For Immediate Release
Media Contact: Todd Dvorak
(208) 334-4112

Date: July 2, 2014

Idaho Petitions U.S. Supreme Court to Hear Medicaid Reimbursement Rate Case

(Boise) – Idaho Attorney General Lawrence Wasden is asking the U.S. Supreme Court to consider the state's appeal of a lawsuit challenging the Medicaid reimbursement rates paid to providers.

Wasden filed a Petition for Writ of Certiorari with the nation's highest court Wednesday on behalf of Richard Armstrong, director of the Idaho Department of Health and Welfare, and Lisa Hettinger, the administrator of Idaho Medicaid. The state's appeal urges the justices to decide a case brought by five providers alleging the Medicaid rates paid by Health and Welfare were too low.

A federal district judge ruled against the state in 2011 and ordered the agency to raise payments for services for developmentally disabled clients, an increase that cost the state $12 million in fiscal 2013. In April, the 9th U.S. Circuit Court of Appeals affirmed the lower court ruling, setting up the decision by Wasden to bring the case to the U.S. Supreme Court.

"There are several critical issues for Idaho in the outcome of this lawsuit," Wasden said. "We're asking the Supreme Court to take up this case because the 9th Circuit's decision incorrectly permits private parties to interfere with the administration of the state's Medicaid program and the Legislature's choices regarding that program."

"As it stands now, the 9th Circuit's decision creates enormous administrative and financial consequences for Idaho and every other state in the circuit," Wasden said.

Armstrong said it's essential for the court to answer the question of whether providers can or should dictate Idaho Medicaid's reimbursement rates.

"Our state's Medicaid program focuses on providing quality, accessible services at an economical cost to taxpayers," Armstrong said. "We try to be fair with our reimbursement rates, which in this case is supported by the fact there were no quality of care or access issues at the rates Medicaid was paying."

The original lawsuit, filed in 2009, contended that Health and Welfare was wrong to keep reimbursement rates at 2006 levels when studies showed the cost of providing services were going up.

U.S. District Judge B. Lynn Winmill ruled in favor of the providers and ordered an increase in the reimbursement rates. The 9th Circuit court agreed and concluded that precedent and the Supremacy Clause in the U.S. Constitution gives private parties – in this case the five providers – the right to enforce Medicaid Act funding conditions against states, even where Congress did not create an enforceable right to do so.

In the petition, Wasden argues the appellate court erred in allowing the providers to essentially rewrite the Medicaid Act and the state's agreement with the federal government related to the terms of federal funding.

"What this does is upset the cooperative partnership between the states and the federal government established under Medicaid," Wasden said. "It also interferes with the state's ability to deliver services effectively and efficiently while maintaining costs at an appropriate level."

Idaho's petition also points out that the 9th Circuit Court of Appeals is the only circuit to require that rates bear a relationship to provider costs, and that budgetary reasons do not justify rate decisions.

A Petition for Writ of Certiorari is the required first step in getting a case to the U.S. Supreme Court. The court receives thousands of petitions each year, but typically grants and hears oral arguments in fewer than 100 appeals.

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