and we'll hear argument in a scientist for says the california department of health care service it please the court i'm tom why and i'm here for the nineteen plaintiffs here who are all what are called border hospitals within the meaning of the california state plan amendment fifteen dash twenty and i start by referring to that because as the panel is aware there is a bit of history here too the department's deliberate discrimination against interstate commerce which in the course of this litigation the department made an attempt to remedy and that the district court found essentially that they had gotten to second base but had not done sufficient to remedy the deliberate discrimination and therefore rendered judgment which is required elimination of the other aspects of discrimination that were identified and a disputed i'd like to address mainly  the hospital's appeal with respect to retrospective relief for the period from july first two thousand and thirteen to the date of the court's order  of december twenty first twenty fifteen the main point that is it issue here is the function purpose and application of section ten eighty five of the california code of civil procedure which gives written really to people who  by virtue of the action of the agency suffer injury and the court declined to give retrospective relief because of its interpretation of section two and eighty five which was not an easy question i must say because the ten eighty five  remedy has been used in very different circumstances we've laid them out in our brief when the court referred to them in the court's order of april sixteen which addressed this issue and the court agreed that yes of the fact that there was discretion involved in the  how that could be done and whether it could be done without infringing illegally on the discretion of the agency and he made distinctions between the case law that well establishes the use of ten eighty five written relief to give monetary relief and distinguish them then those cases included the mission hospital and fifteen which in effect confirmed what the mission hospital cases had said somewhat indirectly and by that i mean that the quilt fornia court said yes the ten eighty five remedy includes damages under section ten eighty five ten excuse me ten ninety five of the code of civil procedure which specifically refers to damages in an appropriate case i'm sorry this is a bit of a confusing case but the district court made a case that's correct and you could you address briefly what is wrong with this court's decision only one thing and that is that in the april sixteenth order the court declined to impose retrospective relief on the same terms that it imposed prospect of really and it did that because of its analysis of section ten eighty five but so you think there's only one thing wrong with the order but if in fact there was something else wrong with the district court's decision such as it's in now a sense of the dormant commerce clause we wouldn't be talking about way your issue is correct they i mean in other words that's another word so if that's the great point of it well well right judge mckee if what you're saying is that if the court was wrong to find that discrimination oh under different for different reasons under different plans when you say those cases are you talking about the state i'm talking about both the children's hospital cases one of which was in the ninth circuit one of which was in the court of appeal california in the ninety seven callup fourth case the children's hospital case that that's really what and district court looked at right well that's correct the the court said that it found persuasive the approach chen noted that and was not persuaded that this was the same kind of situation because he said well you know of this may be a little bit more complicated then simply saying ok stop discriminating and then we know where the money comes however to take issue with with the suggestion that magic hour was acting as a market participant like any private entity oh absolutely and for the reasons that that that both judged and the the children's hospital case found and those i can ask you that because i am troubled by the with all respect the state court of appeals analysis here because it really doesn't track the supreme court it kind of freelances on things the supreme court never said so i'm not quite as sanguine about that case as perhaps the district court was and i personally would look to the supreme court so it would be helpful to me if you were to tell me what your position is not under bond  which we're not bound by but rather well supreme court i guess what i would say about that is there are a number of arguments that the department made but some of  think let me state it this way the department seems to say that if it isn't commerce it's not discriminated against and it's not commerce if it's regulation and it's not intrastate commerce the banta court pointed out and judge john agreed that the definition of commerce is very very broad and you know you could go way back to wickard v fil burn and say it this is commerce there is a special aspect to this the reason why i think the simplest reason why the state is not a market participant is that it is part of a vast regulatory entitlement program for citizens who are defined in each state plan and this from the hospital is this it matters that the hospitals are not required to participate in medicaid now that is really an interesting point because as a practical matter they are required because as a practical well as a legal matter too it depends on certain circumstances let me give you an obvious example when all these people were shot in las vegas  weeks ago there were about two hundred fifty people there who were california citizens all bet you that a number of them were medicare beneficiaries and they went to the local hospitals there is no way that a hospital the question here is regulating and coursing