Source: https://www.healthlawyers.org/News/Press%20Room/Pages/U-S--Supreme-Court-Says-Providers-May-Not-Challenge-Medicaid-Reimbursement-Rates.aspx
Timestamp: 2019-04-26 08:38:07+00:00

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The U.S. Supreme Court held March 31 that providers could not bring a private enforcement action under the Supremacy Clause or in equity to challenge Medicaid reimbursement rates set by a state.
The closely watched 5-4 decision puts to rest an issue that had been before the Court several years earlier in a case that was resolved without reaching the merits of the Supremacy Clause issue. See Douglas v. Independent Living Ctr. of Southern Cal., No. 09-958 (U.S. Feb. 22, 2012).
The majority opinion, written by Justice Scalia and joined in the judgment by Justices Roberts, Alito, Thomas, and Breyer, reversed a Ninth Circuit decision finding providers could enforce Medicaid’s equal access provision, which requires payments be “consistent with efficiency, economy, and quality of care” and “sufficient to enlist enough providers so that care and services are available . . . at least to the extent that such care and services are available to the general population . . .” 42 U.S.C. § 1396a(a)(30)(A), under the Supremacy Clause.
The Court in October 2014 agreed to review the case and heard oral arguments on January 20.
The Court said a broad reading of the Supremacy Clause to allow private enforcement actions where none otherwise existed would be at odds with Congress’ equally broad discretion not only to enact laws, but also to determine how those laws are implemented.
“It would be strange indeed to give a clause that makes federal law supreme a reading that limits Con­gress’s power to enforce that law, by imposing mandatory private enforcement—a limitation unheard-of with regard to state legislatures,” Justice Scalia wrote.
The majority went on to find that the Medicaid providers could not invoke the courts’ equitable powers to enjoin the enforcement of the rates, which allegedly violated federal law, because Section 30(A) itself foreclosed such relief.
In the case of Section 30(A), Congress implicitly excluded private enforcement by enacting requirements that were too open-ended and vague for the courts to adequately fashion a remedy, the majority said.
Instead, Congress “explicitly confer[ed] enforcement of this judgment-laden standard upon the Secretary”—through the ability to withhold Medicaid funds for noncompliance with federal requirements.
“The sheer complexity associated with enforcing §30(A), coupled with the express provision of an administrative remedy, §1396c, shows that the Medicaid Act precludes private enforcement of §30(A) in the courts,” the majority opinion said.
Justice Breyer, who joined in the judgment, focused on this issue in his concurrence. Breyer said not only was Section 30(A) “broad and nonspecific,” but also it applied to the setting of rates for which “administrative agencies are far better suited” than judges, Breyer wrote.
“The consequence, I fear, would be increased litigation, inconsistent results, and disorderly administration of highly complex federal programs that demand public consultation, administrative guidance and coherence for their success,” he added.
Like the majority opinion, Breyer also pointed out that providers were not without other options—including asking the Secretary to step in, and depending on the outcome, potentially seek review of that decision in court under the Administrative Procedure Act (APA).
In the dissent’s view, Congress did not establish the sort of “detailed remedial scheme” necessary to preclude the courts’ equitable powers.
Justice Sotomayor rejected the majority’s suggestion that providers had a viable alternative for seeking relief. “If the State has violated § 30(A) by refusing to reimburse medical providers at a level ‘sufficient to enlist enough providers so that care and services are available’ to Medicaid beneficiaries to the same extent as they are available to ‘the general population,’ agency action resulting in a reduced flow of federal funds to that State will often be self-defeating,” Sotomayor observed.
Armstrong v. Exceptional Child Ctr., Inc., No. 14-15 (U.S. Mar. 31, 2015).

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