Pummeled by the economic crisis in 2009, California elected to help balance its budget by cutting off Medi-Cal coverage for poor adults who received health care from dentists, podiatrists, chiropractors and eye doctors.

Last Friday, the U.S. Court of Appeals for the Ninth District ruled (pdf) they could that to people who use hospitals, but shouldn’t have done that to folks who get their care at rural clinics and federally-qualified health centers.

The covered group tends to be the poorest of the poor—migrant workers, the homeless, public housing residents—who often living in rural areas. The difference is determined by the way the federal Medicaid law is written, one of the points that have been disputed in the courts for four years.

The state changed its Medi-Cal law in 2009 and eliminated reimbursements in Medi-Cal, its version of Medicaid, for those services it deemed non-essential. The California Association of Rural Health Clinics and Avenal Community Health Center sued, arguing that the Medicaid Act specifically demanded a broad interpretation of what constitutes essential health care at clinics and health centers.

The suit also said the state should have gotten federal approval to make the change. The District Court agreed with the state on interpretation of the federal law, but said it should have talked to the feds first. The state then satisfied the court by getting permission, retroactive to 2009, from the federal Centers for Medicare and Medicaid Services (CMS).

A three-judge panel in the appellate court reversed the decision. The court said the “intent of Congress is clear” that the services shouldn’t have been cut and the federal agency was wrong to say otherwise.

It is unclear exactly how many people are affected by the ruling, which may be appealed, but 8.3 million Californians are covered by Medi-Cal. California finances are healthier now and the new state budget is slated to partially restore dental services by next May, according to the San Francisco Chronicle.  

The lawsuit was one of several filed by both patients and providers against various Medi-Cal cuts enacted by the state.

–Ken Broder 

To Learn More:

Medi-Cal Must Restore Dental, Other Care to Needy (by Bob Egelko, San Francisco Chronicle)

Medi-Cal Refund Cuts Invalidated by the 9th (by Tim Hull, Courthouse News Service)

Court: Medi-Cal Must Cover Podiatrists, Dentists (Associated Press)

Rural Clinics Hope DHCS Email Will Turn Tide in Medi-Cal Benefits Lawsuit (by David Gorn, California Healthline)

Lawsuit against State (U.S. Court of Appeals for Ninth Circuit) (pdf)