By Rochelle Bobroff, Directing Attorney, Herbert Semmel Federal Rights Project, National Senior Citizens Law Center
Today the Supreme Court granted certiorari to address the question whether Medicaid beneficiaries have the same right to obtain federal court preemption of state laws in conflict with federal Medicaid requirements, as big businesses have to challenge state consumer protection laws that allegedly conflict with federal statutes. All courts of appeals that have considered this question have held that there was no basis for treating a preemption claim protecting low-income people's interests differently from a preemption claim on behalf of business interests. The Solicitor General recommended that certiorari be denied. Nevertheless, the Supreme Court granted cert in three consolidated cases, which are styled Maxwell-Jolly v. Independent Living Center of Southern California, California Pharmacists Assn, and Santa Rosa Memorial Hospital. I am among counsel representing the Independent Living Center.
Medicaid beneficiaries were unable to get their prescription medications filled when the state of California passed a law slashing reimbursement rates, first by 10 percent and then by 5 percent, in an effort to save the state money. The reimbursement rates were below retailers' costs, and therefore some pharmacies were unwilling to provide the medications to low-income individuals with disabilities. Even though beneficiaries had Medicaid coverage for their prescriptions, many were still unable to get the medications they needed, due to the low reimbursement rates. The beneficiaries filed suit claiming that the state law was preempted by the federal Medicaid statute. The Ninth Circuit held that indeed the state law conflicted with federal law, and therefore an injunction properly halted enforcement of the state law. The federal government has denied the state's proposed plan amendment to implement the rate cut.