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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New HHS Rule Could Lead to Boost in Medicaid Reimbursements

Medicaid reimbursements may rise for primary care physicians next year due to a recent rule proposed by the U.S. Department of Health and Human Services (HHS).  The proposed rule would require Medicaid reimbursements at Medicare levels for family medicine, general internal medicine, pediatric medicine, and related subspecialists during 2013 and 2014.

This proposal is similar to the boost in Medicare payments to primary care physicians in 2011, and aims to ensure that primary care networks are prepared for the expected rise in enrollment resulting from the implementation of the Patient Protection and Affordable Care Act (PPACA).  HHS hopes that increased payments will incentivize primary care physicians to expand services over time, ultimately resulting in improved health and lower costs overall.  States would receive approximately $11 billion in new funds under the proposed rule, with no matching requirement.

© 2012 Parsonage Vandenack Williams LLC

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