Sean Jessee, Fulfilling the Promise of the Medicaid Act: Why the Equal Access Clause Creates Privately Enforceable Rights

• Publication year: 2009

FULFILLING THE PROMISE OF THE MEDICAID ACT: WHY THE EQUAL ACCESS CLAUSE CREATES PRIVATELY ENFORCEABLE RIGHTS

INTRODUCTION

"[T]he restrictive analysis required by federal case law and the recent amendments by Congress render the Medicaid Act's 'equal access' provisions merely illusory."¹In Roob v. Fisher, an Indiana Court of Appeals opinion, Judge Baker explained that preventing Medicaid recipients from enforcing their rights under these provisions (the equal access clause) of the Medicaid Act causes a result "extremely deleterious to those most in need."²Under the equal access clause, a state must provide "methods and procedures"³in its Medicaid plan to assure that "payments to providers produce four outcomes: (1) 'efficiency,' (2) 'economy,' (3) 'quality of care,' and (4) adequate access to providers by Medicaid beneficiaries."⁴Judge Baker's obvious misgivings about disallowing Medicaid recipients to enforce their rights did not change the decision of the Indiana Court of Appeals: Medicaid recipients denied adequate access to healthcare because of a state's low reimbursement rates for healthcare providers cannot enforce their rights through the equal access clause of the Medicaid Act.⁵

The purpose of the equal access clause is to protect individuals against states setting Medicaid reimbursement rates paid to healthcare providers so low that few or no providers will accept Medicaid patients, thus denying

Medicaid recipients adequate access to healthcare.⁶While the court in Roob believed that congressional statutes and federal precedent forced it to rule in a way contradictory to sound public policy,⁷several other courts have interpreted those same statutes and cases to invoke enforceable rights for Medicaid recipients.⁸Judge Baker's opinion suggests that those other courts are employing judicial activism by misreading legal precedent and statutes to reach an agreeable policy decision.⁹In Roob, the court reasoned that it was up to Congress to change the Medicaid statute and end its "apparent indifference to the plight of Medicaid . . . recipients."¹⁰This statement suggests that Medicaid recipients lack additional ways to ensure that they are not denied access to healthcare because of a state's low reimbursement rates. However, the opinion in Roob and the opinions of other courts that have addressed this issue have not analyzed whether the enforcement of the equal access clause is the only way for Medicaid recipients to ensure that they receive adequate access to healthcare. Further, courts have avoided directly addressing the effect such an inquiry would have in determining whether the statute gives rise to an enforceable right under 42 U.S.C. Sec. 1983.¹¹

The judicial split, and the confusion evident in the wide variety of reasoning used to apply the Supreme Court's test for whether a statute is enforceable through Sec. 1983,¹²suggests that the Supreme Court should directly address the enforceability of the equal access clause. Part I of this Comment provides background information about the Medicaid Act, the equal access clause, the dilemma for Medicaid recipients created by low reimbursement rates, and how courts generally view the enforcement of federal statutory rights under Sec. 1983.¹³Part II explores the central reasoning from the circuits that allow the equal access clause to be enforceable, and examines the alternative legal reasoning employed in the circuits that have held that the right is not enforceable. This Part demonstrates that the lack of guidance from the Supreme Court to lower courts has resulted in a multitude of legal reasoning and confusion in determining whether individuals have an enforceable right under Sec. 1983 to enforce the equal access clause of the Medicaid Act.¹⁴Part II also examines recent judicial opinions that appear to indicate a trend toward prohibiting Medicaid recipients from enforcing equal access rights through a

Sec. 1983 suit. It ultimately explains, however, that most of those decisions occurred in circuits that historically, not just recently, ruled against allowing Medicaid recipients to enforce the equal access clause.¹⁵This Comment argues that due to the complexity of the Gonzaga test, lower courts have overlooked whether alternative legal remedies exist, when determining whether the equal access clause creates an enforceable right for Medicaid recipients.¹⁶

