Fulkerson v. COM'R, MAINE DEPT. OF HUMAN SERVICES, Civ. No. 92-238-P.

• Citation: 802 F. Supp. 529
• Decision Date: 13 August 1992
• Docket Number: Civ. No. 92-238-P.
• Parties: Vicki FULKERSON, et al., Plaintiffs, v. COMMISSIONER, MAINE DEPARTMENT OF HUMAN SERVICES, Defendant.
• Court: U.S. District Court — District of Maine

802 F. Supp. 529

Vicki FULKERSON, et al., Plaintiffs, v. COMMISSIONER, MAINE DEPARTMENT OF HUMAN SERVICES, Defendant.

Civ. No. 92-238-P.

United States District Court, D. Maine.

August 13, 1992.

Jack Comart, Augusta, Me., for plaintiffs.

Sue Jerome, Asst. Atty. Gen., Augusta, Me., for defendant.

MEMORANDUM DECISION ON DEFENDANT'S MOTION TO DISMISS COUNTS V AND VIII AND ON CROSS-MOTIONS FOR PARTIAL JUDGMENT ON A STIPULATED RECORD¹

DAVID M. COHEN, United States Magistrate Judge.

In its present posture, this class action raises the question whether final agency rules of the Maine Department of Human Services ("Department" or "DHS") requiring recipients of Medicaid to co-pay for certain medical services violate federal law.² DHS has moved to dismiss Counts V and VIII and the parties have otherwise submitted for decision on the merits, on the basis of a stipulated record, the claims asserted in Counts III, IV and VI.³ Any factual disputes as to these claims may therefore be resolved by the court. See Boston Five Cents Sav. Bank v. Secretary of Dep't of Hous. & Urban Dev., 768 F.2d 5, 11-12 (1st Cir.1985).

I. BACKGROUND

This action was brought by and on behalf of all current and future Medicaid recipients in the state of Maine who are currently seeking or will seek to obtain Medicaid coverage for services regarding which a co-payment obligation is imposed. A state is authorized by 42 U.S.C. § 1396o (a)(2) and (3) to assess recipients a nominal co-payment amount, as defined by the Secretary of the Department of Health and Human Services ("Secretary"), for each service covered by Medicaid with certain exceptions. No copayments may be imposed with respect to services furnished individuals under 18 years of age, pregnant women (in certain circumstances), certain residents of medical institutions and recipients of services provided by health maintenance organizations (referred to collectively by DHS as "individual exemptions"), as well as emergency services and family planning services (referred to by DHS as "service exemptions"). See also 42 C.F.R. § 447.53. The Secretary has established a maximum co-payment chargeable for each service determined in relation to the amount paid by the state for the service. Id. § 447.54(a)(3).⁴ The Secretary has further stated that a state plan implementing the Medicaid program "may provide for a cumulative maximum amount for all ... co-payment charges that it imposes on any family during a specific period of time." Id. § 447.54(d). Providers are prohibited by statute from denying services because of an eligible recipient's inability to pay a co-payment charge. 42 U.S.C. § 1396o (e); 42 C.F.R. § 447.15. However, a recipient who is unable to pay remains indebted to the provider for the required co-payment. Id.

In addressing the state's recent budget crisis, the Maine legislature enacted a statute requiring DHS to achieve certain cost savings in the Medicaid program by imposing on recipients co-payment obligations up to a specified amount per day per listed service or by reducing reimbursements to providers, or some combination of the two. Pub.L.1992, Chap. 780, Pt. R, § R-9, Stipulated Record p. 573.⁵ The statute requires that any co-payments be nominal in amount with monthly limits or exclusions per service category. Id. DHS has promulgated final rules revising the Maine Medical Assistance Manual ("Manual") which, effective September 1, 1992, implement the Maine law. These rules, which are the subject of the plaintiffs' challenge in this action, set forth a schedule of co-payment charges per service per day with monthly caps per service for eleven service categories covered by Medicaid.⁶See Notice— Medicaid Co-payments ("Notice"), Stipulated Record pp. 816-17. The rules do not provide for an aggregate cap on the total amount of co-payments that a recipient could owe per month. As explained by DHS at oral argument, the rules place complete responsibility on providers for determining whether a recipient is receiving an exempt service, for assessing co-payments against a recipient, for keeping track of the co-payments made by each recipient per service per month, for determining whether a monthly service cap has been met and for collecting co-payments that are owed by a recipient. See, e.g., Manual § 5.07-1(D), Stipulated Record p. 19. The rules state that no provider may deny services to a recipient for failure to pay a co-payment obligation and that providers must accept a recipient's representation that he or she is unable to pay. Id. § 5.07-1(C).

