The U.S. Supreme Court will hear a case on whether private sector healthcare providers can sue states to increase Medicaid reimbursements.
In 2009, Idaho rehabilitation providers sued the state of Idaho because they believe the state unlawfully kept Medicaid reimbursements at 2006 levels despite cost of care increases. A federal judge and then an appeals court found in favor of the providers, and the state increased reimbursements resulting in an additional $12 million in funding in 2013.
The state of Idaho is appealing the case under the premise that providers are not allowed to sue the state to increase Medicaid reimbursements because of the Supremacy Clause of the U.S. Constitution—the clause in the Constitution that puts federal law above state law. The state said that requiring increases would interfere with budgeting and flexibility in the program. The providers say they have no other recourse to ensure they receive adequate reimbursements to keep offering services under Medicaid. By law, Medicaid funding must attract enough providers so that beneficiaries have roughly the same access to services as the “general population.”
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.
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