Supreme Court says doctors can't sue over Medicaid cuts

WASHINGTON – The Supreme Court barred doctors, dentists and druggists Tuesday from suing to fight cuts in Medicaid payments.

The justices' 5-4 decision in a case from Idaho held that the Medicaid Act, which offers health care to low-income people, does not authorize medical providers to go to court if they believe a state's reimbursements are too low.

Tuesday's ruling reverses a decision from the U.S. Ninth Circuit Court of Appeals in San Francisco, which has repeatedly blocked California from making cutbacks in its Medicaid payments.

But the California Legislature in the past has adopted provisions to reduce government spending by lowering the payments for Medicaid, a program that is run by the federal government and the states.

Before these cutbacks could go into effect, lawyers for the doctors, dentists and pharmacists sued, contending that the reduced rates violated the Medicaid Act. The legislation says the payments to providers should be "consistent with efficiency, economy and quality of care" and should be "sufficient to enlist enough providers" to serve the local population.

Judges cited this provision and ruled that California's proposed cutbacks would break the promise that health care would be available.

However, the high court in the Idaho case said the Medicaid Act did not give patients the right to sue in court and that it did not authorize judges to intervene on behalf of doctors and other providers.

He said that Medicaid authorizes the secretary of health and human services to ensure that the states are complying with the law. If doctors or dentists are unhappy with the payment rates in California or elsewhere, they should take their complaints to the agency in Washington, he said.

"We think that Congress wanted to make the agency remedy that it provided exclusive," he said in the case of Armstrong vs. Exceptional Child Center. Chief Justice John Roberts and Justices Clarence Thomas and Samuel Alito agreed entirely.

Justice Stephen Breyer agreed on the outcome and provided the fifth vote. "Congress decided to vest broad discretion in the [federal health] agency to interpret and enforce" the law, he said.

In dissent, Justice Sonia Sotomayor faulted the majority for ruling that federal judges may not enforce this part of federal law.

"The court's error today has very real consequences," she wrote. It will allow states to "set reimbursement rates so low that providers [are] unwilling to furnish a covered service for those who need it." Justices Anthony Kennedy, Ruth Bader Ginsburg and Elena Kagan joined her dissent.

California Attorney General Kamala Harris had urged the court to block lawsuits over Medicaid rates.