Part III explores the various other legal avenues Medicaid recipients who are not receiving proper access to medical services can pursue.¹⁷While these additional strategies are effective in certain situations, each has flaws that prevent it from adequately meeting the needs of all individuals suffering from insufficient access to medical services. Part IV discusses the possible implications of allowing Medicaid recipients to enforce the equal access clause through a Sec. 1983 suit.¹⁸This Comment concludes by arguing that the Supreme Court must address the equal access clause issue because of the judicial subjectivity and uncertainty that accompany the application of the Gonzaga test. Due to the lack of additional legal avenues for Medicaid recipients to pursue and the likelihood that the problem of low reimbursement rates will continue, the Court should rule in favor of allowing an enforceable right under the equal access clause to ensure that the promise of the Medicaid Act is not "merely illusory."¹⁹

I. ENFORCING THE EQUAL ACCESS CLAUSE THROUGH A Sec. 1983 SUIT

A. The Medicaid Act

The Medicaid Act was enacted in 1965 as Title XIX of the Social Security Act.²⁰Congress created the Medicaid program to address the need for providing medical care to low-income individuals.²¹Medicaid is the largest source of funding for medical and health-related services for America's poor.²²"Medicaid is a cooperative federal-state program through which the Federal Government provides financial assistance to States so that they may furnish medical care to needy individuals."²³The four main categories of indigent individuals covered by Medicaid are pregnant women, children, individuals eligible for both Medicaid and Medicare, and the disabled.²⁴

The federal government shares the costs of Medicaid with the states that elect to participate in the program.²⁵To qualify for federal assistance, a state must submit to and have approved by the Secretary of Health and Human Services (the Secretary) a "[s]tate plan for medical assistance"²⁶that comprehensively describes the nature and scope of the state's Medicaid program.²⁷Although participation is voluntary, participating states must comply with the specific requirements imposed by the Medicaid Act and the regulations of the Secretary.²⁸A state that fails to comply with the medical assistance plan that it has submitted to the Secretary runs the risk of having its funding revoked.²⁹The state plan is required to establish, among other things, a scheme describing the policy and methods used "for reimbursing health care providers for the medical services provided to needy individuals."³⁰

B. The Equal Access Clause of the Medicaid Act

The equal access clause of the Medicaid Act requires that state plans for medical assistance "assure that payments" for care and services available under the plan "are sufficient to enlist enough providers so that care and services are available . . . at least to the extent . . . available to the general population in the geographic area."³¹In other words, this statutory provision requires that states pay healthcare providers adequate reimbursements for the services provided to Medicaid recipients to ensure that a sufficient number of providers enroll in the Medicaid program and accept Medicaid patients. The equal access clause was passed by Congress to prevent states from attempting to control program costs by improperly limiting provider reimbursement rates.³²

To determine whether all patients have equal access to healthcare, courts should compare the healthcare access of Medicaid beneficiaries with the access of other individuals in the same geographic area who have private insurance coverage.³³The relevant portion of the population for comparison does not include the uninsured.³⁴

Courts have looked at a variety of factors to determine whether equal access to medical services exists.³⁵Courts often first examine the level of reimbursements that healthcare providers receive for providing services to Medicaid recipients.³⁶Additionally, courts may examine the following considerations: the level of physician participation in the Medicaid program (as evidence that recipients have difficulty obtaining care); whether Medicaid recipients utilize healthcare services at a lower rate than the general population uses those services; and if defendants have admitted that the reimbursement rates are inadequate.³⁷For a state to satisfy the equal access clause, it needs only to "produce a result, not . . . employ any particular methodology for getting there."³⁸Therefore, a court should not consider whether the rates are set in an arbitrary and capricious manner.³⁹

C. The Continuing Problem of Low Healthcare Provider Participation in

Medicaid

Despite the equal access clause of the Medicaid Act, healthcare providers have continued to reject Medicaid patients because of low reimbursement rates, and this lack of participation has severely hurt the Medicaid program.⁴⁰

Healthcare provider participation in the Medicaid program is entirely optional,⁴¹and physicians are increasingly deciding not to treat Medicaid patients.⁴²Medicaid payments to healthcare providers have historically been considerably lower than the payments received by physicians for Medicare and private insurance.⁴³Many healthcare providers actually lose money when treating Medicaid recipients.⁴⁴The low reimbursement rates have caused an increasing number of physicians to stop treating new Medicaid patients.⁴⁵

About five out of six physicians who stopped accepting Medicaid patients in

2004-2005 cited inadequate...