Ninth Circuit to Rehear Case SCOTUS Reversed

(CN) - The 9th Circuit ordered a panel rehearing Friday of a case that it ordered dismissed last month upon a reversal by the U.S. Supreme Court.

Exceptional Child Center Inc. and more than a dozen other health care providers brought the lawsuit against Idaho in 2009, claiming the state had kept Medicaid reimbursements flat despite recommendations by its own health department directors for substantial raises to combat rising costs.

Both a federal judge and the 9th Circuit agreed that the providers are entitled to "reimbursement rates that bear a reasonable relationship to provider costs," and ordered Idaho lawmakers to kick down more money - about $12 million in 2013 alone.

But state officials - backed by 27 other states - said that the U.S. Constitution's supremacy clause bars private groups from meddling with the state's delicate task of providing services on a tight budget. In fact, the groups' lawsuit undermines Congressional intent to allow states to administer their Medicaid programs with minimal interference, the state claimed.

This past March, the deeply divided Supreme Court ruled that the supremacy clause bars private entities from using the courts to enforce laws.

Writing for the majority, Justice Antonin Scalia said "it would be strange indeed to give a clause that makes federal law supreme a reading that limits Congress's power to enforce that law, by imposing mandatory private enforcement - a limitation unheard of with regard to state legislatures."

Last month, the 9th Circuit ordered the dismissal of the health care providers' action for lack of subject-matter jurisdiction.

The court replaced that order with an amended one Friday, noting that it has granted the Idaho attorney general's petition for panel rehearing.

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