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From Health Law Daily, July 2, 2013

Exhaustion of state judicial remedies not requisite for filing of claims created by an enforceable right in federal court

By Anthony H. Nguyen, JD

Exhaustion of Louisiana’s procedure for judicial review is not required before a Medicaid claimant may file suit in federal court if an enforceable right is created (Romano v Greenstein, June 28, 2013, Higginbotham, P). The U.S. Court of Appeals for the Fifth Circuit agreed with the district court that a provision in the Medicaid Act—42 U.S.C. sec. 1396a(a)(8)—created an enforceable right under 42 U.S.C. sec. 1983. The individual, rather than the state itself, was the intended beneficiary of the provision. Additionally, the right to benefits asserted by the individual was enforceable because the provision was not vague and imposed an obligation on the state to perform.

Background. Tiffany Romano received Medicaid benefits in Louisiana. In August 2011, the Louisiana Department of Health and Hospitals (DHH) decided that Romano was no longer eligible for Medicaid benefits. Romano appealed the DHH decision to a state administrative law judge (ALJ), who reversed the DHH’s determination. Subsequently in November 2011, DHH again proposed to terminate Romano’s Medicaid benefits. Upon appeal, an ALJ affirmed the termination of Medicaid benefits.

Romano proceeded to sue the DHH in federal court under 42 U.S.C. sec. 1983, the Medicaid Act, and U.S. Constitution. She alleged in her complaint that the DHH’s actions were an illegal termination of her Medicaid benefits. The DHH filed a motion to dismiss, arguing that Louisiana judicial process controlled the matter and that the federal courts did not have subject matter jurisdiction. The DHH also argued that Romano did not have a private cause of action to sue for her Medicaid benefits. Romano moved for summary judgment and the district court denied DHH’s motion to dismiss and granted summary judgment in favor of Romano.

Upon appeal, DHH challenged only the district court’s denial of DHH’s motion to dismiss, arguing that: (1) the district court lacked subject matter jurisdiction over Romano’s claims and (2) Romano did not have a private cause of action under sec. 1983.

Federal jurisdiction. The U.S. Court of Appeals for the Fifth Circuit found that Louisiana law provided Medicaid claimants with both an opportunity for administrative review before an ALJ and an opportunity for judicial review in the state court system. However, Romano’s case did not require the Fifth Circuit to determine whether Romano had to exhaust her state judicial remedies before filing suit in federal court. The appellate court noted that there was no general requirement that a plaintiff exhaust state administrative or judicial remedies before pursuit of a claim under sec. 1983, nor did the Medicaid Act or Louisiana law create an exhaustion requirement for Medicaid beneficiaries.

The court stated that Louisiana law regarding state court review stressed that it was not “limiting…utilization of or the scope of judicial review available under other means of review, redress, relief, or trial de novo provided by law.” Additionally, neither Congress nor Louisiana had specified any exclusive forum for judicial review of Medicaid claims. The Fifth Circuit held that the availability of judicial review in state court did not preclude Romano from pursuing her claim in federal court, nor did it divest the federal district court of its jurisdiction to consider the matter.

Enforceable right. The Fifth Circuit used a three part test enumerated by the U.S. Supreme Court in Blessing v Freestone to determine whether a federal statute created a right enforceable under sec. 1983. The three part test examines whether: (1) Congress intended that the provision in question benefit the plaintiff; (2) the plaintiff demonstrated that the right asserted is protected by the statute and not so “vague and amorphous” that its enforcement would strain judicial competence; and (3) the statute unambiguously imposed a binding obligation on the states.

Because sec. 1396a(a)(8) of the Medicaid Act required that a state plan for Medicaid assistance must “provide that all individuals wishing to make application for medical assistance under the plan shall have an opportunity to do so, and that such assistance shall be furnished with reasonable promptness to all eligible individuals,” the Fifth Circuit held that an enforceable right was created.

Romano was clearly the intended beneficiary of the provision. Additionally, the right that Romano asserted to be protected was described in the provision and not vague. Finally, the language of sec. 1396 imposed a binding obligation on the states because “shall” appeared in the provision.

The case number is 12-30565.

Attorneys: Neal Risley Elliott, Jr. (Louisiana Department of Health and Hospitals) for Bruce D. Greenstein, Secretary of the Louisiana Department of Health and Hospitals

Companies: Louisiana Department of Health and Hospitals

MainStory: TopStory MedicaidNews LouisianaNews MississippiNews TexasNews

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