Supreme Court takes up Idaho Medicaid challenge

AP News
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Posted: Oct 02, 2014 10:41 AM

WASHINGTON (AP) — The Supreme Court said Thursday it will decide whether private sector health care providers can force a state to raise its Medicaid reimbursement rates to keep up with the rising cost of services.

The justices agreed to hear an appeal from Idaho, which wants to overturn a lower court decision that ordered the state to increase payments.

A 2009 lawsuit argued that the state was unfairly keeping Medicaid reimbursement rates at 2006 levels despite studies showing that the cost of providing care had risen. A federal judge agreed, and the 9th U.S. Circuit Court of Appeals affirmed.

The increased reimbursements cost the state an additional $12 million in 2013.

The state contends that the Constitution does not allow private parties to enforce federal Medicaid funding laws against states if Congress has not created such a right. Idaho officials say it's up to the federal agencies that oversee Medicaid to decide whether a state is in compliance with reimbursement rules.

In court papers, the private companies that are suing the state say going to court is the only route available. The companies say there's no other way to force federal officials to pursue states not complying with Medicaid laws.

Idaho officials say the suit interferes with the state's ability to deliver services effectively within budgetary limits. They also say the action frustrates Congress' goal of allowing states flexibility in administering Medicaid programs.

State officials say the Constitution's Supremacy Clause does not allow such a suit by private groups. That clause says federal law is supreme over state law.

Twenty-seven states are supporting Idaho. They say there is a split among federal appeals courts as to whether the clause allows private parties to enforce federal laws against the states, and they want the Supreme Court to reject the 9th Circuit's position.

The Supreme Court considered a similar case in 2012, Douglas v. Independent Living Center of Southern California, but the 5-4 majority opinion declined to address the Supremacy Clause issue. Chief Justice John Roberts, who wrote the dissent, said he would have held that the Supremacy Clause does not offer a right of action on its own if Congress hasn't created a private right of action.

Justice will hear arguments next year in Armstrong v. Exceptional Child Center, Inc., 14-15.

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