Care Dilemmas Vs. Inlfendent Care Centering Center Of...

DOUGLAS, DIRECTOR, CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES
v.
INDEPENDENT LIVING CENTER OF SOUTHERN CALIFORNIA, INC., ET AL.
TOBY DOUGLAS, DIRECTOR, CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES, PETITIONER
v.
INDEPENDENT LIVING CENTER OF SOUTHERN CALIFORNIA, INC., ET AL.
TOBY DOUGLAS, DIRECTOR, CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES, PETITIONER
v.
CALIFORNIA PHARMACISTS ASSOCIATION ET AL.
TOBY DOUGLAS, DIRECTOR, CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES, PETITIONER
v.
SANTA ROSA MEMORIAL HOSPITAL ET AL.
No. 09-958
No. 09-1158
No.10-283
SUPREME COURT OF THE UNITED STATES
Argued October 3, 2011
Decided February 22, 2012*
(Slip Opinion)

Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT
Medicaid is a cooperative federal-state program that provides medical care to needy individuals. To qualify for federal funds, a State must submit its Medicaid plan and any amendments to the federal agency that administers the program, the Centers for Medicare & Medicaid Services (CMS). Before approving a plan or amendments, CMS conducts a review to determine whether they comply with federal requirements. Federal law requires state plans or amendments to "assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers" to make Medicaid "care and services" available. 42 U. S. C. §1396a(a)(30)(A).
After California enacted three statutes reducing the State's payments to various Medicaid providers, the State submitted plan
Page 2 amendments to CMS. Before the agency finished its review, Medicaid providers and beneficiaries sought, in a series of cases, to enjoin the rate reductions on the ground that they were pre-empted by federal Medicaid law. In seven decisions, the Ninth Circuit ultimately affirmed or ordered preliminary injunctions preventing the State from implementing its statutes. The court (1) held that the providers and beneficiaries could bring a Supremacy Clause action; (2) essentially accepted their claim that the State did not show that its amended plan would provide sufficient services; (3) held that the amendments thus conflicted with §1396a(a)(30)(A); and (4) held that the federal statute pre-empted the new state laws. In the meantime, agency officials disapproved the amendments, and California sought further administrative review. The cases were in this posture when the Court granted certiorari to decide whether respondents could mount a Supremacy Clause challenge. After oral argument, CMS approved several of the State's amendments, and the State withdrew its requests for approval of the remainder.
Held: The judgments are vacated and the cases are remanded, thereby permitting the parties to argue before the Ninth Circuit in the first instance the question whether respondents may maintain Supremacy Clause actions now that CMS has approved the state statutes. Pp. 5-8.
(a) CMS' approval does not make these cases moot, but it does put them in a different posture, since the federal agency charged with administering Medicaid has now found that the rate reductions comply with federal law. That decision does not change the substantive question whether California's statutes are consistent with federal law, but it may change the answer. It may also require respondents to seek review of CMS' determination under the Administrative Procedure Act (APA) rather than in a Supremacy Clause action against California. The APA would likely permit respondents to obtain an authoritative judicial determination of the merits of their legal claim. And

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