In a case involving minor Medicaid recipients, Maryland's high court rules that state law may be used to enforce the Medicaid statute. Jackson v. Millstone (Md., No. 48, June 21, 2002).
The Maryland Department of Health and Mental Hygiene denied prior authorization for Medicaid coverage of liver transplants to two minors because the transplants were not regarded as 'appropriate.' Maryland's Medicaid regulations require that in order to be approved for coverage, procedures must be both 'necessary' and 'appropriate.' COMAR 10.09.06.06C. Under the regulations, 'appropriate' means 'an effective service that can be provided, taking into consideration the particular circumstances of the recipient and the relative cost of any alternative services which could be used for the same purpose.' The minors sought injunctive and declaratory relief, arguing that federal law requires only that the medical service be 'necessary,' and that by requiring that the service also be 'appropriate' the state regulation adds an element not allowed by federal law. The circuit court granted the Department's motion to dismiss for failure to state a claim. The court did not explain why the complaint failed to state a claim.
The Court of Appeals of Maryland, the state's highest court, rules that one of the minors may seek prospective relief because the 'not appropriate' standard might be applied to him in the future. The court goes on to hold that 'when a statute or regulation is invalid, sovereign immunity does not preclude a declaratory judgment action or suit for an injunction' against the responsible governmental official. The court relies on a provision of the Maryland Administrative Procedure Act that allows petitions for declaratory injunction for those challenging the validity of a regulation that threatens to interfere with a legal right of privilege. In addition, the Act expressly provides that '[t]he unit that adopted the regulation shall be made a party to the proceeding under this section.' The court finds this to be a waiver of sovereign immunity by legislation. The court also finds that 42 U.S.C. § 1983 may be used to enforce the Medicaid law's requirement that all medically necessary care be provided to minors.
On the merits, the court agrees with the plaintiffs that the 'appropriate' requirement violates federal law by imposing an additional criteria upon qualified recipients.
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