Case Title: Jackson v. Millstone

Citation: 369 Md. 575

Docket Number: 48/00

State: maryland

Court: Maryland Supreme Court

Date: 2002-06-21T00:00:00Z

Document:
No. 48, September Term, 2000
Taurus Jackson, et al. v. Joseph Millstone
[Involves Numerous Issues Under The State Medicaid Program]
IN THE COURT OF APPEALS OF MARYLAND
No. 48
September Term, 2000
___________________________________________
TAURUS JACKSON, et al.
v.
JOSEPH MILLSTONE
__________________________________________
        
Eldridge
       
Raker
Wilner
Cathell
Harrell
Rodowsky, Lawrence F.
  (Retired, Specially Assigned)
Bloom, Theodore G.
  (Retired, Specially Assigned)
 
                                         JJ.
___________________________________________
Opinion by Eldridge, J.
__________________________________________
Filed:   June 21, 2002
1
We shall in this opinion sometimes refer to the Medical Care Financing and Compliance
Division, the state Medical Assistance Program, and the Department of Health and Mental Hygiene,
collectively as the “Department.”
2
 COMAR 10.09.06.06C provides as follows:
“The Department will preauthorize services when the provider submits to the
Department or its designee adequate documentation demonstrating that the service
to be preauthorized is necessary and appropriate.  ‘Necessary’ means directly related
to diagnostic, preventative, curative, palliative, or rehabilitative treatment.
‘Appropriate’ means an effective service that can be provided, taking into
consideration the particular circumstances of the recipient and the relative cost of any
alternative services which could be used for the same purpose.”  
In this action for declaratory and injunctive relief, Taurus Jackson and the
estate of Jessica Nettles, by their next friend, Johns Hopkins Hospital, claim that the
Director of the Medical Care Financing and Compliance Division of the State’s Medical
Assistance Program, Maryland Department of Health and Mental Hygiene, deprived the
plaintiffs of rights to which they were entitled under the federal Medicaid Act, 42 U.S.C.
§ 1396 et seq.1  The plaintiffs sought a declaratory judgment and an injunction
concerning the validity and enforceability of a Maryland medical assistance regulation,
set forth in Code of Maryland Regulations (COMAR) 10.09.06.06C, which requires, for
preauthorization of medical services for an individual, that the medical provider submit
to the Department adequate documentation establishing that the medical service to be
rendered is both “necessary” and “appropriate.” 2  
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3
For a recent review of the medicaid program, see Chief Judge Bell’s opinion for the Court in
Dept. of Health v. Campbell, 364 Md. 108, 771 A.2d 1051 (2001).  See also Wilder v. Virginia Hosp.
Ass’n, 496 U.S. 498, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1990).
The challenge to the regulation arises out of the Department’s application of
COMAR 10.09.06.06C to two requests for preauthorization for liver transplant surgeries.
The plaintiffs argue that the Department violated the federal Medicaid Act when it
denied, based on the regulation, preauthorization for their respective “life-saving” liver
transplant operations.  They contend that for eligible persons under the age of 21, federal
law requires only that the medical service be “necessary,” and that the state regulation,
by requiring that the service also be “appropriate,” adds an element not allowed by
federal law.  The plaintiffs maintain that, with regard to persons under the age of 21, the
Department is prohibited from making determinations based, in part, on the
“appropriateness” of the procedure in question.
I.
Before setting forth the facts of the case, we shall briefly review the medicaid
program.3  Congress enacted the Medicaid Act in 1965 as Title XIX of the Social
Security Act. See 42 U.S.C. § 1396 et seq.; 42 C.F.R. §§ 430-456.  The Act was designed
to enable states, as far as practicable, to furnish medical assistance to individuals whose
income and resources are insufficient to meet the costs of necessary medical services.
To that end, the Act established a medical assistance program, which is a jointly funded
collaboration between the states and the federal government.  It is a voluntary program,
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in which a state may elect, but is not compelled, to participate.  When a state elects to
participate in the medicaid program, it prepares and submits for approval by the federal
Health Care Financing Administration, the federal agency that administers the Federal
Medical Assistance Program, a state medicaid plan for the provision of medical
assistance that complies with the federal Medicaid Act and with the regulations
promulgated by the Secretary of the Department of Health and Human Services.  See 42
U.S.C. § 1396(a); 42 C.F.R. §§ 430-456.  If the federal agency approves the state plan,
then the state qualifies for federal funding, whereby the federal government will
reimburse the state up to 50% of the cost of the medicaid program. See 42 U.S.C.
§ 1396b(a); 42 U.S.C. § 1396d(b).  The federal Office of Inspector General periodically
audits state operations to determine whether the operations are “cost-efficient” and
whether “[f]unds are being properly expended.”  42 C.F.R. § 430.33(a). 
While the federal government establishes broad policy, secures state compliance
with the statute, and dispenses federal funds to supplement state spending on medicaid,
there exists some latitude for each state to determine which of its citizens qualify for this
form of medical insurance and which services its program will provide.  The state agency
charged with dispensing the state medicaid program is responsible for interpreting,
administering, and complying with federal medicaid statutes and regulations.  Within
broad federal rules, each state decides eligibility groups, types and range of services,
payment levels for services, and administrative and operating procedures. 
