U.S. Supreme Court to take Medi-Cal lawsuit case

The U.S. Supreme Court granted California's request Tuesday to decide whether the state can be sued for cutting fees to doctors and hospitals that treat poor people, a case that will affect Gov. Jerry Brown's ability to reduce spending for social services.

Federal courts in the last two years have blocked attempts by then-Gov. Arnold Schwarzenegger and the Legislature to lower Medi-Cal payments and in-home care workers' wages by hundreds of millions of dollars, saying federal laws require states to maintain poor people's access to basic health care.

On Tuesday, the high court agreed to decide whether the lower courts should have even considered those cases.

The state denies it is violating the law and argues that only the federal government can enforce the laws governing Medicaid, the federal-state program known as Medi-Cal in California. Medi-Cal providers and their patients have no right to sue a state for allegedly violating federal Medicaid rules, lawyers for California told the Supreme Court.

The court is not scheduled to take up the issue until the fall and may not decide it until next year. In the meantime, Brown, who defended the state's cuts as attorney general, has asked the Legislature to reduce Medi-Cal rates by 10 percent, or $709 million, in his budget for the fiscal year that starts July 1.

Elizabeth Ashford, a spokeswoman for Brown, said the court's decision to review the cases puts the state "in a much better position in asserting state sovereignty and having more control" over its finances.

She declined to say, however, whether state officials would try to implement the latest proposed cuts before the Supreme Court ruling.

Medi-Cal provides care to 6.6 million low-income Californians. Advocates said public health and the rights of private citizens are at stake in the case.

California's reimbursement rates are already among the nation's lowest, and "to cut them further would only serve to force more doctors out of the program and decrease access to health care for millions of poor and unemployed Californians," said James Hinsdale, president of the 35,000-member California Medical Association.

The justices should maintain "access to courts for regular people who are injured by state enactments that violate federal law," said Stacey Leyton, a lawyer for unionized workers who provide in-home care for more than 400,000 low-income elderly and disabled residents.

Schwarzenegger tried to get the Legislature to abolish the in-home program, saying it was permeated by fraud, and then was blocked by federal courts when he sought to cut workers' wages from $12.10 to $10 an hour. Brown has proposed additional cuts in the program but is not seeking to reduce wages.

President Obama's Justice Department had recommended that the Supreme Court not take California's appeal. The court's agreement to hear the case dismayed a lawyer for 17 Northern California hospitals that challenged the rate cuts.

"The Supreme Court seems to have a majority to restrict the rights of beneficiaries of legislation to sue to enforce their rights," said attorney Michael Sorgen.

This article has been corrected since it appeared in print editions.

E-mail Bob Egelko at begelko@sfchronicle.com.

This article appeared on page C - 3 of the San Francisco Chronicle