April 28

Federal Medicaid Law Preempts Florida’s Reimbursement Statute, U.S. Court Rules

In 2008, then 13-year-old Gianinna Gallardo was struck by a vehicle after getting off of a school bus, leaving her in a persistent vegetative state and unable to care for herself in any manner.  Her parents filed a lawsuit against the driver of the vehicle, the school bus driver and the school district.  The case eventually settled for $800,000, or about 4 percent of the case’s $20 million value.  Because Medicaid had provided $862,688.77 in medical payments on Gianinna’s behalf, her attorney advised the Agency for Health Care Administration (AHCA), Florida’s Medicaid agency, of the settlement.   The attorney also advised the agency that $35,367.52 of the settlement represented past medical expenses that were recoverable by AHCA.

Florida’s reimbursement statute uses a uniform formula in which the recipient’s gross settlement is first reduced by 25 percent to account for attorney fees, the remainder is divided in half, and AHCA is then entitled to recover the lesser of its total medical payments or one half.   Under this formula, AHCA would recover $323,508.29 in medical payments from Gianinna’s settlement. 

Gianinna’s parents filed suit against the agency in federal court seeking an injunction and a declaration that Florida’s reimbursement statute violates federal law inasmuch as it allows the state to recover from the portion of her settlement beyond that allocable to past medical expenses.  AHCA countered that it was entitled to satisfy its lien from the portion of the settlement representing compensation for both past and future medical expenses. The parties filed cross motions for summary judgment.

The U.S. District Court, N.D. Florida, grants the Gallardos’ motion for summary judgment and denies AHCA’s motion.  The court finds that, consistent with the U.S. Supreme Court’s decision in Arkansas Department of Health and Human Services, et al. v. Ahlborn (547 U.S. 268 (2006)), AHCA is entitled to recover for past medical payments it made on Gianinna’s behalf only from that portion of the settlement allocated to past medical expenses.  The court rules that where, as here, the state reimbursement law explicitly allows for recovery from the portion of the settlement attributable to future medical care, that portion of the state law violates, and is preempted by, federal Medicaid law.

For the full text of this opinion, click here.

April 21

Medicaid Applicants Who Did Not Receive Post-Default Notice Are Entitled to Summary Judgment

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 U.S. district court granted the applicants a preliminary injunction, holding that the applicants showed a likelihood of success on the merits based on federal and state regulations. The applicants filed a motion for summary judgment. The state argued that the applicants did not have standing because they did not show that they were injured by not receiving another notice.

The U.S. District Court, Eastern District of New York, grants the applicants’ motion for summary judgment and makes the preliminary injunction permanent. According to the court, the applicants demonstrated irreparable injury because the wrongful denial of Medicaid benefits is “the type of non-monetary, imminent harm that is properly characterized as irreparable.”

For the full text of this decision, go to: http://cases.justia.com/federal/district-courts/new-york/nyedce/2:2009cv05248/298636/162/0.pdf?ts=1490887205

April 19

HHS/CMS Letter to Governors Signals Medicaid Priorities

In a letter to governors, Secretary of Health and Human Services Tom Price and Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma outline the key areas the administration wants to work on with states. The letter describes “a new era” where states have more freedom to design programs to meet the diverse needs of their populations.

Included as a priority in the letter is making the state plan amendment process “more transparent, efficient, and less burdensome,” including facilitating expedited review of waivers. The letter indicates that CMS will be more likely to approve waiver programs that have already been approved in another state. The letter also states that CMS will provide extra time for states to comply with the 2014 Home and Community-Based Services Rule.

Other priorities included in the letter are supporting innovative approaches to increasing employment and community engagement, aligning Medicaid with private insurance, and providing states with more tools to address the opioid crisis.

To read the letter, click here.

April 17

Brothers’ Dispute Over Mother’s Nursing Home Placement Is Not Domestic Violence

R.G was the attorney-in-fact and primary caregiver for his parents. After R.G.’s mother fell ill, R.G. wanted to place his mother in a nursing home. R.G’s brother objected to this plan, but R.G. went ahead and had his mother admitted to a nursing home without his brother’s consent. R.G.’s brother sent angry and threatening texts and emails to R.G. as well as emails expressing his desire to find a way to care for their parents in their home. Eventually the men got into a physical altercation in which R.G.’s brother shoved R.G.

R.G. filed for a restraining order against his brother under the Prevention of Domestic Violence Act. The trial judge ruled that R.G. was harassed and assaulted and issued the restraining order. R.G.’s brother appealed, arguing that R.G. did not meet the definition of a victim of domestic violence.

The New Jersey Superior Court, Appellate Division, reverses, holding that R.G.’s brother’s actions did not amount to domestic violence. The court finds that there was insufficient evidence that R.G.’s brother purposely acted to harass R.G., ruling that “a mere expression of anger between persons in a requisite relationship is not an act of harassment.”

For the full text of this decision, go to: http://njlaw.rutgers.edu/collections/courts/appellate/a0945-15.opn.html

For New Jersey ElderLawAnswers member Donald D. Vanarelli’s more detailed summary of the case, click here.

April 14

Federal Medicaid Law Preempts Less Restrictive State Regulation Regarding Annuities

The U.S. Court of Appeals for the Sixth Circuit rules that a case by the family of a Kentucky Medicaid recipient challenging the state’s adherence to federal law regarding spousal annuities rather than to a less restrictive state regulation is dismissed because federal law preempts the state regulation. Singleton v. Commonwealth of Kentucky (6th Cir., No. 16-5596, Dec. 6, 2016).

Claude Singleton entered a nursing home and applied for Medicaid. His wife, Mary, purchased an annuity with herself as annuitant. Ms. Singleton wished to name the state as remainder beneficiary up to the amount of Medicaid paid on her behalf. State regulations provide that the state must be named remainder beneficiary for the amount of Medicaid benefits paid on behalf of the annuitant, and this did not change even after federal Medicaid law was amended in 2006 to require that states be named as a remainder beneficiary for Medicaid benefits paid on behalf of the institutionalized individual.  However, Ms. Singleton’s attorneys – the Lexington, Kentucky, ElderLawAnswers member firm of McClelland & Associates, PLLC — informed her that the state Medicaid agency’s branch manager would view structuring the annuity pursuant to the state’s regulation as a transfer for less than market value, so Ms. Singleton changed the state’s remainder beneficiary amount to Medicaid paid on behalf of Mr. Singleton.  

After Ms. Singleton died, her children, the annuity’s secondary beneficiaries, sued the secretary of the state Medicaid agency, along with other parties, in federal court, arguing that state regulations may be less restrictive than federal law and that the branch manager’s alleged policy of rejecting annuities drafted pursuant to Kentucky’s own statute was improper. The secretary of state filed a motion to dismiss, claiming immunity. The district court determined the case should not be dismissed because the secretary of state was not immune, and she appealed.

The U.S. Court of Appeals for the Sixth Circuit grants the secretary’s motion to dismiss, holding that federal law preempts the state regulation. According to the court, states may pass less restrictive laws that make additional people eligible for Medicaid, but because this regulation does not extend care to more individuals,  the secretary “was correct that federal law required her to impose a look-back penalty on couples who structured their annuities to avoid paying the state back for the cost of care.”

For the full text of this decision, go to: http://www.opn.ca6.uscourts.gov/opinions.pdf/16a0283p-06.pdf

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