AG Rowe Files Suit Over Medicaid Rule Change

February 29, 2008

Today, Maine Attorney General Steve Rowe announced the filing of a lawsuit against the United States Department of Health and Human Services (US DHHS) and Michael Leavitt in his capacity as Secretary of US DHHS. The Complaint, filed in the United States District Court for the District of Columbia, challenges a certain agency rule that would adversely impact many of Maine?s Medicaid recipients and cost the State?s general fund more than 16 million dollars in fiscal years 2008 and 2009.

The US DHHS promulgated an Interim Medicaid Program Final Rule on December 4, 2007 relating to Medicaid case management and targeted case management.

In the complaint, Maine and three other states allege that portions of the Interim Final Rule promulgated by the US DHHS are arbitrary, capricious, an abuse of discretion and not in accordance with the 2005 Deficit Reduction Act or any of the provisions of Title XIX of the Social Security Act. The complaint also alleges that the US DHHS violated the rule making requirements of the federal Administrative Procedure Act (APA) and that the Interim Final Rule does not provide a reasonable transition period for Maine to modify its case management programs.

Rowe said that many of the provisions in the Interim Final Rule will jeopardize the health and safety of Medicaid beneficiaries, limit the state?s flexibility to provide case management in the most effective and efficient manner and result in a substantial reduction in federal funds for Medicaid case management services.

?This federal rule will abruptly cut off funding that helps protect the health and safety of our state?s most vulnerable citizens. The rule is not only unfair to States and Medicaid beneficiaries, it is also illegal. We are confident that the federal court will find that the Secretary of Health and Human Services exceeded the authority given to him by Congress.? Rowe said. ?States derive no pleasure from suing the federal government. However, in this case, we must do so to protect the health and safety of our citizens.?

The Medicaid Program is a state-federal partnership designed to furnish medical assistance to certain low-income children elderly and disabled individuals whose income and resources are inadequate to pay for necessary medical services. States must comply with federal requirements specified in the Social Security Act (SSA) as well as the regulations and program guidance issued by the US DHHS pursuant to its authority under the SSA.

Rowe added, ?These services are fundamental to the lives of thousands of people across the state. Without the services their physical and mental health will decline. This will lead to a lower quality of life and an increase in the cost of care the state will have to provide.?

The State is asking that the Court bar the Federal Government from enforcing the new Medicaid rule and to award state?s costs and attorneys fees.

Case management is a service that assists beneficiaries in gaining access to needed medical, social, educational and other services. Targeted case management is case management that is targeted to beneficiaries with a particular diagnosis or condition such as individuals with developmental disabilities, individuals with mental illness, individuals with HIV/AIDS, children at risk of abuse and neglect and, foster care children in State custody.

Joining Maine in this lawsuit are Maryland, New Jersey and Oklahoma.


February 29, 2008 David Loughran, (207) 626-8577