The Supreme Court narrowly ruled Tuesday that health-care providers cannot sue states in order to bump up Medicaid reimbursement rates they say are unlawfully low.
The justices ruled 5 to 4 that neither the Constitution nor federal law authorizes doctors and other health-care providers to go to court to enforce the law’s directive that the reimbursement rates set by states be “sufficient to enlist enough providers so that care and services are available” to Medicaid recipients just as they are to the general population.
Medicaid, the federal government’s health-insurance program for the poor, works in tandem with state officials. The program serves more than 69 million people nationwide.
In the case at the court, two home health-care providers sued Idaho, saying it set reimbursement rates far too low. A federal judge agreed, as did the U.S. Court of Appeals for the 9th Circuit.
But state officials and the Obama administration said that was not how the system was supposed to work.
Five justices — Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Clarence Thomas, Stephen G. Breyer and Samuel A. Alito Jr. — agreed. Scalia wrote the majority opinion, but Breyer’s was the controlling vote.
“I recognize that federal courts have long become accustomed to reviewing for reasonableness or constitutionality the rate-setting determinations made by agencies,” Breyer wrote.
But he said he feared that siding with the providers would lead to “increased litigation, inconsistent results, and disorderly administration of highly complex federal programs that demand public consultation, administrative guidance and coherence for their success.”
Breyer normally sides with the other liberals on the court, who dissented in this case.
Justice Sonia Sotomayor said the court should have recognized that federal judges have long had a role in such disputes.
“Congress is undoubtedly aware of the federal courts’ long-established practice” of reviewing agency actions, Sotomayor wrote. So it should be “presumed to contemplate such enforcement unless it affirmatively manifests a contrary intent.”
She was joined by fellow liberal Justices Ruth Bader Ginsburg and Elena Kagan, as well as Justice Anthony M. Kennedy.
Scalia said the decision does not leave the providers without recourse.
“Their relief must be sought initially through the secretary [of the Department of Health and Human Services] rather than through the courts,” Scalia wrote. The department has the power to withhold funds from states not in compliance.
“We doubt that the secretary’s notice to a state that its compensation scheme is inadequate will be ignored,” Scalia wrote.
The case is Armstrong v. Exceptional Child Center, Inc.
Stephen Kimble made more than $6 million in royalties for his idea of a foam-shooting glove, mimicking the powers of Spider-Man, that later became a toy called the Web Blaster. His attorneys were at the Supreme Court on Tuesday saying he deserved even more.
But in an hour of arguments involving nine justices and three lawyers, these words never came up: Spider. Man. Web. Blaster.
Instead, this: “statutory stare decisis.”
That phrase means that the court does not overrule one of its previous decisions unless there is an especially compelling justification for doing so.
Kimble’s attorney had asked the court to do exactly that — to overrule a 1964 decision, Brulotte v. Thys Co., that lower courts said stood in the way of Kimble’s ability to earn more money.
That decision forbids royalty payments after a patent expires, and Kimble’s contract with Marvel Enterprises called for just that.
Roberts pointed out that the court’s decision more than a half-century ago has been largely discredited. “The economists are almost unanimous that this is a very bad rule,” he said.
But there seemed to be little appetite among his colleagues to overturn it. If the decision is causing such problems, several justices said, the remedy should come from Capitol Hill.
Fifty years from now, Sotomayor said, lawyers will be complaining that whatever the court came up with to replace Brulotte could also be wrong. “Why don’t we just let Congress fix it, because if it’s wrong, people can complain to it,” she said.
Kagan agreed. “It’s Congress that’s better positioned to assess the real-world impact, and it’s Congress that’s better positioned to say whether these economic theories are indeed so naive,” she said.
The case is Kimble v. Marvel Enterprises.