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

Date: March 31, 2015

Attorney General Hails U.S. Supreme Court Decision in Idaho Medicaid Lawsuit

(Boise) – Idaho Attorney General Lawrence Wasden is praising an important legal victory handed down today by the U.S. Supreme Court in a 2009 lawsuit over Medicaid reimbursement rates paid to care providers.

The nation’s highest court reversed a decision reached last year by the 9th U.S. Circuit Court of Appeals in a lawsuit between the Idaho Department of Health and Welfare and five Medicaid care providers. Wasden argued the case on behalf of Richard Armstrong, director of the Idaho Department of Health and Welfare, and Lisa Hettinger, the administrator of Idaho Medicaid.

In his U.S. Supreme Court appeal, Wasden argued that lower courts erred in concluding that providers could sue the state to force higher Medicaid reimbursement rates. During oral arguments before the Court in January, Wasden said the lower court decisions created an environment that incorrectly allowed private parties to interfere in the state and federal administration of Medicaid and the Legislature’s choices for that program.

In a 5-4 decision written by Justice Antonin Scalia, the U.S. Supreme Court agreed. The majority rejected the argument made by the providers that the Supremacy Clause in the U.S. Constitution creates the ability to sue states in an effort to force higher Medicaid rates.

“I am pleased with the Supreme Court’s review and having had the opportunity to present Idaho’s case there,” Wasden said. “The State of Idaho has argued consistently that the Supremacy Clause does not create a private cause of action under the law for the providers to seek higher rates than those set by the Legislature.”

Armstrong said the decision allows the Medicaid program to continue focusing on providing quality, accessible services at an economical cost to taxpayers.

“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,” Armstrong said.

This case – Armstrong v. Exceptional Child Center, Inc., – began in 2009 when the providers filed a federal lawsuit alleging Health and Welfare erred in keeping Medicaid reimbursement rates at 2006 levels, especially as studies showed the costs of providing services across the state were increasing.

In 2011, U.S. District Judge B. Lynn Winmill sided with the providers and ordered the state to increase rates. The state responded, raising rates to the providers at a cost of $12 million in fiscal 2013.

Three years later, the 9th U.S. Circuit Court upheld Winmill’s ruling, also concluding 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 funding conditions against the state.

Wasden, whose legal case was supported by 28 other states and the U.S. Solicitor General, countered that those lower court decisions infringed on the cooperative balance that exists in the state/federal management of Medicaid and imposed significant financial consequences on states across the country.

“More than anything, this decision reflects my office’s commitment to the Rule of Law,” Wasden said. “It also underscores the competence my attorneys have in defending the state, whether it’s the most routine hearing in a state court to complex litigation in the highest court in the land.

“I hope this decision will reinforce the confidence the citizens and the Idaho Legislature have in my office’s ability to provide the state with the most accurate and objective legal representation possible,” Wasden said.

Scalia was joined in his opinion by Chief Justice John Roberts and Justices Clarence Thomas, Stephen Breyer and Samuel Alito.

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