December 10, 2016

Case Notes

Armstrong v. Exceptional Child Ctr., Inc., 135 S. Ct. 1378 (2015)

Health care providers cannot bring suit against a state seeking reimbursement of the standard rate of the Medicaid Act because (1) there is no implied right of action created by the Supremacy Clause of the United States Constitution; and (2) there is no private action for injunctive relief because the Medicaid Act precludes private enforcement in the courts due to the sheer complexity of the Act combined with an express remedy built into the Act to preclude private enforcement. Appellee, Exceptional Child Center Incorporation (“Provider”), a provider of “habilitation services” under Idaho’s Medicaid plan, sued appellants, Richard Armstrong and other Idaho Health and Welfare Department officials (combined, the “State”), claiming that they were reimbursed at a rate lower than what is permitted under 42 U.S.C. § 1396a(a)(30)(A) (“Medicaid Act”). The United States Court of Appeals for the Ninth Circuit had affirmed the United States District Court for the District of Idaho, which had entered summary judgment in favor of the Provider, reasoning that the Supremacy Clause gave providers the implied right to sue or seek Idaho’s compliance with the Medicaid Act. The Supreme Court reversed the lower courts in a five to four decision, ruling in favor of the State.

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