(Bloomberg) — Hospitals and other health-care providers can't sue to challenge reimbursement rates set by states under the Medicaid insurance program for the poor, the U.S. Supreme Court ruled today.
The 5-4 decision is a blow to hospitals, which say that Medicaid rates aren't covering their costs. Providers now will have to take any objections to rates to the U.S. Department of Health and Human Services (HHS).
Writing for the court, Justice Antonin Scalia rejected contentions that the U.S. Constitution authorized reimbursement lawsuits. Providers pointed to the Constitution's supremacy clause, which says federal law trumps contrary state requirements.
That provision "instructs courts what to do when state and federal law clash, but is silent regarding who may enforce federal laws in court, and in what circumstances they may do so," Scalia wrote.
Chief Justice John Roberts and Justices Samuel Alito, Clarence Thomas and Stephen Breyer joined Scalia in the majority. Justices Sonia Sotomayor, Ruth Bader Ginsburg, Elena Kagan and Anthony Kennedy dissented.
The dispute stems from reimbursement rates set by Idaho for services provided to people with developmental disabilities. Health-care providers sued the state, claiming the reimbursement rates were too low to comply with the federal Medicaid law. A federal court agreed and said the rates were unlawful because the state didn't consider provider costs.
