Medi-Cal “Optional Benefits” Lawsuit To Be Heard Thursday By Federal Appeals Court6 min read

The issue of whether California is in violation of the federal economic stimulus act and other federal laws when the Legislature and Governor permanently eliminated 9 Medi-Cal benefits for adults, including adult dental and podiatry services will be the focus of a crucial emergency hearing before the US 9th Circuit Court of Appeals, Thursday morning, October 22, at 11:00 AM in San Francisco when it hears a federal lawsuit filed by the Medicaid Defense Fund on behalf of Medi-Cal recipients and advocacy organizations.

How the federal appeals court – the court just below the US Supreme Court – decides on the issue could have sweeping impact not only on the thousands of people with disabilities, mental health needs, seniors and low income adults who had these Medi-Cal benefits eliminated – but on other programs and services funded by federal Medicaid dollars that had reductions in services this past year.

Lower Federal Court Declined to Issue Order Stopping Medi-Cal Benefit Cuts
A lower federal district court in August declined to issue an order that would have required the State to stop the cuts and restore the 9 Medi-Cal benefits. Lynn Carman, lead attorney on the case, immediately filed an appeal to the next higher court – the 9th Circuit Court of Appeals, requesting that they intervene and issue the order to stop the cuts and restore those benefits.

The lawsuit, Gray Panthers of San Francisco, et al. v. Arnold Schwarzenegger, et al. , was filed on behalf of Medi-Cal recipients and advocacy groups including the Gray Panthers, the Independent Living Center of Southern California and the California Foundation for Independent Living Centers.

In February, the Governor proposed and the Legislature, controlled by Democrats approved as part of the agreement to close what was then a projected budget deficit of over $40 billion, the proposal to eliminate 9 of the 35 Medi-Cal benefits that the federal government does not require states to provide, called “optional benefits”. The term however is not an indication of whether the service or benefit is critical in nature to the person receiving it – but rather a description that the federal government does not require the states to provide it.

If the federal appeals court decides to order those “optional benefits” restored based on the claim in the lawsuit by the Medicaid Defense Fund that the State was in violation of several federal laws – including the American Recovery and Reinvestment Act (ARRA) sometimes known as the “economic stimulus act” – the outcome would have sweeping impact on many other programs and services that were hit by major budget cuts this year, including those to regional centers, In-Home Supportive Services (IHSS), adult day health and others that receive Medicaid funding.

The State, in legislative hearings and in court filings, has strongly disputed those claims, saying that the federal stimulus act required the states to maintain eligibility for their Medicaid programs as it was as of July 1, 2008 in exchange for receiving a temporary increase in the amount of federal Medicaid matching funds. That temporary increase ends as of December 31, 2010. The State claims that reducing benefits is not in violation of the stimulus act.

Decision from 9th Circuit Court of Appeals Not Expected Today – Though Could Come Soon

Unlike the federal district court ruling Monday (October 19) on the In-Home Supportive Services budget cuts lawsuit that came from the judge immediately before the end of the two hour hearing, a decision from the US 9th Circuit Court of Appeals is not expected to be handed down immediately. Carman, the 82 year old lead attorney for the Medicaid Defense Fund, however is “hopeful” that the court will decide the case soon after the hearing today given the urgency of the issue of people losing critical health services.

The Medicaid Defense Fund was instrumental in several lawsuits in previous years – and also last year and earlier this year regarding budget reductions to the Medi-Cal program that serves over 1.6 million children and adults with disabilities, the blind and low income seniors (out of a total program caseload of over 6.5 million people). The Medicaid Defense Fund filed lawsuits in federal court last year and again earlier this year that reversed many of the rate reductions to most of the Medi-Cal providers.

9 Medi-Cal Optional Benefits Were Eliminated for Adults As of July 1, 2009

As of July 1, 2009, Medi-Cal will no longer pay for the following “optional benefits” and services for most adults in the Medi-Cal program (21 years or older) living in the community but not in nursing or health facilities. There are however certain important exceptions (see below)
• Adult Dental services
• Speech therapy services
• Podiatric services
• Audiology services
• Chiropractic services
• Acupuncture services
• Optometric and optician services (ophthalmology, which are doctor services for a person’s eyes, will still continue to be covered)
• Psychology services (psychiatry services, and all services through county mental health programs will continued to be covered)
• Incontinence creams and washes

Who Is Exempted from Elimination of These Optional Benefits?

The elimination of the 9 Medi-Cal “optional benefits” and services will NOT change for the following persons who receive services under Medi-Cal:
• Children under the age of 21; or
• Persons living in a skilled nursing facility (Level A or B; this includes subacute care facilities); or
• Pregnant women (the Department of Health Care Services say that persons who are pregnant can continue to receive pregnancy-related benefits and services. They can also receive other Medi-Cal benefits and services listed above to treat conditions that, if left untreated, might cause difficulties for the pregnancy. This includes dental exams, cleanings, and gum treatment. Dental and other benefits and services may also be available up to 60 days after the baby is born;)
• Children receiving services through the California Children’s Services (CSS) program; or
• Adults receiving services through a Program of All-Inclusive Care for the Elderly (PACE).
• Regional Centers – Another exception – though not listed on the Department of Health Care Services notice , are persons with developmental disabilities who are eligible for regional center funded services under the Lanterman Developmental Disabilities Services Act – the nation’s only civil rights act for persons with developmental disabilities. Those persons, under current state law, could ask the regional centers to fund those services being eliminated. Funding to address that was included in the Governor’s budget revisions he made in May, and approved as part of the revised budget passed on July 23/24 by the Legislature and signed by the Governor on July 28th.
• Other Possible Exceptions to the Medi-Cal Optional Benefits Cut: The Department of Health Care Services has said that persons can still receive some or all of the Medi-Cal “optional benefits” that are eliminated, and certain dental services if a person is receiving the services through the Genetically Handicapped Persons Program; or receiving the benefits through the county mental health program; or receiving the benefits through the Medicare Part B program; or receiving the services directly from a physician. (The Department of Health Care Services suggests that persons contact their doctor or dentist if you have any questions about these changes).

The California Disability Community Action Network, is a non-partisan link to thousands of Californians with developmental and other disabilities, people with traumatic brain injuries, the Blind, the Deaf, their families, community organizations and providers, direct care, homecare and other workers, and other advocates to provide information on state (and eventually federal), local public policy issues.