Appeals Court accuses California State lawyers of deception to ram through Medi-Cal cuts.

San Francisco and Sacramento Gray Panthers are plaintiffs in this suit against the State of California for cutting its payments to Medi-Cal doctors, dentists, pharmacists, clinics, and adult day health centers, even though California’s payments to these providers and the ratio of providers to patients are among the lowest in the country.  It is already difficult for Medi-Cal patients to find doctors, yet the California was willing to go to the US Supreme Court to cut its payments by 10% and make the situation even worse.  Now the State has been caught in deceptive practices in the courtroom.  Read more about this case from CDCAN, the California Disability Community Action Network, and here.

San Francisco Chronicle, December 22, 2009

Court accuses state lawyers of lying

Bob Egelko, Chronicle Staff Writer

(12-21) 17:58 PST SAN FRANCISCO — A federal appeals court bluntly accused the Schwarzenegger administration and state Attorney General Jerry Brown’s office on Monday of lying about its defense of cuts in Medi-Cal fees.

Lawyers in Brown’s office committed a “clear violation” of State Bar rules that prohibit attorneys from misleading judges, raising doubts about the credibility of any future statements they make on behalf of state health officials, said the Ninth U.S. Circuit Court of Appeals in San Francisco.

The court said health officials, through their lawyers, had lied about why the state waited more than a year to make its current arguments in the case.

Brown’s office said the court’s comments were “based on a misunderstanding” that the state’s lawyers will try to clear up in the next few days.

In July, the court ruled that the state had violated federal law with 2008 legislation that cut by 10 percent the rates it paid to doctors, dentists, pharmacists, clinics and adult day health care centers serving 7.1 million poor people in the Medi-Cal program.

The ruling required the state to reimburse health care providers hundreds of millions of dollars that the state cut from their fees from July 2008 to March 2009, when a new law took effect setting rates at 1 to 5 percent below July 2008 levels.

The court said state health officials and legislators were simply trying to save money and did not study how the cuts would affect Medi-Cal patients, as federal law requires.

On Monday, the same three-judge panel rejected the state’s claim that the court lacked authority to prohibit the 10 percent rate cuts in July because the law requiring those cuts had expired March 1. The court said it still could order reimbursement, which the state has yet to pay.

The allegations of lying involved the state’s failure to cite the change in reimbursement rates in arguments before the appeals court issued its July ruling. The court noted that the modified reductions were approved in September 2008 and took effect in March, but the state did not mention that fact, or argue that it was important, until its recent appeal that sought to set the July decision aside.

State officials explained that their lawyers became aware of the legal issue only recently while preparing a potential U.S. Supreme Court appeal, the court said Monday.

In fact, the panel said, the state had already filed Supreme Court papers June 1, in an earlier Medi-Cal case, that discussed the latest change in rates and how it affected the appeals court’s jurisdiction over the issue.

Health officials “feigned ignorance” of the facts they had already presented to the Supreme Court, the appeals court said. Citing State Bar rules that forbid attorneys to mislead judges by making false statements, the court said state lawyers’ “clear violation … gives us pause about accepting the veracity of future pleadings filed by the attorney general on behalf of the (state health) director, if not more generally.”

In response, Brown’s office said it had not tried to hide the March rate change, which was well known to all sides in the case. Instead, the attorney general said, the state focused only recently on an argument that the change deprived the court of jurisdiction over the case.

The argument was made “entirely in good faith,” the attorney general’s office said in a statement. The office promised a filing in the next few days that would clear up the confusion.

But a lawyer for plaintiffs in the case said the court was on the mark.

Brown’s Los Angeles office, which handled the appeal, “has consistently lied and misrepresented statements of fact and law throughout the litigation,” said Lynn Carman, attorney for a group of pharmacists. “It is gratifying that the Ninth Circuit has now called a spade a spade.”

E-mail Bob Egelko at

This article appeared on page C – 1 of the San Francisco Chronicle

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