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From Health Law Daily, March 10, 2017

Immigrant’s Medicaid eligibility battle survives her death

By Bryant Storm, J.D.

The Pennsylvania state Medicaid agency failed to dismiss claims that an individual was improperly denied Medicaid benefits in a lawsuit brought by the son of the deceased beneficiary. The court granted in part and denied in part motions to dismiss the complaint, which alleged due process, equal protection, and civil rights violations. While the court rejected arguments that the beneficiary was denied benefits on the grounds of race or national origin, the court found that the complaint sufficiently alleged due process violations as a result of the Medicaid agency’s inadequate handling of the beneficiary’s applications for benefits (Odi v. Alexander, February 27, 2017, Surrick, R.).

Emigration. The individual emigrated from Nigeria to the United States in 2008, receiving permanent resident status and a "green card" in 2010. In 2011, when the individual was diagnosed with breast cancer, she applied for emergency Medicaid through the Delaware County Assistance Office. Her application was approved and she received benefits from May 2011 until May 2012. On May 14, 2012, the state Medicaid agency closed the beneficiary’s case, stopped providing her benefits, and failed to provide her with renewal forms or with a redetermination notice. She then filed a new application for Medicaid benefits, indicating she continued to require treatment for breast cancer. The application was accompanied by a physician letter which indicated that the beneficiary would need to continue receiving treatment for "at least five years."

Denial. On August 21, 2012, the state Medicaid agency denied the application on the grounds that it did not include proof of income. After the additional information was provided, the state agency denied the application on the grounds that the individual did not qualify for benefits because she was not a "United States citizen or an alien lawfully admitted for permanent residence." However, the individual had been a lawful resident at the time of the denial letter, and since 2010.

Appeal. The beneficiary appealed the denial of benefits. Despite several efforts to discuss the appeal informally, via telephone and in writing, the beneficiary’s attempts were unsuccessful. Then, the state Medicaid agency agreed to a hearing by telephone on April 23, 2013. At that hearing, an administrative law judge (ALJ) determined that the denial of medical benefits was improper and the ALJ ordered her benefits reinstated retroactively to August 1, 2012. However, the reinstatement was ineffectual because she was not given functioning "access card" or other credential that enabled her to pay for the medical services. Subsequently, on August 3, 2013, the beneficiary was notified that her benefits were being terminated. She appealed the decision but died from untreated breast cancer on December 13, 2013. A posthumous settlement established benefits to cover the period from August 18, 2013 to December 13, 2013.

Statute of limitations. The deceased beneficiary’s son brought an action against the state Medicaid agency on behalf of his mother’s estate alleging violations of due process, equal protection, and Medicaid law. The state Medicaid agency moved to dismiss the Section 1983 claims on the grounds that the claims were barred by a two-year statute of limitation and the sovereign immunity of the agency. The court held that the claim was not untimely under the continuing violations doctrine because, although the complaint was not filed until more than two years after the beneficiary’s first denial, the alleged improper denial of Medicaid benefits was an ongoing saga with the violations occurring "frequently and consistently over a year-and-a-half time period."

Sovereign immunity. The court held that while sovereign immunity applied to the state Medicaid agency officials in their official capacities, it did not protect those individuals in their individual capacities. The court held that the complaint sufficiently alleged the personal involvement of one Medicaid official in the decision making process regarding the beneficiary’s Medicaid status. However, the complaint failed to specifically demonstrate personal involvement of other officials.

Equal protection. The court held that the son’s equal protection claim—that his mother was treated differently than similarly situated individuals because of her race or national origin—must fail because the complaint did not allege facts regarding similarly situated individuals. Therefore, the court could not ascertain how the beneficiary was differently treated.

Due Process. The complaint established the first element of a procedural due process claim—the denial of a property interest (entitlement to Medicaid benefits)—as well as the fact that inadequate process was afforded in response to that denial. Although the state Medicaid agency provides for a number of administrative procedures in the event of a denial of Medicaid benefits, the court held that the state Medicaid agency failed to follow those procedures. In the case of the deceased beneficiary, despite timely appeals on her part, she was not afforded a hearing in a timely manner. Because administrative action was not rendered in a timely manner, the court held that the complaint adequately alleged a procedural due process violation.

Other claims. The court dismissed other discrimination claims under Section 1981 and Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d), holding that the claims were improperly plead, named the wrong parties, or were factually inadequate. The court granted the plaintiff leave to amend inadequacies in the complaint.

Attorneys: Robin A. Feeney (Fine and Staud, LLC) for John Odi. Barry N. Kramer, Office of the Attorney General, for Gary Alexander.

The case is No.15-4903.

MainStory: TopStory CaseDecisions CMSNews MedicaidNews EligibilityNews MedicaidPaymentNews QualityNews PennsylvaniaNews

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