Exeter Memorial Hosp. Ass'n v. Belshe
| Decision Date | 08 September 1998 |
| Docket Number | Nos. 97-15016,97-15274,s. 97-15016 |
| Citation | 145 F.3d 1106 |
| Parties | , Medicare & Medicaid Guide P 46,351, 98 Cal. Daily Op. Serv. 4210, 98 Cal. Daily Op. Serv. 4497, 98 Daily Journal D.A.R. 5807 EXETER MEMORIAL HOSPITAL ASSOCIATION, dba Memorial Hospital at Exeter, Plaintiff-Appellee, v. Kimberly BELSHE, Director, California Department of Health Services, Defendant-Appellant. CALIFORNIA HEALTHCARE ASSOCIATION, and Association of California Healthcare Districts, Plaintiffs-Appellants, v. CALIFORNIA DEPARTMENT OF HEALTH SERVICES, Kimberly Belshe, Director, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Angela Botelho, Deputy Attorney General, San Francisco, California, for defendant-appellant/defendants-appellees.
Raoul Thorbourne, Deputy Attorney General, Sacramento, California, for defendant and appellant California Department of Health Services.
Byron J. Gross, Hooper, Lundy & Bookman, Inc., Los Angeles, California, for plaintiff-appellee Exeter Memorial Hospital Assoc.
Craig J. Cannizzo, Hanson, Bridgett, Marcus, Vlahos & Rudy, San Francisco, California, for plaintiffs-appellants California Healthcare Assoc.
Appeal from the United States District Court for the Eastern District of California David F. Levi, District Judge, Presiding. D.C. No. CV-96-00693-DFL.
Appeal from the United States District Court for the Northern District of California Claudia Wilken, District Judge, Presiding. D.C. No. CV-96-00965-CW.
Before: SCHROEDER, BEEZER and BRUNETTI, Circuit Judges.
These two appeals raise a question of statutory construction on which reasonable minds can differ. Indeed, two distinguished district judges of this Circuit reached opposite results when faced with it. The issue is whether federal approval was required before a state agency could implement changes to its Medicaid plan in 1995.
Plaintiff Exeter Memorial Hospital Association operates a rural hospital and plaintiff California Healthcare Association is an association of healthcare providers. Each brought suit against the California Department of Health Services challenging the state's implementation of amendments to MediCal, the state's Medicaid plan, before the amendments were approved by the federal government. The plaintiffs maintained that such approval was required; the state maintained that it was not.
Resolution of the issue requires interpretation of the so-called "Boren Amendment" to the Medicaid statutes in 1980. See 42 U.S.C. § 1396a(a)(13)(E) (Supp. IV 1980); see also 42 U.S.C. § 1396a(a)(13) (Supp. V 1981). We view the issue against the backdrop of the earlier versions of the statutes, and the decisions of our own court in earlier cases raising related issues. See, e.g., Oregon Ass'n of Homes for the Aging, Inc. v. Oregon, 5 F.3d 1239 (9th Cir.1993); Washington State Health Facilities Ass'n v. Washington Dep't of Soc. & Health Servs., 698 F.2d 964 (9th Cir.1982) (per curiam).
The district court for the Eastern District of California held that approval was required before implementation of the amendment. Judge Levi relied upon the holding and reasoning of our court in Washington, which was subsequently reaffirmed in Oregon Homes. See Exeter Memorial Hosp. Ass'n v. Belshe, 943 F.Supp. 1239, 1243 (E.D.Cal.1996). The district court for the Northern District of California disagreed in an unpublished decision, holding that our decision in Washington was based upon language of an earlier statute that the Boren Amendment replaced. Judge Wilken reasoned persuasively from that premise that Congress intentionally chose to carry over into the Boren Amendment language that did not require preapproval, rather than language that included an express preapproval requirement. The language of the provisions of the prior statute as well as the provision enacted as the Boren Amendment are set forth in the margin. 1
Judge Wilken's opinion in the Northern District is closely reasoned and accurately reflects the changing language of the statutes and regulations. Nevertheless, we ultimately conclude that, in light of our prior decisions, we must agree with the opinion of Judge Levi in the Eastern District holding that approval is required before implementation of amendments to the Plan. We adopt his opinion in Exeter Memorial Hospital Association v. Belshe, 943 F.Supp. 1239 (E.D.Cal.1996).
The background facts as well as the statutory and regulatory framework are set out in that opinion and need not be repeated here. The opinion also presents a full discussion of this court's decision in Washington, as well as subsequent decisions showing the continuing validity of that opinion. Although the opinion in Washington refers to language of the pre-Boren Amendment statute, it also recognizes that at the time it was decided the Boren Amendment was in effect. See Washington, 698 F.2d at 965. Washington purports to decide the issue before it under then current rather than superceded law. See id. We reaffirmed our holding in Washington in Oregon Homes when we said that "[a]mendments changing payment methods and standards require [federal] approval." See Oregon Homes, 5 F.3d at 1241. Most important, our opinion in Washington was premised on the overall statutory framework rather than the particular language of the statute relating to amendments to state plans. That framework required then, and at all relevant times since, that all plans receive approval by the federal government before they may be implemented, and that all amendments to plans must also be federally approved. In Washington, we held that from these requirements logically flows the requirement that amendments to plans be approved before implementation. See Washington, 698 F.2d at 965. That conclusion is as valid now as it was then, and we follow it in interpreting the Boren Amendment.
In 1997, following the district courts' decisions in these cases, the statute was amended again to eliminate the Boren Amendment and establish instead a notice and comment provision. See Balanced Budget Act of 1997, Pub.L. No. 105-33, 111 Stat. 251, § 4711 (1997), codified at 42 U.S.C § 1396a(a)(13)(A). The amendment is not retroactive and does not affect our decision for the years prior to its enactment. See id. at § 4711(d); Landgraf v. USI Film Prods., 511 U.S. 244, 269-73, 114 S.Ct. 1483, ...
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