Healthcare Law Blog

Supreme Court Rejects Private Suits to Challenge Medicaid Rate Reductions

One of the areas of healthcare impacted heavily by the Great Recession beginning in 2007 was Medicaid reimbursement. Cash-strapped states, in an attempt to alleviate budgetary issues, reduced Medicaid provider reimbursement rates. These rates often fell below the actual cost of care to the providers themselves, which in turn limited the ability of providers to provide care and Medicaid beneficiaries to access care. In response, healthcare providers challenged these rate cuts using a provision of federal law that requires states that accept Medicaid funds to “assure that payments…are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population of the geographic area.”[1] Over the years, providers have mounted challenges to rates using this provision – referred to colloquially as Section 30(a) – with varied results as the law itself change over the years. With the decision in Armstrong v. Exceptional Child Center, Inc.,[2] in March of 2015, however, the U.S. Supreme Court effectively ended the use of Section 30(a) as a viable means to challenge reduced reimbursement rates.

[1] 42 U.S.C. §1396a(a)(30)(A).

[2] Armstrong v. Exceptional Child Center, Inc., 135 S.Ct. 1378 (2015). More >