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From Health Law Daily, March 11, 2015

Maine Supreme Court says attorney general should drop reigns in MaineCare litigation

By Bryant Storm, J.D.

The Maine Supreme Court announced that if the Maine attorney general opposes the position a state agency adopts in a lawsuit, the Maine governor does not need to allow the attorney general’s office to continue to direct that litigation. The Maine Supreme Court issued the announcement in an advisory opinion responding to the governor’s questions regarding the Maine attorney general’s opposition of the Maine Department of Health and Human Services (MDHHS) in litigation with HHS over CMS’s refusal to allow Maine’s Medicaid program (MaineCare) to drop Medicaid coverage for 19- and 20-year-old Maine children of families that are otherwise eligible for Medicaid.

SPA. Through a Medicaid State Plan Amendment (SPA), MDHHS dropped Medicaid coverage for 19- and 20-year-old Maine children. The litigation arose as a result of the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) “maintenance of effort” (MOE) provision. The MOE required states to maintain Medicaid eligibility standards for an additional nine years, after 2010, in order to continue to receive funds. In the SPA litigation, MDHHS claimed that the state did not have the opportunity to adjust its eligibility standards to drop the coverage of the 19- and 20-year-old population before the MOE went into effect.

Representation. Although the Maine Office of the Attorney General initially represented MDHHS in the administrative proceedings surrounding the SPA, following the Maine legislature’s election of Janet Mills to replace the former attorney general, the attorney general’s office refused to represent Maine DHHS in actions related to the SPA. When MDHHS appealed the SPA issue to the First Circuit, the attorney general declined to represent MDHHS but authorized the use of outside counsel. Following the filing of the appeal, the attorney general moved to “intervene in the case to oppose Maine DHHS’s position.” The First Circuit rejected MDHHS’s argument (see CMS succeeds in constitutional fight over MaineCare coverage drop, November 18, 2014).

Conflict of interest. In light of the intention of MDHHS to appeal its case to the U.S. Supreme Court, the Maine attorney general’s office requested that “MDHHS submit copies of outside counsel’s bills and the estimate for the cost to do the petition,” so that MDHHS could retain private counsel. The attorney general’s office indicated that it would “consider the request for outside counsel, and develop a legal fee cap” despite the fact that it had intervened on the opposite side of the litigation. Troubled by the conflict of interest, in the event of continued litigation, resulting from the attorney general’s torn allegiances, the governor sought advice from the Maine Supreme Court regarding the obligations of the executive branch and the attorney general with respect to the SPA litigation.

Solemn occasion. The Maine Supreme Court determined that the governor’s question of whether the Maine executive branch needed to seek the attorney generals permission to hire outside counsel in the litigation was not an issue which constituted a “solemn occasion” or “unusual exigency” requiring the high court to offer an advisory opinion. The court so held because Maine statutes required the written approval of the attorney general to allow a state agency to retain outside counsel. Additionally, the attorney general at no point denied MDHHS the opportunity to retain outside counsel, which the court determined to mean that no unusual exigency was present. However, the court determined that the second question, regarding the authority of the attorney general to direct litigation—by limiting the duration of representation or capping the fees that may be paid to private counsel—in light of the fact that the attorney general intervened on the opposite side of the litigation, did constitute a solemn occasion necessitating an advisory opinion.

Direction. The Maine high court offered its opinion “that, once the attorney general approves the employment of private counsel for a state entity and opposes that entity in litigation, the attorney general is no longer appearing for the state entity and therefore is no longer authorized to direct or manage that entity’s litigation or strategy.” The court reasoned that nothing in the Maine Constitution, Maine statutes, or Maine common law required such oversight to manage the specifics of the relationship between a state agency and private counsel once that relationship has been authorized. Thus, the court held that the attorney general could not, at once, formally oppose the executive branch’s litigation position and direct the executive branch’s litigation through “fiscal or other periodic review” of the executive branch’s private counsel.

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