U.S. top court says private medical providers can't sue states over Medicaid

The U.S. Supreme Court on Tuesday ruled that private medical providers that deliver residential care services in Idaho cannot sue the state in order to raise Medicaid reimbursement rates to deal with rising medical costs.

The justices, on a 5-4 vote, ruled in favor of the state of Idaho, which asserted that medical providers have no legal recourse to sue.

Medicaid is a federal health insurance program for lower-income people that is administered by the states. Idaho's lawyers said that in order to receive Medicaid funding, they are required only to comply with the Medicaid Act and related regulations.

Complaints about payments should be addressed to the federal government, the state said.

The case focused on rates for certain residential services. State officials recommended increases in reimbursement rates in the late 2000s but they were never implemented because the Idaho legislature declined to appropriate funds, according to court papers.

Writing on behalf of the majority, Justice Antonin Scalia said that the providers have no right to sue the state under the so-called Supremacy Clause of the U.S. Constitution, which holds that federal law generally trumps state law.

The clause "instructs courts what to do when state and federal law clash, but is silent regarding who may enforce federal laws in court," Scalia wrote.

Scalia noted that the providers have another option: they can ask the federal government to intervene on their behalf.

In a dissenting opinion, Justice Sonia Sotomayor said there was nothing in the Medicaid law to suggest that Congress intended to prevent private lawsuits.

The medical providers noted that similar litigation in other states, including Illinois and Oklahoma, has been allowed ever since Medicaid was introduced in 1965.

In a December 2013 ruling, the 9th U.S. Circuit Court of Appeals said the providers could sue and ruled in their favor on the merits.

The case is Armstrong v. Exceptional Child Center, U.S. Supreme Court, No. 14-15.

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U.S. Supreme Court, Medicaid, Medicaid Act, Idaho, Congress

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