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In Armstrong v. Exceptional Child Center, Inc., the US Supreme Court revisited the question of whether Medicaid providers may seek relief in federal courts when states fail to pay "sufficient" Medicaid rates. A divided Supreme Court held that the Supremacy Clause of the US Constitution does not support such actions, even when states violate the Medicaid Act of 1965. Payment sufficiency is vital to Medicaid's success in expanding health insurance coverage under the Affordable Care Act. By terminating providers' ability to seek relief in federal courts, Armstrong makes it easier for states to cut Medicaid payment rates at the same time that millions of new enrollees will enter the program, undercutting operation of the Medicaid program and its role in health care reform.

The Supreme Court Ruling That Blocked Providers From Seeking Higher Medicaid Payments Also Undercut The Entire Program