This report originally appeared in the May 2010 issue of DOTmed Business News

A collection of Hospitals in Arizona, Oregon and Nevada are suing the state of California over reimbursement the hospitals say they are owed for treating California Medi-Cal patients, including in trauma centers and for emergency medical services. Medi-Cal is California's Medicaid assistance program.

In a complaint filed in U.S. District Court, Northern District of California, the plaintiffs say that a 2009 law, AB 1383, provides supplemental payment for hospitals but only for in-state facilities, even though out-of-state hospitals treat Medi-Cal patients. The complaint argues that the exclusion of out-of-state hospitals from the supplemental funds violates the U.S. Constitution's Commerce Clause, Fourteenth Amendment Equal Protection Clause and the Supremacy Clause, as well as various federal laws.

According to the complaint, "the Commerce Clause also embodies the cardinal principle that a state may not benefit in-state economic interests by burdening out-of-state competitors." The complaint characterizes AB 1383 as "economic protectionism," since no money is being distributed to out-of-state facilities, more money can be given to California hospitals. The complaint asks the court to enjoin the law from being implemented and for the law to be declared invalid.

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