Scott Detgen, By His Next Friend, L.C. v. Janek

• Decision Date: 16 May 2014
• Docket Number: No. 13–10396.,13–10396.
• Citation: 752 F.3d 627
• Parties: Scott DETGEN, by His Next Friend, L.C. DETGEN; Juanita Barraza, by Her Next Friend, Yolanda Villareal; Brandon Doyel; Joshua Vargas, Plaintiffs–Appellants, v. Dr. Kyle JANEK, in His Official Capacity as Executive Commissioner, Texas Health and Human Services Commission, Defendant–Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

752 F.3d 627

Scott DETGEN, by His Next Friend, L.C. DETGEN; Juanita Barraza, by Her Next Friend, Yolanda Villareal; Brandon Doyel; Joshua Vargas, Plaintiffs–Appellants,

v.Dr. Kyle JANEK, in His Official Capacity as Executive Commissioner, Texas Health and Human Services Commission, Defendant–Appellee.

No. 13–10396.

United States Court of Appeals, Fifth Circuit.

May 16, 2014.

Maureen A. O'Connell, Southern Disability Law Center, Austin, TX, Lewis Alan Golinker, Esq., Assistive Technology Law Center, Ithaca, NY, for Plaintiffs–Appellants.

Jonathan F. Mitchell, Solicitor General, Douglas D. Geyser, Esq., Office of the Solicitor General, for the State of Texas, Erika M. Kane, Assistant Attorney General, Office of the Attorney General, General Litigation Division, Austin, TX, for Defendant–Appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before JONES, SMITH, and OWEN, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

The four plaintiffs are Medicaid beneficiaries with near total physical disabilities, requiring constant personal assistance and care. On the advice of professionals, they asked Texas's Health and Human Services Commission to pay for ceiling lifts, which are classified as durable medical equipment (“DME”). Such lifts are expensive but would allow the disabled beneficiaries to move with straps attached to ceilings. Texas denied coverage under a categorical exclusion in the state's implementing Medicaid regulations. The district court granted summary judgment for the state on the ground that, so long as federal monies were not available to reimburse it, it did not need to provide the lifts.

The Center for Medicare and Medicaid Services (“CMS”) has since offered guidance, however, that federal financial participation would be available. In addition to appealing the judgment, the plaintiffs move this court to vacate it for reconsideration. In the appeal, they maintain that the state's categorical exclusions are preempted by federal law or otherwise violate their procedural due-process rights. Texas responds that categorical exclusions are not preempted and, moreover, that a state can never violate the Medicaid Act and that the plaintiffs do not have a private cause of action to enforce it.

Under binding precedent, these plaintiffs have an implied private cause of action under the Supremacy Clause to pursue this challenge. We additionally note that the state must comply with the requirements of the Medicaid Act, but the Act does not preempt the state's categorical exclusions. We therefore affirm the summary judgment and deny the motion to vacate.

I.

The plaintiffs assert that they have an implied cause of action to pursue their claims. Normally a cause of action must be found in a statute: “Like substantive federal law itself, private rights of action to enforce federal law must be created by Congress.” Alexander v. Sandoval, 532 U.S. 275, 286, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001). The plaintiffs' theory of an implied cause of action does not depend on any rights-creating language in the Medicaid Act; rather, they rely on the Supremacy Clause.¹ The Supreme Court recently dodged the question—incidentally in a case involving the Medicaid Act—whether the Supremacy Clause provides a cause of action itself in the absence of a statutory private cause of action. See Douglas v. Indep. Living Ctr. of S. Cal., Inc., ––– U.S. ––––, 132 S.Ct. 1204, 182 L.Ed.2d 101 (2012).

In light of the Court's failure in Douglas to hold to the contrary, this appeal is governed by Planned Parenthood of Houston & Southeast Texas v. Sanchez (“ PPHST ”), 403 F.3d 324, 330–35 (5th Cir.2005). There this court held that the Supremacy Clause confers an implied private cause of action to enforce all Spending Clause legislation by bringing preemption actions. ² The state is correct that since then, the Supreme Court has held that certain federal statutes contain no private right of action,³ but that was true when PPHST was decided. See, e.g., Sandoval, 532 U.S. at 288–93, 121 S.Ct. 1511. In Sandoval, Hope, and Brunner, it appears that the plaintiffs never made the alternative claim that if the statute does not provide a cause of action, the Supremacy Clause does.⁴

II.

