Federal Appeals Court Deals Another Blow to Challengers of Medicaid Transfer Law

A federal appeals court has dismissed a lawsuit filed by the consumer group Public Citizen, challenging the constitutionality of the Deficit Reduction Act of 2005 (DRA). The court ruled that it was not authorized to investigate Congressional proceedings to determine whether the version of the bill signed into law was the same version passed by both the House and the Senate.

Among various cuts in social programs, the DRA placed severe restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. The legislation barely passed both houses of Congress, but the President signed a bill that had been passed by the Senate but not the House of Representatives.

The Senate enacted the DRA with a provision allowing Medicare to pay beneficiaries for oxygen care for 13 months, but the House passed a version allowing for a 36-month payment -- an estimated $2 billion difference. A Senate clerk later discovered the error and changed the language to what the Senate originally approved. The Speaker of the House and President Pro Tem of the Senate then certified the bill as passed and sent it to the President for his signature.

Public Citizen sued to challenge the DRA's constitutionality because the version of the legislation voted on by the House was not identical to that passed by the Senate, in apparent violation of the U.S. Constitution's requirement that both chambers of Congress pass identical versions of a bill before the bill can be signed into law by the President. (See "Consumer Group Sues Over 'Law' Changing Medicaid Rules.")

A federal district court ruled that under the "enrolled bill" rule that the U.S. Supreme Court articulated in its decision in the late-19th century case Marshall Field & Co. v. Clark (143 U.S. 649 (1892)), once the President has signed a bill that the presiding officers of both houses attest is the bill passed by Congress, a court should not look behind the President's signature to question whether it in fact passed both houses. According to the district court, although the Supreme Court's decision was in "some respects outdated," it was still applicable law that should be applied broadly.

Public Citizen appealed, arguing that the Marshall Field decision still allows courts to entertain other evidence that a bill did not pass both houses in identical form. The group further argued that later decisions of the Supreme Court narrowed the applicability of the Marshall Field rule.

The U.S. Court of Appeals for the District of Columbia Circuit affirms the district court's ruling, finding that the court properly applied Marshall Field's 'enrolled bill' rule. Accordingly, even if other evidence from the Congressional record indicates that the House voted to enact a different provision than that which it signed, the courts are barred from considering this outside evidence.

In a statement, Public Citizen expressed disappointment that "the courts have not been willing to stand up for a basic principle of our Constitution: the requirement that both chambers of Congress pass identical versions of a bill before that bill can be signed into law by the president." The group said it had not yet decided whether to pursue the case further.

Public Citizen's suit was one of a number of lawsuits filed in the wake of the DRA. Another federal court dismissed lawsuits filed by an independent professional student loan firm, two individual Federal Family Education Loan (FFEL) institutions, and members of the House of Representatives, holding that in each case the plaintiffs' lacked the legal standing to bring such a suit. A lawsuit filed by ElderLawAnswers member attorney Jim Zeigler is still pending.

To download the full text of this decision in PDF format, go to: https://pacer.cadc.uscourts.gov/docs/common/opinions/200705/06-5232a.pdf.
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