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Tuesday, December 23, 2014

Enforcing Medicaid Against Recalcitrant States: The Former HHS Officials' Amicus Brief in Armstrong

Back in October, I wrote a post, titled "Is Ex parte Young Doomed?," about the Supreme Court's grant of certiorari in Armstrong v. Exceptional Child Center, Inc., which the Justices limited to the following question:

Does the Supremacy Clause give Medicaid providers a private right of action to enforce § 1396a(a)(30)(A) against a state where Congress chose not to create enforceable rights under that statute?

As I wrote back then, this is the exact question that the Court ducked in its 2012 decision in Douglas v. Independent Living Centers of Southern California--a case in which, in a four-Justice dissent, Chief Justice Roberts would have dramatically curtailed the ability of private litigants to bring Supremacy Clause-based claims for injunctive relief to enforce any federal statute against a state officer if that statute didn't provide its own cause of action. Although HHS effectively mooted Douglas by approving the contested California state plan amendment while the case was pending, such a step is almost certainly not available in Armstrong--which means the Justices in the majority in Douglas, especially Justices Kennedy and Breyer, will now have to take a position on whether such a Supremacy Clause-based suit for injunctive relief is ever available for statutes lacking private causes of action. (The Supreme Court has previously endorsed the availability of such suits, but hasn't revisited those cases since its more recent jurisprudence curtailing the ability of private litigants to enforce statutes without their own cause of action, whether directly or through 42 U.S.C. § 1983).

One of the interesting back-stories to Douglas, which I covered in some detail on this blog, was the aggressive (and, in my view, disappointing) anti-private-enforcement position taken by the Solicitor General in an amicus brief filed in support of California. Leaving aside the controversial merits of the SG's Douglas brief, it was also a position that was radically inconsistent with the historical position of the Department of Health & Human Services (HHS) on the private enforcement question, especially with regard to "Section 30(A)"--the Medicaid Act's requirement that states set reimbursement levels high enough so that Medicaid recipients are able to have "equal access" to median quality medical care. Without this "equal access" mandate, economic pressures would almost certainly lead states to reimburse providers at the lowest possible levels, which in turn would likely relegate Medicaid recipients to the worst available providers. The problem, as the ACA litigation helped demonstrate, is that HHS doesn't have a lot of choices when faced with a state violating the Medicaid Act. The only real "stick" HHS possesses in such a scenario is the drastic remedy of cutting off Medicaid funding--which punishes the beneficiaries far more than it punishes recalcitrant states.

To that end, and tellingly, HHS did not sign the SG's Douglas brief, even though it had signed the SG's more equivocal cert.-stage amicus in the same case (which had recommended that the Court not take the case). Instead, in Douglas, I helped to put together an amicus brief on behalf of "Former HHS Officials," explaining why, because of the reality described above, (1) HHS has historically supported private enforcement of the Medicaid Act (and Section 30(A) in particular); and (2) partly as a result of this historical pattern, and partly for other reasons, lacks the institutional, political, financial, or administrative resources effectively to enforce Medicaid all by itself. 

As in Douglas, the SG has once again sided with the states in Armstrong--albeit in an amicus brief that appears, at first blush, to be far more modest. Instead of opposing Supremacy Clause-based claims for injunctive relief in general, the SG's Armstrong amicus punts on that question, arguing that the Court need not resolve that general issue because "recognition of a private right of action under the Supremacy Clause in this case would be incompatible with the statute, the methods for its enforcement, and respondents’ claim."

And as in Douglas, a group of former HHS officials (including 15 senior administrators from three different administrations, led by former Secretaries Califano and Shalala) has now filed an amicus brief disputing the SG's position--and documenting how, 

Since the early days of the Medicaid program, federal courts have recognized that providers may sue to ensure that state Medicaid plans conform to the requirements of federal law. Congress intended for such enforcement, and HHS has understood—and come to rely upon—its existence.

