Federal Appeals Court Reverses Decision Dismissing Suit Against Michigan’s Medicaid Program

The 6th U.S. District Court of Appeals on May 15 reversed a lower court's ruling that Michigan state officials cannot be sued to force them to provide medical benefits guaranteed under federal Medicaid law and ordered the U.S. District Court in Detroit to rehear the case, the AP/Detroit News reports. Last year, U.S. District Court Judge Robert Cleland dismissed a lawsuit filed by Westside Mothers -- a Detroit-based group of 450 low-income individuals -- Families on the Move Inc., the American Academy of Pediatrics and the American Academy of Pediatric Dentistry against Michigan Department of Community Health Director James Haveman and former Michigan Medical Services Administration Deputy Director Robert Smedes. The groups argued that the state was not meeting its obligation under federal law to provide a comprehensive benefit package known as early and periodic screening diagnostic and treatment -- or EPSDT -- services to Medicaid beneficiaries under age 21 (Barks Hoffman, AP/Detroit News, 5/17). The plaintiffs filed suit under a civil rights law (Section 1983) that allows state officials to be sued for violating constitutional or federal laws. But Cleland dismissed the case, saying the law did not allow lawsuits for failure to carry out terms of a federal grant program. He also ruled that Medicaid is a "contract" between the federal government and the state of Michigan, and while Medicaid beneficiaries profit from the program, they "have no right to enforce [Medicaid law] in court" (Kaiser Daily Health Policy Report, 5/14/01). But the Court of Appeals this week ruled that Medicaid is "not merely a contract between the federal government and the states," and the state must provide EPSDT services as required because it is a federal law. Further, the court said that immunity from lawsuits does not apply to state officials under such circumstances (Detroit News, 5/17).