NB Ex Rel. Peacock v. District of Columbia
794 F.3d 31
D.C. Cir.2015Background
- Medicaid recipients alleged District denial of prescription drug coverage without adequate notice of hearing rights under Title XIX and due process.
- DHCF administers the District's Medicaid prescription drug program; Xerox processes claims and issues at‑sale coverage decisions in real time.
- Regulatory framework: Title XIX permits some drug coverage decisions to be limited or subject to prior authorization; drugs not excluded may be covered if eligibility criteria are met.
- Regulations require notice of a hearing or opportunity to request a hearing in certain actions; denial of a specific prescription at the point of sale is at issue.
- District court dismissed Title XIX claims; also dismissed state-law claims for lack of pendant jurisdiction after federal claims were dismissed.
- On appeal, the court affirms dismissal of Title XIX claims but reverses on due process, remanding to determine what process is due.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Title XIX notice for denial at the point of sale | Peacock argues notice is required whenever a drug denial occurs. | District asserts notice is not triggered by a simple denial at point‑of‑sale under regulation. | Title XIX claims dismissed; regulations do not require notice for denials at point of sale. |
| Due process entitlement to process for prescription drug denials | Plaintiffs contend they have a protected property interest and deserve process beyond a mere completion of enrollment. | District argues no entitlement absent meeting all eligibility preconditions for benefits. | Remanded to determine what process is due; plaintiffs have a protected property interest and state action via Xerox. |
Key Cases Cited
- Goldberg v. Kelly, 397 U.S. 254 (1970) (due process protections for public benefits)
- Bd. of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) (legitimate entitlement as prerequisite for property interest)
- Mathews v. Eldridge, 424 U.S. 319 (1976) (due process balancing test factors)
- Brentwood Acad. v. Tenn. Secondary Schs. Athletic Ass'n, 531 U.S. 288 (2001) (state action nexus in private conduct cases)
- Skinner v. Ry. Labor Execs. Ass’n, 489 U.S. 602 (1989) (private action with government nexus may be state action)
- Wash. Legal Clinic for the Homeless v. Barry, 107 F.3d 32 (1997) (entitlement and due process considerations for benefits)
- Daniels v. Woodbury Cnty., Iowa, 742 F.2d 1128 (1984) (mandatory vs. discretionary benefit award standards)
- Eidson v. Pierce, 745 F.2d 453 (7th Cir. 1984) (due process entitlement considerations for benefits)