Good Holding, Bad Dicta in District Court Case

Disabled adults sought to obtain additional services under a Medicaid Home and Community-Based Services waiver program.

In a case involving disabled adults seeking to obtain additional services, i.e. Community Integrated Living Arrangement services, under a Medicaid Home and Community-Based Services waiver program, the United States District Court for the Northern District of Illinois ruled in favor of the plaintiffs on the enforceability of the Medicaid provision but ultimately dismissed the claim on the merits.  Bertrand v. Maram, 2006 WL 2735494 (Sept. 25, 2006).  The decision is noteworthy, because while it follows precedent regarding the enforceability of the Medicaid statute, it sets forth a rationale for overturning this precedent.  The judge is Virginia Kendall, who was appointed by President Bush (II), following the recommendations of Senators Obama and Durbin.  Her previous experience had been as a federal prosecutor.  See http://durbin.senate.gov/record.cfm?id=246783. 

Plaintiffs sought to enforce 42 U.S.C. § 1396a(a)(8), which provides that medical assistance be “furnished with reasonable promptness to all eligible individuals.”  The Court noted that the Court of Appeals for the Seventh Circuit held that this provision is enforceable through 42 U.S.C. § 1983 in Bruggerman ex rel Bruggerman v. Blagojevich, 324 F.3d 906, 910 (7th Cir. 2003).  The district court was critical of the Seventh Circuit for reaching that conclusion “without any analysis.”  

The district court noted that, in the absence of Seventh Circuit precedent, it would have found that 1396a(a)(8) does not create a right that could be enforced through § 1983.  The district court viewed 1396a as having an aggregate focus, because it indicated that the state must furnish medical assistance instead of the individual shall receive medical assistance.  This finding ignores the “Suter fix,” 42 U.S.C. 1320a-2.  In the Suter fix, Congress explicitly stated that a provision shall not be deemed unenforceable based on the fact that its requirements are phrased in terms of a state plan.  The district court went on to state that the fact that the Secretary of Health and Human Services could suspend payments if the state failed to substantially comply with its obligations, “implies that Congress did not intend to create a private right of action.”  To reach this conclusion, the court looked at 42 U.S.C. § 1396c, which was not a basis for suit in the case.  The court did not address the fact that a cutoff of funds by HHS would provide no remedy for beneficiaries.

Finally, the court noted that beneficiaries had a right to a fair hearing, and concluded that “the availability of the administrative remedy is evidence that Congress did not intend to create a right enforceable in federal court under § 1983.”  The district court cited two Supreme Court cases, Wright v. Roanoke Redevelopment and Housing Auth. 479 US 418, 432 (1987) and Wilder v. Virginia Hospital Ass’n, 496 U.S. 498 522-23 (1990), which held precisely to the contrary.  Indeed, the Supreme Court stated in Wright: “the existence of a state administrative remedy does not ordinarily foreclose resort to § 1983.”  Similarly, in Wilder, the Supreme Court stated in regard to the Medicaid appeal process: “This administrative scheme cannot be considered sufficiently comprehensive to demonstrate a congressional intent to withdraw the private remedy of § 1983.”

Despite this dicta clearly aimed at encouraging other courts to reverse decades of case law permitting enforcement of the Medicaid statute under § 1983, the court followed Bruggerman and held that section 1396a(a)(8) created a right enforceable under § 1983 to medical assistance with reasonable promptness to all eligible individuals. 

On the merits, the State argued that even if the Medicaid reasonable promptness provision is enforceable, the plaintiffs are entitled to no specific services, because the beneficiaries were receiving Medicaid pursuant to a waiver.  The court rejected this argument, quoting several cases holding that the reasonable promptness requirement applies to waiver services.

However, the court upheld the state’s denial of Community Integrated Living Arrangement services to the plaintiffs, because the waiver explicitly noted that those services would be restricted by Priority Population Criteria.  The court explained that the federal government, the Center for Medicare and Medicaid Services, had approved the use of Priority Population Criteria as an appropriate assessment criteria for determining an individual’s need.  The court found that CMS’s decision was entitled to substantial deference.