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Opinion analysis: A right to sue under Medicaid — maybe

Dividing 5-4 for the first time in a ruling this Term, the Supreme Court on Wednesday chose to forgo a ruling on a long-pondered case, returning it to a lower court for another look but with an indication that patients, their doctors, and other providers of medical care for the poor and the disabled may still be allowed in court to challenge sharp cuts in payment levels by the financially stressed state of California.  Many of those cuts have now won the approval of the federal government that oversees the Medicaid program, and the Court told lower courts to take that into account in deciding whether the legal challenge can go forward.

The Court had heard argument in Douglas, et al., v. Independent Living Center (docket 09-958) and two companion cases on the first day of this Term, and had apparently labored over it since then.   In November, it called for new briefs from both sides on the impact on the cases — if any — of federal approval of most of the benefit cuts.   Even with those replies in hand, the Court seemed still to have difficulty deciding it.  In the end, it chose not to decide itself the issue on which review had been granted: whether the Constitution’s Supremacy Clause could be used by Medicaid patients and providers as the basis for a challenge to a state’s Medicaid reductions — a right to sue that the Ninth Circuit Court had recognized.

California’s legislature, in the midst of a state budget crisis, in 2008 and 2009 had made a series of reductions in the payments that the state would make for Medicaid services, to doctors, drugstores, and clinics.  The first cut would lop off 10 percent of those payments, the second one made more modest cuts, and a third put a ceiling on what the state would pay for wages and benefits to county governments that provided in-home support services.   Those cuts initially were rejected by federal authorities, but then officials began a new review after the state filed new data about them.

In the meantime, a number of lawsuits were filed by patients and providers, based on an argument that the Constitution’s Supremacy Clause gave them a right to sue, in order to ensure that the state of California lived up to its obligations under the Medicaid program to keep benefit levels high enough to attract enough providers to provide the care available to the needy and disabled.   The lawsuits resulted in a series of court orders that blocked the benefit cuts, barring the state from carrying out the reductions.

State officials took the dispute on to the Supreme Court, and the Justices granted review in January of last year, on the issue of whether a right to sue to protect Medicaid benefit levels existed under the Supremacy Clause.   After the case had been argued on October 3, the federal government notified the Court that it had taken action following its further review of the reductions, upholding many of them.   The Court then sought added written arguments from both sides.  The Court received those by mid-November, and then returned to deliberating over a decision.

In the decision released this morning, Justice Stephen G. Breyer wrote for the majority, joined by Justices Ruth Bader Ginsburg, Elena Kagan, Anthony M. Kennedy, and Sonia Sotomayor.   Those five concluded that, while the Supremacy Clause was at best a doubtful source for a lawsuit, the patients and providers may yet have a right to proceed now that final federal agency approval had been completed, by suing under the Administrative Procedure Act.   The majority did not decide finally, however, whether the change in circumstances meant that there could be no Supremacy Clause challenge; that was the issue left to the Ninth Circuit to decide in the first instance.

As the case had proceeded through the Court, the parties had raised major issues over when a constitutional clause — such as the Supremacy Clause — could provide the basis for a right to sue against a public program, when a federal law did not itself explicitly give those involved in the program a private right to sue.   Those larger issues were left unresolved in the Court’s final action.

Chief Justice John G. Roberts, Jr., wrote for the dissenting Justices, joined by Justices Samuel A. Alito, Jr., Antonin Scalia, and Clarence Thomas.   They argued that the federal law governing the Medicaid program does not provide any right to sue, under any provision of law or the Constitution, to challenge reductions in state payments for Medicaid.   Only the federal government, the dissenters contended, has the authority to enforce the Medicaid program and thus to ensure that states comply with the duties that law imposes on them.





Recommended Citation: Lyle Denniston, Opinion analysis: A right to sue under Medicaid — maybe, SCOTUSblog (Feb. 22, 2012, 6:05 PM),