Cal. Ass'n of Rural Health Clinics v. Douglas

A private right of action exists to enforce an individual's rights created under 42 U.S.C. § 1396a(bb).

In 2009, California passed Section 14131.10 of the Welfare and Institutions Code (“the Code”). The Code authorized the California Department of Health Services (“the Department”) to eliminate certain Medicaid services provided by the California Medical Assistance Program. The California Association of Rural Health Clinics and the Avenal Community Health Center (“the Association”) challenged the elimination of these services under federal preemption and procedural deficiency theories. The Ninth Circuit held that the Association had a private right of action to challenge the Code under 42 U.S.C § 1983 but no private right to challenge the legislation prior to the Code's approval by the Centers for Medicare and Medicaid Services ("CMS"). The panel joined several sister Circuits and held "that a private right of action exists to enforce rights created by 42 U.S.C. § 1396a(bb).” The panel noted the language of § 1396a(bb) specifically referred to “rural health clinics and Federally qualified health centers,” therefore members of the Association were named beneficiaries. The right to payment for services rendered was therefore “neither vague nor amorphous.” Because Congress had unambiguously expressed intent to create this right to payment for services in the Association's class, CMS’s, interpretation was given no deference. Finally, the panel held it was clear that the Medicaid statute defined certain terms at issue in this case by wholesale import from Medicare definitions and denied a defendant cross-appeal as moot. REVERSED and REMANDED and DENIED.