The brief, which I co-authored along with Matt Hoffman and Andrew Kim from Goodwin Procter, is in some important ways different from the brief we filed back in Douglas. There, our focus was on the SG's (since abandoned) position that private enforcement of the Medicaid regime would generally interefere with HHS's enforcement authorities and discretion. Here, our focus is on the SG's more modest claim about congressional intent and judicial enforcability of Section 30(A). Thus, the SG's Armstrong brief argues that Congress never intended for such private enforcement--and, even if it did, that courts would struggle to provide such enforcement given the vague language of the "equal access" provision's mandates.

Our brief rejects both of those claims, demonstrating how, not only have courts routinely applied Section 30(A)'s procedural and substantive requirements without serious difficulty (and, indeed, would have to do the same thing if HHS started to reject state Medicaid plans on the ground that they violate Section 30(A)), but how that provision--one of the Medicaid Act's most important requirements--would effectively be unenforcable without private enforcement by Medicaid beneficiaries or providers through some vehicle.

In other words, insofar as the SG's brief tries to duck the larger question implicated in Armstrong by arguing that Section 30(A) is an especially weak federal statute to enforce through such a Supremacy Clause-based injunctive action, our brief argues that it is, in fact, a textbook case for such a claim--since it is an essential federal mandate against states that, without such private enforcement, would almost certainly be frustrated.

Idaho's opening brief is available here; the Respondents' opening brief is here. Oral argument is scheduled for Tuesday, January 20.

Posted by Steve Vladeck on December 23, 2014 at 10:51 AM in Civil Procedure, Constitutional thoughts, Steve Vladeck | Permalink


"It is beyond dispute that federal courts have jurisdiction over suits to enjoin state officials from interfering with federal rights." Yeah, I would say the Court did more than "endorse" that the Supremacy Clause provides a right of action.

Posted by: anon | Dec 29, 2014 10:12:26 AM

I actually think it's far more than $0.55 of each additional dollar, depending upon the state--and especially where its folks who are only covered by Medicaid because of the ACA. But in any event, this is a key to the HHS position--it's not in the federal government's financial interest to zealously enforce _any_ provision of the Medicaid Act, because noncompliance _saves_ the federal government money. That's one of the many reasons why the SG's position--exclusive HHS enforcement--just doesn't make sense.

As for state courts, I'm not an expert on Idaho procedural law, but I've always understood the Ex parte Young line of cases to be somewhat suspicious of how well we trust state courts to provide federal injunctive relief against state officers--not that they lack the competence to do so, but that they may just not be especially inclined to allow for such enforcement.

On the tribal point, that's helpful--thanks!

Posted by: Steve Vladeck | Dec 23, 2014 5:10:19 PM

Maybe the SG is interested because there potentially could be significant federal dollars at stake? If a federal court orders a state Medicaid agency to increase provider reimbursement rates for a particular service, then the feds will be on the hook for about $0.55 of every additional dollar.


1.) Why aren't state courts appropriate fora for equal access claims? It seems to me that they will be much better attuned to the state-by-state balancing act of trimming Medicaid costs as much as possible, while not trimming them so much that providers start discriminating against Medicaid patients.

2.) Steve, you might look at tribal consultation requirements as a good analogy for how HHS deals with unapproved Medicaid cuts. Those requirements were beefed up a good bit by ARRA (at least in the Medicaid context), and it's my understanding that HHS went after a number of states during the Great Recession for cutting rates that theoretically might affect the tribes without sufficiently consulting with them.

Posted by: My $0.02 | Dec 23, 2014 3:34:46 PM

Nicole -- Thanks for the kind words. My sense is that, at least in this case, the SG felt to some degree bound by both (1) the fact _that_ the government had filed in Douglas; and (2) _what_ it had filed in Douglas.

That said, I still don't understand the SG's larger interest in opposing private enforcement in a context where the _only_ defendants will be state, as opposed to federal, officers, especially from an administration that has purported to be so deeply committed to supporting the enforcement of federal rights. Thus, it strikes me that it would've been far more prudent for the SG to have simply stayed out of both of these cases.

Posted by: Steve Vladeck | Dec 23, 2014 2:55:54 PM

Steve, thanks for a nice round up and for your work on what will undoubtedly be another important amicus. Any additional insights as to why the SG cannot stop shaking this tree?

Posted by: Nicole Huberfeld | Dec 23, 2014 12:43:54 PM

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