CHA News Article

Supreme Court Rules That Providers Can’t Sue States Over Medicaid Payments

The U.S. Supreme Court ruled today in a 5-4 decision that the Supremacy Clause of the U.S. Constitution does not allow providers to sue state officials to force higher Medicaid payments under Section 30(A) of the Medicaid Act. Section 30(A) requires states to “assure payments [that] are consistent with efficiency, economy, and quality of care.” In Armstrong v. Exceptional Child, the court ruled that the Supremacy Clause — which requires courts to give federal law priority when federal and state law clash — does not create a private right of action permitting providers to sue state agencies to obtain higher reimbursement rates, even though such suits may be the only way to enforce federal payment requirements. The court’s ruling reverses a decision by the Ninth Circuit, which had affirmed a lower court ruling that the Supremacy Clause gave providers a private right of action to sue to enforce the federal Medicaid law.

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