Maine challenges Medicaid expansion requirements, citing coercion
Maine challenges expansion, citing coercion
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?”