Massachusetts Medical Society v. Dukakis

Facts

In 1985, Massachusetts enacted Chapter 475, which required physicians, as a condition of obtaining or renewing their medical licenses, to agree not to charge Medicare beneficiaries any amount exceeding the “reasonable charge” determined by the federal Medicare program. Under the federal Medicare system, physicians could either accept “assignment” (agreeing to accept the Medicare-determined reasonable charge as payment in full) or bill patients directly, potentially charging more than the Medicare-approved amount (balance billing). The 1984 amendments to the Medicare Act created incentives for physicians to become “participating physicians” who would accept assignment for all Medicare patients, but did not mandate this practice. The Massachusetts Medical Society, American Medical Association, and an individual physician challenged the state law, arguing that it violated the Supremacy Clause by conflicting with the federal Medicare Act’s voluntary approach to assignment and that it violated due process by imposing a licensure condition unrelated to professional competence. The plaintiffs claimed the law would reduce access to medical care for Medicare beneficiaries by causing physicians to leave Massachusetts or refuse to treat Medicare patients.