Court throws out LePage lawsuit seeking expedited approval for Medicaid cuts

AUGUSTA, Maine — A federal court has thrown out the LePage administration’s lawsuit that sought to force federal health officials to expedite the approval of Maine’s request to make about $20 million in cuts to its Medicaid program.

In a one-page decision filed Thursday, a three-judge panel from the First Circuit Court of Appeals in Boston “summarily denied” Maine’s case, saying “the facts do not warrant” the state’s call for an expedited review of its request to amend its state Medicaid plan with cuts affecting coverage for about 36,000 low-income residents.

The decision came less than two weeks after Maine Attorney General William Schneider petitioned the court to force an expedited decision from the federal Centers for Medicare and Medicaid Services after the agency informed the LePage administration it wouldn’t rule on its request to cut Medicaid on the administration’s desired time frame.

The federal government had not yet filed a response in the case.

Spokeswomen for Schneider and for Gov. Paul LePage both declined comment Thursday afternoon. Schneider’s spokeswoman, Brenda Kielty, noted that a settlement conference for Maine and federal officials has been scheduled for the beginning of October at the Boston court.

Opponents of the Medicaid cuts cheered the decision.

“The fact that the First Circuit summarily denied the state of Maine’s petition for review goes to show it was without merit,” said Sara Gagne-Holmes, executive director of Maine Equal Justice Partners, which had sent a letter to U.S. Health and Human Services Secretary Kathleen Sebelius in early August urging her to reject the state’s request to cut Medicaid coverage. “It means that Maine, just like any other state, needs to follow the law, which means they can’t cut coverage for thousands of Maine people.”

Rep. Emily Cain, the Democratic leader in the Maine House, praised the court for exercising “due diligence” in the case. “It’s not surprising since the request was purely political and a frivolous use of taxpayer dollars,” she said in a statement.

Schneider’s court filing was a response to a letter the federal government sent LePage on Aug. 31 to tell him the Centers for Medicare and Medicaid Services, or CMS, was still reviewing Maine’s request for an amendment to its Medicaid state plan, and that it wouldn’t meet LePage ’s Sept. 1 deadline the administration sought for a decision.

The LePage administration had requested the Sept. 1 decision when it submitted its request for the Medicaid plan amendment on Aug. 1 so it could implement the planned cuts by Oct. 1 to keep the state budget out of the red. But in the Aug. 31 letter to LePage, acting CMS administrator Marilyn Tavenner noted the agency has 90 days under federal law to review such a request.

If the federal government uses the 90 days it’s allowed to rule on the state’s Medicaid-trimming request, the state might not have a decision until the end of October, well after the original Oct. 1 implementation date for the coverage cuts.

The state cuts would eliminate coverage for 19- and 20-year-olds, tighten income eligibility requirements for low-income parents and scale back Medicaid access for elderly residents who also qualify for Medicare benefits.

Whether the LePage administration can make the cuts has been in question since lawmakers started debating them earlier this year and included them in two supplemental budget packages.

The Affordable Care Act, the Obama administration’s health care reform law, largely bars states from making Medicaid cuts in advance of a planned 2014 expansion of the program through a provision known as “maintenance of effort.”

While the U.S. Supreme Court in June largely upheld the health care reform law as constitutional, the court ruled it unconstitutional for the federal government to withhold funds for existing Medicaid services as a way to enforce the Medicaid expansion.

The LePage administration read that part of the ruling more broadly and took it as a sign it could make cuts to its existing Medicaid program through a routine process — an amendment to Maine’s Medicaid State Plan. Schneider said in August that the maintenance of effort requirements are “part and parcel of the Medicaid expansion that was struck down.”

The LePage administration had been counting on the Medicaid cuts to fill a $20 million budget hole, and administration officials haven’t elaborated on backup plans to close the budget gap if the Medicaid cuts aren’t approved.

Sen. Richard Rosen, R-Bucksport, said Thursday he hopes the federal government acts in a timely manner and approves the cuts.

“I hope they don’t intend to delay and avoid giving the state a straightforward decision,” said Rosen, who chairs the budget-writing Appropriations Committee. “We are facing a very serious and real problem to be able to fund and maintain the Medicaid program because of the fiscal crisis at the federal level. We see the need for eligibility changes to keep the program at affordable levels for the state budget.”

A spokesman for CMS declined comment Thursday.