States’ budgets now in the hands of Supreme Court

The new term for the Supreme Court began Monday, and the first case of the new term has significant implications for state budgets. The case comes from California, where Medicaid patients and Medi-Cal providers have sued the state for making benefit cuts in recent years. The Sacramento Bee blog explains the background of the case:

The state Department of Health Care Services must document that Medi-Cal cuts will not undermine access to care to receive federal approval. As part of the state budget this year, Gov. Jerry Brown and state lawmakers approved a 10 percent cut in reimbursements to Medi-Cal, mandatory co-pays and a soft cap on doctor visits.

The state told the Obama administration this summer it would show how the cuts maintain care for Medi-Cal patients consistent with federal law.

But state officials have refused to make public any such findings, rejecting a Public Records Act request filed by the California Medical Association and the California Pharmacists Association. DHCS rejected a similar request from The Bee in August.

State rules to comply with receiving federal requirements for Medicaid are somewhat vague; they must provide funding “sufficient to enlist enough providers” for Medicaid recipients. At stake is whether or not patients and practitioners have the right to sue to enforce spending levels, or whether enforcement must be carried out through the federal government.

As we all know, many states’ budgets, including California’s, are in poor shape, and Medicaid is one of the main drivers of state budget deficits. President Obama, surprising some of his supporters on healthcare reform, is not in favor of permitting lawsuits against states over Medicaid funding.

The Supreme Court will provide its opinion within the next few months, deciding some of the potential options that states will have when working to reduce spending.