Supreme Court considers providers' right to sue state over payments

This week the United States Supreme Court considered arguments in a case that could have far-reaching ramifications for providers' ability to sue states for insufficient Medicaid reimbursement, Kaiser Health News reported.

Under current law, Medicaid must provide beneficiaries with the same care access as privately insured people. The plaintiffs in Armstrong vs. Exceptional Child Center, a group of providers for developmentally disabled Medicaid patients, filed suit against the state of Idaho for keeping reimbursements flat despite a requirement that payments increase in compliance with a formula approved by the federal government.

More is at stake than the providers' lawsuit; the ruling will establish precedent for whether providers have the right to sue the state for increased payments, KHN reported. On Tuesday, Chief Justice John Roberts expressed concern the precedent would allow for more lawsuits that could be unsustainable for state budgets.

"It seems to me that this is a prescription for budget-busting across the board," Roberts said, according to the transcript of the arguments. "It seems to me [we] will be putting the setting of budget priorities in the hands of dozens of different federal judges, and I just don't know what the practical significance of that is going to be."

A majority of states, provider groups such as the American Medical Association and the American Hospital Association and the Obama administration have all backed Idaho's position in the case, which holds that only the federal government has the right to dispute payment rates in court.

Both Roberts and Justice Antonin Scalia asked why the plaintiffs did not bring the issue to the Centers for Medicare & Medicaid Services; however, the federal government's only method of enforcing the payment formula is to cut off its federal Medicaid funding entirely, a step it has never taken before.

Providers who accept Medicaid payments will likely have financial troubles in 2015, as a temporary payment increase for primary care physicians is set to expire this year, FiercePracticeManagement previously reported. As one of 23 states that have yet to expand the program under the Affordable Care Act, Idaho's Medicaid providers are especially expected to struggle.

To learn more:
- read the article
- here's a transcript of the arguments (.pdf) 

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