Supreme Court rules healthcare providers can't sue states over Medicaid rates
Ruling is a blow to healthcare providers who say they are losing money in seeing patients covered by Medicaid due to inadequate reimbursement.
U.S. Supreme Court building
Healthcare providers cannot sue states to force increases in Medicaid reimbursement, the Supreme Court ruled on Tuesday in a 5-4 decision.
The well-watched Armstrong v. the Exceptional Child Center Inc. ruling is a blow to healthcare providers who say they are losing money in seeing patients covered by Medicaid due to inadequate reimbursement.
The case went to the Supreme Court after a lower court sided with two Idaho health providers that claimed Medicaid reimbursement rates in the state were at 2006 levels. The increased reimbursements cost Idaho an additional $12 million in 2013.
Twenty-seven states filed legal papers supporting Idaho, while medical providers said going to court was the only way to get Idaho to comply with federal Medicaid laws since the government had taken no action.
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The majority of Justices said the providers had no private right to enforce Medicaid funding laws. The providers must raise any payment disputes directly with the federal government, according to the ruling.
The American Hospital Association said it was disappointed with the decision.
“Access to care for all patients is a priority of the nation’s hospitals. Medicaid is one of the backbones that serves as a safety net," the AHA said in a release. "This decision means hospitals will not be able to bring cases to court when state agencies fail to live up to their obligations.”
Despite the loss to healthcare providers, there’s an upside for hospitals, according to consultant Kip Piper of Sellers Dorsey, which specializes in Medicaid and health care reform.
For hospitals in the 22 states without Medicaid expansion, the ruling offers a better chance of seeing that passed, he said.
Had the decision gone the other way, “there would be a huge level of uncertainty,” Piper said. Rate decisions would have gone to the courts, rather than to CMS or the Legislature, he said.
“In a non-expansion state, this could have been a deal-breaker,” Piper said.
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Medicaid is a $540 billion federal program that’s growing at a rate of 8 percent a year, according to Piper. However, the Medicaid tax base isn’t growing enough to fund the program at that level, he said.
Justice Antonin Scalia, who wrote the opinion, was joined by Chief Justice John Roberts and Justices Clarence Thomas, Stephen Breyer and Samuel Alito in the majority vote.
In dissent, were Justices Sonia Sotomayor, Anthony Kennedy, Ruth Bader Ginsburg and Elena Kagan.
Here’s the full ruling:
Twitter: @SusanMorseHFN
