SCOTUS Rules Providers Cannot Sue States Over Medicaid Reimbursement Rates

The Supreme Court of the United States ruled on Tuesday that providers cannot sue states over low Medicaid reimbursement rates. The justices voted 5-4 in favor of the state of Idaho, which reversed a lower court’s ruling in the case of Armstrong v. Exceptional Child Center Inc.

The lawsuit, from 2009, claimed that Idaho was keeping Medicaid reimbursement rates at 2006 levels despite studies showing that the cost of providing care had increased since then. The 9th US Circuit Court of Appeals agreed in December 2013 with the providers and increased reimbursement costs in Idaho by an additional $12 million.

Idaho officials said the lawsuit would interfere with the state’s ability to fund Medicaid programs within set budgetary limits and 27 states filed legal papers in support of Idaho, according to the Associated Press.

Justice Antonin Scalia, writing the opinion of the court, said the providers have no right to sue the state. Instead, they can ask HHS to intervene on their behalf.

“We doubt that the Secretary’s notice to a State that its compensation scheme is inadequate will be ignored,” Justice Scalia wrote.

The providers claimed the right to sue the state under the Supremacy Clause of the Constitution, which holds that federal law generally trumps state law. However, all the justices agreed that “the Supremacy Clause does not provide an implied right of action, and that Congress may displace the equitable relief that is traditionally available to enforce federal law,” according to Justice Scalia. However, the disagreement stems from the conclusion that such displacement has occurred in this case.

Justices Sonia Sotomayor, Anthony M. Kennedy, Ruth Bader Ginsburg, and Elena Kagan were the dissenters. Justice Scalia delivered the opinion of the court with Justices Samuel Anthony Alito, Jr., Stephen G. Breyer, Clarence Thomas, and John G. Roberts, Jr.