Miller by Miller v. Whitburn

• Decision Date: 01 December 1993
• Docket Number: No. 93-1976,93-1976
• Citation: 10 F.3d 1315
• Parties: , Medicare&Medicaid Guide P 41,937 Tiffany MILLER, by her next friend DeAnna MILLER, Plaintiff-Appellant, v. Gerald WHITBURN, Secretary of the Wisconsin Department of Health and Social Services, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1315

10 F.3d 1315

43 Soc.Sec.Rep.Ser. 35, Medicare&Medicaid Guide P 41,937

Tiffany MILLER, by her next friend DeAnna MILLER, Plaintiff-Appellant, v. Gerald WHITBURN, Secretary of the Wisconsin Department of Health and Social Services, Defendant-Appellee.

No. 93-1976.

United States Court of Appeals Seventh Circuit.

Argued June 10, 1993.

Decided Dec. 1, 1993.

T. Christopher Kelly, Madison, WI, G. David Miller, Jr. (argued), Susemihl, Lohman, Kent & McDermott, Walter S. Rouse, Anderson, Campbell & Laugesen, Colorado Springs, CO, for plaintiff-appellant.

Donald P. Johns (argued), Office of the Atty. Gen., Wisconsin Dept. of Justice, Madison, WI, for defendant-appellee.

Before CUDAHY and RIPPLE, Circuit Judges, and ALDISERT, Senior Circuit Judge. ^*

CUDAHY, Circuit Judge.

Tiffany Miller is five years old. She suffers from a condition known as "short-bowel syndrome." As a result of this disability, Tiffany must be fed exclusively through intravenous total parenteral nutrition (TPN), a procedure in which a feeding catheter is placed directly into Tiffany's stomach. Another catheter in her stomach drains all secretions. An undesired byproduct of TPN feeding is progressive liver deterioration. The only way to restore Tiffany's liver function is to replace the liver, along with her lower intestine, in a liver-bowel transplant. Without such a transplant, Tiffany is almost certain to die from liver failure.

There is no dispute that Tiffany is entitled to Medicaid benefits. The Medicaid statute, 42 U.S.C. Sec. 1396 et seq., authorizes federal grants to states, thus enabling them to provide medical care to persons otherwise unable to obtain it. Although participation in Medicaid is optional, once a state has chosen to take part, as Wisconsin has, it must comply with all federal statutory and regulatory requirements. Even so, states retain a great deal of discretion in determining which medical services to cover under their Medicaid plans. There are, however, seven "mandatory medical services" for which a state Medicaid plan must provide in order to qualify for federal funding. See 42 U.S.C. Sec. 1396a(a)(10)(A). Included among these are "early and periodic screening, diagnostic, and treatment services" (EPSDT services) for persons under age 21. 42 U.S.C. Sec. 1396d(a)(4)(B). EPSDT services include certain screening, vision, dental and hearing services, 42 U.S.C. Secs. 1396d(r)(1)-(4), as well as "[s]uch other necessary ... treatment ... to correct or ameliorate ... conditions discovered by the screening services...." 42 U.S.C. Sec. 1396d(r)(5). Tiffany contends that a liver-bowel transplant, which all agree is required to sustain her life, is such "necessary treatment."

Whitburn ¹ responds that pursuant to 42 U.S.C. Sec. 1396b(i)(1) a state may, at its discretion, decide which, if any, transplants to fund. ² Tiffany rejoins that Sec. 1396b(i)(1) does not give participating states absolute discretion to decide which transplants to fund and that, even if it does so provide in general, Sec. 1396d(r)(5) trumps Sec. 1396b(i)(1) and obligates Medicaid-participating states to pay for medically necessary transplants for those individuals, such as Tiffany, who qualify for EPSDT services. In this respect, she notes that a state Medicaid plan must cover EPSDT services "whether or not such services are [otherwise] covered under the State plan." 42 U.S.C. Sec. 1396d(r)(5). Indeed, two other circuits recently confronted with this apparent tension between two provisions of the Medicaid statute have concluded (1) that Sec. 1396b(i)(1) does not confer upon the states absolute discretion as to which transplants to cover and (2) that Sec. 1396d(r)(5) does compel Medicaid-participating states to provide funds for all medically necessary transplants for children who otherwise qualify for EPSDT services. Pittman v. Secretary, Florida Department of Health & Rehabilitative Services, 998 F.2d 887, 891 (11th Cir.1993) and Pereira v. Kozlowski, 996 F.2d 723, 727 (4th Cir.1993). But see Ellis by Ellis v. Patterson, 859 F.2d 52, 55 (8th Cir.1988) (holding that Sec. 1396b(i)(1) gives Medicaid-participating states complete discretion to decide which, if any, transplants to fund). Pittman and Pereira are in conflict with Judge Crabb's opinion in this case. But we need not resolve that conflict because the issue decided by the Fourth and Eleventh Circuits is not properly before us.

