On August 29, 2005, seven low-income Missouri residents who received health coverage through Medicaid filed this lawsuit in the U.S. District Court for the Western District of Missouri. The plaintiffs sued the State of Missouri under the Medicaid Act, pursuant to 42 U.S.C. 1983 and the Supremacy Clause. The plaintiffs, represented by an array of public interest organizations, sought declaratory and injunctive relief, asking the court to enjoin Missouri from enforcing an emergency Medicaid regulation that would deny plaintiffs access to durable medical equipment (DME). The plaintiffs claimed that the emergency regulation, eliminating coverage of DME for most categorically-needy Medicaid recipients in the state, violated the Medicaid Act's comparability requirements and reasonable standards provisions.

As background, DME includes a wide variety of medical devices and equipment, including wheelchairs, prosthetics, orthopedic devices and hospital beds. Before 2005, Missouri provided DME as a stand-alone benefit to all recipients of Medicaid in the state. However, due to budget constraints, Missouri eliminated coverage of DME except for residents who are needy children, blind, or pregnant. In September 2005, the state promulgated an emergency regulation that reinstated coverage of certain DME items for all Medicaid recipients -- while at the same time extended coverage of additional items only to recipients who are blind, pregnant, needy children or those receiving home health care. The plaintiffs, who did not fall into those categories, were unable to obtain coverage for previously covered DME. Rather than challenging the statute, the plaintiffs argued that the emergency regulation impermissibly extended DME coverage to blind recipients but not others -- in violation of federal law.

On September 13, 2005, the court (Judge Whipple) denied the plaintiffs' motion for a preliminary injunction. In evaluating the plaintiff's argument, Judge Whipple reasoned that the Missouri emergency regulations likely did not violate the comparability requirement of the Medicaid Act. Judge Whipple concluded that the plaintiffs had other ways of obtaining DME through the state's Medicaid program. Further, he noted that Missouri had filed for a waiver from the Department of Health and Human Services (HHS) and the Center for Medicare and Medicaid Services (CMS) to permit it to provide DME services to the blind (but not other categorically need persons such as the plaintiffs). The plaintiffs appealed the District Court's decision to the Eighth Circuit Court of Appeals.

On June 22, 2006, the Eighth Circuit (Judge Benton) vacated and remanded the District Court's decision, finding that the state DME regulation was likely preempted by the Supremacy Clause. (Lankford v. Sherman, 451 F.3d 496 (8th Cir. 2006)). The Eighth Circuit determined, in line with the District Court's conclusion, that Missouri's provision of DME did not violate the Medicaid Act's comparability requirement. After HHS/CMS denied the waiver, Missouri decided to cover DME for the blind using solely state (and no federal) funds, meaning that it need not comply with the federal requirement. For the same reasons, the court concluded that the provision of DME services did not violate the reasonable standards requirement. The court further concluded that the plaintiffs did not have a private right of action under 1983 to enforce Medicaid's reasonable-standards provision.

The Eighth Circuit concluded that Missouri's DME regulations conflicted with the federal regulations that implement Medicaid's reasonable-standards requirement; thus, the regulations violated the Supremacy Clause. The plaintiffs had argued that the state regulation was unreasonable because it failed to provide sufficient DME services to meet Medicaid's basic objectives and the state's proposed alternatives to obtain the necessary DME were insufficient. The court agreed, concluding that the plaintiffs established a likelihood that they would prevail on the merits of their preemption claim pertaining to the reasonable-standards requirement. The court explained that because likelihood of success on the merits is only one of the four factors in determining whether to grant a preliminary injunction and the district court failed to address the other facts, the case should be remanded.

On March 2, 2007, Judge Whipple, on remand, granted the plaintiffs' motion for summary judgment and for a preliminary injunction to enjoin enforcement of Missouri's emergency Medicaid regulations that essentially eliminated the plaintiffs' access through Medicaid of DME. Judge Whipple ordered the state to amend its current DME program to comply with Medicaid's reasonable-standards requirement, thus remedying the preemption problem that the Eighth Circuit found.

On June 1, 2008, the defendants informed the court that on May 18, 2007, the Missouri General Assembly had passed a bill that covered all medically necessary DME. As such, defendants asked the court to declare that they were in compliance with the court's March 2 order.

On January 23, 2008, Judge Whipple declared that the defendants were in compliance with that order. He noted, however, that the only issue before the court was the legality of Missouri's 2005 emergency regulations. By eliminating that proposed regulatory scheme, Missouri complied with the order. However, the court was not deciding whether the state's subsequent legislative action in May 2007 conformed with the reasonable-standards requirement.

Because Judge Whipple found the defendants in compliance with the March 2, 2007 order, the case is closed.

Greg Margolis - 02/12/2017


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