9th Circuit says California illegally cut medical aid to poor

07/06/2013 12:00 AM

07/08/2013 8:02 AM

A federal appeals court Friday struck down California's 2009 cuts of health care for the rural poor, which were made to save money while the state was in the throes of a budget crisis.

The state's position was that coverage of adult dental, podiatry, optometry and chiropractic services for poor people in rural and other underserved areas is not mandatory under the federal Medicaid Act, and thus could be halted.

Not so, said a three-judge panel of the 9th U.S. Circuit Court of Appeals.

Reversing a holding by a federal trial judge in Sacramento, the panel ruled the state statute authorizing the cuts "impermissibly eliminates mandatory services from coverage."

After an association of rural clinics and a Central Valley health center challenged the state's 2009 cuts, U.S. District Judge Frank C. Damrell Jr. – now retired – ruled the slashed services are optional under the Medicaid Act, and he granted summary judgment in the state's favor in 2010.

"By its very terms," the appellate judges said in a 22-page opinion, the act requires state plans to cover services provided to poor people by "rural health clinics and federally qualified health centers."

Because "the intent of Congress is clear, that is the end of the matter," the panel declared, quoting a landmark U.S. Supreme Court opinion dealing with interpretation of federal legislation.

The U.S. Centers for Medicare and Medicaid, the federal agency that administers Medicare and works with the states to administer Medicaid, agreed with Damrell that the services are optional and approved the cuts.

Again, the appellate judges stated that is a misinterpretation of the law, and consequently "we do not defer to CMS' approval" of the state plan amendments.

Medicaid (Medi-Cal in California) is a cooperative program through which the federal government provides financial assistance to states so they can furnish health care to low-income people.

Matt Robinson, a spokesman for the state agency, said Friday in an email: "DHCS is examining this ruling and considering its potential next steps."

The state can seek reconsideration by the appeals panel, a hearing before an enlarged panel of the 9th Circuit, a review by the U.S. Supreme Court, or it can live with Friday's opinion.

Call The Bee's Denny Walsh, (916) 321-1189.

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