The Supreme Court will decide whether private sector health care providers can force a state to raise its Medicaid reimbursement rates to keep up with rising costs.
The justices on Thursday agreed to hear an appeal from Idaho.
The state is trying to overturn a lower court decision that ordered the state to increase payments.
A 2009 lawsuit claimed the state was unfairly keeping Medicaid reimbursement rates at 2006 levels despite studies showing that the cost of providing care had gone up. A federal judge agreed, and the 9th U.S. Circuit Court of Appeals affirmed.
The state says the Constitution doesn't allow private parties to enforce federal Medicaid funding laws against states. Justices will hear arguments in the case next year.