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Maine AG seeks First Circuit review of Medicaid plan amendment

By Jessica M. Karmasek | Sep 5, 2012


AUGUSTA, Maine (Legal Newsline) - Maine Attorney General William Schneider says he had "no choice" but to file a petition for review with a federal appeals court after the federal government refused to rule on the state's request to make cuts to its Medicaid program on an "expedited basis."

"In a letter dated Aug. 31, 2012, CMS (the U.S. Department of Health and Human Services Centers for Medicare and Medicaid Services) indicated that it will not issue an expedited decision on Maine's SPA (proposed State Plan Amendment) and did not address paying Maine's costs while the SPA is pending before CMS, foreclosing the possibility of advancing resolution of this issue without resort to litigation," Schneider said in a statement Tuesday.

"The failure of CMS to take action in consideration of the State's critical time constraints is in effect a denial Maine's proposed SPA.

"Given the response from CMS, Maine has no choice but to present this matter to the U.S. Court of Appeals for the First Circuit."

The State, through its Department of Health and Human Services, submitted its SPA to CMS on Aug. 1.

Maine proposed to amend its Medicaid plan to make specific MaineCare eligibility changes to three groups, consistent with legislative directives effective Oct. 1.

"Maine's standards in these areas still remain at or greater than the federal minimums with the proposed MaineCare eligibility changes," Schneider noted.

At that time, the State asked CMS to review the SPA on an "expedited basis" and to approve its plan by Sept. 1. Officials explained to CMS that a quick decision was needed so that the State could achieve its budget savings, as directed by the Legislature, and achieve a balanced budget, as required by the state constitution.

Schneider said the State "made it clear" to CMS that it would suffer "irreparable injury" absent the federal government's expeditious review of the SPA -- or its commitment to pay Maine for its costs while the SPA was pending, which CMS could later recoup by adjusting Medicaid reimbursements to Maine, the attorney general explained.

Maine filed its petition for review of the federal government's failure to act on the State's request Tuesday.

"This amendment is designed to save the State of Maine $19.93 million on its Medicaid expenses beginning on Oct. 1, 2012," Deputy Attorney General Paul Stern wrote in the two-page filing. "This failure to act effectively denies Maine's application.

"Exhaustion of administrative remedies here would be futile for several reasons."

Also Tuesday, the State filed a motion for injunctive relief, asking the First Circuit to order CMS to approve the SPA or order CMS to pay Maine's share for coverage of the three groups over and above the amounts Maine would pay if the SPA was approved on or before Oct. 1.

"We anticipate that the First Circuit will resolve this matter expeditiously," Schneider said.

According to the Bangor Daily News, the cuts would eliminate coverage for 19- and 20-year-olds, scale back Medicaid access for elderly residents who also qualify for Medicare, and toughen income eligibility requirements for low-income parents.

President Barack Obama's Patient Protection and Affordable Care Act doesn't allow states to make cuts to existing Medicaid services ahead of its expansion in 2014.

However, the U.S. Supreme Court ruled in June that if a state does not comply with new eligibility requirements for Medicaid, the states can only lose new funds available instead of all of their funding.

From Legal Newsline: Reach Jessica Karmasek by email at

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