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4
See Schweiker v. Hogan, 457 U.S. 569, 102 S.Ct. 2597, 73 L.Ed.2d 227 (1982) (noting that
states have the option of providing coverage to the medically needy); Smith v. Rasmussen, 249 F.3d
755, 757 (8th Cir. 2001) (stating that a “state plan must provide for medical assistance to the
categorically needy, but the state may choose whether to provide services to those persons within the
classification medically needy, who ‘do not qualify for some forms of federal assistance but who
nonetheless lack the resources to obtain adequate medical care’”) (quoting Hodgson v. Board of
County Comm’rs, County of Hennepin, 614 F.2d 601, 606 (8th Cir. 1980)); Friedman v. Berger, 547
F.2d 724 (2d Cir. 1976), cert. denied, 430 U.S. 984, 97 S.Ct. 1681, 52 L.Ed.2d 378 (1977) (holding
that medicaid assistance to the medically needy is a matter of state option).
Maryland has chosen to participate in the medicaid program. It does so through the
Maryland Medical Assistance Program, operated by the Department of Health and Mental
Hygiene.  See Maryland Code (1982, 2000 Repl. Vol., 2001 Supp.) § 15-103 of the
Health General Article.  The program’s director, or a designee, is responsible for the
approval or denial of applications for preauthorization for payment.  Preauthorization,
or approval from the Department, is required before one can receive medical assistance
benefits.  See COMAR 10.09.06.01B(30).
Although the federal Medicaid Act only mandates that states provide medical
assistance for those classified as “categorically needy,” 4 Maryland’s state plan is
designed to provide comprehensive health care services for “categorically needy” and
“medically needy” persons.  See §§ 15-201.1, 15-103 of the Health-General Article;
COMAR 10.09.06.01B(21).  See also 42 U.S.C. § 1396a(a)(10)(A), (C) (listing those
who qualify as “categorically” and “medically” needy, respectively).  Under the Maryland
Medicaid Plan, “categorically needy” includes “aged, blind, or disabled persons, or
-5-
5
“Child” means “an unmarried person younger than 21 years old.”  COMAR 10.09.24.02B(12).
families and children,5 who are otherwise eligible for Medical Assistance and who meet
the financial eligibility requirements for FIP, SSI, or Optional State Supplement.”
COMAR 10.09.24.02B(11).  Essentially, “categorically needy” persons are those whose
income levels are so low that they qualify to receive cash assistance from an approved
state program, and they cannot afford to pay for basic needs or medical assistance.  The
“medically needy,” on the other hand, are “persons who are otherwise eligible for
Medical Assistance, who are not categorically needy, and whose income and resources
are within the limits set under the [s]tate [p]lan.”  COMAR 10.09.24.02B(38).  See Jaffe
v. Sharp, 463 F. Supp. 222 (D. Mass. 1978) (defining the “medically needy” as
individuals and families whose income exceeds that of categorically needy but is
nevertheless insufficient to cover medical care).  Included among the “medically needy”
under the Maryland Medical Assistance Plan are persons under the age of 21.  COMAR
10.09.24.03D(2).  Taurus Jackson currently qualifies for medical assistance in Maryland
as either categorically or medically needy, and he “may select any . . . category for which
technical eligibility may be established.”  COMAR 10.09.24.04M(3)(a).
II. 
Taurus Jackson is under the age of 21 and, as pointed out above, is qualified for
medicaid benefits.  When Taurus was ten years old, he developed end stage liver disease.
In July 1992, Taurus received preauthorization by the Department for a liver
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transplantation and underwent surgery, but the new liver failed a month later.
Consequently, in September 1992, Taurus was preauthorized by the Department for a
second liver transplantation and again underwent surgery.  During this period, Taurus had
been placed in foster care facilities, and he was not always given his prescribed
medication.
About two and a half years later, in March 1995, Taurus was treated for chronic
rejection but with minimal results.  His liver function continued to deteriorate, and his
primary health care provider, Johns Hopkins Hospital, determined that Taurus was going
to die without another liver transplant.  The Hospital requested preauthorization for
Taurus’s third liver transplantation.  In ruling on this request, the Department considered
Taurus’s complicated past post-operative recovery, whereby his own behavioral problems
and the failure to adhere to medication requirements contributed to his previous liver
failures.  The Department denied the preauthorization request, stating that “a third
transplant was not necessary or appropriate for preapproval for reimbursement” because
Taurus “remains at great risk for future transplant failure.”  The Hospital and Taurus
requested that the Department reconsider, and the Department asked for supplemental
information to be submitted regarding Taurus’s psychiatric condition and related
behavioral problems. Johns Hopkins Hospital submitted supplemental information that
Taurus’s psycho-social problems had improved, but the Department found that this
information was insufficient. The Department again denied the preauthorization request,
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stating that Taurus’s liver transplantation “procedure does not meet criteria for approval.”
On June 27, 1996, a matching liver was found for Taurus.  Johns Hopkins
Hospital, believing that the liver transplantation procedure was necessary in order to keep
Taurus alive, performed at its own expense a successful transplant operation.  Taurus
remains alive today.  
