Supreme Court Battle Brewing Over Medicaid Fees

Rita Gorenflo’s 7-year-old son Nathaniel was in severe pain from a sinus infection.

But since the boy was covered by Medicaid, she couldn’t immediately find a specialist willing to see him.  After days of calling, she was finally able to get Nathaniel an appointment nearly a week later near their South Florida home. That was in 2005.

Last month, ruling in a lawsuit brought by the state’s pediatricians and patient advocacy groups, a federal district judge in Miami determined Nathaniel’s wait was “unreasonable” and that Florida’s Medicaid program was failing him and nearly 2 million other children by not paying enough money to doctors and dentists to ensure the kids have adequate access to care.

The Florida case is the latest effort to get federal judges to force states to increase Medicaid provider payment rates for the state and federal program that covers about 70 million low-income Americans. In the past two decades, similar cases have been filed in numerous states, including California, Illinois, Massachusetts, Oklahoma, Texas and the District of Columbia– with many resulting in higher pay. 

But while providers and patient advocates nationwide hailed the Florida decision, they are deeply worried about a U.S. Supreme Court case  that they say could restrict their ability across the country to seek judicial relief from low Medicaid reimbursement rates.

The high court on Jan. 20 will hear a case from Idaho seeking to overturn a 2011 lower court order to increase payments to providers serving Medicaid enrollees with development disabilities. In the original case, five centers serving developmentally disabled adults and children argued that Idaho was unfairly keeping Medicaid reimbursement rates at 2006 levels despite studies showing that the cost of providing care had risen.

Idaho officials argue only the state and federal government should be able to set provider fees in Medicaid  and all other “private parties,” including patients and providers, should not be able to use the court system to gain higher rates. Twenty-seven states and the Obama administration are supporting Idaho’s appeal, along with the National Governors Association.

But providers and patient advocacy groups say they need to use the courts because states too often put their overall budgetary needs over the need of Medicaid patients to have adequate access to doctors and hospitals. Low rates inhibit doctors, dentists and other providers from participating in Medicaid, they say.

“Without recourse to the courts… hospitals and other providers will continue to bear losses that, for some, are unsustainable,” the American Hospital Association said in a brief filed in the Supreme Court case.