Maine chal­lenges Med­i­caid ex­pan­sion re­quire­ments, cit­ing co­er­cion

Maine chal­lenges ex­pan­sion, cit­ing co­er­cion

Modern Healthcare - - FRONT PAGE - Joe Carl­son

The U.S. Supreme Court ruled in June that Congress can­not un­duly co­erce states into ex­pand­ing their Med­i­caid pro­grams, caus­ing health­care le­gal ex­perts to think it was only a mat­ter of time be­fore states started ap­ply­ing that rea­son­ing to other as­pects of the re­form law they didn’t like. The state of Maine did ex­actly that last week.

In a pe­ti­tion for re­view filed with the 1st U.S. Cir­cuit Court of Ap­peals, Maine At­tor­ney Gen­eral Wil­liam Schneider asked

“Is each and ev­ery lit­tle change (to Med­i­caid) now go­ing to be­come some­thing that the states bat­tle?”

—Joel Hamme, lawyer

the judges to rule that Maine should not have to main­tain its gen­er­ous Med­i­caid el­i­gi­bil­ity rules dur­ing a bud­get cri­sis be­cause the re­form-law re­quire­ment for states to main­tain the Med­i­caid sta­tus quo un­til 2014 is un­con­sti­tu­tion­ally co­er­cive.

Maine says it could lose all of its fed­eral Med­i­caid fund­ing—22% of the state bud­get—if it re­fused to com­ply with the re­form law’s so-called main­te­nance-of-ef­fort re­quire­ment. “This pro­vi­sion clearly ‘is a gun to the head’ of Maine,” the pe­ti­tion says, quot­ing lan­guage from the 7-2 Supreme Court de­ci­sion that struck down the Af­ford­able Care Act’s manda­tory Med­i­caid ex­pan­sion in June.

But Joel Hamme, a Wash­ing­ton prin­ci­pal with Power Pyles Sut­ter and Verville, said a 1st Cir­cuit rul­ing in fa­vor of Maine could open the flood­gates for other state chal­lenges, not only of the main­te­nanceof-ef­fort rules but other as­pects of the re­form law that they deem co­er­cive, such as min­i­mum ben­e­fit lev­els.

“The im­pli­ca­tions are pretty se­ri­ous and grave if the courts are go­ing to go off in that di­rec­tion,” Hamme said. “Is each and ev­ery lit­tle change (to Med­i­caid) now go­ing to be­come some­thing that the states bat­tle? Maine’s suit sort of sug­gests, yes, that is what is go­ing to hap­pen.”

Hamme, a past pres­i­dent of the Amer­i­can Health Lawyers As­so­ci­a­tion, said the eas­i­est so­lu­tion for the 1st Cir­cuit would be “to punt” by rul­ing that the Supreme Court de­ci­sion was lim­ited to the is­sue of Med­i­caid el­i­gi­bil­ity ex­pan­sion. That would still al­low the Supreme Court jus­tices to de­fine a co­er­cion stan­dard in an ap­peal.

The case in Maine springs from ef­forts by the state Leg­is­la­ture to cut about $20 mil­lion from the $879 mil­lion Med­i­caid pro­gram.

The cuts would be made by re­mov­ing ben­e­fits for an es­ti­mated 36,000 peo­ple by chang­ing the el­i­gi­bil­ity rules in three cat­e­gories of ben­e­fi­cia­ries, as a way of meet­ing the state’s re­quire­ment to have a bal­anced bud­get in place by Oct. 1. Maine of­fi­cials said their pro­gram would still ex­ceed fed­eral min­i­mums and na­tional av­er­ages for el­i­gi­bil­ity rules.

Such a change re­quires a waiver from the CMS, be­cause the re­form law’s main­te­nanceof-ef­fort rule forces states to keep in­tact the Med­i­caid rules they had in place on March 23, 2010—which were ac­tu­ally the ben­e­fits that states have vol­un­tar­ily main­tained since 2008 in or­der to qual­ify for en­hanced Med­i­caid fund­ing in the Amer­i­can Re­cov­ery and Rein­vest­ment Act. The re­form law im­poses MOE rules for adult ben­e­fi­cia­ries un­til 2014 and for chil­dren un­til 2019.

On Aug. 1, the CMS no­ti­fied the state that it would not grant its re­quest for an ex­pe­dited de­ci­sion on the pro­posed changes. That prompted the state to re­quest ad­min­is­tra­tive re­view un­der an ar­gu­ment chal­leng­ing the very le­gal­ity of the MOE rule, at least as ap­plied to Maine, be­cause of co­er­cion.

A spokesper­son for the CMS de­clined to re­spond di­rectly to Maine’s lit­i­ga­tion, but said in an e-mailed state­ment, “We will re­view this mat­ter care­fully and ren­der a de­ci­sion as soon as our re­view is com­plete.”

Hamme said sim­i­lar chal­lenges may soon fol­low, be­cause the high court’s co­er­cion rul­ing left many lawyers scratch­ing their heads, es­pe­cially since the re­form law’s ex­pan­sion is al­most en­tirely funded by the fed­eral gov­ern­ment: “If that’s co­er­cive, then what isn’t co­er­cive about Med­i­caid?”

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