Supreme Court Justice Anthony Kennedy (Photo: Chip Somodevilla/Getty Images)

The next Supreme Court justice could usher in significant changes to Medicaid, giving states far more power to cut the program.

The issue: Many conservative lawyers and judges say private entities — like health care providers — shouldn't be able to sue over Medicaid's coverage decision. If that view ultimately prevails, states could make much bigger cuts without the threat of a lawsuit.

"A right without a remedy is not a right.”
— Rodney Whitlock, health care lobbyist

Where it stands: The Supreme Court ruled in 1990, in Wilder v. Virginia Hospital Association, that providers can sue over inadequate payment rates. Kennedy dissented from that ruling, and later helped to narrow its scope — but the court never fully closed the door on provider lawsuits.

  • Kennedy “was willing to leave the courthouse doors open in Medicaid cases, whereas the conservative majority is willing to shut it – I mean, really slam it," said Sara Rosenbaum, a George Washington University law professor.

The impact: Kennedy's replacement could be the fifth vote to shut providers out entirely.

  • Conservatives including Justice Clarence Thomas and the late Antonin Scalia, have argued that Medicaid is a contract between states and the federal government, and that the law doesn't give individuals the right to sue for the entitlements the statute requires. Only HHS should decide whether a state is out of line, they've said.
  • If the right to sue goes away, “it's certainly possible that a state would start hacking away at its program. There would be no deterrence at all," Rosenbaum said.

What we're watching: This issue could find its way back to the court relatively soon. Kansas and Lousiana have asked the Supreme Court to hear cases regarding about whether they can exclude Planned Parenthood from their Medicaid programs, and whether Planned Parenthood can sue over that exclusion.

  • Two federal appeals courts said the states couldn't exclude Planned Parenthood. But a third appeals court ruled that Planned Parenthood doesn't have the right to sue Arkansas over the same issue.

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