977 F.3d 599
7th Cir.2020Background
- Plaintiffs are Illinois residents classified as “medically needy” for Medicaid and require long‑term skilled nursing care.
- They incurred medical expenses before qualifying as medically needy and contend unpaid or outstanding bills should count as "incurred expenses" under 42 U.S.C. §1396a(r)(1)(A) to reduce their countable income.
- Illinois recognizes them as medically needy but does not credit prior/unpaid bills as current medical outlays when calculating eligibility/benefits.
- Plaintiffs sued in district court seeking additional Medicaid payments; the district court dismissed on the pleadings.
- The central legal questions: whether §1396a(r)(1)(A) creates a private right enforceable in court; whether §1396a(a)(8) (reasonable promptness) can be used to challenge benefit amounts; and whether ADA/Rehabilitation Act claims or leave to amend could salvage the suit.
- Seventh Circuit affirmed: no private right under §1396a(r)(1)(A); §1396a(a)(8) cannot be used to increase benefit levels; ADA/RA claims failed; amendment would be futile absent plausible new allegations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1396a(r)(1)(A) creates a private right of action enforceable by beneficiaries | Plaintiffs: statute requires states to count incurred medical expenses (including prior unpaid bills); courts may enforce that duty | Illinois: Medicaid is a federal–state cooperative program; statute does not create an enforceable private right; administrative remedies exist | No private right; beneficiaries must use administrative/federal enforcement mechanisms |
| Whether §1396a(a)(8) (reasonable promptness) can be used to challenge the amount of benefits | Plaintiffs: unpaid past expenses mean needed funds aren’t being paid “with reasonable promptness” | Illinois: §1396a(a)(8) governs timing, not quantum, of benefits; cannot be turned into a claim about benefit levels | Rejected — reasonable‑promptness provision cannot be used to increase benefit amounts |
| Whether ADA / Rehabilitation Act provide relief for alleged discrimination in benefit calculation | Plaintiffs: state discriminates against disabled by not crediting past medical bills, denying necessary accommodations | Illinois: plaintiffs receive Medicaid and more aid than non‑disabled; claimed grievance is substantive benefit amount, not discrimination or denial of accommodation | Rejected — no actionable disability discrimination or required accommodation compatible with Medicaid plan |
| Whether district court abused discretion by denying leave to amend | Plaintiffs: should have been permitted to file an amended complaint to state a plausible claim | Illinois: plaintiffs failed to specify what viable allegations they'd add; amendment would be futile | No abuse — plaintiffs did not identify plausible amendments; amendment would not cure deficiencies |
Key Cases Cited
- Maine v. Thiboutot, 448 U.S. 1 (1980) (recognized §1983 suits for some federally funded program beneficiaries)
- Wilder v. Virginia Hospital Ass'n, 496 U.S. 498 (1990) (allowed §1983 enforcement for certain Medicaid provisions)
- Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. 320 (2015) (refused private right for providers to enforce Medicaid funding conditions)
- Astra USA, Inc. v. Santa Clara Cnty., 563 U.S. 110 (2011) (no private suit to enforce terms of a state–federal contract set by statute)
- Gonzaga Univ. v. Doe, 536 U.S. 273 (2002) (limits on implying private rights under §1983)
- Romano v. Greenstein, 721 F.3d 373 (5th Cir. 2013) (held §1396a(a)(8) can be enforced in private suit)
- Doe v. Kidd, 501 F.3d 348 (4th Cir. 2007) (same re: §1396a(a)(8))
- Sabree v. Richman, 367 F.3d 180 (3d Cir. 2004) (same re: §1396a(a)(8))
- Bertrand v. Maram, 495 F.3d 452 (7th Cir. 2007) (Seventh Circuit skeptical of private‑right line but assumed it for decision)
- Vaughn v. Walthall, 968 F.3d 814 (7th Cir. 2020) (ADA/RA do not require states to depart from Medicaid program terms)
- Winter v. Miller, 676 F.2d 276 (7th Cir. 1982) (explaining Medicaid "categorically" vs. "medically needy" nomenclature)