The Medicaid law doesn't allow providers or beneficiaries to sue to prevent cuts, Chief Justice John Roberts wrote in dissent, and the plaintiffs can't count on the Supremacy Clause to circumvent that obstacle.
"To decide this case, it is enough to conclude that the Supremacy Clause does not provide a cause of action to enforce the requirements [of the Medicaid statute] when Congress, in establishing those requirements, elected not to provide such a cause of action in the statute itself," he wrote.
In its majority opinion, the high court does not take a stance on the Supremacy Clause but strongly urges the plaintiffs and the lower court to abandon that line of argument. Instead, the justices write, the cuts are ripe for a challenge under the Administrative Procedure Act now that federal regulators have signed off on them.
"Respondents' basic challenge now presents the kind of legal question that ordinarily calls for APA review," Justice Stephen Breyer wrote for the majority. "The Medicaid Act commits to the federal agency the power to administer a federal program. And here the agency has acted under this grant of authority."
Gov. Jerry Brown (D-Calif.) had sought permission to cut provider payment rates by 10 percent in order to cut the state's deficit by hundreds of millions of dollars. The Centers for Medicare and Medicaid Services approved some of those cuts late last year.