Rule of Law

SCOTUS Bars Suits Against States Over Medicaid



Healthcare providers cannot sue states to cough up more Medicaid reimbursements to cover the rising costs of care, a deeply divided Supreme Court ruled Tuesday.


The 5-4 opinion authored by Justice Antonin Scalia stems from a case in which more than a dozen private healthcare providers sued Idaho in 2009, claiming the state had kept Medicaid reimbursement rates flat despite recommendations by its own health department directors for substantial raises to combat rising costs.


Both a federal judge and the 9th Circuit agreed that the providers are entitled to “reimbursement rates that bear a reasonable relationship to provider costs,” and ordered Idaho lawmakers to kick down more money – about $12 million in 2013 alone.


But state officials – backed by 27 other states – said that the U.S. Constitution’s Supremacy Clause bars private groups from meddling with the state’s delicate task of providing services on a tight budget. In fact, the groups’ lawsuit undermines Congressional intent to allow states to administer their Medicaid programs with minimal interference, the state claimed.


The high court heard a similar case from California in 2012, but its 5-4 decision danced around the Supremacy Clause after the Centers for Medicare and Medicaid Services approved state reimbursement rates before the court had a chance to rule.


After agreeing to hear the case last fall, the high court this time did not dance around the Supremacy Clause – stating emphatically that the Constitution bars private entities from using the courts to enforce laws – and reversing both the 9th Circuit and the district court.


“It is unlikely that the Constitution gave Congress such broad discretion with regard to the enactment of laws, while simultaneously limiting Congress’s power over the manner of their implementation, making it impossible to leave the enforcement of federal law to federal actors,” Scalia wrote. “If the Supremacy Clause includes a private right of action, then the Constitution requires Congress to permit the enforcement of its laws by private actors, significantly curtailing its ability to guide the implementation of federal law.”


He continued: “It would be strange indeed to give a clause that makes federal law supreme a reading that limits Congress’s power to enforce that law, by imposing mandatory private enforcement – a limitation unheard of with regard to state legislatures.”


The high court rejected the providers’ argument that the court’s own case-law on preemption – frequently weighing whether to bar state laws that conflict with federal law – means that the Supremacy Clause justifies lawsuits to correct such violations.


“It is true enough that we have long held that federal courts may in some circumstances grant injunctive relief against state officers who are violating, or planning to violate, federal law,” Scalia wrote. “But that has been true not only with respect to violations of federal law by state officials, but also with respect to violations of federal law by federal officials. Thus, the Supremacy Clause need not be (and in light of our textual analysis above, cannot be) the explanation. What our cases demonstrate is that, ‘in a proper case, relief may be given in a court of equity . . . to prevent an injurious act by a public officer.'” [Parentheses and ellipses in opinion.]


The 13-page opinion also noted that the Medicaid Act lacks any language granting or implying that healthcare providers have a private right of action.


“Our precedents establish that a private right of action under federal law is not created by mere implication, but must be ‘unambiguously conferred,'” the court said, citing 2002’s Gonzaga University v. Doe. “Nothing in the Medicaid Act suggests that Congress meant to change that.”


Justices John Roberts, Clarence Thomas, Stephen Breyer and Samuel Alito joined the Scalia opinion.


But in a dissent, Justice Sonia Sotomayor – joined by Justices Anthony Kennedy, Ruth Bader Ginsburg and Elena Kagan – said that the majority has ignored its own case-law giving courts the equitable power to order states to comply where Congress hasn’t provided any other remedies.


“The contention that the Medicaid Act’s language was intended to foreclose private enforcement actions entirely is difficult to square with the provision’s history,” Sotomayor wrote. “The specific equal access mandate invoked by the plaintiffs in this case – that reimbursement rates be ‘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’ – was added to the Act in 1989. At that time, multiple Federal Courts of Appeals had held that the so-called Boren Amendment to the Medicaid Act was enforceable pursuant to Section 1983 – as we soon thereafter concluded it was.”


She continued: “Because the authority invoked for enforcing the Medicaid Act is equitable in nature, a plaintiff is not entitled to relief as of right, but only in the sound discretion of the court. Given the courts’ ability to both respect states’ legitimate choices and defer to the federal agency when necessary, I see no basis for presuming that Congress believed the judiciary to be completely incapable of enforcing it.”


Constitutional watchdogs bemoaned Tuesday’s decision by the high court.


“Make no mistake, the practical effects of this ruling are enormous for ordinary Americans,” said Constitutional Accountability Center civil rights director David Gans. “The court today turned its back on the principle of access to our federal courts, leaving low income people seeking access to health care to the vagaries and limitations of the executive branch.”


Gans’ colleague, CAC appellate counsel Brianne Gorod called the decision “just the latest in a long line of Roberts Court cases that bend over backwards to allow corporations to enforce federal rights, while closing the courthouse doors to ordinary Americans and minorities seeking to enforce theirs.”