In ‘Affirmation of State Sovereignty,’ Federal Judge Rules Michigan State Officials May Not Be Sued Over Medicaid Benefits

A federal judge has ruled that Medicaid beneficiaries may not sue Michigan state officials in order to force the state to provide medical benefits guaranteed under federal Medicaid law, the New York Times reports. U.S. District Court Judge Robert Cleland found that Medicaid is a "contract" between "two sovereigns," the federal government and the state of Michigan, saying that "Congress may not force states into being its agents." While Medicaid beneficiaries profit from the program, they "have no right to enforce [Medicaid law] in court" because of the state's sovereign immunity, granted under the Constitution, from suits. Cleland noted that Congress has allowed for only one method of redress: The HHS secretary may withhold federal funding from states not meeting their Medicaid responsibilities. Cleland ruled that Congress "chose this 'specific limited remedy'" and that the "courts may not substitute an alternative form of relief."

Case History
The case stems from a lawsuit filed in 1999 by a group of parents seeking a package of Medicaid benefits for their children known as "early and periodic screening, diagnosis and treatment," or EPSDT that entitles children to any service needed to correct medical problems identified through such examinations. The parents filed under a 19th century civil rights law known as Section 1983, which allows state officials to be sued for violating "rights secured by" federal law or the U.S. Constitution. However, Cleland ruled the statute did not allow lawsuits for failure to carry out the terms of a federal grant program, such as Medicaid. In addition, he ruled that state officials could not be held liable for "Michigan's breach of its Medicaid contract." Lawyers for the parents plan to appeal the decision.

Reactions
While the case has "shocked" advocates for the poor and "some legal scholars," state officials are pleased. Sara Rosenbaum, a professor of health law and policy at George Washington University, said, "If the ruling stands, it is the end of the Medicaid program as a source of insurance. It makes Medicaid unenforceable by private individuals. The ability to enforce your right to benefits is the essence of insurance. Without that ability, you no longer have insurance." But Carol Isaacs, director of policy, legislation and legal affairs at the Michigan agency that runs Medicaid, said, "This was a good decision, a correct well written decision." The Times reports that Illinois, North Carolina, Texas and other states have already cited the ruling -- issued in March -- in similar cases (Pear, New York Times, 5/13). To access the decision in its entirety, click here.