Supreme Court punts on major Medicaid case

In one of the year’s most closely watched decisions, a sharply divided U.S. Supreme Court sent a case back to a lower court Wednesday that disability advocates feared could have ended the ability of individuals to sue states for violations of federal Medicaid law.

U.S. Supreme Court Building
U.S. Supreme Court Building

“Today, the Supreme Court rejected an attempt to eliminate a critical legal tool for protecting the rights of low-income individuals,” stated the National Senior Citizens Law Center in a news release.

In 2008, the California legislature cut Medicaid reimbursement rates for doctors and other health care providers by 10 percent. A group of health care patients and providers subsequently sued the state, arguing that the cuts would drive a significant portion of providers out of the industry, therefore preventing the state from meeting its obligations under federal Medicaid law.

The cuts were blocked by both a district court and the U.S. Circuit Court of Appeals for the 9th Circuit, where the lawsuit is currently pending.

The Supreme Court, however, heard arguments in October regarding the narrow question of whether the patients and providers had standing to bring the lawsuit in the first place.

The state of California argued that only the federal government, not individuals and providers, has the authority to sue states for violations of Medicaid law. Specifically, the state argues Congress has never granted this authority to patients and providers through federal Medical law. In a surprise move, the Obama Administration filed an amicus brief on the state’s behalf.

For a group of disability and health care and advocacy groups, whom filed amicus briefs at the high court, this right does not need to be specified by Congress because allowing individuals to sue states for violations of federal law is a long established aspect of federalism.

“Over the history of the program, private enforcement has been the primary means of halting ongoing state violations of federal law and realizing Medicaid’s promises and protections,” stated the National Disability Rights Network in an amicus brief on behalf of the patients providers, along with the AARPPlanned Parenthood and a host of disability advocacy groups.

Since arguments were heard in October, the federal government, after three years of blocking the cuts, approved the state’s reduction to its Medicaid reimbursement rates.

Writing for a five-member majority, Supreme Court Judge Stephen Breyer wrote that this “change of circumstances” meant that the case should be remanded back to the 9th Circuit to hear new arguments on the case. Essentially, this change of circumstances means that the lawsuit can be reviewed as a challenge against the federal government, and not just the states, because the federal government has now approved the changes.

In a vigorous dissent, however, four members of the court would have barred patients and providers from being able to bring the lawsuit.

“We have emphasized that ‘where the text and structure of a statute provide no indication that Congress intends to create new individual rights, there is no basis for a private suit,” Chief Justice John Roberts wrote in the dissent, joined by Justices Alito, Scalia and Thomas.

For disability advocates, Wednesday’s decision was a sigh of relief.

“The Court’s decision puts off to another day the serious and legitimate questions posed in this case. We continue to believe that the Medicaid law can and should be enforced by citizens seeking relief from the courts, not only by executive branch officials,” said Emily Spitzer, executive director of the National Health Law Program, in a news release.

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