Newton-Nations v. Betlach
660 F.3d 370
9th Cir.2011Background
- Plaintiffs are economically vulnerable Arizonans receiving Medicaid benefits through AHCCCS and challenged 2003 increases to copayments that were made mandatory and potentially denial-driven for those unable to pay.
- Arizona's program relies on §1315 waivers; the Secretary approved a waiver and amendments in January and December 2001, incorporating cost-sharing changes.
- Arizona expanded coverage to childless, non-disabled adults up to 100% FPL via Proposition 204; AHCCCS applied nominal and non-mandatory copayments to expansion/population groups under §1315 authority.
- In October 2003, AHCCCS implemented a rule increasing copayments for non-categorically needy participants; HHS retroactively approved the rule in February 2004.
- Plaintiffs asserted four claims, including that cost-sharing violated the Medicaid Act and the Secretary exceeded authority, and that notices violated due process; the district court granted summary judgment for defendants on some claims and denied on others.
- On appeal, the Ninth Circuit affirmed in part, reversed in part, and remanded for further consideration on certain issues, including the adequacy of the Secretary’s §1315 review and the 2003 notices' due process implications, with intervening 2010–2011 notices potentially moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether cost-sharing limits apply to medically needy populations under demonstration projects | Medically needy remain Medicaid-eligible; cost-sharing protections should apply. | Medically needy populations not identified in the state plan become expansion populations; §1396o limits apply to expansion, not medically needy. | Cost-sharing restrictions do not apply to such expansion populations. |
| Whether the Secretary’s § 1315 approval complied with Beno v. Shalala requirements | Record lacked judgment on experimental value, impact, and extent; Beno violated. | Approval complied with §1315; reasonable construction under Chevron. | Secretary’s §1315 approval reversed; remanded for further consideration consistent with Beno and this opinion. |
| Whether the § 3515 human participants requirement applied to the demonstration project | Heightened copayments harmed participants and require informed consent protections. | Regulations exempt demonstration projects; §3515b not violated. | Affirmed district court on this claim; regulation-based exemption applies. |
| Whether the 2003 notices regarding copayments complied with due process and Medicaid Act requirements | Notices were constitutionally deficient and inadequate under the Medicaid Act. | Notices not tightly challenged earlier; intervening events may moot the claim; rulings pending remand. | Claims remanded for determination of ongoing basis; not resolved on the record here. |
Key Cases Cited
- Phx. Mem’l Hosp. v. Sebelius, 622 F.3d 1219 (9th Cir. 2010) (expansion populations and cost-sharing under §1315 discussed)
- Beno v. Shalala, 30 F.3d 1057 (9th Cir. 1994) (requires analysis of experimental value, impact, and extent under §1315)
- Spry v. Thompson, 487 F.3d 1272 (9th Cir. 2007) (expansion populations concept and eligibility distinctions in Medicaid)
- Motor Vehicle Mfrs. Ass’n v. State Farm Ins., 463 U.S. 29 (U.S. Supreme Court 1983) (APA arbitrary and capricious standard)
- Christopher v. SmithKline Beecham Corp., 635 F.3d 383 (9th Cir. 2011) (Chevron deference framework and agency interpretation)
- Pharmacy Research and Mfrs. of Am. v. Walsh, 538 U.S. 644 (U.S. Supreme Court 2003) (Medicaid eligibility categories explained: categorically vs medically needy)