you know what look to the supreme court language and i take your point i mean of course the hospitals had to treat them but that is a federal maybe there's no legal compulsion on the part of the artists the hospitals to render emergency service well there is a guy comes from the federal government doesn't well it comes from emtala but it also comes in in california they would have to do it in nevada i can't tell you with authority what the state law requires there but yes but this is so let's take a case where we've got you're  using a nevada example we have out of state regulations that may require treatment in those states and we have federal regulations but that kind of begs the question of whether the california system is a regulatory coercive system so i'm still not quite sure what your answer is on that well i think the answer is that there really is no option for the hospitals to stay out of the plan that is i think the reason why if someone were to say to you can would we voluntarily signed but you know really particularly love your reimbursement plan but what makes them sign up well they don't have to sign up to quite getting my point and so i'm probably not articulating it well enough and that is we have the emergency treatment requirement that by law but in terms of signing up to this program what is it as i understand there's no requirement you say for the hospital to sign up doesn't have to they still have to treat it might have to treat but there i have to sign up with doesn't matter if they're doing the treatment they're in the business of providing the treatment to the patients and by the way when we talk about the emergency services you might say that's be the not the tail that's the inaccurate no i mean it is accurate that it comes under federal law but it is not accurate that it doesn't come under state law at least as far as california is concerned what and what california don't think that that exempts the department as a market participant because i think even to say market is a misnomer because this isn't a market this is a highly regulated service which these hospitals have really no option but to accept comply with and participate in the people who live on the border live in reno or patronize the washoe hospital there which is also renowned named by named as renowned just don't have that choice i think we have your point mind you we're down to almost no time and ok thank here in setting reimbursement rates i can market participant as a market participant yes your honor now because i understand it articulated by the supreme court first of all its conduct is analogous to that of may grieve or not agree to abide by for serving cover patient as excuse me for serving in rowley's in that health plan and that's exactly what the department is doing here it said and i you know i think his point is although he didn't mention it but i i hear mr weiss is point is being that what you have here is a practical matter is really the functional equivalent of regulation and you could go back to one a key in the supreme court where i realize it's we're out of the and that's kind of hard to unscramble some of the supreme court decision but isn't what's happening here because the reality is that there's the functional equivalent of regulation no your honor the department's establishment of payment terms for in patient hospital services someone who has private insurance or someone who has no insurance at all so there are no as some of the cases put it no doubt you know downstream or spillover effects these are the department's  terms for medicare payments for medical coverage services are had been and are restricted to services provided to covered services provided to medicare beneficiaries only so i suppose they mini of those individuals would have no insurance state payment would simply not be involved in medicare absolutely is a voluntary program on the on the part of the of the states all states do currently all just have it in the program but it is participate it is basically the department in setting to be specific during the department in its conduct of establishing terms of payment for in patient hospital services question of the state or government entity acting as a market just been of course is acting in a in its governmental capacity in that respect in a sovereign capacity like i suppose in the health care provider acts as a market participant correct but our point is that the conduct of the department in this instance is exactly analogous to that of a private health plan seeking to set rates that at that are sufficient to enlist a sufficient numbers of providers to provide care to enroll these as the state is required by medicaid law to do and and wage index that's applied to payment terms and so does result in a differential between payments to in state and out of state hospitals but the basis of that is not the location of the hospital specifically the basis is in fact the department's effort just like the the federal medicare program to take into account real differences in wages between areas and the medica act requires under forty two u s c thirteen ninety six a thirty a as we've identified newspapers requires the state to take into account factors of efficiency and economy in setting rates and the department was directed by the state legislature to consider whether in fact in meeting that mandate it should consider whether to adjust payment rates based on wage differences and as we've identified that there could be wage differences with in california as well absolutely your honor and there is some small town is different than what the angeles the same result occurs right that that's correct absolutely a hospital in  with it in san francisco or santa cruz was identified in the study conducted by the department's contractor of this issue had it much higher wage costs in that area than hospitals in rural areas and therefore the department deemed it appropriate specifically looking at