Medicaid Recipients Who Wanted to Deduct Pre-Eligibility Expenses From Income Do Not Have Right to Sue in Federal Court

A U.S. district court holds that Illinois Medicaid recipients who wanted to deduct pre-eligibility nursing home expenses from their income for the purposes of determining their contribution do not have a private right of action to sue under federal law. Nasello v. Eagleson (U.S. Dist. Ct., N.D. Ill., No. 18 C 7597, Oct. 8, 2019).

A group of nursing home residents in Illinois each incurred nursing home expenses, which they still owe. They applied for Medicaid, and the state approved their applications as long as they contribute a portion of their income to the cost of their care. The state did not deduct their pre-eligibility nursing home expenses from their income when determining how much they were required to contribute.

The applicants sued the state in federal court, arguing that Medicaid regulations require that prior medical expenses should be offset from the calculation of their income. The applicants sued under 42 U.S.C. § 1396a(a)(8), which provides that anyone wishing to apply for medical assistance shall have the opportunity to do so, as well as § 1396a(a)(17) and § 1396a(r)(1)(A), which require the state to take medical expenses into account when determining income. The state filed a motion to dismiss.

The U.S. District Court, Northern District of Illinois, grants the motion to dismiss, holding that the recipients do not have a federal right of action. According to the court, § 1396a(a)(17) and § 1396a(r)(1)(A) do not contain a private right of action because they are phrased in terms of "what a state must do, rather than any individual benefitted." While the court notes that the recipients do have a private right of action under § 1396a(a)(8), the court rules that because they were not denied Medicaid benefits, they did not state claim under that section of Medicaid law.

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