Federal Judge Bars Medicaid Suits Against States

In a decision that could affect millions of nursing home residents receiving or hoping to receive assistance from Medicaid, a federal district court has ruled that private individuals who believe they are not receiving proper benefits under their state's Medicaid program cannot sue state officials.

The case, Westside Mothers v. Haveman, No 99-CV-73442-DT (E.D. Mich.), involves a lawsuit brought by a group of parents of children receiving Medicaid who charged that the state of Michigan was failing to provide medical services under the "early and periodic screening, diagnosis and treatment" benefits program, as required by federal Medicaid law. Although the case pertains to children, it is important for elderly Medicaid recipients as well, many of whom sue over how their states interpret federal Medicaid law.

While the federal government sets out the main rules under which Medicaid operates, each state runs its own program and may interpret the federal rules in its own way. Medicaid recipients who believe that their state is not giving them the benefits mandated by the federal government, or that the state is unfairly excluding them from the Medicaid program, have had the option of suing the state.

Up until now, courts have ruled that while states can choose not to participate in the Medicaid program, if they do participate, they must comply with federal Medicaid law. But Judge Robert H. Cleland of the Eastern District Court in Michigan ruled that the constitutional principle that federal statutes are the supreme law of the land does not apply to programs like Medicaid. The Medicaid program, the judge said, is a contract between two sovereign governments'”the federal government and the state. Medicaid recipients are the beneficiaries of that contract, said Judge Cleland, but they have no right to sue to enforce the contract. The only recourse for Medicaid recipients who believe that their state is not complying with federal Medicaid law, the judge said, is to persuade the federal Department of Health and Human Services to cut off the state's federal Medicaid funds.

An appeal of the ruling is planned. Sara Rosenbaum, a professor of health law and policy at George Washington University, told The New York Times that "[i]f the ruling stands, it is the end of the Medicaid program as a source of insurance. It makes Medicaid unenforceable by private individuals. The ability to enforce your right to benefits is the essence of insurance. Without that ability, you no longer have insurance."