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What are the major funding implications for Medi-Cal & Medicaid patients?

Medicaid reimbursement payments to health care providers under the Medicaid Act are required to be ‘consistent with efficiency, economy, and quality of care and services.’  The rate of Medicaid payments was recently challenged when health care providers in Idaho sued Medicaid over rates. What are the major funding implications for Medi-Cal and Medicaid patients, based on the ruling of Armstrong vs Exceptional Child Center Inc.?

Medicaid Reimbursement
Under Medicaid, states are given funds by the federal government to reimburse medical expenses for individuals that have dependent children, as well as individuals that are old and disabled.

The funds provided by Medicaid typically cover costs for institutional care. However, in instances where the cost of in-home care is either the same or less than the cost of institutional care, states may reimburse service providers for the cost of in-house care for individuals that are eligible for Medicaid.

The issue
Under section 30(A) of the Medicaid Act, state Medicaid agencies are required to take account of provider costs when setting reimbursement rates. In the case of Armstrong vs Exceptional Child Center Inc, the court was asked to consider whether under the Supremacy Clause, individual medical providers had a private right of action to enforce Section 30(A) of the Medicaid Act. This was in view of the fact that Congress did not clearly grant a private right of action.

Judgment and Implications
The US Supreme Court sided with the state of Idaho, and ruled that the Supremacy clause does not create a private right of action. Based on the ruling, hospitals and other health care providers cannot sue Medicaid over low reimbursement rates.  This means that health care providers are going to find it difficult to get better Medicaid funding rates.

For more information on Medi-Cal and Medicaid related matters, contact Nelson Hardiman, Los Angeles, CA. Call 310.203.2800 for an appointment.

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