At Policy ICU, we’ve often talked about other avenues for change in health care that exist beyond Congress. The “one big, beautiful bill” is taking up most of the attention on federal health care policy. But other reforms from CMS like reforming state directed payments for Medicaid or prior authorization can bring similar big changes to health care.
SCOTUS Ruling Will Impact Medicaid Reimbursements
Health systems and hospitals may have gotten another shock this week when SCOTUS ruled in favor of South Carolina in a case that could have big implications for Medicaid funding and the Medicaid “right to choose” provision.
In a 6-3 decision, SCOTUS sided with South Carolina and allowed them to block a lawsuit from Planned Parenthood to provide non-abortion health care services for Medicaid patients. SCOTUS and the legal war against Planned Parenthood continues to linger since the 2022 Dobbs decision. But the impact to health care beyond Planned Parenthood may be a turning point for Medicaid. The ruling brings more strict provisions around where Medicaid dollars can go and could severely limit how patients on Medicaid can access clinics and locations for routine health care services.
The South Carolina Planned Parenthood clinic was receiving Medicaid reimbursements for providing health care services, but the SCOTUS ruling now affirms that any facility or clinic that offers health care services and abortion services cannot receive Medicaid funding.
The Battle on “Qualified Providers”
Medicaid beneficiaries usually have the right to pick health care providers with a provision called “right to choose,” “freedom of choice,” or “any qualified and willing provider.” It allows patients to select any qualified provider enrolled in the Medicaid program who agrees to treat them. Much of the legal background around the South Carolina ruling started in 2018 when South Carolina Governor Henry McMaster removed abortion clinics from the list of qualified providers for Medicaid patients. The rulings went back and forth among appeals courts until SCOTUS agreed to take up the case last December.
The SCOTUS ruling in Medina v. Planned Parenthood South Atlantic could provide a blueprint for other states to cut off any facility or clinic providing abortion and non-abortion health care services from Medicaid dollars. The biggest impact may be felt by patients looking for routine medical services in low-income or more rural areas who are blocked out or may need to travel further.
How It Will Play Out
Health systems will need to keep an eye on how state law, pending bills, regulations or governor executive orders interpret the use of federal health care dollars for Medicaid services and abortion services. States and areas with large Medicaid populations and fewer providers are likely to see the biggest impacts.
More conservative states may use existing executive orders or fast track state legislation in special sessions or budget negotiations to create their own versions of the South Carolina provision.
Overall, in a year that is already creating a generational shift in how Medicaid is funded and regulated, we could see yet another big change for the health care industry.
