Medicaid Litigation Update
April 7, 2006

Medicaid Litigation—Focusing on Eligibility and Services
Prepared by:
Jane Perkins
National Health Law Program

I. Enforcement of Medicaid Act Pursuant to 42 U.S.C. § 1983

A. 42 U.S.C. § 1396a(a)(8) (reasonable promptness)

Westside Mothers v. Olszewski, 368 F. Supp. 2d 740 (E.D. Mich. 2005)

Michelle P. v. Holsinger, 356 F. Supp. 2d 763 (E.D. Ky. 2005)

Okla. Chapter of Am. Acad. of Pediatrics v. Fogarty, 366 F. Supp. 2d 1050 (N.D. Okla. 2005)

Reynolds v. Giuliani, 2005 U.S. Dist. LEXIS 2743 (Feb. 14, 2005) and 2005 U.S. Dist. LEXIS 32541 (S.D.N.Y. Dec. 14, 2005)

Mundell v. Zimmer, 2005 U.S. Dist. LEXIS 19815 (D. Colo. Sept. 2, 2005)

B. 42 U.S.C. § 1396a(a)(10)(A) (eligibility entitlement)

Compare
Watson v. Weeks, 2006 U.S. App. LEXIS 3011 (9th Cir. Feb. 8, 2006)

Westside Mothers v. Olszewski, 368 F. Supp. 2d 740 (E.D. Mich. 2005)

Michelle P. v. Holsinger, 356 F. Supp. 2d 763 (E.D. Ky. 2005)

Okla. Chapter of Am. Acad. of Pediatrics v. Fogarty, 366 F. Supp. 2d 1050 (N.D. Okla. 2005)

With
Mundell v. Zimmer, 2005 U.S. Dist. LEXIS 19815 (D. Colo. Sept. 2, 2005)

C. 42 U.S.C. § 1396a(a)(10)(B) (amount, duration and scope)

Michelle P. v. Holsinger, 356 F. Supp. 2d 763 (E.D. Ky. 2005)

Conlan v. Shewry, 131 Cal. App. 4th 1354 (Ct. App. 1st Dist. 2005)

Lankford v. Sherman, No. 05-4285-CV-C-DW (W.D. Mo. Nov. 22, 2005)

D. 42 U.S.C. § 1396a(a)(17) (reasonable standards)

Compare
Lankford v. Sherman, No. 05-4285-CV-C-DW (W.D. Mo. Nov. 22, 2005)

With
Watson v. Weeks, 2006 U.S. App. LEXIS 3011 (9th Cir. Feb. 8, 2006)

Mundell v. Zimmer, 2005 U.S. Dist. LEXIS 19815 (D. Colo. Sept. 2, 2005)

E. 42 U.S.C. § 1396a(a)(30) (payment rates)

Sanchez v. Johnson, 416 F.3d 1051 (9th Cir. 2005) (regarding recipients)

Westside Mothers v. Olszewski, 368 F. Supp. 2d 740 (E.D. Mich. 2005) (same)

St. Margaret’s Ctr. v. Novello, 2005 N.Y. App. Div. LEXIS 12855 (S.Ct. Nov. 10, 2005) (regarding providers)

Kapable Kids Learning Ctr. v. Ark. Dep’t of Human Servs., 2005 U.S. Dist. LEXIS 37252 (E.D. Ark. Sept. 15, 2005) (same)

Okla. Chapter of Am. Acad. of Pediatrics v. Fogarty, 366 F. Supp. 2d 1050 (N.D. Okla. 2005) (recipients can enforce; providers cannot)

F. 42 U.S.C. §§ 1396a(a)(43); 1396d(a)(4)(B), 1396d(4) (Early and Periodic Screening Diagnosis and Treatment services)

Westside Mothers v. Olszewski, 368 F. Supp. 2d 740 (E.D. Mich. 2005)

Okla. Chapter of Am. Acad. of Pediatrics v. Fogarty, 366 F. Supp. 2d 1050 (N.D. Okla. 2005)

G. 42 U.S.C. § 1396a(bb)(5) (FQHC payments)

Rio Grande Community Health Ctr. v. Rullan, 397 F.3d 56 (1st Cir. 2005)

H. 42 U.S.C. § 1396n(c) (home and community based waivers)

Compare
Michelle P. v. Holsinger, 356 F. Supp. 2d 763 (E.D. Ky. 2005)

With
Interhab, Inc. v. Schalansky, No. 02-C-1335 (Shawnee Co., Kan. Dist. Ct. Sept. 14, 2005)

II. Enforcement of Medicaid Act pursuant to U.S. Const. Art. IV (Supremacy Clause)

Camacho v. Texas Workforce Comm’n, 408 F.3d 229 (5th Cir. 2005)

Planned Parenthood of Houston & Southeast Texas v. Sanchez, 403 F.3d 324 (5th Cir. 2005)

Ahlborn v. Ark. Dep’t of Human Servs., 397 F.3d 620 (8th Cir. 2005)

