Wednesday, January 21, 2015

US Supreme Court Considers Medicaid Provider Lawsuits

Dianne De La Mare

On Tuesday, January 20, 2015, the US Supreme Court heard oral arguments in Armstrong v Exceptional Child Center, a Medicaid rate case that questions the remedies that providers have to ensure that they are being paid adequately for services they furnish to beneficiaries. The key question in Armstrong is whether Medicaid providers have a private right of action under the Supremacy Clause to sue the state in federal court over low Medicaid rates and to enforce, on their own, the so-called “equal access” provision (42 U.S.C. §1396a(a)(30)(A). The Obama Administration and the states have argued in the past that Congress has refrained from granting providers the right to sue their State Medicaid agencies. Healthcare providers argue that the real issue is about ensuring access for beneficiaries and that states only keep Medicaid payments low for budgetary reasons. During the recent oral arguments, it was clear that the justices are split – some of the justices were skeptical, based on questions they posed, that healthcare providers should be allowed to sue state Medicaid agencies over low reimbursement rates. Other justices, however, asked where providers could challenge low Medicaid rates if not in the court system.

The US Supreme Court confronted this same issue almost two years ago in the California case of Douglas v Independent Living, when it heard a challenge from California providers that were seeking to block Medicaid payment cuts; but ultimately avoided deciding the question when it remanded, in a five-four decision, the case to the Ninth Circuit on procedural grounds to consider the matter in light of CMS’s consideration of those Medicaid rates in its review of the CA state plan amendment.

On December 24, 2014, AHCA/NCAL submitted an amicus brief in Armstrong, along with other interested stakeholders, urging the Court to remand the case to the Ninth Circuit to consider the private right of action question in light of 42 USC Section 1320a. This is a little known and somewhat obscure provision in Title XIX that has not yet been addressed in either the Ninth Circuit or the US Supreme Court that provides that substantive provisions of Title XIX may be privately enforced if such rights existed as of the date of the provision’s enactment by Congress.

To see the amicus brief go to The Association will continue to track this important litigation and update the membership as relevant.

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