Jessica Nettles was 14 years old when she was diagnosed with liver failure,
chronic hepatitis, and an immune deficiency disease.  She was qualified for medicaid
benefits.  In January 1995, Johns Hopkins Hospital, which was Jessica’s primary health
care provider, requested and received preauthorization from the Department for a liver
transplantation for Jessica.  No liver became available during the 60 day authorization
period, and, as a result, the preauthorization expired.  Consequently, in June 1995, the
Hospital sought recertification for a liver transplantation for Jessica.  This time, the
Department requested supplemental information regarding Jessica’s other diagnosed
medical problems and how they would affect her liver transplantation surgery and
chances of recovery.  Johns Hopkins Hospital submitted supplemental information and
stated that the other diseases would not affect Jessica’s chances of a successful liver
transplantation.  The Department denied the recertification, stating that, because it could
not predict how Jessica’s other diseases would affect the liver transplantation surgery,
it considered the “liver transplant in [Jessica’s] situation experim ental.”  Johns Hopkins
Hospital requested that the Department reconsider its decision, and the Hospital
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submitted additional information, including outside experts’ opinions that Jessica
would certainly die without the liver transplant and that the operation would be
successful even in light of Jessica’s other medical problems.  Nevertheless, the
Department again denied Jessica’s preauthorization request, stating that her liver
transplantation  was not “appropriate.”
On April 30, 1996, Johns Hopkins Hospital was notified that a matching liver
was available for Jessica.  Since the Hospital believed that a liver transplant was the
only way to reverse Jessica’s end stage liver disease and to save her life, the Hospital
at its own expense performed a transplantation that day.  Jessica eventually died in
September 1997 of liver failure.
In May 1998, Taurus Jackson and Jackie Vandergrift, personal representative of
the estate of Jessica Nettles, by their next friend, Johns Hopkins Hospital, filed a
complaint in the Circuit Court for Howard County against the Director of the Medical
Care Financing and Compliance Division of the Medical Assistance Program, Maryland
Department of Health and Mental Hygiene.  The plaintiffs alleged that the Department
violated the Medicaid Act, 42 U.S.C. § 1396 et seq., by the application of COMAR
10.09.06.06C to requests for preauthorization of life-saving liver transplantation
services for both Taurus and Jessica, and by the denial of preauthorization for the
“medically necessary” liver transplantations.  The plaintiffs sought declaratory and
injunctive relief,  relying upon the Civil Rights Act of 1871, 42 U.S.C. § 1983, as well
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as Maryland case-law.  Specifically, the plaintiffs requested a declaration that COMAR
10.09.06.06C is invalid because it goes beyond what is authorized by federal law.  They
sought an injunction preventing the Department from further using COMAR
10.09.06.06C when making preauthorization decisions for state covered services
because of the regulation’s allegedly illegal “appropriateness” requirement.  The
Department moved to dismiss, contending that (1) the case was moot, (2) the suit was
barred by sovereign immunity, and (3) the plaintiffs failed to state a claim upon which
relief could be granted.
The Circuit Court for Howard County, without any written declaration of rights
or written opinion, assumed that the case was not moot and was not barred by sovereign
immunity, but granted the motion to dismiss for failure to state a claim.  The court did
not explain why, in its view, the complaint failed to state a claim.  The plaintiffs
appealed, and the Court of Special Appeals, in an unreported opinion, affirmed on the
ground that the case had become moot.  The plaintiffs then filed a petition for a writ of
certiorari which we granted.  Jackson v. Millstone, 359 Md. 668, 755 A.2d 1139 (2000).
The plaintiffs have emphasized that they are not seeking money damages or
reimbursement for the expenses associated with Taurus’s third liver transplant
operation or Jessica’s liver transplant operation, and that they are not seeking
injunctive relief requiring payment for those operations.  Instead, they are seeking
“prospective relief” in the form of a declaratory judgment and an injunction concerning
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the validity of COMAR 10.09.06.06C and the Department’s requirement that the
medical service be “appropriate” before it will preauthorize the service for children.
(Petitioners’ brief at 28).  The Department in this Court reiterates the three argumen ts
made in the courts below, namely that the case is moot, that sovereign immunity bars
the action, and that the challenged regulation is not inconsistent with federal law.
III.
A.
The Court of Special Appeals held “that this case is moot because [the children]
have already received liver transplants from Hopkins . . . .”  The plaintiffs argue that
the issue concerning the validity of the challenged regulation 
“is justiciable because it is capable of repetition yet evades review.
The Program has adopted a regulation that allows it, in violation of
Federal law, to deny preauthorization of medically necessary
transplantation services for children based on considerations of
‘appropriateness.’  The Program applied this regulation to JHH’s
requests to preauthorize medically necessary, life-saving liver
transplantations for the Children, and denied preauthorization
based on a cost-benefit analysis.  The denial of preauthorization for
transplantation services based on an illegal cost-benefit analysis
evades review because a new preauthorization must be obtained
every 60 days and the operation must be performed immediately as
soon as the organ becomes available or the child will die.  COMAR
10.09.06.06D.  Further, this issue is capable of repetition because
the Program has a permanent regulation authorizing it to deny
medically necessary operations for children based on a cost-benefit
analysis.”  (Petitioners’ brief at 20).
