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Nina Marshall

, National Council for Behavioral Health

Who Can Sue? Supreme Court Hears Medicaid Rates Case

January 29, 2015 | Medicaid | Comments
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When Medicaid rates are too low, what right of action does the public hold? That’s the decision before the Supreme Court this spring. Last week they heard arguments about whether Medicaid providers have standing to sue state Medicaid programs for low rates.

In Armstrong v. Exceptional Child Center, a group of providers serving people with developmental disabilities sued Idaho officials for failing to increase rates and holding rates flat for “purely budgetary reasons.” Since Medicaid is an entitlement program, beneficiaries have a right to services so long as they are both covered by that state’s Medicaid program and they are medically necessary. When determining fee structures to pay providers, State Medicaid agencies and the Centers for Medicare and Medicaid Services (CMS) have put in some provisions to help assure that beneficiaries have access to services. Despite this, Medicaid fees are, on average, a third lower than Medicare rates and even further behind commercial payments.

State Medicaid plans are required to “assure that payments are consistent with efficiency, economy, and quality of care and are 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 in the geographic area.” But we all know what happens when rates are flat or cut. Nonprofit social service providers are a creative group that have a long history of making do, reallocating funding, and fundraising harder to fill in the gaps. Often with a mission to serve people regardless of their ability to pay, nonprofits rarely stop seeing Medicaid beneficiaries because the rates are too low. But what are the long-term consequences of this reshuffling, and how are Medicaid programs going to meet the demand for services when nearly 10 million new people have joined the program in the last two years?

Twenty-seven states, the National Governor’s Association, and the federal government have all filed briefs in support of Idaho and dismissing the case. Consumer protection groups have lined up on the other side. The Supreme Court is not expected to issue its ruling until this coming summer.