Sierra Med. Servs. Alliance v. Kent, 883 F.3d 1216 (9th Cir. Mar. 6, 2018).
Numerous private ambulance companies sued the Director of the California Department of Health Care Services (DHCS), alleging that the rate set for reimbursing their cost of providing emergency medical transportation to Medi-Cal patients—which the companies alleged covered only one-fifth of their actual cost—violated various constitutional provisions. The district court granted the DHCS’s motion for summary judgment, ruling that, despite Health and Safety Code section 1317(d) (which required the companies to provide emergency services regardless of the patient’s ability to pay) the plaintiffs lacked a constitutionally protected property interest in a particular reimbursement rate and that Medi-Cal did not compel plaintiffs to furnish their resources for public use. The companies appealed.
The Ninth Circuit affirmed. Although the district court had erred when it reasoned that plaintiffs’ voluntary enrollment as Medi-Cal providers deprived them of a constitutionally protected property interest, the companies had failed produce evidence that section 1317(d) effects a regulatory taking. The companies did not present evidence demonstrating (1) the overall economic impact of section 1317(d); (2) any investment-backed expectations or interference with such expectations; or (3) the character of the government action. The companies’ due process claim regarding the adequacy of the reimbursement rate failed because they voluntarily elected to become Medi-Cal providers, and therefore could not have a constitutionally protected interest in any particular reimbursement rate. Finally, the equal protection challenge—that higher rates were being paid to public ambulances—failed rational basis review. DHCS reasonably favored public providers over the private companies since payments to them counted toward the state’s share of the cost of covering its Medicaid population.
Peder K. Batalden
pbatalden@horvitzlevy.com
Horvitz & Levy LLP
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