The Department responds by arguing that the particular issue in this case is not
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6
See, e.g., Matthews v. Park & Planning, 368 Md. 71, 96-97, 792 A.2d 288, 302-303 (2002);
Coburn v. Coburn, 342 Md. 244, 250, 674 A.2d 951, 954 (1996); In re Riddlemoser, 317 Md. 496,
502-503, 564 A.2d 812, 815 (1989); Robinson v. Lee, 317 Md. 371, 376, 564 A.2d 395, 397 (1989);
State v. Peterson, 315 Md. 73, 82-83, 553 A.2d 672, 677 (1989); Mercy Hospital v. Jackson, 306
Md. 556, 562-563, 510 A.2d 564-565 (1986), and cases there cited. 
“‘capable of repetition’” because each case involving a preauthorization request
depends upon the “‘factual circumstances’” of that case.  (Respondent’s brief at 11).
The Department also asserts that there are not very many preauthorization requests for
transplant operations under the Maryland medicaid program, and that, if a similar issue
arises in the future, “‘there should be no difficulty in having it passed upon as a live
issue.’” (Id. at 12-13).
Although the action brought on behalf of the estate of Jessica Nettles is moot,
Taurus Jackson’s action challenging the validity of the Department’s regulation is not
moot.  Moreover, Taurus Jackson’s action does not fall into that “rare” category of
cases where “[w]e have addressed moot questions when ‘the public interest clearly will
be hurt if the question is not immediately decided,’ [and] if the issue is ‘likely to recur
frequently . . . .’” In re Adoption No. 93321055, 344 Md. 458, 488, 687 A.2d 681, 695
(1997), quoting Lloyd v. Supervisors of Elections, 206 Md. 36, 43, 111 A.2d 379, 382
(1954).6  Rather, in light of the relief being sought, Taurus Jackson’s action represents
a live controversy, and the suit is clearly allowed under Maryland and federal law.
Taurus is presently qualified for medicaid benefits, and he is under the age of 21.
In light of Taurus’s prior history, his present liver might well begin to fail, and Johns
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Hopkins Hospital would likely seek preauthorization for another liver transplant
operation.  Under these circumstances, Taurus and the Hospital would again face the
strong possibility of having the preauthorization denied under the “appropriate” prong
of COMAR 10.09.06.06C which, they contend, violates federal law.
Maryland law expressly recognizes that these circumstances present a live
controversy subject to a declaratory judgment action.  The subtitle of the Maryland
Administrative Procedure Act dealing with agency regulations provides, in Code (1984,
1999 Repl. Vol.), § 10-125 of the State Government Article, as follows (emphasis
supplied):
“§ 10-125.  Declaratory judgment.
(a) Petition authorized. – (1)A person may file a petition for a
declaratory judgment on the validity of any regulation, whether or
not the person has asked the unit to consider the validity of the
regulation.
(2) A petition under this section shall be filed with the
circuit court for the county where the petitioner resides or has a
principal place of business.
(b) Authority to consider. – A court may determine the validity
of any regulation if it appears to the court that the regulation or its
threatened application interferes with or impairs or threatens to
interfere with or impair a legal right or privilege of the petitioner.
(c) Unit as party. – The unit that adopted the regulation shall be
made a party to the proceeding under this section.
(d) Finding of invalidity. – Subject to § 10-128 of this subtitle,
the court shall declare a provision of a regulation invalid if the
court finds that:
(1) the provision violates any provision of the United
States or Maryland Constitution;
(2) the provision exceeds the statutory authority of the
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unit; or
(3) the unit failed to comply with statutory requirements
for adoption of the provisio n.”
Taurus is a person who has filed a declaratory judgment action challenging the validity
of a regulation, and he contends that the application of the regulation “threatens to
interfere with or impair a legal right or privilege” of Taurus under the federal and state
medicaid law.  The legal issue, concerning the validity of a portion of the regulation,
is a substantial one.  In light of the past and present circumstances, there is a real
possibility that the regulation may in the future be applied adversely to Taurus.  This
is precisely the type of controversy for which the cause of action under § 10-125 of the
State Government Article was enacted.
Moreover, a multitude of cases in this Court recognize the availability of actions
for declaratory judgments or injunctions challenging the validity of statutes or
regulations which may, in the future, be applied to or adversely affect the plaintiffs.
See, e.g., Maryland HMO ’s v. Health Service Cost Review Commission, 356 Md. 581,
741 A.2d 483 (1999) (a member of an HMO, whose future medical insurance premiums
might be affected by a hospital rate regulation methodology adopted by the
Commission, may bring an action for a declaratory judgment and an injunction
challenging the methodology adopted by that government agency); Maryland
Aggregates v. State, 337 Md. 658, 655 A.2d 886, cert. denied, 514 U.S. 1111, 115 S.Ct.
