Does Medicaid Act provide a private right of action for Medicaid providers?

Under the Medicaid Act, Medicaid agencies must give consideration to provider costs when setting rates. However, is there any recourse for private health care providers in instances in which Medicaid rates are deemed to be too low? In other words, does the Medicaid Act provide a private right of action for Medicaid providers?  That right was recently tested in the case of Armstrong vs Exceptional Child Center Inc.


Medicaid is a federal health insurance program that is administered by the each state, and is aimed at low-income people. Medicaid reimburses costs for institutional care, but the federal government gives states some discretion when setting rates under the Medicaid program.

Armstrong vs Exceptional Child Center Inc.

Recently,medical providers in Idaho sued Medicaid in order to get them to comply with federal payment requirements. The suit was in relation to rates set for people with developmental disabilities.

They argued that low rates would deter new medical providers from agreeing to participate in Medicaid, and also cause existing providers to reconsider their participation. The overall result would be reduced access to health care for Medicaid patients. However, Idaho Medicaid officials argued that the private right of action was not authorized by Congress.

The US Supreme Court ruled in favor of the state of Idaho. Therefore the Medicaid Act does not provide a private right of action for Medicaid providers. This ruling means that health care providers have no recourse in cases where Medicaid rates are not in keeping with costs, as they can’t sue Medicaid to raise the rates (learn more).

Contact Nelson Hardiman, Los Angeles, CA, for more information on Medi-Cal and other matters. Call 310.203.2800 to speak to an attorney.

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