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Medicaid
Children’s Healthcare is a Legal Duty v. HCFA, 212 f.3d 1084 (8th Cir. 2000)
The American Academy of Pediatrics, the Litigation Center, the Iowa Medical Society, and the American Nurses Association joined in an amicus curiae brief to challenge the validity of certain provisions of the Balanced Budget Act of 1997 under the First Amendment. The law provides Medicare and Medicaid reimbursement for services provided in “religious nonmedical health care institutions,” 42 USC §1395x (ss), a euphemism for Christian Science sanitaria. The lower court upheld the statute, and so Children’s Healthcare Legal Duty, Inc. (CHILD) appealed the case to the Eighth Circuit. The amicus brief argued that the statute implies that spiritual healing is on a par with medical care. Moreover, the federal support of these institutions facilitates medical neglect of children. The AMA, by special permission of the court, participated in the oral argument.
By a 2-1 decision, a three-judge panel of the Eighth Circuit affirmed. CHILD then petitioned the United States Supreme Court for certiorari. The Litigation Center joined the American Academy of Pediatrics and other non-profit organizations in an amicus brief in support of CHILD’s petition. However, the Supreme Court denied CHILD’s petition.
Clayworth/California Medical Association v. Bonta, 140 Fed.Appx. 677 (9th Cir. 2005)
Due to an extreme fiscal crisis, the California Legislature passed a new, austere budget, including an across-the-board 5% reduction in the reimbursement rate paid to California Medicaid service providers. However, the Medicaid Act requires that state Medicaid programs satisfy minimum "quality of care" and "equal access" requirements for recipients. The State of California did not determine whether the across-the-board rate cuts would satisfy these provisions of the Medicaid Act, and anecdotal evidence suggested that they would not.
Two separate lawsuits, consolidated into one action, challenged the rate cut. These were brought by various individuals and organizations, including the California Medical Association (CMA), the California chapter of the American Academy of Pediatrics, and several other specialty medical societies. The trial court preliminarily enjoined the rate cuts on fee-for-service payments. The Director of the California Department of Health and Human Services, Diana Bonta, then appealed the preliminary injunction to the Ninth Circuit.
The Litigation Center and the American Academy of Pediatrics filed a brief as amicus curiae to support the plaintiffs. The issue addressed was whether private parties (as opposed to the federal government) have the legal right to challenge inadequate funding of Medicaid programs.
The Ninth Circuit summarily reversed the trial court, holding that private parties do not have a right of action to enforce the “equal access/equal quality” provision of the Medicaid Act. CMA petitioned for rehearing en banc, and the Litigation Center helped to underwrite the cost of that petition. However, the Ninth Circuit denied the request for rehearing.
DeSario v. Thomas (f/k/a Slekis v. Thomas), 139 F.3d 80 (2d. Cir. 1998)
This class action lawsuit challenged the use of an exclusive list of coverage for durable medical equipment by the Connecticut Medicaid program. The United States Court of Appeals ruled that an exclusive list would be acceptable and that states can limit Medicaid coverage to services that meet the needs of the majority of its population. The court acknowledged that its ruling was inconsistent with the rulings of other circuits which had addressed the same issue. The plaintiffs then sought certiorari from the U.S. Supreme Court. The Litigation Center joined approximately 200 other public interest organizations in filing an amicus brief in support of the petition for certiorari.
The Health Care Financing Administration (“HCFA”) subsequently distributed a clarification letter to all state Medicaid directors. The letter stated that the coverage test that the Second Circuit had (arguably) approved in DeSario would not, in the future, be acceptable to HCFA. In light of HCFA’s policy pronouncement, the U.S. Supreme Court granted certiorari, vacated the Second Circuit decision, and remanded the case for reconsideration.
Interest in this Case: Fourteen national and thirty two state and community-based agencies, organizations and professional associations joined as amici in the petition to ensure that persons who must rely on Medicaid can obtain health services that meet their needs.
Frew v. Hawkins 457 F.3d 432 (5th Cir. 2006)
Issue
The issue in this case was whether the Texas Medicaid program was required to comply with federal Medicaid mandates regarding health care for needy children.