DHS further explained at oral argument that recipients will receive a new Medicaid card every month marked to signify whether they qualify for an individual exemption which excludes them from liability for co-payments under any circumstances. See, e.g., Notice, Stipulated Record p. 816. A "no" in the co-pay column of the card identifies individuals who are not required to pay any co-payment amount. Id. Along with this card, recipients will receive each month a notice that lists all of the individual exemptions and states that they have a right to a hearing if they believe themselves exempt and a "no" does not appear in the co-pay column of their card. See id. p. 817. Prior to the effective date of the co-pay rules, each recipient will receive a notice ("initial notice") that lists the individual exemptions, the service exemptions, a chart showing the co-payment charges per service based on cost of service and the daily and monthly co-payment caps per service and the statutory authority for imposition of co-payments. Id. The notice informs recipients that they may not be denied a service because of an inability to pay a co-payment obligation but that they may continue to owe the provider the co-payment amount. Id. p. 816. As in the case of the monthly notice, it is explained in the initial notice that if recipients believe they have been incorrectly classified they are entitled to a fair hearing and may request such a hearing by writing to DHS at the listed address. Id. p. 817. According to the initial notice, if a recipient has a dispute with a provider because he has been charged a co-payment amount although he is exempt, or has reached a daily or monthly cap, or has been charged the wrong amount or has been denied a service, he may call DHS at the listed telephone number for assistance. Id.

II. AVAILABILITY OF § 1983 REMEDY FOR COUNTS V AND VIII

The plaintiffs allege in Counts V and VIII that the co-payment rules violate 42 U.S.C. § 1396a(a)(30)(A) in two respects. That section requires that a state plan implementing the Medicaid program

provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan ... as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.

Id.

In Count V the plaintiffs specifically assert that the Department's co-payment policy, as embodied in the rules, "will result in an insufficient number of providers to ensure that Medicaid services are available to recipients at least to the extent that those services are available to the general population" and is therefore violative of the equal-access-to-care requirements of section 1396a(a)(30)(A) and 42 C.F.R. § 447.204.⁷ Complaint ¶ 60. In Count VIII the plaintiffs contend that the rules do not assure that Medicaid payments are consistent with efficiency, economy and quality of care as also mandated by section 1396a(a)(30)(A).⁸

DHS contends that recipients do not have a right to sue under section 1983 because subsection (a)(30)(A) is clearly intended to benefit service providers—not recipients— and that, in any event, its language is too ambiguous to create an enforceable right under section 1983. Defendant's Memorandum in Support of Motion to Dismiss Counts V and VIII at 4-8. The plaintiffs respond that the purpose of the Medicaid Act as a whole is to benefit recipients, see 42 U.S.C. § 1396a(a), that subsection (a)(30)(A) was clearly intended to ensure that recipients enjoy quality care and equal access to medical services and that these provisions are sufficiently specific and binding to be enforceable under section 1983. Plaintiffs' Memorandum in Opposition to Defendant's Motion to Dismiss Counts V and VIII at 1-5.

It is well-established that section 1983 provides a private cause of action for violations of federal statutes. Maine v. Thiboutot, 448 U.S. 1, 4, 100 S.Ct. 2502, 2504, 65 L.Ed.2d 555 (1980). The United States Supreme Court has recognized only two exceptions to this rule. No cause of action will lie where (1) "the statute does not create enforceable rights ... within the meaning of § 1983," or (2) "Congress has foreclosed such enforcement of the statute in the enactment itself." Wright v. City of Roanoke Redevelopment & Hous. Auth., 479 U.S. 418, 423, 107 S.Ct. 766, 770, 93 L.Ed.2d 781 (1987).

In deciding whether 42 U.S.C. § 1396a(a)(30)(A) creates "enforceable rights" I am to apply a three-part test. I must first consider whether the equal-access-to-care and efficiency requirements were "intended to benefit" the class plaintiffs. Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103, 106, 110 S.Ct. 444, 448, 107 L.Ed.2d 420 (1989) (citation and internal quotation marks omitted); see also Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498, 509, 110 S.Ct. 2510, 2517, 110 L.Ed.2d 455 (1990). If so, then I must find that a right enforceable under section 1983 exists unless the language of subsection (a)(30)(A) "reflects merely a `congressional preference' for a certain kind of conduct rather than a binding obligation on the governmental...