When Tiffany applied for Medicaid coverage for her proposed liver-bowel transplant, the Department denied her request for one reason and one reason only: the Department considered the procedure "experimental." In a letter to Tiffany's physician, Dr. Alfred D. Dally, Chief Medical Consultant for the Department's Bureau of Health Care Financing, gave the following explanation of the Department's refusal to fund Tiffany's transplant:

We are writing in response to your recent request to refer Tiffany Miller ... to the University of Pittsburgh for a liver-intestinal organ transplantation. The Wisconsin Medical Assistance Program considers intestinal transplants to be experimental, and therefore not reimbursable. This is consistent with Wisconsin Administrative Code for Medical Assistance HSS 107.03(4) which prohibits medical assistance coverage for services considered experimental.

Department's Br. in Opposition to Motion for Temporary Restraining Order, Attachment D (R.O.A. 8). We have scoured the record in this case and have found no other reason given for the Department's refusal to pay. Unlike its Florida and Virginia counterparts in Pittman and Pereira, respectively, the Department did not rely upon Sec. 1396b(i)(1) as a basis for denying payment. Rather, the Department took the position that a liver-bowel transplant was not a "necessary treatment" because its effectiveness is unproven. ³

As a result, the issue in this litigation has been from the outset the judicial reviewability and propriety of the Department's determination that liver-bowel transplants are experimental. See, e.g., Complaint and Motion for Temporary Restraining Order at 3 (R.O.A. 2) ("The [Department] has seriously erred in its characterization of the procedure as being experimental and therefore the denial of the transplant services are in direct contravention of Federal Law providing coverage for necessary medical treatment for needy children."); Department's Br. in Opposition to Temporary Restraining Order at 7 (R.O.A. 8) ("The department may limit reimbursement for those treatments considered experimental and not generally recognized as effective by the medical profession...."); Plaintiff's Supplemental Brief at 1 (R.O.A. 14) ("The Plaintiff's right, pursuant to 42 U.S.C. Sec. 1983, to challenge the [Department's] decision that liver-bowel transplants are experimental is the issue before the court."). The district court twice concluded that the Department's determination was not reviewable. Transcript of Proceedings, February 3, 1993, at 6 (denial of preliminary injunction) ("[The Department] has made the decision that the liver-bowel transplants that are presently undertaken at the University of Pittsburgh are not proven and effective. This kind of a decision made in what was a legislative setting, as nearly as I can tell at the present time, is simply not subject to federal court review."); Miller v. Whitburn, 816 F.Supp. 505 (W.D.Wis.1993) (denial of permanent injunction). Rejecting this conclusion, we vacate and remand.

We agree with the statement of Tiffany's counsel at oral argument that the issue in this case is whether a Medicaid recipient may "challenge the reasonableness of a state's decision regarding the medical necessity of a life saving procedure." Specifically, Tiffany contends that the Department's characterization of liver-bowel transplantation as experimental is "arbitrary and capricious" and asks for judicial review of that determination. Tiffany does not contend that the Department must pay for her liver-bowel transplant simply because her physician has determined that it is a medically necessary treatment. Rather, Tiffany argues that the transplant procedure is a "necessary treatment" for which the Department is obligated to pay pursuant to Sec. 1396d(r)(5). As previously noted, the Department has not based its refusal to make payment on any residual discretion it may have under Sec. 1396b(i)(1) to decline funding for transplants. The Department has, instead, rested exclusively on the established doctrine that a Medicaid-participating state is under no obligation to pay for experimental procedures, Rush v. Parham, 625 F.2d 1150, 1154-55 (5th Cir.1980). Thus, the Department has effectively conceded that it must pay for the transplant if its characterization of liver-bowel transplants as experimental falls outside of its admittedly substantial discretion. ⁴

The theory supporting the proposition that states need not provide funding for experimental procedures is that such treatments are "medically un necessary." Rush, 625 F.2d at 1156 (emphasis supplied). Essentially, the Department has defined the phrase "necessary treatment," as used in Sec. 1396d(r)(5), to exclude all experimental treatments. ⁵ Tiffany acknowledges that this is a valid exercise of the Department's discretion. ⁶ She does argue though that the Department is wrong when it labels liver-bowel transplantation as an experimental procedure. This case boils down, therefore, to two relatively straight-forward questions: (1) is the Department's classification of liver- bowel transplantation as experimental judicially reviewable ⁷ and (2) if so, what is the appropriate standard of review?

More than ten years ago, the Supreme Court held that 42 U.S.C. Sec. 1983, the procedural vehicle that brings this case to us, provides a cause of action for violations of federal statutes as well as the federal Constitution. Maine v. Thiboutot, 448 U.S. 1, 4, 100 S.Ct. 2502, 2504, 65 L.Ed.2d 555 (1980). Since that...