When California cut Medicaid reimbursements, service providers and program recipients sued the state. Now the U.S. Supreme Court is set to decide whether or not such suits are allowed.

Justices heard arguments Monday in the case, which centers on a 2008 decision by California lawmakers to begin reducing Medicaid payments to doctors and other providers by up to 10 percent.

Health providers and Medicaid recipients — including those with disabilities — sued arguing that the cuts, which were designed to save the state more than $700 million, violated federal law. They said that lower payments would lead to fewer providers accepting Medicaid and ultimately jeopardize access to care.

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The state countered, however, that only the federal government — not the courts — has the ability to determine whether or not reimbursement rates are sufficient.

The Obama administration is supporting California in the case, which is being watched intensely by states and disability advocates alike. A ruling is expected sometime next year, reports USA Today. To read more click here.