SCOTUS Punts on Medicaid Changes Lawsuits


ACRU Staff


February 24, 2012

This column by ACRU Senior Legal Analyst Ken Klukowski was published February 23, 2012 on The Washington Examiner website.

By a 5 to 4 vote, the U.S. Supreme Court declined today to resolve an issue that could be instrumental in determining the outcome of the 2012 election: When a state changes its Medicaid system, reducing or cutting funds to providers, can those providers sue?

This is a hot-button issue because abortion providers are suing states that cut their funding. The most prominent of these is Planned Parenthood of Indiana v. Commissioner, pending before the Seventh Circuit appeals court in Chicago.

Medicaid is a massive federal-state partnership. (It’s also dysfunctional and is bankrupting the states, but that’s a topic for another day.) When states change their programs, the U.S. Department of Health and Human Services (HHS) can object.

In Douglas v. Independent Living Center of Southern California, the justices heard arguments in five cases in which California cut payments to providers, and HHS rejected the changes.

The question was whether these private providers had a right to sue under the Medicaid statute, or instead if only HHS can sue California. The Ninth Circuit said private providers could sue.

The case was argued before the court last October, then several weeks later, HHS reversed course and okayed California’s plan. So in today’s decision, written by Justice Stephen Breyer, the Court threw out the Ninth Circuit decision and sent the case back down for a second round of litigation.

Chief Justice John Roberts dissented, joined by the conservatives, arguing that Congress created Medicaid and Congress can decide who can sue under Medicaid’s various parts.

Nothing in the statute suggests private providers could sue for cut rates. So the conservative wing wanted to issue a decision saying so, and end this controversy.

Although the abortion lawsuits relate to a different part of Medicaid, the SCOTUS case could impact the abortion cases.

This would have been valuable, given all the fighting over abortion funding and Obamacare mandates. But by a single vote, the High Court declined to help, so the issue continues in limbo for now.



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