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Two Decisions on California Regulations Impacting Government Benefits

By FindLaw Staff | Last updated on

The Ninth Circuit decided two cases pertaining to California legislation impacting health-related government benefits.

Dominguez v. Schwarzenegger, No. 09-16359, was an action to enjoin California legislation that reduced the state contribution to wages paid to In-Home Supportive Services (IHSS) providers because it was preempted by Section 30(A) of the Medicaid Act.

The court of appeals affirmed an injunction for plaintiff on the grounds that 1) both the legislature and the Department of Social Services recognized that reimbursement rates--that is, providers' wages and benefits--were directly correlated to ensuring that services were consistent with efficiency, economy, and quality of care, and sufficient to ensure access to services under the IHSS program; 2) since the court of appeals determined that the State should have studied the impact of its decreased contribution to providers' wages and benefits prior to passing Cal. Welf. & Inst. Code section 12306.1(d)(6), the State was not ipso facto immunized from challenges to its actions because it had no system in place to make such an assessment; and 3) the district court did not abuse its discretion in concluding that plaintiffs established irreparable harm absent injunctive relief, as its finding regarding provider harm was not clearly erroneous.

California Pharm. Assn. v. Maxwell-Jolly, No. 09-55532, involved an action to enjoin the California Department of Health Care Services Director from implementing state legislation reducing payments to certain medical service providers.

The Ninth Circuit affirmed a preliminary injunction in favor of plaintiffs, on the ground that the state failed to study the impact of a 5% percent rate reduction on the statutory factors of efficiency, economy, quality, and access to care prior to implementing the rate reductions.

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