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Supreme Court rules health care providers lack standing to challenge Medicaid rates

April 08, 2015

By Craig Palmer

The Association is "disappointed" in the U.S. Supreme Court's March 31 ruling that health care providers do not have standing to bring a lawsuit challenging inadequate Medicaid reimbursement rates based on a state's failure to meet Medicaid's equal access requirement, the ADA said in a statement.

"This ruling creates yet another hurdle for advocates of Medicaid reform," said ADA President Dr. Maxine Feinberg. "Dentists and physicians continue to vigorously advocate for improvements to state Medicaid programs. Oral health is vital to overall health, especially for chronic diseases such as diabetes, and yet most states allocate just two percent or less of their Medicaid budgets for dental services. The Supreme Court decision results in one less recourse for health care providers seeking to hold states accountable to federal mandates.

The ADA Division of Legal Affairs provided the following analysis of the ruling in the Armstrong v. Exceptional Child Care Center case that health care providers do not have standing to compel a state to raise Medicaid reimbursement rates alleged to be inadequate under the Medicaid Act.

The case arose when an Idaho health care provider sought a federal court injunction to require the state to increase its rates consistent with the stated intent of the Medicaid Act to provide access to quality care and medical services, "at least to the extent that such care and services are available to the general public in the [relevant] geographic area."

The ADA, American Medical Association and other health care associations filed an amicus brief in support of the health care provider, arguing that Supremacy Clause of the United States Constitution, the clause making federal law the supreme law of the land, created a private right of action that permitted the plaintiffs to seek the requested relief. The court ruled, however, that the plaintiffs did not have standing to pursue their action and held that the only "corrective" remedy provided under the Act was the power of the Secretary of Health and Human Services to withhold federal Medicaid money from Idaho.

The broad language used by the court on the private remedy issue raises the question as to whether Medicaid patients will still have the right to challenge state underfunding of Medicaid programs, though potential claimants may argue that the court's ruling is not binding precedent as to that particular issue.

A PDF version of the court's opinion is posted under "recent decisions" at scotusblog.com. For more information, see the Jan. 16, 2015, report, ADA supports court brief, profoundly interested, on the ADA News page at ADA.org.