By Bruce C. Vladeck & Bruce C. Vladeck

Texas Insider Report: WASHINGTON, D.C. – Virtually all of the debate over the health care legislation enacted last year has focused on the constitutionality of the individual mandate, the requirement that, by 2014, nearly all Americans either purchase health insurance or pay a fine if they fail to do so.

But last week the court also heard oral arguments in another case that could, indirectly, have a far greater impact on whether the act can meet the goal of expanding health care access by broadening eligibility for Medicaid, by 2014, to 15 million people.    

One of the central substantive requirements of the Medicaid program, which serves more than 50 million poor and disabled Americans, is what’s known as the equal access mandate, which requires states to set the rates at which they reimburse Medicaid providers at levels sufficient to ensure an adequate supply of providers. As both Congress and the executive branch have understood since Medicaid’s creation in 1965, there would be little incentive for providers to participate in Medicaid if their payments were too far below market levels.

Nevertheless, in response to vast budget shortfalls, the California Legislature in 2008 enacted an across-the-board 10% cut in reimbursement levels for Medi-Cal, the state Medicaid program. Three groups of Medicaid beneficiaries and providers sued the state, arguing that the categorical reduction was inconsistent with, and therefore pre-empted by, the equal access mandate.  Read More…