Enforcing Medicaid's Entitlement Still Uncertain In The Wake Of The Supreme Court's Douglas Decision

The Medicaid statute begins with seven words: "A state plan for medical assistance must," and the statute then proceeds to list 83 requirements that a state Medicaid plan is required to meet.1 Absent from the statute, however, is any remedy for Medicaid beneficiaries or providers who are harmed by a state's failure to satisfy any one of those requirements. An aggrieved party can always petition the Centers for Medicare & Medicaid Services (CMS), the federal agency that oversees the program, for relief when a state fails to comply with its obligations. But since CMS views itself as a partner with the states in overseeing the Medicaid program, aggrieved parties may want to secure independent judicial enforcement of Medicaid's entitlements. The lack of an enforcement mechanism in the statute has stymied these efforts. In 1990, the Supreme Court seemed to have resolved the issue in favor of providers and beneficiaries in Wilder v. Virginia Hospital Association.2 In Wilder, a divided Supreme Court ruled that providers could use the federal civil rights statute as a means to enforce a then-existing Medicaid requirement that a state Medicaid plan provide "reasonable and adequate" reimbursement rates.3 According to Justice Brennan, writing for the majority, one could infer that the Medicaid statute created "enforceable rights" to reasonable and adequate Medicaid reimbursement because of the lack of an effective administrative enforcement mechanism through CMS.4 Moreover, the federal Medicaid statute itself did not foreclose a challenge to the then-existing Medicaid requirement.5 Therefore, because a state official - Governor Wilder, acting through his Medicaid commissioner - had deprived Virginia hospitals of a right guaranteed under federal law - access to "reasonable and adequate" reimbursement rates - the federal civil rights statute was an appropriate vehicle to vindicate that right. In the intervening years, three things changed that called into question the continuing vitality of the Wilder decision. First, in 1997, Congress repealed the statute upon which the Wilder decision relied.6 In its place, Congress imposed a much weaker requirement on the states: namely, that a state plan merely provide for a public process before setting rates for providers.7 The second was a change in the make-up of the Supreme Court itself; Justice Marshall, who had been in the majority in Wilder, was replaced on the Court by Justice Thomas, who seemed less...