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From Health Law Daily, October 30, 2014

Michigan must reexamine Medicaid eligibility of enrollees in terminated plan

By Harold M. Bishop, JD

A federal district court has found that three Michigan residents, representing a class of similarly situated residents, are likely to succeed on their claims that a notice of termination of their Medicaid benefits under Michigan’s Plan First! Family Planning Program (Plan First!) was inadequate under the Medicaid Act and that the state’s Medicaid agencies were obligated under the Act to conduct a redetermination of eligibility of each enrollee for a new Medicaid program called Healthy Michigan Plan (Healthy Michigan). The court determined that the termination notices failed to provide a sufficiently detailed explanation for each Plan First! enrollee’s ineligibility for other state Medicaid programs, such as Healthy Michigan, which would have allowed each enrollee to make an informed decision as to whether to appeal Michigan’s Medicaid eligibility determination. Because members of the class were likely to suffer irreparable injury if they were denied Medicaid benefits, the balance of equities favored the class, and the relief served the public interest, the court preliminarily enjoined their termination and required a redetermination of their eligibility (Dozier v Haveman, October 29, 2014, Michelson, L)

The Medicaid plans. This case arises out of the state of Michigan’s winding down of the Plan First!, a Medicaid waiver program that covered family-planning services, and the introduction of the Healthy Michigan, a Medicaid program that providing more comprehensive healthcare benefits. Plan First!, which began in 2006, was geared toward providing family planning services for women ages 19 to 44 who were not pregnant, had income below 185 percent of the federal poverty level, and who would not otherwise be eligible for Medicaid coverage.

In 2010, the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) amended the Medicaid statute to expand coverage for certain adults under the age of 65, who were not pregnant, with income below 133 percent of the federal poverty level, and who would not otherwise be entitled to or enrolled in another Medicaid category (42 U.S.C. 1396a(a)(10)(i)(VIII)). The state of Michigan implemented this expanded coverage through Healthy Michigan.

Plan First! was scheduled to expire on June 30, 2014. An initial letter informing beneficiaries of the termination of the program was mailed to Plan First! enrollees on March 18, 2014. Then, on June 7, 2014, Michigan mailed a notice to certain individuals enrolled in Plan First! advising that coverage under the program was ending and that they had been determined ineligible for Medicaid.

Maya Dozier, Michelle Mackay, and Krickett Luckhardt (Plaintiffs), Plan First! enrollees, asserted that Michigan failed to: (1) conduct a pre-termination review; (2) provide a constitutionally adequate pre-termination notice; and (3) provide a meaningful opportunity to be heard. Plaintiffs sought to enforce these rights on behalf of a class consisting of Plan First! recipients who are eligible for Medicaid under other categories. Having previously granted class certification, the court addressed their motion for a preliminary injunction.

Analysis. The court rejected Michigan’s assertion that the Medicaid regulations apply differently to Plan First! because it is an optional waiver program rather than a comprehensive or mandatory program. In sum, based on the Medicaid statute, implementing regulations, and relevant case law, the court found that Michigan had a duty to conduct a redetermination of eligibility for individuals enrolled in the Plan First! waiver program before terminating benefits under the program. The court also agreed that the notices were inadequate under the Medicaid Act and implementing regulations. The court found it unnecessary to address the constitutional due process issue.

Injunction. The court preliminarily enjoined Michigan’s Medicaid agencies from terminating any class member’s Plan First! benefits until they provide each class member notice of their Medicaid eligibility under 42 U.S.C. sec. 1396a(a)(3) and its implementing regulations.

According to the court, the notice must: (1) explain that benefits under the Plan First! program have  been temporarily restored via this litigation and will expire when the class member is placed in a new Medicaid eligibility category, is determined ineligible for any other Medicaid eligibility category, or the injunction is lifted; (2) inform the member that a review of the member’s eligibility for the Healthy Michigan Plan has been performed based on all information reasonably available; (3) provide a member-specific reason for why the member was not found eligible for Healthy Michigan or else state that the member is eligible for Healthy Michigan; and (4) unambiguously state that the member has a right to challenge the eligibility determination through an administrative process which includes the right to an administrative hearing.

If the Michigan Medicaid agencies do not possess sufficient information to perform such a review, the court ordered them to submit at least one written request to the individual member requesting the necessary information.

The case number is 14-12455.

Attorneys: Katie N. Linehan, Center for Civil Justice, for Maya Dozier. Kristin M. Heyse, Michigan Department of the Attorney, for James K. Haveman.  

Companies: Michigan Department of Community Health; Michigan Department of Human Services                   

MainStory: TopStory CaseDecisions EligibilityNews CMSNews HealthReformNews MedicaidNews MichiganNews

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