california california itself to use these medicare wage index to adjust prices to ensure that the state is essentially only participant in this market correct for providing health coverage to medicare beneficiaries well your honor is that true and i understand that correctly i don't think that's correct you're all right  and as we've identified in our papers the department it is seeking services for it's in rowley's and as required by medicaid hack it's required just said it's are sufficient to attract enough providers so that beneficiaries have access equal access to services in different geographic areas but there's only one person person entity doing that that's doing that and then it's looking for different and it has different beneficiaries individuals who are then and these hospitals are representing only have one place to get their medicare reimbursement right the day if i understand your question your honor yes the hospitals make if they if they choose to enroll and of course it's voluntary  is is look is purchasing medical services it's seeking to list providers in the broader health care service market and we think that that's the appropriate way to look at the market yes  it's i suppose the same is true throughout the country in other words if it's federal regulations that apply here if citizens let's say eastern part of california go into nibbana and get injured residents have coming into california vice versa absolutely if a nevada resident happens to be in california and is injured or or lives near the border and for one reason or another for non emergency services it's customary to it makes it worse but i don't think it's correct your honor because first of all there are private hospitals that choose not to participate in the medicare medicare or medic referred to is is an obligation to serve emergency patients is an obligation is voluntarily undertaken by a hospital by choosing to enroll in the medicare program  it's not a course of your honor because it's played just want the court to focus solely on the service to medical patients but the obligation to serve emergency patients who come to the it's not it's not it's just simply not related to the medical nor do it it's really unhinged from the dormant commerce clause analysis the fact that they have to serve these patients that show up on their doorstep yes your honor it's participation in medic how is voluntary so and of nevada hospital arizona hospital oregon may choose not to enroll in as a provider in the medical program and receive the payment medical receives now as a practical matter you may be that that they need to seek any sources of reimbursement for that cover service and so it may behoove them to to to enroll however as a legal matter they are not required to it is i mean that's where they are can their complaint of course is that the level of reimbursement correct ultimately translates into money yes i think the concern is the level of reimbursement but the lino they knew beforehand that they have to pay as requested by the state of california right they momentarily provide the service the i think fundamentally the court can also look to the standards articulated in marcus with cases where preemption is involved we pointed out the court's recent decision in the airline service providers association case there the very similar type of analysis court looks to whether the government entity is is pursuing the efficient procurement of needed services and the scope of the regulation has a narrow scope that defeats any suggestion that it's seeking to impose a general policy that's exactly where the circumstance here is articulated the department is simply seeking to procure hospital services for enrollees in the medicare program and if the rates do not govern in any way the rates that the private insurer must pay for the same service or that a hospital may charge for the same service if it's not medicare outside of the medicare program mr weiss referred to the medicare program as being a vast government program i think that's one of the things that government function but it's the else is really no different if this were for example a small state such as south dakota that is not as large as california what is really going on is the department is acting just like the medicare program of correct and this court's decision in big country fears we've talked about in our papers made clear that just because the the state is acting in some capacity fulfilling a government function does not take take it outside of the realm of the market participant exception that would that would allow the exception to swallow the rule when the courts have looked at whether a government entity is serving in a sovereign capacity it's  where it's undertaking could essentially governmental functions such as you know taxation or the this this type of thing obviously that's not the case here we've got a modern regulatory program that the state has voluntarily agreed to to undertake to provide health insurance for those california residents who are unable to afford private insurance and thank you thank you  in our response brief reply in response brief it page twenty four we have cited and quoted from each of the border state statutes that are what you might call that impose on these border hospitals the obligation to treat emergency patients who are medicare beneficiaries when they need it such as the example i gave and the fact is these are services that are provided by legal compulsion which if they were across the border they would be paid a significantly larger allowance for the expense of treating these patients and it is a federal legal compulsion is no there are imposition of the states of  participate in the california well they are participating in at that trial and no it isn't that but they're not participating they're participating because of the state and federal law crappy not because it's because they are hospitals ok that you're in for the morning