Ronald Goldman & 27 Other Taxpayers v. Sec'y of Exec. Office of Health & Human Servs.
| Decision Date | 10 March 2021 |
| Docket Number | Docket: 2084CV01604 |
| Parties | RONALD GOLDMAN & 27 OTHER TAXPAYERS v. SECRETARY OF THE EXECUTIVE OFFICE OF HEALTH AND HUMAN SERVICES |
| Court | Massachusetts Superior Court |
Present: Robert B. Gordon
County: SUFFOLK, ss.
Ronald Goldman and twenty-seven other Massachusetts taxpayers (the “Plaintiffs”) bring this action under G.L. c. 29, § 63, challenging the legality of the expenditure of state funds by the Commonwealth’s Medicaid program, MassHealth, to reimburse medical providers of neonatal male circumcisions performed in the absence of a diagnosed medical condition requiring the procedure. The MassHealth program is administered by the Defendant, Secretary of the Executive Office of Health and Human Services (“MassHealth” or the “Defendant”), which now moves to dismiss the Plaintiffs’ Verified Complaint (“Complaint”) pursuant to Mass. R. Civ. P. 12(b)(6). For the reasons which follow, the Defendant’s motion shall be ALLOWED IN PART and DENIED IN PART.2
The Medicaid program was established in 1965 in Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (the “Act”). Medicaid was designed to provide federal financial assistance to states that choose “to furnish medical assistance to certain categories of needy persons.”3 Moe v. Secretary of Admin. & Finance, 382 Mass. 629, 633 (1981); see also 42 U.S.C. § 1396-1. At the federal level, the Medicaid program is administered by the Centers for Medicare & Medicaid Services (“CMS”), a division of the United States Department of Health and Human Services (“HHS”). Douglas v. Independent Living Ctr. of. S. California, Inc., 565 U.S. 606, 610 (2012). States choosing to participate in the program must submit a plan of administration to CMS that complies with the Act and with regulations promulgated by HHS. See 42 U.S.C. § 1396a; Guilfoil v. Secretary of Exec. Office of Health & Human Servs., 486 Mass. 788, 789 (2021).
“Participating States are required to cover the costs of care for the ‘categorically needy,’ which the [A]ct defines as those individuals who are unable to cover the costs of their basic needs and who already receive or are eligible for certain forms of public assistance.” Daley v. Secretary of Exec. Office of Health & Human Servs., 477 Mass. 188, 190 (2017). States may additionally elect to provide benefits to “medically needy” individuals, defined to include “people who have income and resources to cover the costs of their basic needs but not their necessary medical care.” Id. (citation omitted); see also 42 U.S.C. § 1396a(a)(10)(C). Participating states are also required to cover certain types of medical assistance, including, inter alia, “physicians’ services,” which are defined as “professional services performed by physicians, including surgery, consultation, and home, office, and institutional calls. . . .” 42 U.S.C. §§ 1396a(10)(A); 1396d(a)(5); 1395x(q); see also 42 C.F.R. § 440.50 ().
Beyond these federal requirements, “states have wide latitude to determine the scope of coverage and to institute wide-ranging and comprehensive medical programs under their medical assistance plans.” Roe v. Norton, 522 F.2d 928, 933 (2d Cir. 1975). To that end, the Act identifies various optional categories of medical assistance that states may choose to provide. Some of these categories are highly specific, such as eyeglasses and prosthetic devices, and others more broadly framed, such as “medical care, or any other type of remedial care recognized under State law. . . .” 42 U.S.C. §§ 1396a(a)(10)(A), 1396d(a); 42 C.F.R. § 440.225. Accordingly, Medicaid coverage evidences “a high degree of diversity from state to state, reflecting each state’s own determination of its medical and social priorities.” Roe, 522 F.2d at 933.
Each state’s Medicaid plan must also include “reasonable standards” for determining both eligibility for coverage and the extent of medical assistance to be provided, which standards must be “consistent with the objectives” of the Act and “provide such safeguards as may be necessary to assure . . . that care and services will be provided in a manner consistent with simplicity of administration and the best interests of the recipients.” 42 U.S.C. §§ 1396a(a)(17), (19). Further, all state plans must: “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[.]”
