SCOTUS Decision in Douglas v. Independent Living Center

Today the Supreme Court issued a 5-to-4 decision in a case involving the ability of Medicaid providers to bring suit challenging state laws that allegedly reduced reimbursement rates below what federal law required.  The case is Douglas v. Independent Living Center (when cert. was granted, the case was captioned Maxwell-Jolly v. Independent Living Center, covered earlier here). Justice Breyer’s majority opinion (joined by Justices Kennedy, Ginsburg, Sotomayor, and Kagan) begins:

We granted certiorari in these cases to decide whether Medicaid providers and recipients may maintain a cause of action under the Supremacy Clause to enforce a federal Medicaid law—a federal law that, in their view, conflicts with (and pre-empts) state Medicaid statutes that reduce payments to providers. Since we granted certiorari, how­ever, the relevant circumstances have changed. The fed­eral agency in charge of administering Medicaid, the Cen­ters for Medicare & Medicaid Services (CMS), has now approved the state statutes as consistent with the federal law. In light of the changed circumstances, we believe that the question before us now is whether, once the agen­cy has approved the state statutes, groups of Medicaid providers and beneficiaries may still maintain a Supremacy Clause action asserting that the state statutes are inconsistent with the federal Medicaid law. For the rea­sons set forth below, we vacate the Ninth Circuit’s judg­ments and remand these cases for proceedings consistent with this opinion.

Chief Justice Roberts authors a dissenting opinion (joined by Justices Scalia, Thomas, and Alito), which states:

The Court decides not to decide the question on which we granted certiorari but instead to send the cases back to the Court of Appeals, because of the recent action by CMS approving California’s new reimbursement rates. But the CMS approvals have no impact on the question before this Court. If, as I believe, there is no private right of action under the Supremacy Clause to enforce §30(A), that is the end of the matter. If, on the other hand, the Court be­lieves that there is such a cause of action, but that CMS’s recent rate approvals may have an effect on that action going forward, then the Court should say just that and then remand to the Ninth Circuit for consideration of the effect of the agency approvals.

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