Medicaid Act

Issues

The Supreme Court will consider whether individual Medicaid providers have a private right of action under the Supremacy Clause to enforce section (30)(A) of the Medicaid Act (“§ (30)(A)”), which requires state Medicaid agencies to take provider costs into account when setting reimbursement rates, when Congress has not explicitly granted a private right of action. Richard Armstrong, the Director of Idaho’s Department of Health and Welfare, argues that individuals do not have a private right of action under § (30)(A) or the Supremacy Clause because a private remedy cannot exist without congressional intent and private litigants should not play a role in determining whether a state gets federal funding. According to Exceptional Child Center, however, when a state law conflicts with federal law, individuals have a private right of action under the Supremacy Clause to bring an injunction and prevent harm that would result from the conflicting state statute. The Court’s ruling will impact the right of individuals to recover under the Supremacy Clause as well as the administration of Medicaid and other statutory schemes that provide funding to states as long as they comply with federal law. 

Questions as Framed for the Court by the Parties

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E.M.A., a minor, suffered catastrophic injuries during her birth due to the physician's negligence during delivery. As part of its Medicaid program, North Carolina paid for E.M.A.’s medical expenses upon her mother’s agreement to reimburse the Medicaid program for any recovery gained from a third party to cover E.M.A.’s medical expenses. When E.M.A. settled her claim against the physician for a fraction of her medical costs, North Carolina attached a lien equal to one third of the total settlement. In this case, the Supreme Court will resolve a conflict between the North Carolina Supreme Court and the United States Court of Appeals for the Fourth Circuit.  The Court will decide whether a North Carolina law that allows the North Carolina Department of Health and Human Services (“DHHS”) to assert a lien against a Medicaid recipient's recovery from a third party, when limited to the lesser of either the total amount of medical expenses or one third of the Medicaid recipient’s total settlement amount, violates the "no-lien" provision of the Medicaid Act. DHHS argues that the North Carolina statute is consistent with the Medicaid Act’s no-lien provision because it operates as an advanced agreement to apportion one third of the settlement toward medical expenses.  E.M.A. responds that the statute violates the Medicaid Act because it allows DHHS to recover a proportion of the settlement that is greater than her medical expenses.  This case will allow the Court to balance the interest that States have in maintaining solvent Medicaid programs against the interests of Medicaid claimants who fail to recover sufficient damages from third-parties to cover their medical costs.

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