1965, 131 L.Ed.2d 856 (1995) (an action by operators of quarries, potentially subject
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to a recently enacted statute, for a declaratory judgment that the statute was invalid and
an injunction against the future enforcement of the statute); Christ v. Department, 335
Md. 427, 433 n.5, 644 A.2d 34, 36-37 n.5 (1994) (a declaratory judgment action,
“authorized by the Maryland Uniform Declaratory Judgment Act, Code (1974, 1989
Repl. Vol.), §§ 3-401 through 3-405 of the Courts and Judicial Proceedings Article, and
more specifically by . . . § 10-125 of the State Government Article,” by a minor
potentially subject to an administrative regulation, attacking the validity of the
regulation); Judy v. Schaefer, 331 Md. 239, 627 A.2d 1039 (1993) (an action for
injunctive relief, by persons eligible to receive state medical assistance benefits,
challenging the validity of the Governor’s order reducing the amount of future
assistance); State v. Burning Tree Club, Inc., 315 Md. 254, 554 A.2d 366, cert. denied,
493 U.S. 816, 110 S.Ct. 66, 107 L.Ed.2d 33 (1989) (an action for declaratory and
injunctive relief by an entity covered by a state statute, against state officials,
challenging the validity of the statute on various state and federal constitutional
grounds); American Trucking Ass’ns v. Goldstein, 312 Md. 583, 541 A.2d 955 (1988)
(This Court held that the trial court should enjoin the future enforcement of a tax
statute which violated the Commerce Clause); Department of Transportation v.
Armacost, 311 Md. 64, 532 A.2d 1056 (1987) (a suit for a declaratory judgment and an
injunction on the ground that a state agency regulation was not authorized); Hargrove
v. Board of Trustees, 310 Md. 406, 529 A.2d 1372 (1987), cert. denied, 484 U.S. 1027,
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108 S.Ct. 753, 98 L.Ed.2d 766 (1988) (a declaratory judgment action, against state
officials, challenging on state and federal constitutional grounds a provision of the state
pension law); Joseph H. Munson Co. v. Secretary of State, 294 Md. 160, 448 A.2d 935
(1982), affirmed, 467 U.S. 947, 104 S.Ct. 2839, 81 L.Ed.2d 786 (1984) (a suit, by an
entity potentially affected by a state statute, for a declaratory judgment and to enjoin
enforcement of the statute on First Amendment grounds); Cities Service Co. v.
Governor, 290 Md. 553, 431 A.2d 663 (1981) (an action for declaratory and injunctive
relief, by a corporation potentially subject to a recently enacted statute and
implementing regulations, against the Governor, the Comptroller, and the Attorney
General, challenging the validity of the statute and the regulations on state and federal
constitutional grounds); Bowie Inn v. City of Bowie, 274 Md. 230, 335 A.2d 679 (1975)
(an action for a declaratory judgment and an injunction restraining the enforcement of
a local statute); State v. Lundquist, 262 Md. 534, 278 A.2d 263 (1971) (This Court
affirmed a declaratory judgment that a recently enacted statute violated the First
Amendment, and upheld an injunction restraining the State from enforcing the statute);
Bruce v. Director, Department of Chesapeake Bay Affairs, 261 Md. 585, 276 A.2d 200
(1971) (a suit for a declaratory judgment and an injunction based on the invalidity of
a state statute).
As the above-cited cases illustrate, when a statute or a regulation such as
COMAR 10.09.06.06C may adversely affect a plaintiff in the future, and when the
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plaintiff has standing to challenge the enactment, the plaintiff’s action in a circuit
court, against the appropriate government official or agency, for a declaratory judgment
or injunction based on the alleged invalidity of the enactmen t, represents a live
controversy.  See Davis v. State, 183 Md. 385, 390-391, 37 A.2d 880, 884 (1944),
where this Court held that, when a plaintiff may be “directly affected by the challenged
statute,” his declaratory judgment action attacking the statute is not “moot” and that
“‘the controversy presented is . . . real and substantial.’”
B.
The above-cited cases are also dispositive of the Department’s reliance upon the
doctrine of sovereign immunity.  Where a statute or regulation is invalid, sovereign
immunity does not preclude a declaratory judgment action or suit for an injunction
against the governmental official who is responsible for enforcing the statute or
regulation.  As Judge Delaplaine explained for the Court in Davis v. State, supra, 183
Md. at 389, 37 A.2d at 883, “if a person is directly affected by a statute, there is no
reason why he should not be permitted to obtain a judicial declaration that the statute
is unconstitutional.”  The Court in Davis went on to point out that, in addition, “a court
of equity has power to restrain the enforcement of a void statute or ordinance at the suit
of a person injuriously affected.”  Ibid.  Specifically with regard to sovereign
immunity, the Davis opinion held (183 Md. at 393, 37 A.2d at 885):
“Although a State may not be sued without its consent, an officer
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of the State acting under color of his official authority may be
enjoined from enforcing a State law claimed to be repugnant to the
State or Federal Constitution, even though such injunction may
cause the State law to remain inoperative until the constitutional
question is judicially determined.”
See also, e.g., Police Comm’n v. Siegel, 223 Md. 110, 115, 162 A.2d 727, 729, cert.
denied, 364 U.S. 909, 81 S.Ct. 273, 5 L.Ed.2d 225 (1960); Pitts v. State Bd. of
Examiners, 222 Md. 224, 226, 160 A.2d 200, 201 (1960); Pressman v. State Tax
Commission, 204 Md. 78, 84, 102 A.2d 821, 825 (1954), and cases there cited;
Baltimore Police v. Cherkes, 140 Md. App. 282, 309-310, 780 A.2d 410, 426-427
(2001).  
In addition, § 10-125 of the State Government Article specifically authorizes a
declaratory judgment action to challenge the validity of a state administrative
regulation, and the statute in subsection (c) expressly provides that “[t]he unit that
adopted the regulation shall be made a party to the proceeding . . . .”  Even if sovereign
immunity were otherwise a defense to this type of action (and, as shown by the above-
cited cases, it is not a defense), § 10-125 would constitute a waiver of such immunity.
