Two Justices Could Make Medicaid Suits An Endangered Species

The ability of Medicaid beneficiaries to sue to enforce the federal law and regulations is under serious attack. The most dangerous predators are Justices Scalia and Thomas.

In their separate opinions in the Maine prescription drug case decided May 19, 2003 (Pharmaceutical Research and Manufacturers of America v. Walsh, 2003 WL 21134460) both Justice Scalia and Justice Thomas make clear that given the opportunity, they would reverse longstanding precedent allowing private suits under 42 U.S.C. § 1983 for alleged violations of the federal Medicaid law and regulations.

Justice Thomas wrote that Spending Clause legislation is

"much in the nature of a contract. This contract analogy raises serious questions as to whether third parties may sue to enforce Spending Clause legislation-through pre-emption or otherwise…When Congress wishes to allow private parties to sue to enforce federal law, it must clearly express this intent. Under this Court's precedents, private parties may employ 42 U.S.C. § 1983 or an implied private right of action only if they demonstrate an 'unambiguously conferred right'. Petitioners quite obviously cannot satisfy this requirement and therefore arguably is not entitled to bring a pre-emption lawsuit as a third-party beneficiary to the Medicaid contract." (citations omitted).

This position echoes a statement by Justice Scalia in Barnes v. Gorman, 122 S. Ct. 2097 (2002). However, Justice Scalia also added that "[w]e do not imply, for example, that suits under Spending Clause legislation are suits in contract, or that contract-law principles apply to all issues that they raise." 122 S. Ct. at 2102, n.12.. Justice Thomas makes his observation even though the respondents did not raise the issue, and adds that had they done so "I would give careful consideration to whether Spending clause legislation can be enforced by third parties in the absence of a private right of action."

The Court already has held that the Medicaid statute does not confer a private right of action. Wilder v. Virginia Hospital Association, 496 U.S. 498 (1990). Justice Scalia offers an alternative reason not to enforce the Medicaid statute, namely that the provision in the statute for termination of funding by the Secretary of Health and Human Services is the only remedy available to beneficiaries, subject to judicial review under the arbitrary and capricious standard of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A). This position also has been rejected by the Court in the past, which recognized that other than complaining to HHS, complainants have no role in the review of a state Medicaid plan by HHS. Wilder v. Virginia Hospital Association, 496 U.S. 498, 521-22 (1990); Rosado v. Wyman, 397 U.S. 397 (1970) (AFDC statute identical to Medicaid as to funding cutoff).

Since most programs benefitting the poor or underserved populations are Spending Clause legislation with procedures for funding cut off, the adoption of these views by a majority of the Court would realize the far right agenda of eliminating entitlement programs.