Bob Egelko, Chronicle Staff Writer
Tuesday, December 22, 2009
(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.”
To read entire story click here.