Thursday, August 16, 2012

Second Circuit Affirms Private Right of Action Against Dilatory Medicaid Agency

There exist countless Federal and State statutes and regulations that require governmental agencies to act within certain time frames. All too often, however, agencies ignore the deadlines, leaving the citizen requesting action frustrated and seemingly with no recourse.

Persons denied Medicaid benefits may file for "fair hearings" before an Administrative Law Judge.  Under Federal law, a fair hearing must be held within 90 days of the date that the fair hearing is requested. See 42 C.F.R. Sec. 431.244(f)(l)(ii).  In New York, fair hearings are administered through the Department of Health ("DOH").

All too often, the DOH has failed to hold the requested fair hearings within the 90-day time frame.  A group of aggrieved New Yorkers, in the case of Shakhnes v. Berlin,  filed a class-action lawsuit in U.S. District Court for the Southern District of New York requesting a determination that the DOH must comply with Federal law in timely holding fair hearings after a Medicaid denial.

Evidence during the trial showed that in at least 36 percent of the cases the DOH failed to hold fair hearings within 90 days, and that the average time to resolved cases took a whopping 326 days. The District Court found in the plaintiffs favor and issued an injunction ordering the DOH to hold fair hearings and implement the relief ordered at the hearings within the statutory 90-days window.  The DOH appealed the ruling to the Second Circuit Court of Appeals.

On August 13, 2012, the Second Circuit affirmed the District Court's ruling, but held that the District Court's decision was overbroad in requiring the DOH to not only hold fair hearings within 90-days, but to actually implement relief ordered in the fair hearing within the same 90-day time frame.  The Circuit Court held that Federal law does not impose an obligation for the state Medicaid agency to implement the relief ordered with in such 90-day window, and thus remanded the case to the District Court with instructions to "craft an order of injunctive relief consistent with this opinion."

Click here to read the full Circuit Court opinion.

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