Maryland’s Medicaid Program Violated Federal Law in Declining Reimbursement for Beneficiaries’ Liver Transplants, Appeals Court Rules

The Maryland Court of Appeals on June 21 unanimously decided that the state violated federal Medicaid guidelines when it determined that liver transplants for two teenagers were not "appropriate" and refused to reimburse Johns Hopkins Hospital for the costs of the procedures, the Baltimore Sun reports. The court ruled that federal Medicaid guidelines say only medical necessity, not whether the procedure is appropriate, is the standard in approving coverage for beneficiaries under age 21 (Siegel/Goldberg, Baltimore Sun, 6/22).

The Cases
The decision stems from liver transplants given to two Medicaid beneficiaries, Taurus Jackson and Jessica Nettles. In Jackson's case, Hopkins administrators requested authorization for a liver transplant in November 1995, even though Jackson had a life-long history of liver problems and already had had two unsuccessful liver transplants. Hopkins doctors contended that without the third procedure, Jackson would have died. But saying the patient had "behavioral problems," state Medicaid officials denied the request three times. In June 1996, Hopkins physicians completed the transplant without state approval. In the second case, Nettles had been diagnosed with liver failure, chronic hepatitis and "other medical problems," prompting her doctors to request a liver transplant in 1995. State Medicaid officials, however, said that a "definitive causative diagnosis" had not been established and denied the request. Hopkins doctors sent additional information about Nettles' condition to the state, but received a second denial. However, Hopkins doctors eventually performed the transplant. Hopkins administrators sought reimbursement from the state's Medicaid program for both procedures, but their request was denied. In 1998, Hopkins filed suit in Howard County Circuit Court on behalf of Jackson and Nettles, charging that the state violated federal Medicaid law when it refused to preauthorize more than $250,000 in payments for the transplants. In March 1999, however, the court dismissed the case, a decision that was affirmed by the state Court of Special Appeals one month later (Kaiser Daily Health Policy Report, 12/5/00).

Precedent Setting
The appeals court ruling reverses the county circuit court's ruling and returns the case there for "further proceedings." The Sun reports that the "nature of the hearing is unclear, but it must include enforcement of the top court's ruling." The ruling could "affect a range of [preauthorized] Medicaid-funded procedures for children," the Sun reports, although state health department spokesperson Karen Black said she did not know how the ruling would affect the program. Marta Harting, an attorney representing Johns Hopkins, said, "It's critically important that Medicaid steps up to the plate and provides reimbursement and services for these kinds of cases" (Baltimore Sun, 6/22).