42 U.S.C. § 1396a(30)(A) (“Section 30(A)”).
Once a state plan is approved by CMS, the federal Government subsidizes a formulaic portion of the state’s expenses in administering its Medicaid program. 42 U.S.C. §§ 1396a(b), 1396b. If the United States Secretary of Health and Human Services (the “Federal Secretary”) later determines that a state has failed “to comply substantially” with the requirements set forth in 42 U.S.C. § 1396a or with any aspects of the state’s own plan, he may withhold the state’s federal reimbursement payments until he “is satisfied that there will no longer be any such failure to comply.” 42 U.S.C. § 1396c.
The Commonwealth’s Medicaid program, more commonly known as MassHealth, is administered by the Defendant in accordance with the terms of G.L. c. 118E. Chapter 118E, section 15 requires MassHealth to “provide Medicaid benefits” for all medical care and services required under the federal Act, and accords the Defendant discretion regarding whether and to what extent to provide Medicaid benefits “for such additional medical care or services” as federal law permits. G.L. c. 118E, § 15. In this connection, MassHealth is required to “formulate such methods, policies, procedures, standards and criteria, except medical standards and criteria, as may be necessary for the proper and efficient operation of [MassHealth] in a manner consistent with simplicity of administration and the best interests of recipients.” G.L. c. 118E, § 12. The agency thus “may adopt, promulgate, amend and rescind rules and regulations suitable or necessary to carry out” its statutory obligations, id., and determine the “amount, duration and scope” of covered care.4 See G.L. c. 118E, § 15; see also G.L. c. 118E, § 7 (). “Such rules and regulations may include appropriate limitations on care and services based on such criteria as medical necessity or utilization control procedures.” G.L. c. 118E, § 15.
Pursuant to its statutory authority, the Defendant enacted 130 Code Mass. Regs. § 450.204 (“Section 450.204”), which regulation states that MassHealth “does not pay. . . provider[s] for services that are not medically necessary and may impose sanctions on a provider for providing or prescribing a service . . . where such service . . . is not medically necessary.” See also 130 Code Mass. Regs. § 433.451(B)(1) (). Section 450.204 further provides that:
“(A) A service is medically necessary if
(1) it is reasonably calculated to prevent, diagnose, prevent the worsening of, alleviate, correct, or cure conditions in the member that endanger life, cause suffering or pain, cause physical deformity or malfunction, threaten to cause or to aggravate a handicap, or result in illness or infirmity; and
(2) there is no other medical service or site of service, comparable in effect, available, and suitable for the member requesting the service, that is more conservative or less costly to the MassHealth agency.”
Section 450.204 additionally requires medically necessary services to “be substantiated by records including evidence of such medical necessity and quality,” and dictates that providers make such records available to MassHealth upon request. Moreover, all inpatient services provided to MassHealth members are subject to a process known as “utilization review,” whereby the Defendant “will review inpatient services provided to members to determine the medical necessity . . . of such services.” 130 Code Mass. Regs. § 415.414(B). “If, as the result of any review, the [Defendant] determines that any hospital inpatient admission, stay, or service provided to a member was not covered under the member’s coverage type . . . the [Defendant] will not pay for that inpatient admission, stay, or service.” Id. § 415.414(D).
“[P]hysicans are required to bill MassHealth for their services using numeric codes . . . listed in the current procedural terminology manual published by the American Medical Association. . . .” Jacobs v. Massachusetts Div. of Med. Assistance, 97 Mass. App. Ct. 306, 309 (2020). Each of these codes, known as “CPT codes,” is assigned a rate of reimbursement. Id. The CPT codes for neonatal male circumcision (54150 and 54160) are classified as surgery CPT codes. See 101 Code Mass. Regs. § 316.05(2).5 The scope of MassHealth’s coverage for services billed under a surgery CPT code is set forth in its regulations...
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