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SCOTUS Medicaid Hearing Has Broad Repercussions

By jfellows@healthleadersmedia.com  
   January 15, 2015

At issue is whether a private party, in this specific case, Idaho Medicaid providers, can sue a state agency for not paying them a fair rate for the services it provides the state's Medicaid beneficiaries.

All eyes are on the King v. Burwell case that the U.S. Supreme Court will hear in March and which could throw a major monkey wrench into the legal sustainability of health insurance exchanges, the hallmark of the Patient Protection and Affordable Care Act (PPACA).

But another case the justices will hear next week could give Medicaid providers a channel to remedy the lackluster reimbursement rates they receive from states.

At issue is whether a private party, in this specific case, Idaho Medicaid providers, can sue a state agency for not paying them a fair rate for the services it provides the state's Medicaid beneficiaries.

The question arises out of a 2009 lawsuit, brought by five Idaho residential habilitation Medicaid providers. The providers sued Richard Armstrong, director of the Idaho Department Health and Welfare (IDWH), and Leslie Clement, the state's Medicaid director. Armstrong is still the director of IDWH; Clement has since moved onto state healthcare administration in Oregon.

The providers allege Idaho's Medicaid rates were too low. Independent reviews done prior to 2009 showed that the state needed to increase its reimbursement rates, and the department proposed the rate hikes, but state legislators didn't fund recommendations. The independent analysis showed that its recommended increases would have added $4 million to the state budget.

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Jacqueline Fellows is a contributing writer at HealthLeaders Media.

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