Supreme Court rules providers cannot sue states for higher Medicaid rates.

The Washington Post (4/1, Barnes) reports that the Supreme Court “narrowly ruled” Tuesday “that neither the Constitution nor federal law authorizes doctors and other health-care providers to go to court to enforce the law’s directive that the reimbursement rates set by states be ‘sufficient to enlist enough providers so that care and services are available’ to Medicaid recipients just as they are to the general population.” The case involved two home healthcare providers suing Idaho, saying it set reimbursements unlawfully low. Five justices – Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas, Stephen Breyer, and Samuel Alito – ruled against the providers.

The AP (4/1, Hananel) reports that the lawsuit, Armstrong v. Exceptional Child Care Center, “claimed Idaho was unfairly keeping Medicaid reimbursement rates at 2006 levels despite studies showing that the cost of providing care had gone up.” Lower courts agreed and the increased reimbursements cost the state an additional $12 million in 2013.

USA Today (4/1, Wolf) reports the justices ruled that Federal law “empowers only the secretary of Health and Human Services to withhold Medicaid funds if a state does not comply with the law’s funding requirements.” Justice Scalia, writing for the majority, said the section of the law that requires states to maintain “sufficient” Medicaid reimbursement levels was written too broadly too allow for private lawsuits. Scalia called it “judicially unadministrable.”

The Wall Street Journal (4/1, Bravin, Subscription Publication) reports that Justices Sonia Sotomayor, Anthony Kennedy, Ruth Bader Ginsburg, and Elena Kagan dissented. Sotomayor wrote in the dissenting opinion, “Now it must suffice that a federal agency, with many programs to oversee, has authority to address such violations through the drastic and often counterproductive measure of withholding the funds that pay for such services.”

Bloomberg News (3/31, Stohr) reports that the high court’s decision “is a blow to hospitals, which say that Medicaid rates aren’t covering their costs.” Providers now will have to take any objections to Medicaid rates to HHS.

According to the Los Angeles Times (4/1, Savage), the American Medical Association and other health associations “had urged the court to protect Medicaid from state cutbacks.”

From AMA Morning Rounds, 4-1-15.