Lankford v. Sherman, No. 05-4285-CV-C-DW (W.D. Mo. Nov. 22, 2005)

III. Medical Assistance as Payment, not Services

Westside Mothers v. Olszewski, 368 F. Supp. 2d 740 (E.D. Mich. 2005)

Health Care for All v. Romney, 2005 U.S.Dist. LEXIS 14187 (D. Mass. 2005)

IV. Interplay between Medicaid and Americans with Disabilities Act

ARC of Wash. State, Inc. v. Braddock, 427 F.3d 615 (9th Cir. 2005)

Sanchez v. Johnson, 416 F.3d 1051 (9th Cir. 2005)

V. Medicaid Services

A. Edmonds v. Levine, Medicare & Medicaid Guide (CCH) ¶ 301,789 (S.D. Fla. Feb. 15, 2006) (outpatient prescription drugs)

B. Rosie D. v. Romney, 2006 U.S. Dist. LEXIS 3026 (D. Mass. Jan. 26, 2006) (EPSDT-community-based services for children with serious emotional disturbance)

C. Health Care for All v. Romney, 2005 U.S.Dist. LEXIS 14187 (D. Mass. 2005) EPSDT-dental services)

D. C.F. v. Dep’t of Children and Families, 2005 Fla. App. LEXIS 20245 (Ct. App. Jan. 18, 2005) (EPSDT and medical necessity)

VI. Medicaid Cost Sharing

Beeker v. Olszewski, 2006 U.S. Dist. LEXIS 5325 (E.D. Mich. Feb. 13, 2006)

VII. Emergency Medical Conditions and Undocumented Aliens

Szewczyk v. Dep’t of Social Serv., 275 Conn. 464 (S.Ct. 2005)

VIII. Equal Protection

Duffy v. Meconi, 395 F. Supp.2d 132 (D. Del. 2005) (allowing North Carolina resident to raise equal protection challenge to Delaware’s denial of her application for Medicaid benefits and to challenge residency requirement as violation of constitutional right to travel)
IX. Experimental Waivers

Rosen v. Goetz, 410 F.3d 919 (6th Cir. 2005). After the Governor announced the State’s intention to disenroll 320,000 recipients, the district court, sua sponte, determined that a 2001 consent decree that required compliance with certain federal Medicaid due process requirements barred the disenrollment proposal. On appeal, the Sixth Circuit reversed. The court held that the State’s requirement that beneficiaries establish a “valid factual dispute” before being entitled to a hearing did not violate due process. Moreover, the State did not violate Medicaid regulations by using Tennessee Department of Human Services attorneys, who are presumed to perform adjudicatory or quasi-adjudicatory functions fairly, to screen claims to decide whether an enrollee raised a valid factual dispute. Finally, over plaintiffs’ objections that the notices did not specify the reasons for disenrollment, the court held that the termination notices given to the beneficiaries did not violate due process.

Grier v. Goetz, No. 3:79-3107, 2005 WL 3074592 (M.D. Tenn. Aug. 3, 2005). The District Court permitted the State to make limited amendments to a consent decree to conform to CMS-approved amendments to the State’s § 1115 waiver, while also finding that: 1) the state could not categorically deny reimbursement under Medicaid for a 72-hour emergency supply of a drug for which prior authorization was required but had not been obtained; 2) a state is not required to provide notice of an enrollee’s right to a hearing when a drug becomes subject to prior authorization; 3) state may deny services in excess of limits, where the state promised to use a “soft cap”; 4) provider’s refusal to provide a requested service because an enrollee has reached a benefit limit constitutes state action thereby requiring state to inform enrollee of the reason for the denial; 5) a provider’s refusal to provide a requested service due to a Medicaid enrollee’s failure to pay a co-pay constitutes state action thereby requiring state to inform enrollee of the reason for the denial; and 6) the state could not require a treating physician to justify any deviation from the standard course of treatment when the physician’s opinion was reasonably supported by the enrollee’s medical records.

Nelson v. Milwaukee County DHFS, No. 04CO193, 2006 U.S. Dist. LEXIS 7513 (E.D. Wis. Feb. 7, 2006). Plaintiffs contend that the Milwaukee County care management organization is paying plaintiffs’ residential care providers to little, thus causing them to leave the program and forcing the plaintiffs to move. Plaintiffs alleged violations of the ADA, the Rehab Act, and § 1396a(a)(30)(A). The court held that plaintiffs failed to allege any injury in fact in the past, and dismissed the claims against past conduct. Plaintiffs’ forced and traumatic transfers if the providers withdraw going forward did, however, amounts to injury in fact that can be redressed. As to the ADA, plaintiffs alleged discrimination based on lower provider payments and limits on choice than are available for persons under 60 and persons in non-Family Care counties. These claims were found sufficient to survive a motion to dismiss. Allegations of the threatened withdrawals also were enough to satisfy claims of discrimination due to lack of maximum community integration.

National Health Law Program (Mar. 2006)

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