From Health Law Daily, March 25, 2016

Medicaid recipients lack private right to challenge ‘reasonable standards’ provision

By Harold Bishop, J.D.

New York Medicaid recipients do not have a private right of action to enforce the reasonable standards provision of the Medicaid Act. The Second Circuit vacated a grant of summary judgment to recipients who challenged the state’s coverage restrictions placed on orthopedic footwear and compression stockings for certain conditions based on that provision. The court refused to decide the Medicaid recipients’ unequal treatment claim under the Americans with Disabilities Act (ADA) and the Rehabilitation Act because they were duplicative of another claim. With respect to the remaining claims, however, the court affirmed the district court grant of summary judgment (Davis v. Shah, March 24, 2016, Lynch, G.).

Allegations. Medicaid recipients brought a class action against Nirav Shah, Commissioner of the New York State Department of Health (New York), challenging New York’s coverage restrictions on certain medical services provided under its Medicaid plan. The Medicaid recipients claimed that New York’s 2011 Medicaid amendments, which restrict coverage of orthopedic footwear and compression stockings to patients with certain enumerated medical conditions, violated the Medicaid Act’s (42 U.S.C. § 1396 et seq.) reasonable standards, home health services, due process, and comparability provisions, as well as the antidiscrimination provision and integration mandate of Title II of the ADA (42 U.S.C. § 12131 et seq.) and section 504 of the Rehabilitation Act (29 U.S.C. § 794).

District court decision. On December 9, 2013, the U.S. District Court for the Western District of New York granted summary judgment to New York on the Medicaid recipients’ home health services claim and the hearing aspect of their due process claim, and summary judgment to the Medicaid recipients on all remaining claims (see Participation in Medicaid requires assistance to be applied equally, December 11, 2013). The court later entered a permanent injunction barring New York from enforcing its coverage restrictions against any beneficiaries under its plan.

On appeal. The Second Circuit affirmed the district court decision in part and vacated in part. It vacated the district court’s grant of summary judgment to the Medicaid recipients on the reasonable standards provision of the Medicaid Act because neither the Medicaid Act nor the Supremacy Clause of the U.S. Constitution confers a private cause of action to Medicaid recipients to enforce the provision. The court also refused to decide the Medicaid recipients’ unequal treatment claim under the ADA and Rehabilitation Act because they were largely the same as their ADA integration mandate claim. With respect to the remaining claims, the court affirmed the district court for the following reasons:

• Home health services claim. Because orthopedic footwear and compression stockings constitute optional “prosthetics” rather than mandatory “home health services” under the Medicaid Act, New York was entitled to summary judgment on plaintiffs’ home health services claim.
• Due process claim. Because the due process provision required New York to provide Medicaid recipients with written notice prior to terminating their benefits, New York was entitled to summary judgment on the hearing element and the Medicaid recipients were entitled to summary judgment on thenotice element of their due process claim.
• Comparability provision claim. Because New York’s coverage restrictions deny some categorically needy individuals access to the same scope of medically necessary services made available to others, the Medicaid recipients were entitled to summary judgment on their comparability provision claim.
• Anti-discrimination claims. Because New York’s restrictions violate the integration mandate of the ADA and Rehabilitation Act, the Medicaid recipients were entitled to summary judgment on their anti-discrimination claims under those statutes.

Finally, because the district court’s injunction was broader than was warranted by the Second Circuit’s liability conclusions, the appellate court vacated that injunction and remanded the matter to the district court for further consideration of the appropriate relief.

The case is No. 14-543-cv.

Attorneys: Jonathan Feldman (Empire Justice Center) for Harry Davis. Victor Gerard Paladino, Office of the Attorney General, for Nirav Shah, Commissioner, New York State Department of Health.

Companies: New York State Department of Health

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