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Supreme Court Sides Against Providers in Medicaid Rate-Setting Case

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Supreme Court Sides Against Providers in Medicaid Rate-Setting Case

April 3, 2015

On March 31, the Supreme Court of the United States issued its opinion in Armstrong v. Exceptional Child Center, Inc. (Docket No. 14-15), holding that the Supremacy Clause does not grant private providers the right to bring a private cause of action against a state. The case originated in Idaho, where a group of private service providers brought a case against the state alleging that the state set Medicaid rates too low to pay for services it required under its program, and that the state knew the rates were not adequate. The Ninth Circuit Court of Appeals had affirmed the providers' right to bring the case. The Supreme Court reversed the opinion of the Appeals court, leaving providers without recourse through the courts to enforce Medicaid rates. The opinion of the Court noted that Congress is empowered under the Supremacy Clause to determine enforcement mechanisms and there is no indication under the Medicaid Act that a private right of action is permitted. Instead, the Court advises providers to take up unfair and inadequate rates with the federal agency, the Centers for Medicare and Medicaid Services, and the Secretary of its overarching federal agency, the Department of Health & Human Services.

ANCOR joined the American Health Care Association/National Center for Assisted Living, the National Community Pharmacists Association, the American Pharmacists Association, and America's Essential Hospitals in filing an amicus brief in support of the plaintiffs in December, arguing that there are multiple ways that the Court could uphold the rights of providers in light of the Supremacy Clause.

Barbara Merrill, Chief Executive Officer of ANCOR, who attended the oral arguments before the Supreme Court in January said, "Today, we are tremendously disappointed in a decision that will negatively impact providers and individuals with disabilities nationwide for years to come. By depriving providers of the right to pursue adequate rates, the Court leaves those who dedicate their lives to supporting people with disabilities without the means to ensure they will receive sufficient funding to do so. As we celebrate the 25th Anniversary of the Americans with Disabilities Act this year, we are dismayed that the Court would create such a barrier to community services. We thank Justices Sotomayor, Kennedy, Ginsburg and Kagan for their deep understanding of the importance of this issue and 'the real consequences' of providing limited relief to providers to pursue a just path forward."

A memorandum prepared by Joel Hamme of Powers Pyles Sutter & Verville, who represented ANCOR in the amicus brief submitted in the case, is attached with an analysis of the Court's opinion.