Massachusetts v. Sebelius
638 F.3d 24
| 1st Cir. | 2011Background
- Massachusetts MassHealth seeks to recover Medicaid payments from CMS in four retroactive dual-eligibility cases.
- In each case, beneficiaries later became federally eligible for Medicare for the same services.
- Massachusetts argues Medicaid statutes require it to seek reimbursement directly from CMS, not from providers.
- CMS and CMS-related entities contend only providers may receive Medicare payments, so MassHealth must obtain reimbursement via providers.
- District court granted 12(b)(6) dismissal, holding Medicare statute unambiguously forbids direct CMS recovery; alternative Chevron/Auer analysis proposed.
- On appeal, First Circuit affirms dismissal, deciding CMS interpretation is correct under Chevron and agency regulations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May CMS directly reimburse MassHealth in retroactive dual eligibility cases? | Massachusetts says Medicaid statute requires direct CMS recovery. | CMS interprets Medicare statute to allow only providers to bill and be paid by Medicare; MassHealth is not a provider. | MassHealth cannot recover directly from CMS |
Key Cases Cited
- Ark. Dep't of Health & Human Servs. v. Ahlborn, 547 U.S. 268 (2006) (Medicaid payer of last resort and cap on state lien recovery principles)
- Massachusetts v. United States, 522 F.3d 115 (1st Cir. 2008) (statutory interplay between Medicaid and Medicare; subrogation context)
- Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (agency deference framework for interpretations of statutes regulating agency actions)
- Auer v. Robbins, 519 U.S. 452 (1997) (deference to agency interpretations of its own regulations (agency posture))
- Atlanticare Med. Ctr. v. Comm'r of the Div. of Med. Assistance, 439 Mass. 1, 785 N.E.2d 346 (Mass. 2003) (state must seek reimbursement from liable third parties; not determinative on direct CMS recovery)
- Chase Bank USA, N.A. v. McCoy, 131 S. Ct. 871 (2011) (Supreme Court addressing agency interpretation and litigation posture issues)
- Gonzales v. Oregon, 546 U.S. 243 (2006) (agency interpretation of statutes and regulatory wording)
- United States v. Mead Corp., 533 U.S. 218 (2001) (definition and limits of Chevron deference)