A Maryland court declines to dismiss a suit by Medicaid long-term care beneficiaries over the state's failure to allow them to use their patient pay amount to pay off medical expenses incurred prior to determination of Medicaid eligibility. Smith v. McCann(Cir. Ct. Balt. City, No. 24-C-05-007421, March 10, 2006).
A class of Maryland recipients of Medicaid long-term care benefits filed suit over the state's refusal to allow them to deduct from their patient pay amount health care costs that they had incurred prior to becoming Medicaid-eligible. In response to the state's failure to allow deductions for pre-April 1, 2004, applicants, and its imposition of a three-month limit on prior medical expenses, the recipients sought injunctive and declaratory relief. (For background on the case, click here.)
The recipients claimed that the state's policies violate 42 U.S.C. § 1396a(r)(1)(A)(ii) of the federal Medicaid statute, which permits virtually unlimited deductions, as well as the Maryland Administrative Procedures Act because the challenged policies never went through the normal rule-making process. In a third count, the recipients alleged that the state violates 42 U.S.C. § 1396c(2), which provides for the Secretary of Health and Human Services to take action on a finding that a State plan is not in compliance with a the federal Medicaid statute. The recipients sought relief on the first and third counts under 42 U.S.C. § 1983. The state moved to dismiss, arguing that the recipients had failed to exhaust administrative remedies and that the statutes on which they base their § 1983 claims do not confer a private right of action.
The Circuit Court for Baltimore City rules that exhaustion of administrative remedies is not required before filing suit under § 1893, and that Maryland statutory authority to challenge the validity of a regulation in a court action trumps Maryland's otherwise strong exhaustion requirement for the state law claim. The court also rules that the medical expense deduction provision satisfies the requirement that there is an "unambiguously conferred [individual] right" for a § 1983 action under Gonzaga University v. Doe, 536 U.S. 273, 283 (2002). The same could not be said of the third count under the State Plan, and it was dismissed.
Maryland ElderLawAnswers member Ron M. Landsman is the lead attorney in the case. Co-counsels are longtime National Academy of Elder Law Attorneys member René H. Reixach of the Rochester, New York, firm of Woods, Oviatt & Gilman LLP and Cyril Smith and Carlos Angulo of the firm Zuckerman Spaeder LLP.
For the full text of this decision, click here.
For a copy of the complaint, click here.
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