Supreme Court to hear suit regarding proposed cuts to Medicaid providers

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The U.S. Supreme Court has agreed to hear arguments in a case that could ultimately allow the state of California—and others—to make payment cuts to Medicaid providers, including long-term care operators.

Newly elected California Gov. Jerry Brown's (D) has adopted many of the spending proposals of his predecessor, Gov. Arnold Schwarzenegger (R), including one from 2008 that would allow lower Medi-Cal reimbursements. Brown's proposed 10% reimbursement cuts would save $709 million in the fiscal year starting July 1, McClatchy Newspapers reported.

Twenty-two other states have sided with California and eagerly anticipate the Supreme Court's ruling since it could indicate what kind of private lawsuits could be filed over public benefits. Providers are worried that California's proposed cuts would cause physicians to flee the program, leaving coverage gaps in many places.

The nation's highest court is expected to hear oral arguments in the fall, with a decision issued in early 2012.