Furthermore, regarding Taurus’s action under the Civil Rights Act of 1871, 42
U.S.C. § 1983, it is clear that the defendant-respondent Director of the Medical Care
Financing and Compliance Administration has no immunity from prospective relief.
In Ritchie v. Donnelly, 324 Md. 344, 356, 597 A.2d 432, 437 (1991), this Court
explained:
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“Moreover, as to a claim for prospective relief, a state officer
or employee is a ‘person’ under § 1983 regardless of the capacity
in which he is acting.  An action for an injunction may be
maintained under § 1983 against a state officer or employee even
though the officer or employee was sued in his official capacity.
Will v. Michigan Dept. of State Police, supra, 491 U.S. at 71 n.10,
109 S.Ct. at 2311 n.10, 105 L.Ed.2d at 58 n.10; Sterling v.
Constantin, 287 U.S. 378, 393, 53 S.Ct. 190, 193, 77 L.Ed. 375,
382 (1932).   Ex parte Young, 209 U.S. 123, 159-160, 28 S.Ct. 441,
454, 52 L.Ed. 714, 729 (1908); Henne v. Wright, 904 F.2d 1208,
1211 n.2 (8th Cir. 1990), cert. denied, 498 U. S. 1032, 111 S.Ct.
692, 112 L.Ed.2d 682 (1991); Chaloux v. Killeen, 886 F.2d 247,
252 (9th Cir. 1989); Harrington v. Schossow, 457 N.W.2d 583, 586
(Iowa 1990).”
See also Okwa v. Harper, 360 Md. 161, 193 n.16, 757 A.2d 118, 135 n.16 (2000).  
More specifically, courts have rejected the defense of immunity in actions for
declaratory or injunctive relief against state officials, by eligible persons or health care
providers under the medicaid program, who claim that state practices violate the federal
Medicaid Act and/or implementing federal regulations. See, e.g., Wilder v. Virginia
Hosp. Ass’n, 496 U.S. 498, 512, 110 S.Ct. 2510, 2518-2519, 110 L.Ed.2d 455, 468-469
(1990) (action against state officials, under 42 U.S.C. § 1983, for prospective
injunctive relief, with the Court pointing out that the Medicaid Act “imposes a binding
obligation on States participating in the Medicaid program . . . and . . . this obligation
is enforceable under § 1983 by health care providers”); Westside Mothers v. Haveman,
289 F.3d 852 (6th Cir. 2002) (Medicaid-eligible children under the age of 21 are entitled
to injunctive relief, under 42 U.S.C. § 1983, requiring state officials to comply with the
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Medicaid Act); Antrican v. Odom, 290 F.3d 178 (4th Cir. 2002) (Sovereign immunity
does not preclude the plaintiffs from obtaining “an injunction mandating that in the
future, State officials bring the [state] Medicaid program into compliance with the
Medicaid Act.  This mandate might potentially impact the State treasury, but it is
nonetheless prospective”); Lewis v. New Mexico Dept. of Health, 261 F.3d 970 (10th
Cir. 2001) (The immunity defense is not available to state officials who are sued for
injunctive relief to bring the state medicaid program in conformance with the Medicaid
Act); Boatman v. Hammons, 164 F.3d 286 (6th Cir. 1998) (Medica id recipients are
entitled, under 28 U.S.C. § 1983, to an injunction requiring state officials to comply
with the Medicaid Act).  See also Dalton v. Little Rock Family Planning Services, 516
U.S. 474, 116 S.Ct. 1063, 134 L.Ed.2d 115 (1996).
IV.
Prior to addressing the substance of the petitioners’ challenge to COMAR
10.09.06.06C, we shall comment upon a procedural error committed by the Circuit
Court.  As previously mentioned, the Circuit Court assumed that this action for a
declaratory judgment and injunctive relief was neither moot nor barred by sovereign
immunity, and the court resolved the case on its merits.  Instead of filing a written
declaration of rights, however, the Circuit Court’s decision consisted of a brief order
stating that “the court finds [that] the Complaint fails to state a claim upon which the
requested relief could be granted.  Therefore, the Motion to Dismiss is granted .”
-20-
Even if we agreed with the Department that the challenged regulation did not
violate federal law, we would be required to reverse the Circuit Court’s decision for
failure to file a written declaratory judgment.  The Court in Harford Mutual v. Woodfin,
344 Md. 399, 414-415, 687 A.2d 652, 659 (1997), explained as follows:
“This Court has reiterated time after time that, when a
declaratory judgment action is brought, and the controversy is
appropriate for resolution by declaratory judgment, ‘the trial court
must render a declaratory judgment.’  Christ v. Departm ent, 335
Md. 427, 435, 644 A.2d 34, 38 (1994).  ‘[W]here a party requests
a declaratory judgment, it is error for a trial court to dispose of the
case simply with oral rulings and a grant of . . . judgment in favor
of the prevailing party.’  Ashton v. Brown, 339 Md. 70, 87, 660
A.2d 447, 455 (1995), and cases there cited.
