Court Dismisses Nursing Home's Lawsuit Against State for Denying Resident's Medicaid Application

A federal district court dismisses a case brought against the state by a nursing home on behalf of a resident who was denied Medicaid benefits due to her life insurance policy, ruling that the nursing home did not have authority to file a federal lawsuit on the resident's behalf after the resident's death. Hillspring Health Care Center, LLC v. Dungey (U.S. Dist. Ct., S.D. Ohio, No. 1:17-cv-35, Jan. 4, 2018).

Barbara Graham entered a nursing home and applied for Medicaid. The state denied her application because a $10,000 life insurance policy was considered excess resources. Ms. Graham died while her application was pending. The nursing home appealed the state's decision on her behalf, arguing that Ms. Graham did not have the ability to convert the life insurance to cash. After the state denied the appeal, a trial court affirmed the denial of benefits.

The nursing home sued the state in federal court, arguing that the state violated Medicaid law by denying the application. The state filed a motion to dismiss.

The United States District Court, Southern District of Ohio, grants the motion to dismiss. The court rules that the nursing home's claim is moot because Ms. Graham is deceased and can no longer benefit. According to the court, the nursing home, as Ms. Graham's authorized representative, does not have "the authority to maintain a federal lawsuit on [Ms.] Graham's behalf after her death and after a final decision on [Ms.] Graham's Medicaid eligibility has been made." In addition, the court rules that the claim is barred under the Rooker-Feldman doctrine because "a federal district court lacks subject matter jurisdiction to review final adjudications of a state court."

For the full text of this decision, click here.

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