Term: 2014
Docket: 14-15
Armstrong v. Exceptional Child Center, Inc.
- Pro
14-15 ARMSTRONG V. EXCEPTIONAL CHILD CENTER, INC. DECISION BELOW: 567 Fed.Appx. 496 LIMITED TO QUESTION 1 PRESENTED BY THE PETITION. CERT. GRANTED 10/2/2014 QUESTION PRESENTED: To receive federal Medicaid funding, a state must adopt a plan containing "methods and procedures" that will "safeguard against unnecessary utilization" of Medicaid services and "assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available ... at least to the extent that such care and services are available to the general population ..." 42 U.S.C. § 1396a (a)(30)(A). Congress chose not to confer on Medicaid providers any enforceable rights under this statute. The Ninth Circuit in this case, however, held that (a) Medicaid providers could enforce § 1396a(a)(30)(A) directly under the Supremacy Clause; and (b) the State of Idaho's Medicaid reimbursement rates were preempted by that statute because they did not "substantially reimburse providers their costs" and because they remained in place "for purely budgetary reasons." The questions presented are: 1. Does the Supremacy Clause give Medicaid providers a private right of action to enforce § 1396a(a)(30)(A) against a state where Congress chose not to create enforceable rights under that statute? 2. If Medicaid providers have a private right of action, are a state's Medicaid provider reimbursement rates preempted by § 1396a(a)(30)(A) where they do not bear a reasonable relationship to provider costs and remain in place for budgetary reasons? LOWER COURT CASE NUMBER: 12-35382
The U.S. Supreme Court case Armstrong v. Exceptional Child Center, Inc., revolved around the issue of whether Medicaid providers could sue states for not adhering to federal reimbursement rates under Section 30(A) of the Medicaid Act. The Exceptional Child Center and other Idaho residential habilitation service providers sued Idaho's Department of Health and Welfare director Richard Armstrong, arguing that they were being inadequately compensated according to federal law standards. The Ninth Circuit Court sided with the plaintiffs but this decision was overturned by the Supreme Court in a 5-4 ruling led by Justice Scalia in March 2015. The court held that private parties do not have a cause of action under Supremacy Clause to enforce rights under §30(A) because it lacks "rights-creating" language needed for such enforcement through lawsuits against state officials on grounds that official action violates federal law.
In the dissenting opinion for Armstrong v. Exceptional Child Center, Inc., Justice Sotomayor argued that the majority's decision effectively left providers without any recourse to enforce federal Medicaid payment standards against states. She contended that Congress intended these standards to be legally binding and thus subject to judicial enforcement by affected parties. The Supremacy Clause of the Constitution was seen as a valid basis for such suits, contrary to what the majority held. Furthermore, she criticized their reliance on an implied 'private right of action' doctrine in this context as misplaced and inconsistent with precedent which had allowed similar suits before under different statutes without explicit Congressional authorization. This ruling could potentially undermine federal statutory rights if state officials chose not to comply with them and there were no other effective remedies available.
