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From Health Law Daily, March 1, 2013

TRO denied to disabled adults facing tightened eligibility requirements for MaineCare

By Geri Szuberla, JD, LLM

The reduction or termination of benefits for a class of disabled adults on or after March 1, 2013, under tightened eligibility requirements for MaineCare, Maine’s Medicaid plan, did not warrant a temporary restraining order (TRO) against the change in the state plan (Bourgoin v Sebelius, February 28, 2013, Woodcock, J). In declining to issue a TRO, the court focused only on the very narrow time period between the court’s hearing of the motion for a TRO and the date on which the court is likely to rule on the motion for a preliminary injunction. While the disabled adults in MaineCare unquestionably face financial hardship, the court held, their case did not present the type of emergency that justifies a TRO.

Basis of class action. CMS, the federal agency that administers Medicaid for Kathleen Sebelius, the Secretary of HHS, approved the Maine state plan change on January 7, 2013. A class of disabled adults (the class) asked for a TRO vacating the Secretary’s approval of more restrictive eligibility requirements for MaineCare. They claimed that the changes violated a section of the Affordable Care Act (ACA) (P.L. 111-148, P.L. 111-152) that generally prohibits participating states from making their eligibility standards, methodologies, or procedures more restrictive between March 23, 2010, and the date that the Secretary determines the state’s health insurance exchange is fully operational.

This “maintenance of effort” requirement codified at 42 USC sec. 1396a(gg)(1) contains an exception with respect to non-pregnant, non-disabled adults whose income exceeds 133% of the federal poverty level (FPL). To use the exception, a participating state must certify to the Secretary of HHS that it has or projects to have a budget deficit.

State plan amendment. On March 23, 2010, Maine calculated countable income by applying an additional disregard amount equal to 50% of the FPL. Subsequently, the Maine Legislature passed a law authorizing the state Medicaid agency to restrict MaineCare eligibility contingent on receiving from CMS a written waiver of the maintenance of effort requirements or a written notification that such a waiver is not necessary. On December 20, 2011, the Commissioner of the state agency submitted a letter to the Secretary certifying a budget deficit in state fiscal year 2013, and on August 1, 2012, the Commissioner submitted the disputed State Plan Amendment (SPA) to CMS, that reduced the additional disregard from 50% of the FPL to 40% of the FPL.

Irreparable harm. The motion for a TRO alleged that approximately 6000 people would lose their health coverage on March 1, 2013, because of the change in financial eligibility standards. The exception to the ACA “maintenance of effort” requirement does not apply to the disabled adults who make up the class requesting the TRO and a preliminary injunction against the Secretary’s approval of the change, they argued. The Secretary disagreed, based on an interpretation of the language of the Medicaid statutes as a whole. The Medicaid statute generally does not authorize coverage of subgroups, she said, and state plans must cover, or not cover, groups as a whole.

Ruling. The court said that the procedural posture of this case falls between a motion for a TRO and a motion for a preliminary injunction. In this case, the timing of the motion for a TRO precluded an evidentiary hearing and required the court to make a decision one day after receiving the reply brief of the class. Given the complicated legal questions involved and the rushed consideration the parties and the court have been forced to give those questions at this stage, the court concludes that the class of disabled adults did not carry their burden to convince the court of the “strong likelihood” of their success on the merits. At the time of the court’s decision, the harm the class alleged was speculative, and the cost to the United States or to the State of Maine if the TRO was granted were unclear. The motion for the TRO was denied.

The case number is 2:13-cv-00055-JAW.

Attorneys: Caroline L. Wolverton, United States Department of Justice, for Kathleen Sebelius, Secretary, United States Department of Health and Human Services.

MainStory: TopStory EligibilityNews MedicaidNews CMSNews MaineNews

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