The court held that Medicaid’s Comparability, Freedom of Choice and Reasonable Promptness provisions create enforceable rights under 42 U.S.C. § 1983. The court also held that the “Equity” provision of Medicaid is not enforceable through § 1983, and declined to rule on the Equal Access provision in light of a pending certiorari petition. The court refused to dismiss the plaintiff’s Supremacy Clause claim, which reiterated all of their Medicaid Act claims; it is unclear whether this ruling recognizes that provisions not enforceable through § 1983 are still enforceable through the Supremacy Clause. 

          Significantly, plaintiffs asserted Medicaid Act claims under both § 1983 and the Supremacy Clause. The court said it was dismissing some claims and not others under § 1983, but said it was not dismissing a Supremacy Clause claim – which it discussed as a single, distinct claim – re-alleging the same violations of Medicaid. Rejecting the State’s “contract” argument, the court said that the State “is bound to administer the State Plan in accordance with federal law, and to the extent that the state plan conflicts with federal law, the Plaintiffs have sufficiently alleged a Supremacy Clause claim. Therefore, the Defendants’ motion to dismiss on Supremacy Clause grounds will be denied.” The court noted that a previous case had held a provision of Louisiana’s plan barred by the Supremacy Clause. St. Tammany Parish Hosp. Service Dist. v. Dept. of Health and Hum. Resources, 677 F. Supp. 455 (E.D.La.1988).

           It is not clear whether the court’s refusal to dismiss this claim encompasses the alleged violation of the Equity provision (which the court dismissed under § 1983) and the Equal Access provision (which the court declined to rule on under § 1983). The availability of Supremacy Clause claims to enforce Medicaid is currently at issue before the Ninth Circuit in Independent Living Center of So. Calif. v. Shewry (No. 08-56061) (summary of Jul. 11 decision here). There, the court followed other circuits in holding that a Supremacy Clause claim is viable without regard to § 1983 requirements. The State has said it will seek panel rehearing in that case.

          Here, the Women’s Hospital Foundation and several beneficiaries sued to challenge the Louisiana’s inadequate reimbursement rates. The State asserted sovereign immunity on the ground that the State (rather than its officials) was the real party in interest, and that an injunction would require expenditures from the State treasury. The court stated that clear precedent permitted injunctive relief in this case under the Ex Parte Young doctrine. The court also rejected the argument that the federal government’s power to withhold Medicaid funds constitutes a comprehensive enforcement scheme that precludes injunctive relief. The court rejected the State’s “contract” argument as being without any basis is precedent, saying: “The State Plan is the state embodiment of federal law, and DHH officials cannot avoid being held accountable under this law by arguing that Medicaid is merely a contract between DHH and CMS.”

          The court decided to withhold ruling on whether the Equal Access provision, 42 U.S.C. § 1396a(a)(30)(A), is enforceable under § 1983, noting a circuit split and pending cert. petition in Equal Access for El Paso, Inc. v. Hawkins, 509 F.3d 697 (5th Cir. 2007).

          The court held the Comparability provision, 42 U.S.C. § 1396a(a)(10)(B), enforceable under § 1983. It says that medical assistance “shall not be less in amount, duration, or scope than the medical assistance made available to any other such individual.” The court said that “distinct differences exist between the Equal Access Provision and the Comparability Provision,” which the Fifth Circuit held did not create rights. “The language of the Comparability Provision is specifically targeted to provide adequate healthcare assistance to individual Medicaid patients and invites a comparison of the medical assistance to persons covered under Medicaid and the community at large.” The court also noted the use of the mandatory term “must,” and concluded that (10)(B) meets all requirements for § 1983 enforcement.

          The court reached the same conclusion on the Freedom of Choice provision, 42 U.S.C. § 1396a(a)(23) (“Any individual eligible for medical assistance may obtain such assistance” from any qualified provider). “Unlike the Equal Access Provision, the Freedom of Choice Provision speaks directly to the eligible ‘individuals’ under Medicaid and ensures their ability to personally seek medical assistance. This language is focused on the individual Medicaid recipient, and his or her access to medical assistance of his or her choosing.”

          It held the same regarding the Reasonable Promptness provision, 42 U.S.C. § 1396a(a)(8). “First, the provision is directed at “all individuals wishing to make an application” for assistance; thus, this provision contemplates the individual right to medical assistance for all persons eligible under Medicaid. Second, the right conferred is clear in that the requested assistance “shall be furnished with reasonable promptness to all eligible individuals.” The court rejected the argument that this provision requires only prompt eligibility decisions, saying that “the word ‘assistance’ refers to ‘medical assistance’ in the beginning section of the Reasonable Promptness Provision, and thus, this provision requires the prompt administration of medical care.” Other courts have accepted the State’s argument. See, e.g., Mandy R. ex rel. Mr. and Mrs. R. v. Owens, 464 F.3d 1139 (10th Cir. 2006). The court did hold, however, that only the individual beneficiaries had standing to enforce this provision.

          The court held that the Equity provision, 42 U.S.C. § 1396a(a)(2) (state must ensure cost-sharing with federal government on “on equalization or other basis which will assure” that lack of funds does not impede access to care), does not create rights under § 1983. “The plain language of the statute omits all reference to individual Medicaid recipients and/or their rights under the Medicaid Act. …Instead, the Equity Provision addresses the percentage of the non-federal share of Medicaid funding to be provided by the state or local government.”

          The court stated summarily that it would treat separately alleged claims under Medicaid regulations “in the same way it has construed allegations under the various statutory provisions.”

          The court dismissed without prejudice a claim based on state Medicaid law, saying it lacked jurisdiction over because of sovereign immunity.

                Finally, the court refused to dismiss an Equal Protection claim. Although a similar claim was rejected in Ass'n of Residential Resources in Minnesota, Inc. v. Gomez, 51 F.3d 137 (8th Cir. 1995), the court noted that that decision was on a motion for summary judgment rather than a motion to dismiss. The court said that the plaintiffs here had sufficiently alleged a discriminatory and irrational difference in treatment between Women's Hospital and state-funded charity hospitals.