Medicaid Applicants Entitled to Post-Default Notice Before Case Is Abandoned

A U.S. district court reverses a previous decision and grants a preliminary injunction to a group of Medicaid applicants who argued they are entitled to a post-default notice before their Medicaid application is considered abandoned. Fishman v. Daines (U.S. Dist. Ct., E.D. N.Y., No. 09-cv-5248(JFB)(ARL), March 4, 2016).

Once New York State determines a Medicaid applicant is no longer entitled to Medicaid, it sends a letter notifying the applicant that he or she may request a fair hearing. The state then sends two more letters, notifying applicants that a fair hearing has been requested and scheduled. If an applicant misses the hearing, a default judgment will be entered against him or her.

Two Medicaid applicants initiated a class action against the state of New York, claiming that the state does not provide proper notice before entering a default judgment. The applicants asked for a preliminary injunction, requiring the state to mail a default notice to applicants before their appeals are abandoned. The state Medicaid manual provides that a case is considered abandoned after the applicant misses a hearing and does not respond to a mailing inquiring whether the applicant wishes further action. The U.S. district court denied the preliminary injunction, finding that the applicants received sufficient notice. The applicants appealed, and the U.S. Court of Appeals for the Second Circuit reversed and remanded, ordering the district court to consider whether the rights conferred in the federal regulations governing dismissal of appeals are broader than what is guaranteed by the due process clause.

The U.S. District Court, Eastern District of New York, grants the preliminary injunction, holding that the applicants have shown a likelihood of success on the merits based on federal and state regulations. According to the court, federal regulation requires that the state cannot dismiss a Medicaid fair hearing request without good cause and the state Medicaid manual requires that notice be provided before a claim is abandoned, so before dismissing an appeal as abandoned, the state must send out a post-default notice.

For the full text of this decision, go to: https://www.gpo.gov/fdsys/pkg/USCOURTS-nyed-2_09-cv-05248/pdf/USCOURTS-nyed-2_09-cv-05248-2.pdf

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