AMA interest
The AMA believes that every United States citizen should have access to necessary medical care, regardless of ability to pay.
Case summary
This class action sought, through enforcement of a consent decree, to require the Texas Medicaid program to provide needy children with “Early and Periodic Screening, Diagnosis and Treatment Services” mandated under the federal Medicaid law.
The State of Texas appealed from an order finding that it failed to comply with the consent decree requiring compliance with this Medicaid mandate. The United States Court of Appeals for the Fifth Circuit affirmed the trial court order and in January 2007, the United States Supreme Court denied review of the Fifth Circuit's affirmance.
Litigation Center involvement
The Litigation Center contributed toward the plaintiffs' legal expenses.
McCreary v. Offner, 172 F.3d 76 (D.C. Cir. 1999)
In the late 1980’s, a number of state Medicaid programs adopted policies that limited or denied Medicaid reimbursement of Medicare Part B copayments for patients who qualify under both Medicare and Medicaid. The issue is whether, in the event of such dual qualification, the states must pay at the higher Medicare rates, or whether they can pay at the lower Medicaid rates. All four federal circuits that considered the issue prior to 1997 found that the state programs violated federal law and they were required to pay copayments based on the higher Medicare rates.
In January 1997, the Litigation Center, in states affected by these policies, began helping its members resolve their physician members’ Medicaid reimbursement shortfalls through negotiation with Medicaid programs and through litigation in both federal court (seeking declaratory relief prospectively) and state court (seeking payment of claims retrospectively).
In August 1997, Congress passed the Balanced Budget Act of 1997 (“BBA”), which authorized Medicaid’s underpayment of Medicare copayments for future medical services and which also attempted to moot any pending lawsuits filed to collect past-due reimbursement. The Litigation Center challenged Congress’ retroactive application of the BBA provisions in court cases then pending in Montana and the District of Columbia. The Litigation Center also served as amicus curiae in related cases in Tennessee and Wisconsin.
The Seventh Circuit, the Ninth Circuit, and the U.S. District Court for the District of Columbia all held against the physician plaintiffs. The Litigation Center supported a petition for certiorari by the California Medical Association and filed its own amicus curiae brief. The Supreme Court denied the CMA petition as well as similar petitions by other parties in these lawsuits. In a final effort to preserve physician rights, the Litigation Center supported an appeal by the Medical Society of the District of Columbia to the D.C. Court of Appeals. The case was named McCreary v. Offner. The appellate court held that HHS’s permitting states to limit reimbursement to health care providers was reasonable.
Interest in this Case: Physicians have provided medical services to poor and elderly patients and patients with disabilities, for which they have not been properly compensated by the Medicaid programs. The Litigation Center wants to help these physicians recover the money they were promised at the time they rendered their services, according to the law in effect when those services were rendered.
Result: Following the above-mentioned rulings in other jurisdictions, the D.C. Court of Appeals also ruled against the physician plaintiffs.
Oklahoma Chapter of the American College of Pediatrics v. Fogarty
472 F.3d 1208 (10th Cir. 2007)
Issue
The issue in this case was whether the Oklahoma Medicaid Program violated the “equal access” provision of the federal Medicaid law and deprived Medicaid recipients of their civil rights. The suit maintained that the State of Oklahoma, if it were to continue the program, had to increase its funding and reduce the bureaucratic barriers to access.
AMA interest
The AMA believes that every United States citizen should have access to necessary medical care, regardless of ability to pay.
Case summary
The Oklahoma Chapter of the American Academy of Pediatrics (OKAAP), the Community Action Project of Tulsa County, and several patients (but no physicians) sued the individuals responsible for running the Oklahoma Health Care Authority (OHCA). The first named defendant, Michael Fogarty, was the Chief Executive Officer of OHCA.
The principal claim was that Oklahoma Medicaid funding was so low that physicians were unwilling or financially unable to treat qualifying children. In addition, OHCA imposed bureaucratic requirements on Medicaid recipients, which made their continued participation in the program more difficult and induced some of them to cease using its benefits, even though they were substantively eligible. Thus, the care available to these children was less than the care available to the general population of children.
