Virginia Department of Medical Assistance Services v. United States Department of Health & Human Services
400 U.S. App. D.C. 319
| D.C. Cir. | 2012Background
- Medicaid IMD exclusion generally bars FFP for individuals in IMDs under 65, with two exceptions: age 65+ and the under-21 inpatient psychiatric services exception (paragraph 16).
- Paragraph (h) defines inpatient psychiatric hospital services for individuals under 21 with three criteria: inpatient setting, active treatment likely to improve condition, and care provided before age 21 (ceasing by age 22).
- Audits (2001–02) led CMS to disallow Virginia and Kansas IMD claims not meeting the under-21 inpatient-psychiatric-services criteria; DAB upheld CMS in related decisions.
- District court granted summary judgment for HHS, concluding the IMD exclusion is unambiguous and the under-21 exception narrowly applies to inpatient psychiatric services only.
- The appeals were consolidated on review under the Administrative Procedure Act, Chevron step 1 analysis, and related statutory/administrative-law principles.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of the under-21 exception | States argue the exception is broader than inpatient psych; could cover other IMD services. | HHS asserts exception covers only inpatient psychiatric hospital services defined in (h). | Unambiguous; exception limited to inpatient psychiatric services. |
| Relation to comparability and other provisions | States contend structure (1396a(a)(10)) and other provisions imply broader coverage. | Plain language controls; other provisions do not override the narrow exception. | Plain language governs; comparability and other provisions do not broaden the exception. |
| Legislative history and regulations supporting broader reading | Legislative history and some regulations support broader interpretation. | History/regulations are inconclusive or align with the narrow reading. | Legislative history inconclusive; regulations consistent with narrow reading; text controls. |
| EPSDT and other funded services under IMD | EPSDT/other services should be funded alongside under-21 inpatient services. | IMD exclusion remains in place, except for the narrow under-21 inpatient-psychiatric services. | EPSDT/other services do not alter the narrow under-21 inpatient-psychiatricServices scope. |
| Waivers and cost-neutral home/community-based care | Waivers could be cost-neutral by offsetting IMD costs with community care. | Cost-neutrality uncertain; Congress did not indicate a broader scope alteration. | Record insufficient to determine cost-neutrality; still, the under-21 exception remains narrow. |
Key Cases Cited
- Conn. Nat'l Bank v. Germain, 503 U.S. 249 (1992) (interpretation of plain meaning when language is unambiguous)
- Engine Mfrs. Ass'n v. U.S. EPA, 88 F.3d 1075 (D.C. Cir. 1996) (prescribes Chevron step analysis and deference to agency interpretation)
- U.S. Postal Serv. v. Postal Regulatory Comm'n, 640 F.3d 1263 (D.C. Cir. 2011) (Chevron framework applied to agency interpretations)
- Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644 (2003) (Medicaid/Medicare statutory interpretation framework (agency deference))
- U.S. ex rel. Totten v. Bombardier Corp., 380 F.3d 488 (D.C. Cir. 2004) (statutory language plainness and textual primacy)
- Ricci v. DeStefano, 557 U.S. 557 (2009) (interpretation of separate provisions in harmony)