid reimbursement rates, can be summed up by the movie title: The Good, The Bad, and the Ugly. The Good is the majority’s holding that refuses to deny court access to low-income Medicaid beneficiaries who had difficulty obtaining medications and other services when California slashed rates in violation of federal law. The Bad is the narrowness of the court’s decision, which is limited to simple instructions to the lower court on remand. And the Ugly is the dissent seeking to slam the courthouse doors on the poor.
The plot (or facts) in this case bears no resemblance to the movie. When California slashed Medicaid provider rates to save money, ignoring the impact on beneficiary access to care, providers and beneficiaries sued the state. Federal Medicaid law requires states to ensure adequate access to care. So, the state laws cutting reimbursement rates conflicted with federal law. The suit alleged that the state rate cut statute was “preempted” under the Supremacy Clause of the Constitution by the contrary federal law. Businesses routinely bring preemption challenges to state laws that allegedly conflict with federal law.
The state tried to get the case thrown out of court, arguing that beneficiaries could not bring a preemption suit to enforce the Medicaid statute. But the Ninth Circuit, relying on over a century of Supreme Court cases permitting preemption cases to go forward, held that poor people have the same right to bring preemption challenges as businesses, and let the case proceed. All other Circuits to consider whether preemption is available in these circumstances were in agreement.