Although the Michigan Department of Health and Human Services (DHHS) restored benefits retroactive to dates of application for Medicaid coverage for two non-US citizens after the applications were erroneously denied, these claims are not moot as to a potential class. The U.S. Court of Appeals for the Sixth Circuit reversed and remanded the Eastern District of Michigan’s dismissals after finding that fact issues precluded summary judgment on some claims (Unan v. Lyon, March 31, 2017, Moore, K.).
Immigration status and Medicaid eligibility. Non-citizens are eligible for Medicaid benefits after attesting to "satisfactory immigration status" and providing required documentation. States are required to provide a reasonable opportunity for applicants to provide these documents if they have attested their status, but not verified. When DHHS implemented system changes required by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), several applicants were erroneously granted Emergency Services Only (ESO) coverage, which does not provide coverage for general or preventive treatment, even if they may have been eligible for comprehensive coverage. These system errors automatically denied non-citizen applicants who had not yet verified their immigration status and placed them in ESO coverage, despite the reasonable opportunity rule.
Two applicants, one a legal permanent resident and the other a refugee, applied for Medicaid in April 2014. Neither were asked for documentation, and both received statements of approval for ESO Medicaid with no explanation regarding denial of comprehensive coverage. In August 2014, the two filed a class action suit against DHHS, alleging (1) failure of prompt provision of coverage; (2) failure of providing reasonable opportunity to verify status; and (3) failure to provide notice. Two days later, both were granted Medicaid eligibility retroactive to the beginning of April.
Mootness. The district court found that because DHHS had addressed system issues, reprocessed necessary applications, and provided retroactive benefits, all issues were moot and no other class members existed (see Issues processing immigrants’ Medicaid applications sufficiently rectified, January 12, 2016). The appeals court disagreed, citing the "picking off" exception. This exception prevents parties from avoiding class litigation by strategically settling individual claims. Although DHHS argued that the entire putative class was addressed through a systemic fix, the court noted that the relief provided to the two potential class representatives in this case was provided on an ad hoc basis rather than through a systemic fix. Further, evidence showed that hundreds of erroneous ESO assignments occurred after the permanent fix was supposedly implemented.
The appeals court found that neither the erroneous assignment nor the notice claims were moot, and reversed the grant of summary judgment for DHHS. However, the appeals court affirmed the denial of the applicants’ motion for summary judgment because they did not demonstrate a lack of factual dispute. The appeals court also held that DHHS was entitled to judgment as a matter of law on the notice claims, finding that the agency has resolved these issues.
The case is No. 16-1185.
Attorneys: Anna Marie Hill (Michigan Immigrant Rights Center) for Aelen Unan. Joshua Sean Smith, Office of the Attorney General, for Nick Lyon.
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