Supreme Court Hears Medicaid Payment Dispute
October 3, 2011
The US Supreme Court opened its term today hearing oral arguments in a case to determine who can challenge Medicaid payment policies.
The lawsuit, Douglas v. Independent Living Center, was brought by a number of plaintiffs challenging California’s ten percent cut in Medicaid payments.
Lawyers for the state of California were joined by the U.S. Solicitor General in asking the Court to not allow doctors and patients to sue to block reductions in Medicaid payments.
The California legislature adopted the cuts to address a multi-billion dollar budget shortfall.
At dispute is whether the state violated a federal rule requiring Medicaid payment rates to be sufficient to ensure the continued participation of physicians and other providers.
Central to that dispute is who has standing to challenge a state that reduces rates below what could be considered sufficient.
While federal law does not expressly grant providers the right to sue over cuts in payments, the plaintiffs argue that that right is granted under the supremacy clause of the U.S. Constitution, which says federal statutes are superior to state laws.
A ruling for the plaintiffs could spell trouble for states, a number of which have cut provider payments to plug gaps in their budgets even as Medicaid rolls have increased. An emergency room doctor in Spokane, Washington recently sued that state over its limits on emergency room visits by Medicaid enrollees.
Both sides in the case faced pointed questioning from justices during oral arguments. The lawyer for the plaintiffs was asked how policy decisions could be carried out if providers were allowed to sue just because they thought the rates were too low.
Attorneys for California and the Obama administration argued to skeptical justices that because Congress did not include a right to sue in the Medicaid act, the supremacy clause does not apply.
The case has put a number of Democrat members of Congress at odds with the Obama administration. House Minority Leader Nancy Pelosi (D-Calif.) and other key Democrat lawmakers filed a friend of the court brief in support of the plaintiffs.
A decision in the case is expected next spring.