Health Law Daily Beneficiaries unable to sue state agency, coverage not reduced or eliminated
Tuesday, August 7, 2018

Beneficiaries unable to sue state agency, coverage not reduced or eliminated

By Jeffrey H. Brochin, J.D.

Medicaid beneficiaries whose coverage was being transitioned from one New York managed long-term care program (MLTCP) to a different one lacked standing to sue the New York Commissioner of the Department of Health (DOH) upon a finding that their coverage had not been reduced nor eliminated; however, because the nature of one beneficiary’s claims were inherently transitory, his putative class action claims survived (Samele v. Zucker, August 2, 2018, Spatt, A.).

MLTCP requirement. The Commissioner required beneficiaries of Medicaid and Medicare in New York to enroll in an MLTCP in order to receive funded long-term services. Beneficiaries of MLTCP home care provider GuidNet were informed by letter on or about March 20, 2017, that it would not be providing MLTCP services in Nassau, Suffolk, and Westchester counties beginning June 1, 2017. Enrollees were told that they should select a new MLTCP before May 18, 2017 to assure a smooth transition, and that they would continue to receive services from GuildNet until the transfer to the new plan was complete.

After the Commissioner received a number of complaints from GuildNet enrollees about the March 20 letter, he sent a new letter to GuildNet enrollees on May 2017, advising them that they did not need to transfer to a new plan by June 1, and that the state required GuildNet to continue providing existing services until a smooth transfer to a new plan could be completed. Certain beneficiaries filed suit, claiming improper notice and violations under the Due Process Clause as well as under the Medicaid Act (42 U.S.C. §1396 et seq.), Americans with Disabilities Act (ADA) (42 U.S.C §12131 et seq.), and section 504 of the Rehabilitation Act (29 U.S.C. §794). The DOH moved to dismiss.

No loss or reduction in coverage. The court first addressed the issue of standing, and determined that because the primary beneficiaries failed to establish that they were faced with the imminent prospect or even the threat of loss of medical care, they did not demonstrate an injury, a necessary element for a showing of standing. Pursuant to the Commissioner’s May 2017 letter, GuildNet had to continue providing the same level of care to them until they found a new provider. They were free to seek out other MLTCPs who would offer the same level of care, and in fact two of the beneficiaries were eventually offered 24-hour care by different MLTCPs. Accordingly, their claims were deemed to be moot.

Standing not the same as mootness. The court noted that although standing and mootness are interrelated concepts, they are not to be confused. Standing relates to whether a litigant has a personal stake at the commencement of an action, while mootness ensures that the litigant’s interest exists throughout the life of the lawsuit. A case is moot when the issues presented are no longer live or the parties lack a legally cognizable interest in the outcome.

Inherently transitory claims. There are three exceptions to the general rule that the mooting of a named plaintiff’s claims moots a class action: (a) the defendant voluntarily ceases the injury-causing conduct in an attempt to evade judicial scrutiny; (b) the claims are inherently transitory; or (c) the claims are capable of repetition, yet evading judicial review. The court found that although the named beneficiaries’ claims were moot, the nature of claims such as that of another beneficiary, were inherently transitory, and therefore the putative class action claims could survive.

Based on the foregoing, the court granted the Commissioner’s motion to dismiss as to the claims which did not establish standing, however it was denied to the extent that the inherently transitory exception applied to the other beneficiary’s claims which were preserved for the purposes of the putative class action. The court also denied the motion for class certification without prejudice.

The case is No. 2:17-cv-03397 (ADS)(AKT).

Attorneys: Benjamin Wait Taylor (New York Legal Assistance Group) for Gemma Samele and Selma Roher. Dorothy O. Nese, Office of the New York State Attorney General, for Howard Zucker.

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