Michigan Medicaid Can’t Dodge Immigrant Coverage Suit

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By Matthew Loughran

Michigan’s Medicaid agency will have to face claims it violated federal law by erroneously assigning noncitizen residents to a lower level of coverage than that for which they were eligible ( Unan v. Lyon , 2017 BL 105090, 6th Cir., No. 16-1185, 3/31/17 ).

A split panel of the U.S. Court of Appeals for the Sixth Circuit March 31 revived claims that the state Department of Health and Human Services violated the Medicaid Act when it assigned noncitizen residents and refugees to Emergency Services Only Medicaid coverage without providing the individuals an opportunity to prove that they were actually eligible for comprehensive Medicaid coverage. The court said efforts by the state to address the errors in assignment didn’t mean the claims by the plaintiffs couldn’t still be heard by the court.

The case shows the difficulties that states face when trying to comply with Medicaid requirements of the Affordable Care Act. The errors allegedly occurred as a result of Michigan’s attempt to implement various systemic changes mandated under the ACA. The state says it has since fixed the problem and assigned all applicants to the proper level of coverage.

Technical Difficulties Blamed

The majority opinion, written by Judge Karen Nelson Moore, reversed and remanded a decision by the U.S. District Court for the Eastern District of Michigan. The federal trial court had ruled the concerns of the Medicaid applicants couldn’t be heard by a court because the state’s efforts to fix the problems had resolved the issue.

Moore disagreed, saying the issues presented by the Medicaid applicants were so transitory that they could evade review by being addressed for identified class representatives before the court has a chance to rule on whether to certify the case as a class action.

Judge Helene N. White filed a separate opinion, agreeing with most of Moore’s opinion. White departed from Moore only in finding the state hadn’t attempted to “pick off” possible class representatives by only fixing the coverage eligibility for any named plaintiffs that were brought to the state’s attention.

“We are very pleased with the decision as far as it went,” Edward J. Hoort, director of the Center for Social Justice in Saginaw, Mich., told Bloomberg BNA.

“The entire case is somewhat perplexing to me and I understand why they remanded it for further proceedings because there was very little on the record,” he added.

Hoort, whose organization represented the Medicaid applicants, said the state’s technical problems may have explained the errors, but it didn’t excuse them.

“The assistant attorneys general in our very first meetings admitted that we were correct and blamed everything on a computer program, which really isn’t a defense for violating federal law,” he said.

Hoort added that the provision permitting noncitizen residents and refugees to receive Medicaid funding had been in place for many years and the state had been able to deal with such applications successfully before putting in the new computer system.

“The last three cases we have filed against the state, the defense has been that it’s the computers’ fault,” he said.

The state hasn’t yet determined whether to pursue the appeal further by either asking for a review by the full complement of judges on the Sixth Circuit or by petitioning the U.S. Supreme Court for review.

“At this time, we are reviewing the court’s decision to determine what future action may be appropriate,” Jennifer Eisner, public information officer for the Michigan DHHS, told Bloomberg BNA.

Dissent Says Relief Has Been Granted

Judge Jeffrey S. Sutton wrote a dissenting opinion, arguing the state’s efforts to fix the error in the computer system had effectively removed the court’s jurisdiction to hear the case.

According to Sutton, the state showed that it had provided sufficient relief for all of the proposed class members by providing them retroactive Medicaid benefits and adequate notice of their benefit decisions.

“That human error may lead to future erroneous assignments or computer code mistakes does not justify a lawsuit that seeks a never-ending injunction,” he said.

The Medicaid applicants are represented by the Michigan Immigrant Rights Center in Kalamazoo, Mich., and the Center for Social Justice in Saginaw, Mich. The state is represented by the Office of the Attorney General of Michigan in Lansing, Mich.

To contact the reporter on this story: Matthew Loughran in Washington at mloughran@bna.com

To contact the editor responsible for this story: Peyton M. Sturges at PSturges@bna.com

For More Information

The court's opinion is at http://src.bna.com/nA9.

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