- The Supreme Court on Tuesday reversed a lower court decision in Armstrong v. Exception Child Center, ruling that providers may not sue states over low Medicaid reimbursement rates.
- An Idaho federal district court originally ruled that the state rates did not comply with federal law that requires states to "assure that payments are consistent with efficiency, economy and quality of care and are sufficient to enlist enough providers" to ensure sufficient access to care. The 9th US Circuit Court of Appeals upheld that ruling.
- Providers argue that turning to the courts to raise rates is the only expedient way to get the job done: "Courts are uniquely positioned to provide injunctive relief—ordering the state to do or not do something," MaryBeth Musumeci of Kaiser Family Foundation said. "By contrast, the Health and Human Services secretary only can withhold federal funds in administrative actions to enforce state compliance with the Medicaid Act."
This has left providers with only one avenue to enforce the equal-access provision: HHS' administrative process. The agency secretary must approve any amendments to state Medicaid plans to ensure they meet federal requirements. If a state disagrees with that assessment, it can request an administrative hearing and seek review in federal court. During that process, the state can continue to enforce the disputed policy, as the HHS administrative process does not include injunctive relief.
A group of former HHS officials filed an amicus brief noting that CMS has limited resources to oversee state Medicaid programs and relies on legal action by private parties to ensure the equal access mandate is being met.
The SCOTUS decision does not address whether Idaho's rates violated the equal-access provision. Some analysts have argued that this decision may cause some providers to drop out of the state's Medicaid program.