In a 5-4 decision handed by the U.S. Supreme Court on Tuesday, March 31, physicians, hospitals and other private providers will not be allowed to sue states over Medicaid reimbursement rates, even if the state doesn't abide by federally approved remibursement formulas.
One of the issues taken up by the High Court this session adressed the rights of providers to sue states over payment rates for those participating in the Medicaid program. In Armstrong v. Exceptional Child Center, a number of providers for developmentally disabled patients sued the state of Idaho because officials did not increase Medicaid payments to keep up with rising costs of delivering care as set forth on the federal level.
In the split decision, the justices sided with attorneys who argued allowing such actions would flood the courts with lawsuits and that Congress hasn't provided a private right to enforce federal Medicaid funding through the court system.
Attorneys for the plaintiffs cited the "equal access" provision and said that if states don't fully fund Medicaid, then providers are apt to leave the program, creating a void of care. Furthermore, they cited tthe U.S. Constitution's Supremacy Clause, which makes federal law supreme over state laws.
In writing the majority opinion, Justice Antonin Scalia noted the Supremacy Clause does give weight to federal laws but "it was not understood as conferring a private right of action." The clause, he continued "instructs courts what to do when state and federal law clash but is silent regarding who may enforce federal laws in court."
The SCOTUS ruling overturns the decision of a federal district court that initially sided with providers. In the wake of this ruling, providers' only option of recourse is the HHS administrative procedure. Ultimately, HHS can withhold federal funding from states found to be out of compliance with the Medicaid Act, and the justices' decision points providers to this pathway to resolve disputes. The issue of equal access was not specifically addressed in the ruling.