“The fact that the side which requested the declaratory
judgment did not prevail in the circuit court does not render a
written declaration of the parties' rights unnecessary.  As this Court
stated many years ago, ‘whether a declaratory judgment action is
decided for or against the plaintiff, there should be a declaration in
the judgment or decree defining the rights of the parties under the
issues made.’  Case v. Comptroller, 219 Md. 282, 288, 149 A.2d 6,
9 (1959).  See also, e.g., Christ v. Departm ent, supra, 335 Md. at
435-436, 644 A.2d at 38 (‘[t]he court's rejection of the plaintiff's
position on the merits furnishes no ground for failure to file a
declaratory judgment); Broadwater v. State, 303 Md. 461, 467, 494
A.2d 934, 937 (1985) (‘the trial judge should have declared the
rights of the parties even if such declaration might be contrary to
the desires of the plaintiff’); East v. Gilchrist, 293 Md. 453, 461
n.3, 445 A.2d 343, 347 n.3 (1982) (‘where a plaintiff seeks a
declaratory judgment . . . , and the court's conclusion . . . is exactly
opposite from the plain tiff's contention, nevertheless the court
must, under the plain tiff's prayer for relief, issue a declaratory
judgment’); Shapiro v. County Comm., 219 Md. 298, 302-303, 149
A.2d 396, 399 (1959) (‘even though the plaintiff may be on the
losing side of the dispute, if he states the existence of a controversy
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which should be settled, he states a cause of suit for a declaratory
decree’).” 
More recently, in Allstate v. State Farm, 363 Md. 106, 117 n.1, 767 A.2d 831, 837 n.1
(2001), Judge Wilner for the Court stated:
“Once again, we are presented with a declaratory judgment
action in which there is no written declaratory judgment.  We have
admonished trial courts that, when a declaratory judgment action
is brought and the controversy is appropriate for resolution by
declaratory judgment, the court must enter a declaratory judgment
and that judgment, defining the rights and obligations of the parties
or the status of the thing in controversy, must be in writing. It is not
permissible for the court to issue an oral declaration.  The text of
the judgment must be in writing.  See Harford Mutual Ins. Co. v.
Woodfin, 344 Md. 399, 414-15, 687 A.2d 652, 659 (1997); Ashton
v. Brown, 339 Md. 70, 87, 660 A.2d 447, 455 (1995); Christ v.
Department of Natural Resources, 335 Md. 427, 435, 644 A.2d 34,
38 (1994).  Nor, since the 1997 amendment to Maryland Rule 2-
601(a), is it permissible for the declaratory judgment to be part of
a memorandum.  That rule requires that ‘[e]ach judgment shall be
set forth on a separate docum ent.’  When entering a declaratory
judgment, the court must, in a separate document, state in writing
its declaration of the rights of the parties, along with any other
order that is intended to be part of the judgment.  Although the
judgment may recite that it is based on the reasons set forth in an
accompanying memorandum, the terms of the declaratory judgment
itself must be set forth separately.  Incorporating by reference an
earlier oral ruling is not sufficient, as no one would be able to
discern the actual declaration of rights from the document posing
as the judgment.  This is not just a matter of complying with a
hyper-technical rule.  The requirement that the court enter its
declaration in writing is for the purpose of giving the parties and
the public fair notice of what the court has determined.”
See also, e.g., Baltimore v. Ross, 365 Md. 351, 358 n.6, 779 A.2d 380, 384 n.6 (2001);
-22-
Bushey v. Northern Assurance, 362 Md. 626, 651-652, 766 A.2d 598, 611-612 (2001);
Maryland HMO ’s v. Health Services Cost Review Commission, 356 Md. 581, 603, 741
A.2d 483, 495 (1999).
V.
As previously discussed, a participating state is given some latitude in
determining the scope of coverage, eligibility for assistance, and services that its
medical assistance program chooses to provide.  See Beal v. Doe, 432 U.S. 438, 444,
97 S.Ct. 2366, 2371, 53 L.Ed.2d 464, 472 (1977); Meusberger v. Palmer, 900 F.2d
1280, 1282 (8th Cir. 1990) (stating that participating states “have some discretion in
determining which medical services to cover under their [m]edicaid program”).
Nevertheless, despite a state’s latitude in adopting its particular medical assistance
program, once a state elects to participate in the federal medicaid program, it must
comply with all requirements of the Medicaid Act and governing regulations.  See
Dept. of Health v. Campbell, 364 Md. 108, 112, 771 A.2d 1051, 1053 (2001); Pereira
v. Kozlowski, 996 F.2d 723 (4th Cir. 1993); Mississippi Hosp. Ass’n v. Heckler, 701
F.2d 511 (5th Cir. 1983); Miller v. Smith, 665 F.2d 172 (7th Cir. 1981); Webster v.
USLIFE Title Co. of Arizona, 123 Ariz. 130, 598 P.2d 108 (1979); Potter v. James, 499
F. Supp. 607 (M.D. Ala. 1980); Montgomery County Ger. & Rehab. Ctr. v.
Comm onwealth of Pennsylvania, 462 A.2d 325 (Pa. Cmwlth. 1983).