The state makes the alternative argument that even if plaintiffs have a cause of action, it is impossible for a state to violate the Medicaid Act. The state analogizes the Act to legislation tying highway funds to a certain maximum speed limit: A state may lawfully establish a higher limit, but it will forgo funds. Thus, the state claims, here it may lawfully pass nonconforming Medicaid legislation at the risk of losing federal funds, but not at the risk of private lawsuits. It reasons that unlike other legislation that can preempt state law, this federal law does not include language such as “shall,” commanding a state to perform a certain function.

The provision on which plaintiffs rely, however, does contain such language: “A State plan for medical assistance must ... include reasonable standards ... for determining eligibility....” 42 U.S.C. § 1396a(a) (emphasis added). Additionally, several courts, including the Supreme Court, have held that once a state accepts federal funding, it must conform to the requirements of the relevant federal law, including the Medicaid Act: “Although participation in the Medicaid program is entirely optional, once a State elects to participate, it must comply with the requirements of Title XIX.” Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct. 2671, 65 L.Ed.2d 784 (1980); see also Hope Med. Grp. for Women v. Edwards, 63 F.3d 418, 421 (5th Cir.1995).

Indeed, a contrary ruling would contradict PPHST, which held that there is an implied private cause of action under the Supremacy Clause to enforce all Spending Clause legislation. Under the state's theory, the holding in PPHST would have been totally unnecessary because it is impossible for a state to violate a Spending Clause statute, so a private cause of action does plaintiffs no good. We agree that if no private cause of action existed, it would be up to the federal government to decide how to enforce compliance, and it could choose to withhold funds. That, indeed, is how at least two Supreme Court Justices would interpret the Medicaid Act.⁵ But this court in PPHST, 403 F.3d at 332 & n. 34, specifically discounted those two views in coming to its conclusion. Although it is quite possible, as Texas maintains, that no state has made such an argument, PPHST necessarily (even if implicitly) directs that when a state violates the federal requirements of the Medicaid Act, a private plaintiff can sue the state to enforce those requirements.

III.

Regarding the merits, the basis for this challenge is the requirement that “[a] State plan for medical assistance must ... include reasonable standards ... for determining eligibility for and the extent of medical assistance under the plan ... which are consistent with the objectives of this subchapter,” 42 U.S.C. § 1396a(a)(17), and the implementing regulation requiring that each provided service “must be sufficient in amount, duration, and scope to reasonably achieve its purpose,” 42 C.F.R. § 440.230(b). The plaintiffs rely on this statutory language, an agency guidance letter, and precedent to contend that the state's categorical exclusion is not a “reasonable standard.”

States have broad discretion to implement the Medicaid Act: “This [statutory] language confers broad discretion on the States to adopt standards for determining the extent of medical assistance, requiring only that such standards be ‘reasonable’ and ‘consistent with the objectives' of the Act.” Beal v. Doe, 432 U.S. 438, 444, 97 S.Ct. 2366, 53 L.Ed.2d 464 (1977). In combination with the presumption against preemption and its concomitant clear-statement rule, the discretion conferred in Doe leaves little doubt that we must affirm the summary judgment if the statutory language does not plainly prohibit categorical exclusions.

As we have noted, the statute requires that “[a] State plan for medical assistance must ... include reasonable standards ... for determining eligibility for and the extent of medical assistance under the plan.” Additionally, the Medicaid Act requires a state program to cover “home health services,” 42 U.S.C. § 1396a(a)(10)(D), which include “[m]edical supplies, equipment, and appliances suitable for use in the home,” 42 C.F.R. § 440.70(b)(3). But, as plaintiffs acknowledge, the Act does not identify the specific equipment that a state must offer, and the scope of offerings is governed by the “reasonableness” standard in the statute. Plaintiffs maintain that the categorical exclusion of ceiling lifts is unreasonable because ceiling lifts fall within the state's definition of DME and are medically necessary.

The state categorically excludes such lifts from coverage for a number of reasons. Although the district court specifically relied on the lack of federal financial assistance for its ruling—a ruling that is undermined by subsequent CMS guidance to the contrary—the state also flatly excludes such lifts because they require structural modifications to residences. Texas also excludes from the definition of DME, in the home services category, ramps, elevators, stairwell lifts, and platform lifts. Further, the state explains in its brief that it provides more cost-effective alternatives such as “transfer boards, freestanding track (or ‘Niklas') lifts, transfer chair systems for use with the bath or commode, and manually or electronically operated floor lifts (also known as ‘Hoyer’ lifts).” The ceiling lifts at issue here would cost the state between $15,000 and $20,000, and even the insurers Aetna and Cigna deny coverage for such equipment.

It is hardly unreasonable for a state to exclude—even categorically—any medical device whose purpose can be served by a more cost-effective method. Not only has Texas not violated...