Marooning by Gridlock: Armstrong and the Continuous Strain Between Medicaid Costs and Healthcare Access

Abstract

Cost containment and access have long been the primary concerns in the American healthcare system. Naturally, the federal government has sought to manage both, but often the fiscal needs of healthcare practitioners directly conflict with the health needs of patients. Medicaid is a prime example of this constant tension. As healthcare costs have continued to rise, some states have reduced the amounts they are willing to pay healthcare practitioners in exchange for their services. Rather than forgo the business, a group of practitioners in the Supreme Court case, Armstrong v. Exceptional Child Center, challenged the state of Iowa for the right to sue for adequate compensation. However, the Supreme Court struck down this claim by holding that the practitioners had no right to sue based either on the Supremacy Clause or the Medicaid statute.This comment is the first to analyze potential legal alternatives for resolving the Medicaid compensation problem in light of the Armstrong decision. It will first assess both the Administrative Procedure Act and Constitutional Due Process Jurisprudence in connection with entitlement programs. This comment will ultimately propose an amendment to Medicaid’s reimbursement rate setting process that will allow healthcare providers to directly negotiate with the states so that gridlock will not ensue, leaving Medicaid patients without the healthcare they need.