A district court ruled in favor of the centers, and the 9th U.S. Circuit Court of Appeals affirmed the ruling. The state petitioned the Supreme Court to resolve the issue.
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Supreme Court justices are still undecided about whether physicians and other health providers have the right to sue states over low Medicaid reimbursement.
During arguments, Idaho deputy attorney general Carl J. Withroe argued the courtroom is an incorrect avenue for Medicaid providers to dispute pay rates. If displeased, physicians and other health providers should issue an administrative challenge to the Centers for Medicare & Medicaid Services over its approval of the state’s Medicaid plan. He noted that such state plans – known as waivers – must be approved by the CMS every 5 years.
But Justice Sonia Sotomayor called this pathway an ineffective remedy.
“Let’s assume inflation is going up constantly. What happens 2 years into the plan when providers can’t work for what the state is giving or the state is imposing a tremendous hardship on them, which is happening to a lot of providers who are being underpaid. Where do they go? ... What do they do?”
Other panelists, such as Justice Ruth Bader Ginsberg, expressed doubt that the centers’ case against the state has merit, namely that Idaho is violating Medicaid’s equal access provision.
“According to the district court, all eligible recipients received the services that they needed,” Justice Ginsberg said. “So again, there was no waiting list; nobody’s being kept waiting. These providers, while they say they’re not getting enough, are still providing the service. So where is the [equal access] violation?”
Attorney James M. Piotrowski, who represented the centers, countered that the equal access provision imposes both procedural and substantive requirements. The substantive requirement mandates there must be enough providers to allow access and generate quality care, Mr. Piotrowski said. The procedural requirement entails that the rates be set based upon factors that Congress considers important.
“The violation of [the equal access provision] here was that the state gave no consideration whatsoever to the federal factors,” he said. “They relied only on their own factors.”
The Armstrong case is being closely watched by states, physicians, and patient advocates alike. Twenty-seven states have reached out to the high court in support of Idaho. The states saidthey have been subject to numerous, unwarranted lawsuits because of misguided interpretations of the Supremacy Clause. A number of physician and patient advocacy associations joined a friend-of-the-court brief in support of the centers, including the American Academy of Family Physicians and the American Medical Association. The AMA and other organizations said ongoing violations of Medicaid’s equal access provision by states continue to drive doctors from the program and harm access to care.
A decision by the high court is expected by June.
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