The Court was asked to consider two questions: whether developmentally disabled recipients of Medicaid funds and their service providers have a private right of action against state officials to compel the enforcement of a federal law governing state disbursement of such funds and whether the State of California has unlawfully discriminated by paying community-based service providers lower wages and benefits than it pays employees in state institutions.
The Public Interest Law Center of Philadelphia, DREDF’s co-counsel for Plaintiffs in Sanchez v. Johnson (No. 04-15228), issued this statement on the August 2, 2005, Ninth Circuit US Court of Appeals Opinion:
The Governor and the legislature now face a very large problem that has begun to destroy community services for people throughout California. Although the federal Court said it couldn’t act, the state can and must deal with this crisis. Providers serving persons with disabilities in the community have seen insubstantial increases in payments since 1989. Although the state has collected $254 million in additional federal money for the disabled since this case started none of it has been used to pay for services for the disabled. The system cannot continue hemorrhaging skilled workers and replacing them with untrained persons who could be earning more at fast food restaurants.
The opinion of the Court of Appeals for the Ninth Circuit (PDF), holding that the Medicaid Act requirement that states ensure payments consistent with quality of care is not enforceable, is a severe defeat for accountability in federal programs. Over 180,000 persons with disabilities in California are dependent upon Medicaid to provide residential and day services.
The lawsuit challenged the State’s failure to increase wages of direct care workers for persons with disabilities residing in the community, resulting in turnover in excess of 50 percent a year. California has increased rates paid to community providers for wages insubstantially since 1989. As a result, workers in community facilities are paid 54 percent of what similar workers in California’s institutions are paid. Only two states in the nation paid less per person than California for Medicaid Home and Community Based Services. The decision also will make it impossible for millions of people using Medicaid to enforce provisions about quality or availability of medical services. No other Court of Appeals in the country has held that this provision of the Medicaid Act is not enforceable by intended recipients of services. Indeed, the Ninth Circuit Court identified four other Courts of Appeals, which had previously upheld the enforceability of this provision.