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From Health Law Daily, February 27, 2017

State, not local government, bears Medicaid Act responsibility to ensure services

By Patricia Hammond, J.D.

The Fifth Circuit reversed a district court’s decision to grant a preliminary injunction in favor of a health center, finding that the center failed to show a likelihood of success on the merits. The health center, the appellate court reasoned, did not present evidence that a local government had a duty under the Medicaid Act to ensure the availability of medical services for the local population and entitle it to relief pursuant to 42 U.S.C. § 1983 (Jefferson Community Health Care Centers, Inc. v. Jefferson Parish Government, February 24, 2017, Dennis, J.).

Health center ensures services following devastating hurricanes. Jefferson Parish, Louisiana, faced a public health crisis following Hurricanes Katrina and Rita. To address the crisis, the Parish allowed Jefferson Community Health Care Centers (JCHCC), a local non-profit organization, to use the Parish’s facilities in River Ridge and Marrero to restore basic health services to the area for the following ten years, plus an additional five years unless terminated in writing. In exchange, JCHCC provided or coordinated primary care and clinical preventive services throughout the Parish using federal funding.

Eviction and preliminary injunction. Mismanagement of funds necessitated a change in leadership, and ultimately the Parish terminated the agreement. JCHCC filed suit against the Parish, the Council, and multiple individual council members seeking a preliminary injunction barring its eviction. In the district court, JCHCC argued that the termination of the CEAs violated the rights of the Medicaid beneficiaries who were patients of the sites, in violation of the Medicaid Act. The court found that the argument stretched the limits of preliminary injunction rules but concluded that JCHCC made some showing of a substantial likelihood of success on the merits of its claim (see ‘Petty’ parish can’t close FQHC unless it proves care availability, July 27, 2016). On appeal, the Parish argued that the district court erred in its conclusion and that JCHCC had failed to establish that Medicaid beneficiaries had a right to obtain health care services on the premises in question.

State responsibility to ensure medical assistance. The Medicaid Act provides for the allocation of federal funds to states that submit a state plan for medical assistance, requiring that such a plan provide for making certain medical assistance available, including the services provided by JCHCC at the River Ridge and Marrero facilities. Previously, the Medicaid Act defined the term "medical assistance" as "payment of part or all of the cost of services." However, section 2304 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) changed the definition to include payment of part or all of the cost of care and services, "or the care or services themselves, or both." The court noted that Congress intended to clarify that where the Medicaid Act refers to the provision of services, a participating state is required to provide or ensure the provision of services—not just to pay for them.

However, the court also noted that the problem with JCHCC’s theory is that the Parish is not a state. While the state of Louisiana may be required to provide or ensure the availability of medical services to its Medicaid beneficiaries, the terms of the Medicaid Act impose no such obligation on the Parish. JCHCC does not point to any authority stating that every local government in participating states must provide the relevant services, nor does it point to any authority establishing that the Parish has any obligation to do so under Louisiana state law. Thus, JCHCC’s theory is unsustainable, and JCHCC has failed to establish the substantial likelihood of success required to obtain a preliminary injunction.

The case is No. 16-30875.

Attorneys: Matthew Sidney Freedus (Feldesman Tucker Leifer Fidell LLP) for Jefferson Community Health Care Centers, Inc. James M. Garner (Sher Garner Cahill Richter Klein & Hilbert, L.L.C.) for Jefferson Parish Government, Jefferson Parish Council, and Ricky J. Templet, District 1 Parish Council Member.

Companies: Jefferson Community Health Care Centers, Inc.; Jefferson Parish Government; Jefferson Parish Council

MainStory: TopStory CaseDecisions CMSNews MedicaidNews LouisianaNews MississippiNews TexasNews

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