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Medicaid Providers Can't Sue Over Frozen Payouts

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Medicaid Providers Can't Sue Over Frozen Payouts

December 5, 2011

The Ninth Circuit Court ruled last Wednesday that while California broke federal law when it unilaterally froze reimbursement rates for Medicaid providers, the providers have little recourse to the courts.

After chastising the state for ignoring long-established federal Medicaid procedures in a rush to balance its budget, the Pasadena-based federal appeals court nonetheless vacated a preliminary injunction.

Several trade associations representing health care providers had no specific right to challenge the move, according to the ruling.

While three appellate judges agreed that the state had indeed violated the law, they found that the providers had no "unambiguously conferred right" to challenge the state's actions. Requiring that states submit Medicaid-plan amendments to federal authority is a "general or administrative" provision, and "an agency cannot create a right enforceable through § 1983 where Congress has not done so," according to the ruling.