Private Parties May Not Sue States over Medicaid Reimbursement Rates

On March 31, 2015, the United States Supreme Court decided Armstrong v. Exceptional Child Ctr., Inc.. At issue was whether a provider of Medicaid-covered services may sue, as a private party, a state over their reimbursement rates. The providers sought to sue states over rates that they believed were too low and not in compliance with Section 30(a) of the Medicaid Act.

Section 30(a) states that reimbursement rates should be “consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.”

The providers argued that the language of the act, coupled with the Supremacy Clause of the United States Constitution, means that providers can sue to enforce the federal law. In doing so, the providers believed they could force states to increase their Medicaid reimbursement rates. The Supreme Court rejected this notion and found that it is up to the Department of Health and Human Services to remedy the state’s rates.

© 2015 Houghton Vandenack Williams
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