Health Center Regulatory Issues

9th Circuit Decision a Victory for Health Centers

By Roger Schwartz and Arielle Gurwitch

The U.S. Court of Appeals for the Ninth Circuit issued a decision on Friday, July 5, that provides a clear victory for Federally Qualified Health Centers and Rural Health Centers.  At issue, was California legislation that eliminated Medicaid coverage for certain healthcare services, including adult dental, podiatry, optometry, and chiropractic services.  FQHCs and other plaintiffs in the litigation maintained that this legislation conflicted with the federal Medicaid Act and was therefore invalid. Plaintiffs sued the State arguing that federal law prohibited the elimination of coverage for certain mandatory services. Reversing the district court’s decision, the 9th Circuit Court determined that the Medicaid Act explicitly requires that RHC and FQHCs be reimbursed for “physician services” as defined in the Medicare Act, which includes “services furnished by doctors of medicine or osteopathy, but also the services furnished by dentists, podiatrists, optometrists and chiropractors.”  Therefore, the decision concludes that RHCs and FQHCs must still be reimbursed by Medicaid for providing these services to their patients, despite the limiting nature of the California state law. 

An additional important determination by the court in this case is its conclusion that in the Medicaid Act, Congress reflected its intent that FQHCs and RHCs providers have a private right of action under 42 USC 1983 to challenge the California state law. In effect, the Ninth Circuit joined a number of other Federal Courts in determining that FQHCs and RHCs can seek remedy in Federal Court if they believe that a state law is contrary to the service and payments protections that are provided to them in the Medicaid Act.

NACHC filed an amicus brief in this case arguing in support of the FQHCs’ position.

Read more about this case in this article in the San Francisco Chronicle.

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