Providers had argued in a case, Armstrong v. Exceptional Child Center Inc., that suing over low rates is sometimes the only way to enforce federal payment requirements. Otherwise, low rates could lead to fewer providers agreeing to participate in Medicaid and thus less access to care for Medicaid patients, some had argued.Those on the other side, however, had argued against allowing such lawsuits, saying a ruling in favor of providers could mean endless litigation that would slow the system. They argued that Congress has not authorized such suits.

The Supreme Court took up the case after Idaho residential providers for disabled patients sued state officials over the state’s failure to implement new, higher rates, for which the Legislature didn’t provide sufficient funding. A federal district court ruled that Idaho’s rates weren’t in line with the federal law’s requirements that states “assure that payments are consistent with efficiency, economy and quality of care and are sufficient to enlist enough providers” to ensure adequate access to care. That was upheld by the 9th U.S. Circuit Court of Appeals, which also sided with the providers.

In 2012, the Supreme Court declined to rule in a similar case in California, when providers sued the state over amendments to the state’s Medicaid program including a 10% rate cut. The issue in that case also was whether providers could sue to enforce federal Medicaid law. At the time, the California Medical Association regarded the high court’s refusal to take the case as a victory because it seemed to allow providers to sue over Medicaid rates.