Federal appeals court rules against doctors, patients in Oklahoma Medicaid pay suit

In spite of the setback, physicians say the case has shed light on the program's deficiencies and has led to increased reimbursements.

By Amy Lynn Sorrel, AMNews staff. Jan. 29, 2007.

A federal appeals court rejected physicians' and patients' claims that Oklahoma officials violated the Medicaid Act by underfunding the state's program. But doctors say the ruling will not undo the positive changes the case generated.

The 10th U.S. Circuit Court of Appeals overturned a 2005 trial court ruling that found the Oklahoma Health Care Authority set physician reimbursements at such low levels that not enough pediatricians and specialists were available to provide needed services. The lower court found that the insufficient rates violated the Medicaid Act's equal access requirements by depriving low-income children of their right to prompt care.

But a three-judge appeals court panel concluded in a Jan. 3 opinion that the federal law "simply requires a state Medicaid plan to provide 'medical assistance' ... in other words, [it] requires a state Medicaid plan to pay for all such medical services, not, as plaintiffs suggest, to directly provide for them."

Judges said the doctors and patients who brought the class-action lawsuit did not have the right to sue to enforce the law. Doctors say this leaves them little recourse to ensure that states comply.

The Oklahoma Chapter of the American Academy of Pediatrics, with the Community Action Project of Tulsa County and several Medicaid recipients, sued the state in 2001.

"The important thing is this suit brought up an undeniable problem, and regardless of what the appeals court said, it drew the [Oklahoma] Legislature to an honest appraisal of what was going on," said American Medical Association President William G. Plested III, MD.