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From Health Law Daily, October 3, 2016

Assisted-living coverage requires that plan of care be approved up front

By Harold Bishop, J.D.

A class of Ohio Medicaid beneficiaries were not entitled to retrospective Medicaid coverage for assisted-living services. The court of appeals found that the federal Medicaid statute only allows states to spend Medicaid funds on assisted-living facilities provided "pursuant to" a written plan of care. Because the Ohio Medicaid beneficiaries did not have state agency approved plans of care in effect when they entered the assisted-living facilities, they were ineligible for retrospective benefits. In fact, the state agency would have been in violation of federal law had it used Medicaid funds to pay for the assisted-living services before approval of the services plans (Price v. Medicaid Director, September 30, 2016, Kethledge, R.).

Background. The daughters of two Ohio Medicaid beneficiaries, acting on their behalf, filed a putative class action against the director of Ohio’s Medicaid program and the director of the Ohio Department of Aging seeking retroactive coverage of the assisted-living services provided to their mothers. In September 2015, the district court certified the class and granted summary judgment, ordering Ohio to grant retroactive benefits for the assisted-living services.

Appeal. On appeal, the Sixth Circuit made a number of findings. First, it found that the beneficiaries had standing to sue on their February 2013 complaint because at the time of filing their time had not run out to request a state Medicaid hearing. However, as to two additional claims alleged in a November 2014 amended complaint, the court found a lack of standing because by then the time to request a state Medicaid hearing had run out.

In addition to standing, Ohio also argued on appeal that the beneficiaries could not sue a state in federal court for retroactive monetary relief under the Eleventh Amendment. The Sixth Circuit found that the Eleventh Amendment did not bar the beneficiaries’ claim for injunctive relief because a federal court may enjoin state officers to comply with federal requirements by awarding benefits going forward, even if the court may not order payment of past benefits. In this case, the district court’s injunction ordered Ohio to cease it prospective-only payment practice and to notify class members of their right to request an administrative hearing to obtain past assisted-living benefits. As such, the district court’s order did not abridge Ohio’s sovereign immunity.

Finally, the court of appeals agreed with Ohio that under 42 U.S.C. §1396n(c)(1) it could only spend Medicaid funds on assisted-living services that are provided "pursuant to a written plan of care." The beneficiaries argued that the phrase "pursuant to" is synonymous with "consistent with," and thus they were entitled to reimbursement provided before approval of the service plans, as long as those benefits were "consistent with" the plans later approved by the state. The court decided that no one gives the phrase "pursuant to" that meaning. The court, instead, noted that the leading legal dictionaries define "pursuant to" as "in compliance with" or "as authorized by." Thus, the court concluded that to be provided "pursuant to" a plan, the services must be authorized by the plan.

The court of appeals ordered the district court to enter judgment in favor of Ohio.

The case is No. 15-4066.

Attorneys: Janet E. Pecquet (Beckman Weil Shepardson LLC) for Kathryn A. Price; Jeffrey P. Jarosch, Office of the Attorney General, for Medicaid Director, Office of Medical Assistance.

Companies: Office of Medical Assistance, Ohio Department of Job and Family Services

MainStory: TopStory CaseDecisions CMSNews CoverageNews MedicaidNews

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