Douglas v. Babcock

• Decision Date: 25 March 1993
• Docket Number: No. 92-1231,92-1231
• Citation: 990 F.2d 875
• Parties: , 40 Soc.Sec.Rep.Ser. 568, Medicare & Medicaid Guide P 41,440 Reba DOUGLAS, for herself and all others similarly situated, Plaintiff-Appellant, v. C. Patrick BABCOCK, Director of the Michigan Department of Social Services, and Louis Sullivan, Secretary of Health and Human Services, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 875

990 F.2d 875

61 USLW 2601, 40 Soc.Sec.Rep.Ser. 568,

Medicare & Medicaid Guide P 41,440

Reba DOUGLAS, for herself and all others similarly situated Plaintiff-Appellant, v. C. Patrick BABCOCK, Director of the Michigan Department of Social Services, and Louis Sullivan, Secretary of Health and Human Services, Defendants-Appellees.

No. 92-1231.

United States Court of Appeals Sixth Circuit.

Argued Dec. 14, 1992.

Decided March 25, 1993.

Edward J. Hoort (argued and briefed), Legal Services of Southern Michigan, Flint, MI, for plaintiff-appellant.

Erica Weiss Marsden, Office of Atty. Gen. of Michigan, Lansing, MI, Robert Haviland, Asst. U.S. Atty., Flint, MI, Jennifer H. Zacks (argued and briefed), Michael Jay Singer, U.S. Dept. of Justice, Appellate Staff, Civ. Div., Washington, DC, for defendants-appellees.

Before: MERRITT, Chief Judge; and GUY and RYAN, Circuit Judges.

RYAN, Circuit Judge.

Reba Douglas seeks pregnancy-related Medicaid benefits. She appeals from a grant of summary judgment in favor of the Director of the Michigan Department of Social Services (MDSS) and the Secretary of Health and Human Services (HHS). Douglas presents the following issues on appeal:

1. Whether the district court erred in finding Douglas ineligible for pregnancy-related benefits under 42 U.S.C. § 1396a(a)(10)(A)(i)(III) or (IV), in light of a previous determination that she was uncooperative in establishing the paternity of her oldest child; and

2. Whether the denial of benefits violated Douglas's right to equal protection under the law.

We find the district court correctly determined these issues and we shall affirm.

I.

Reba Douglas, who was pregnant and had two minor children, applied for Medicaid prenatal and postpartum medical benefits in 1989. MDSS denied Douglas's application because the state Aid to Families with Dependent Children (AFDC) agency found she had failed to cooperate, without good cause, in establishing the paternity of her oldest child, Ezekio, who was born in 1979, and assigning rights for his support. This finding of noncooperation was made pursuant to 42 U.S.C. § 602(a)(26) and 45 C.F.R. § 232.12(a), as administered under the Michigan statutory scheme.

Douglas filed suit in the United States District Court for the Eastern District of Michigan, contesting the denial of prenatal care for herself and all others similarly situated. After the district court denied class certification, Douglas proceeded individually, contending that the AFDC cooperation and assignment provisions with respect to Ezekio did not apply to eligibility for Medicaid prenatal benefits for her current pregnancy, and that HHS's interpretation of the statute violated her right to equal protection under the law. She sought injunctive relief.

The district court granted a preliminary injunction barring MDSS and HHS from "interpreting the assignment and cooperation requirements of the Medicaid statute to bar prenatal ... care of pregnant women who have complied with the requirements with respect to the child in utero."

HHS appealed issuance of the injunction to this court. ¹ While the appeal was pending, Congress amended 42 U.S.C. § 1396k to exempt a specific group of pregnant women, described in 42 U.S.C. § 1396a(l )(1)(A), from its cooperation requirements. Following oral argument, this court remanded the case to the district court for consideration of the effect of the 1990 amendment. ²

On remand, the district court found that Douglas was not covered by the 1990 amendment. The court granted summary judgment for MDSS and HHS, concluding that "following the plain language of the statute," Douglas was not eligible for Medicaid prenatal care, because she had failed to cooperate. The district court denied Douglas's equal protection claim, finding that the challenged statute was rationally related to a legitimate government interest. 792 F.Supp. 1030. Douglas perfected a timely appeal to this court.

II.

This court reviews a grant of summary judgment de novo. Brooks v. American Broadcasting Cos., 932 F.2d 495, 500 (6th Cir.1991). This appeal raises a question of statutory construction, a legal question we review de novo. Cf. Smith v. Commissioner, 937 F.2d 1089, 1096 (6th Cir.1991).

III.

