North East Medical Services v. CA Dept. of Health, No. 11-16795 (9th Cir. 2013)
Annotate this CaseThis dispute arose from California's implementation of a change to Medicare in 2006. The Centers argued that California mishandled the shift in payment responsibility for dual-eligibles' prescription drug costs from state Medicaid programs to the new, federal Medicare Part D Program. The Centers brought suit for declaratory and injunctive relief. Among other things, the Centers urged the federal courts to declare unlawful California's "seizure" of the Centers' Medicare Part D funds, in excess of what would be owed under the per-visit rate for the Centers' expenses. The court concluded that the Eleventh Amendment barred the Centers' claims for retroactive monetary relief; the court affirmed the district court's dismissal of the Centers' claims to the extent that they sought money damages; however, the court reversed the district court and remanded to allow the district court to assess Ex parte Young's application to the Center's remaining claims.
Court Description: Eleventh Amendment / Medicare. The panel affirmed in part and reversed in part the dismissal, on the basis of Eleventh Amendment immunity, of two federally funded healthcare clinics’ actions alleging that the California Department of Health Care Services incorrectly calculated payments for Medicaid-covered pharmacy services provided to “dual-eligible” Medicare beneficiaries who also receive Medicaid. Affirming in part, the panel held that where the clinics had already paid money to California, they could not avoid the Eleventh Amendment’s general bar to seeking money damages from a state simply by alleging that California was not entitled to the payments. The panel rejected the argument that the Eleventh Amendment did not bar the clinics’ claims because they brought suit as agents of the federal government to protect a federal interest in the grant funds they claimed California wrongfully seized. The panel also rejected the argument that the clinics sought only the return of improperly seized property. The panel reversed the dismissal of claims alleging prospective relief and remanded to allow the district court to assess whether the clinics may proceed with those claims pursuant to the Ex parte Young doctrine.
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