The complaint alleged that the equal access violation deprived the plaintiffs of their civil rights under 42 U.S.C. § 1983. The suit asked the court to certify a plaintiff class, to consist of those Oklahoma children who were currently or in the future would be eligible for certain services under Medicaid. Ultimately, the complaint sought an injunction to require that OHCA meet the federal equal access requirements and otherwise comply with Medicaid standards.
One irony of the lawsuit was that, to an extent, the defendants sympathized with the plaintiffs who, after all, were asking that the defendants receive additional funding from the State of Oklahoma, so they could discharge their statutory duties. On January 26, 2002, the Tulsa World reported that Dr. T.J. Brickner, OHCA Chairman, acknowledged that Medicaid payments were insufficient to cover physicians’ costs: “We’ve got to solve the access problem. The pediatricians have a point.”
The trial court certified a plaintiff class of patients, found that OHCA had substantially violated the Medicaid equal access requirement, and referred the case to a United States Magistrate Judge for submission of a proposed injunctive order. The trial judge also found the OKAAP lacked standing as a plaintiff, and dismissed it from the lawsuit.
On May 19, 2005, the trial court entered a final judgment and injunction, ordering the largest and broadest reimbursement rate increase in any case of its kind in United States history. The court ordered that, on an immediate interim basis, the Oklahoma Medicaid Program reimburse covered, medically necessary physician services for minor children at 100% of the Current Procedural Terminology (CPT) rate paid by Medicare for such services. The court also required the Oklahoma Medicaid Program to hire a consulting firm to determine the reimbursement rate needed to comply on a long term basis with the Medicaid equal access provision.
The defendants moved for recovery of their costs in the lawsuit, arguing that they had prevailed in the litigation. However, the court denied that motion, pointing out that the plaintiffs, rather than the defendants, had been the prevailing parties.
The plaintiffs appealed from the final judgment and injunction, contending in particular that the trial court erred in applying a “substantial compliance” standard in determining whether defendants met their statutory obligations to provide medical assistance to the plaintiff class. The defendants cross-appealed.
On January 3, 2007, the Tenth Circuit Court of Appeals reversed the trial court decision and remanded the case with instructions to enter judgment for the defendants. The ruling was based on the appellate court’s conclusion that there was a lack of a private (i.e., non-governmental) right of action and a failure of evidence on the merits.
Although the court result appears to have been ultimately unfavorable, during the approximately year-and-a half that the trial court order was in effect the Oklahoma Legislature substantially increased Medicaid funding. Moreover, there appears to be a good chance that, notwithstanding the Tenth Circuit’s reversal, those funding levels will be ongoing. Thus, this lawsuit significantly benefited thousands of physicians and hundreds of thousands of needy children in Oklahoma.
Litigation Center involvement
The Litigation Center contributed substantially toward the plaintiffs’ litigation expenses. Also, the Litigation Center, along with the American Academy of Pediatrics (the national organization), filed a brief as amici curiae to the Tenth Circuit.
View the brief (PDF, 734KB)
Sanchez v. Johnson, 416 F.3d 1051 (9th Cir. 2005)
Issue
The issue in this case was whether the "quality of care" and "equal access" section of the Medicaid Act, 42 U.S.C. § 1396a(a)(30)(A), provides a private (i.e., non-governmental) right of action against states (in this case, California) for failure to fund Medicaid programs adequately.
AMA interest
The AMA believes that every United States citizen should have access to necessary medical care, regardless of ability to pay.
Case summary
Plaintiffs, developmentally disabled individuals, contended that this provision creates a private right of action, and such right is necessary to ensure that states provide "equal access" to health care for Medicaid beneficiaries.
On August 2, 2005, the Ninth Circuit reversed the trial court, holding that private parties do not have a right of action to enforce the “equal access/equal quality” provision of the Medicaid Act. The plaintiffs asked for a rehearing of the panel decision, but their request was denied on December 5, 2005.
Litigation Center involvement
The Litigation Center joined with the American Academy of Pediatrics in an amicus curiae brief to support the plaintiffs.
View the brief. (PDF, 2MB)
Content provided by: Office of General Counsel