Health Law Update

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In 2005, the Florida Pediatric Society, the Florida Association of Pediatric Dentists, and a number of parents and guardians on behalf of their individual children in the Medicaid program brought suit against the state of Florida alleging violations of the following:
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	<li>42 U.S.C. § 1396a(a)(8) and (a)(10) – requiring that children receive medical and dental services known as Early Periodic Screening Diagnosis and Treatment, with reasonable promptness (Reasonable Promptness);</li>
	<li>42 U.S.C. § 1396a(30)(A) – requiring that rates for reimbursing medical and dental providers be set, inter alia, so as to secure access to care for children that is equal to that of other children in the same geographical area (Equal Access); and</li>
	<li>42 U.S.C. § 1396a(a)(43) – requiring that the state conduct outreach programs to inform individuals determined to be eligible for Medicaid of the availability of services and to ensure that such patients requesting those services are able to receive them (Outreach).</li>
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The plaintiffs contended, in essence, that the root cause of the violations of the Reasonable Promptness and Equal Access requirements were Medicaid provider reimbursement rates that were unreasonably low. The state responded that the plaintiffs had no private right of action to enforce the Reasonable Promptness and Equal Access requirements. The state also argued that the terms “reasonable promptness” and “medical assistance” were vague and that beneficiaries had no access issues. The court found that the plaintiffs “experienced insufficient access to medical care because [the State’s] reimbursement rates are so low that they fail ‘to enlist enough providers so that care and services are available … at least to the extent that [they] are available’ to those with private insurers. 42 U.S.C. § 1396a(a)(30)(A). Moreover, I find that defendants did not inform plaintiffs of services that are available to them, which resulted in several of the named plaintiffs being unable to take advantage of medical services to which they are entitled. The evidence presented at trial makes clear that plaintiffs’ injuries are directly attributable to defendants’ unlawful conduct.” The court also held that the plaintiffs had a right of action under 42 U.S.C. § 1983 to enforce the Reasonable Promptness and Equal Access requirements.

The Affordable Care Act (ACA) provided a temporary increase in Medicaid payments for primary care in 2013 and 2014 by requiring states to pay at least as much as Medicare paid for primary care services. With the start of the new year, however, the Medicare parity requirement ended. The impact will vary from state to state, however, the Urban Institute estimates that physicians receiving the enhanced payments will see their primary care fees reduced by 43 percent, on average. The reduction in rates has the potential to seriously erode access to care.

Providers’ and recipients’ rights to enforce the Reasonable Promptness and Equal Access requirements, however, remain unsettled despite the Florida decision, as the U.S. Supreme Court is poised to hear the Armstrong v. Exceptional Child Center case on January 20th. The Armstrong case will decide whether states must comply with the federal Medicaid Act’s “equal access” provision that is intended to make sure physicians and other healthcare providers receive sufficient payment to provide care to low-income and disabled patients. The Obama administration, in its Supreme Court brief, argued that healthcare providers do not have a legal right to enforce the Equal Access requirement for several reasons: (1) “Medicaid providers are akin to third-party beneficiaries and thus have judicially enforceable contract rights only where the contract was intended to confer on them a legally enforceable right; (2) the language and structure of the Equal Access Medicaid provisions confirm that private enforcement by Medicaid providers would not be appropriate; (3) that the Supreme Court and Congress have assumed, with respect to federal-state programs under the Social Security Act, that there is no private right of enforcement under a nonstatutory cause of action and that a claim is not available under 42 U.S.C. § 1983 for a violation of a federal law as opposed to a federal right; and (4) that the action does not involve a defense at law, nor does it seek immunity from an allegedly preempted state regulation.”

The Armstrong case should be monitored by providers as it may well set the stage for how providers are reimbursed for many years to come, especially in light of the constrained budgets of many states. Please note that BakerHostetler is counsel to a party that submitted amicus curiae brief.

Who Decides When Medicaid Payment Rates Are Not Enough?