Ohio Dep't of Medicaid v. Thomas Price

864 F.3d 469, 2017 FED App. 0161P, 2017 WL 3122762, 2017 U.S. App. LEXIS 13274
CourtCourt of Appeals for the Sixth Circuit
DecidedJuly 24, 2017
Docket16-3550
StatusPublished
Cited by6 cases

This text of 864 F.3d 469 (Ohio Dep't of Medicaid v. Thomas Price) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ohio Dep't of Medicaid v. Thomas Price, 864 F.3d 469, 2017 FED App. 0161P, 2017 WL 3122762, 2017 U.S. App. LEXIS 13274 (6th Cir. 2017).

Opinions

GRIFFIN, J., delivered the opinion of the court in which GUY, Jv joined. CLAY, J. (pp. 482-92), delivered a separate dissenting opinion.

OPINION

GRIFFIN, Circuit Judge.

The Ohio Department of Medicaid petitions this , court for review of an order entered by the Centers for Medicare and Medicaid Services (CMS) denying a proposed amendment to the State’s Medicaid plan. At issue is whether Ohio’s juvenile pretrial detainees are “inmate[s] of a public institution”—a population ineligible for federal Medicaid reimbursement under 42 U.S.C. § 1396d(a)(29)(A). CMS has deter-, mined they are. Because the agency’s interpretation is not arbitrary, capricious, or an abuse of its discretion, we deny the petition for review.

I.

A.

Medicaid is a cooperative federal-state program that provides funds to participating states for the medical care of needy individuals. Harris v. Olszewski, 442 F.3d 456, 460 (6th Cir. 2006). To qualify for federal funds, states must submit to CMS “a state Medicaid plan that details the nature and sqope of the State’s Medicaid program. It must also submit any amendments to the plan that it may make from time to time,” Douglas v. Indep. Living Ctr. of S. Cal., Inc., 565 U.S. 606, 610, 132 S.Ct. 1204, 182 L.Ed.2d 101 (2012). Before approving a state’s plan or an amendment to it, CMS reviews the plan for compliance with all statutory and regulatory requirements. See Rosen v. Goetz, 410 F.3d 919, 927 (6th Cir. 2005); see also 42 U.S.C. §§ 1316(a)(1), (b) & 1396a(b). “And ... the agency will not provide federal funds for any state plan amendment until the agency approves the amendment.” Douglas, 565 U.S. at 611, 132 S.Ct. 1204.

One constraint on state plans is Medicaid’s inmate exclusion, which prohibits federal financial participation (FFP) for state medical éxpenditures made on behalf of “any individual who is an inmate of a public institution (except as a patient in a medical institution).” 42 U.S.C. § 1396d(a)(29)(A).1 State governments are traditionally responsible for the medical care of those they punish by incarceration. See Estelle v. Gamble, 429 U.S. 97, 103, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976); see also Brown v. Plata, 563 U.S. 493, 510-11, 131 S.Ct. 1910, 179 L.Ed.2d 969 (2011). And “[t]he intent of [this] prohibition is to ensure that federal Medicaid funds are not used to finance care that is the responsibility of state and local authorities.” Carolyn L, Yocom, U.S. Gov’t Accountability Off., [473]*473GAO-14-752R Medicaid: Information on Inmate Eligibility and Federal Costs for Allowable Services (2014) (footnote omitted).

CMS defines who is, and who is not, an “inmate of a public institution” in - 42 C.F.R. § 435.1010. The regulation provides in pertinent part:

Inmate of a public institution means a person who is living in a public institution, An individual is not considered an inmate if—
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(b) He is in a public institution for a temporary period pending other arrangements appropriate to his needs.

Id. (emphasis added). An individual is an “inmate of a public institution” barred from coverage if he “is living in a public institution.” Id. However, an individual living in a public institution is not an “inmate of a public institution”—and therefore not barred from coverage—if he resides in the public institution “for a temporary period pending other arrangements appropriate to his needs.” Id.

B.

In early 2014, Ohio submitted a proposed plan amendment to CMS aimed,at exploiting this distinction. Specifically, it sought to classify pretrial detainees under age 19 as non-inmates—i.e., those who live in a public institution for only “a temporary period pending other arrangements appropriate to [their] needs,” and for whom the State can claim federal Medicaid reimbursement. In so doing, petitioner acknowledged it was “requesting ... Medicaid coverage for a specific population that is currently ineligible for Medicaid benefits.”

After requesting and receiving further information from Ohio, CMS denied the amendment. Respondent explained that the inmate exclusion recognizes “no difference” between adults and juveniles, or convicted detainees and those awaiting trial. “For purposes of excluding FFP, for example, a juvenile awaiting trial in a detention center is no different than an adult in a maximum security prison,” “both are considered inmates, of a public institution.” It also rejected Ohio’s , argument that juvenile pretrial detainees fit the regulatory exception for individuals living in a public institution for a “temporary period,” and instead emphasized that the involuntary nature of the stay is the determinative factor: “This exception ..does not apply when the individual is involuntarily residing in a public institution awaiting adjudication of a criminal matter.”

Ohio challenged the decision through a CMS hearing officer and an administrator, and both affirmed the denial. It now petitions for review of the administrator’s ruling as the Secretary’s final decision.

II.

The Administrative Procedure Act governs our review of the Secretary’s decision. Battle Creek Health Sys. v. Leavitt, 498 F.3d 401, 408-09 (6th Cir. 2007). “The APA, which is incorporated by the Social Security Act, see 42 U.S.C. § 1359oo(f)(1), commands reviewing courts to ‘hold unlawful and set aside’ agency action that is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’ ” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994) (quoting 5.U.S.C. § 706(A)(2)). CMS falls short of this standard if its decision “relie[s] on factors which Congress has not intended it to consider, entirely fail[s] to consider an important aspect of the problem, offer[s] an explanation that runs counter to the evidence before the agency, or is so .implausible that it could not be ascribed to a [474]*474difference in view or the product of agency expertise.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983).

“The Medicaid Act commits to the federal agency the power to administer a federal program.” Douglas, 565 U.S. at 614, 132 S.Ct. 1204. “And here,” in denying Ohio’s proposed amendment, “the agency has acted under this grant of authority.” Id. Section 1396a(b) of the Act directs the Secretary to approve state plans that “ful fill! ] the conditions specified” in the statute, and reject those that do not. 42 U.S.C.

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864 F.3d 469, 2017 FED App. 0161P, 2017 WL 3122762, 2017 U.S. App. LEXIS 13274, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ohio-dept-of-medicaid-v-thomas-price-ca6-2017.