Supreme Court Rules Against Home Health Companies Seeking Higher Payments

Home health agencies and other providers cannot sue states for setting low Medicaid reimbursement rates, the U.S. Supreme Court ruled in a 5-4 decision announced today.

The case was brought by five providers of in-home care and other services in Idaho, led by Exceptional Child Center, which provides home care for people with developmental disabilities and maladaptive behaviors. The providers claimed that Idaho violated the Medicaid law by keeping reimbursements at 2006 levels even as the cost of care escalated.

Their argument stemmed in part from a provision of the law that addresses provider payment rates in a Medicaid plan. Rates must be high enough “to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area,” the law states.


The U.S. Court of Appeals for the Ninth Circuit sided with Exceptional Child Center, but the Supreme Court reversed that ruling.

Private companies such as the Idaho providers do not have the right to sue states over Medicaid rates but must turn to the Department of Health and Human Services (HHS) if they believe payments are not in compliance with the law, Justice Antonin Scalia wrote in the majority opinion. He was joined by Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito and Stephen Breyer.

Medicaid is funded jointly by the federal government and states but is overseen at the federal level by HHS. In the minority opinion, Justice Sonia Sotomayor expressed concern that turning to HHS will not “suffice” for providers that are not being paid adequately to care for Medicaid beneficiaries.


“The court’s error today has very real consequences,” Sotomayor wrote, according to the Los Angeles Times. “Previously, a state that set reimbursement rates so low that providers were unwilling to furnish a covered service for those who need it could be compelled by those affected to respect the obligation imposed by (the law).”

Justices Anthony Kennedy, Ruth Bader Ginsburg and Elena Kagan also dissented from the majority.

The White House and 28 states filed briefs on behalf of the state of Idaho. Doctors, hospitals and people with disabilities were among those to file friend-of-the-court briefs in support of Exceptional Child Center.

Progressive think tank the Constitutional Accountability Center (CAC) also filed a brief in support of the Idaho providers, arguing that low-income people who rely on Medicaid ultimately will see access to care restricted if providers cannot fight in the courts for adequate reimbursement rates.

“Make no mistake, the practical effects of this ruling are enormous for ordinary Americans,” stated Constitutional Accountability Center Civil Rights Director David Gans in a press release. “The Court today turned its back on the principle of access to our federal courts, leaving low income people seeking access to health care to the vagaries and limitations of the executive branch.”

Written by Tim Mullaney

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