Douglas argues that the district court erred in denying her the requested prenatal care benefits because she is "categorically eligible" for Medicaid benefits as a low-income woman under 42 U.S.C. § 1396d(n)(1)(C) pursuant to 42 U.S.C. § 1396a(a)(10)(A)(i)(III) or (IV). Douglas contends that since she meets the income and resource requirements referenced in section 1396d(n)(1)(C), she is eligible for Medicaid prenatal care under section 1396a(a)(10)(A)(i)(III ). Douglas next argues that even if she is ineligible under section 1396a(a)(10)(A)(i)(III ), she is alternatively eligible under section 1396a(a)(10)(A)(i)(IV ).

As a final alternative argument, Douglas contends that even if she is determined to be ineligible for Medicaid prenatal benefits under a literal reading of the applicable statutes, she should nevertheless receive the benefits because such a reading would frustrate Congress's intent to provide comprehensive prenatal Medicaid benefits for low-income women. She urges us to not read the statutes "too rigidly" in order to promote what she deems as the more fundamental congressional goal of promoting prenatal care for low-income women.

The Secretary contends that under the provisions of section 1396k, Douglas's previous paternity noncooperation makes her ineligible for Medicaid pregnancy-related benefits. He argues that Douglas is ineligible both under part III and part IV of section 1396a. The Secretary maintains that the cooperation requirement of section 1396k applies to all Medicaid applicants unless otherwise specifically excepted, and applicants covered by part III have not been specifically excepted. While the Secretary acknowledges that applicants covered by part IV have been excepted from the cooperation requirement, he argues that Douglas is not a member of this group. Thus, according to the Secretary, Douglas was ineligible for pregnancy-related Medicaid benefits both before and after the enactment of the 1990 amendment to section 1396k.

IV.

Medicaid was established in 1965 as a venture in "cooperative federalism," to "provid[e] federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons." Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct. 2671, 2680, 65 L.Ed.2d 784 (1980). States that choose to participate in Medicaid are subject to the statutory terms of the program and the regulations promulgated by the Secretary of HHS. 42 U.S.C. § 1396a.

A. Section 1396k

Section 1396k of the Medicaid Act provides several mechanisms by which federal and state governments can recoup some of the costs of medical care provided to low-income persons by pursuing third parties legally obligated to pay these medical costs. Section 1396k contains several interrelated provisions designed "[f]or the purpose of assisting in the collection of medical support payments and other payments for medical care owed to recipients...." 42 U.S.C. § 1396k(a).

First, section 1396k "require[s]" "as a condition of eligibility" that all applicants for Medicaid benefits "assign [to] the State any rights, ... the individual [or any other person who receives benefits for whom the applicant has the authority to execute an assignment] may have to support ... and to payment for medical care from any third party." 42 U.S.C. § 1396k(a)(1)(A).

Second, section 1396k requires that an applicant "cooperate with the State ... in establishing the paternity" of any "person who is eligible for medical assistance," and who is also "a child born out of wedlock...." 42 U.S.C. §§ 1396k(a)(1)(A) and (B). Until its amendment in 1990, the statute excused noncooperation in only one way: a woman would be excused from cooperating in establishing paternity if she was "found to have good cause." 42 U.S.C. §§ 1396k(a)(1)(B)(i) and (ii).

Finally, an applicant is required "to cooperate with the State in identifying, and providing information to assist the State in pursuing, any third party who may be liable to pay for care and services...." 42 U.S.C. § 1396k(a)(1)(C). A "good cause" exception is also available here.

In sum, in order to be eligible for medical assistance, a Medicaid applicant is required to assist the state by assigning any support and medical payment rights to the state, cooperating with the state in establishing the paternity of any minor child born out of wedlock for whom the applicant is legally responsible, and cooperating with the state in identifying and pursuing any third parties who may be liable to pay for medical care. The latter two requirements can be excused if the applicant is found to have "good cause."

MDSS found Douglas noncooperative, without good cause, in establishing the paternity of her oldest child, Ezekio. This determination was upheld on administrative appeal, where Douglas was represented by counsel. Obviously, the question that remains is whether section 1396k's requirements of assignment and cooperation apply to applicants for Medicaid prenatal benefits. Absent an explicit provision to the contrary, there is no reason to think they would not, because as stated above, all applicants "for medical assistance" are "required " to assign rights, and cooperate in establishing paternity and pursuing third parties.

B.

Sections 1396a(a)(10)(A)(i)(III) and (IV)

Against the backdrop of the assignment and cooperation section of the Medicaid Act are provisions establishing the eligibility requirements for prenatal care. A determination of such eligibility requires an eye-glazing examination of a labyrinthine maze of sections, and seemingly infinite subsections, of the Medicaid Act.

We begin in section 1396a(a)(10)(A)(i)(III ) which requires a state plan to make prenatal assistance available for...