While the Medicaid Act does not mandate state assistance for specific medical
-23-
procedures, such as organ transplantations, Congress does explicitly require state
programs to provide financial assistance to qualified recipients for seven broad areas
of medical treatment.  See 42 U.S.C. § 1396a(a)(10)(A); Beal v. Doe, supra, 432 U.S.
at 444, 97 S.Ct. at 2370, 53 L.Ed.2d at 472; Miller v. Whitburn, 10 F.3d 1315, 1316-
1317 (7th Cir. 1993); Pittman v. Secr., Florida Dept. of Health and Rehab. Serv., 998
F.2d 887, 889 (11th Cir. 1993); Pereiria v. Kozlowski, supra, 996 F.2d at 724.  These
mandatory medical services include (1) inpatient hospital services; (2) outpatient
hospital services; (3) laboratory and x-ray services; (4) nursing facility services for
persons age 21 and over, early and periodic screening, diagnostic, and treatment
services (EPSDT services) for persons under the age of 21, and family planning
services and supplies furnished to individuals of childbearing age; (5) physician
services; (6) nurse-midwife services; and (7) nurse practitioner services.  See 42 U.S.C.
§ 1396d(a)(1-5), (17), (21).  EPSDT services include certain screening, vision, dental,
and hearing services (42 U.S.C. §§ 1396d(r)(1)-(4)) as well as “such other necessary
. . . treatment . . . to correct or ameliorate . . . conditions discovered by the screening
services.”  42 U.S.C. § 1396d(r)(5) (emphasis added).
Maryland’s EPSDT screening services provide “preventive health care . . .
including medical and dental services, in order to assess growth and development and
to detect and treat health problems in medical assistance individuals under 21 years
-24-
7
Taurus will not loose medicaid eligibility once he turns 22, because he will still qualify as
categorically needy due to his economic status.  Nonetheless, Taurus’s age is relevant because
Maryland’s medicaid guidelines regarding preauthorization for individuals under 21 are less
stringent, to ensure that this group of “medically needy” individuals receives all medically necessary
care.
8
See COMAR 10.09.06.05, Limitations; 10.09.23.06, Limitations.
old.”  COMAR 10.09.23.01B(8). 7  The EPSDT program covers “all medically necessary
services to correct physical and mental problems identified during the EPSDT
screenings, that are allowable under the federal Medicaid program . . . .”  COMAR
10.09.23.05C.  The regulations governing Maryland’s Medical Assistance program
clearly state that any limits8 on covered services or treatments, which would otherwise
be effective “are not applicable for individuals under 21 years old when it is shown that
the treatments or services are medically necessary to correct or lessen health problems
detected or suspected by the screening service.”  COMAR 10.09.23.06A (emphasis
added).
Because the federally-mandated EPSDT program covers all medically necessary
procedures, without reference to an “appropriateness” analysis, the plaintiffs argue that
a child is entitled to receive preauthorization for state-funded organ transplantation
surgeries upon submission of documentation that the procedures are medically
necessary.  The plaintiffs assert that Maryland wrongfully requires both a “medically
necessary” and an “appropriate” analysis, which resulted in the Department’s denial of
Taurus’s and Jessica’s preauthorization requests for their required liver transplantation
-25-
9
As previously noted, supra n.2, COMAR 10.09.06.06C states that preauthorization will be
granted when “adequate documentation demonstrating that the service to be preauthorized is
necessary and appropriate.”
10
Supra, n.2.
procedures.  Consequently, the plaintiffs insist that the Maryland program illegally adds
a second criterion to the liver transplantation preauthorization process – that the
procedure not only be necessary, but also be appropriate.  COMAR 10.09.06.06C.9
The challenged regulation expressly states that preauthorization decisions are based
upon an “appropriateness” analysis, which takes into consideration such factors as the
“effectiveness” of the treatment.  COMAR 10.09.06.06C.10  “Necessary” is defined as
“directly related to diagnostic, preventative, curative, palliative, or rehabilitative
treatment.”  Ibid.  “Appropriate” is defined as “an effective service that can be
provided, taking into consideration the particular circumstances of the recipient and the
relative cost of any alternative services which could be used for the same purpose.”
Ibid.
In measuring the “effectiveness,” the plaintiffs assert that the Maryland program
illegally focuses on the idiosyncracies of each individual patient, thereby permitting the
Department to claim that certain liver transplants are “experimental.”  These factors go
beyond that which is considered “necessary,” or that which is the “only option for
treatment” in order to sustain lives.  (Petitioners’ Brief at 19).  Thus, plaintiffs argue
that the use of COMAR 10.09.06.06C, in preauthorization decisions for children under
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the age of 21, violates a child’s rights under federal law.
Despite the latitude which a state has in adopting a medicaid plan, a state plan
must establish “‘reasonable standards . . . for determining . . . the extent of medical
assistance under the plan which . . . are consistent with the objectives of [Medicaid].’”
Harris v. McRae, 448 U.S. 297, 302, 100 S.Ct. 2671, 2680, 65 L.Ed.2d 784, 795
(1980), quoting Beal v. Doe, supra, 432 U.S. at 441, 97 S.Ct. at 2369, 53 L.Ed.2d at
470.  See 42 U.S.C. § 1396a(a)(17).  For example, regulations implementing the
Medicaid Act require that each medical service provided by a state be “sufficient in
amount, duration, and scope to reasonably achieve its purpose.”  42 C.F.R. 440.230(b).
See 42 U.S.C. § 1396a(a)(10)(B), (C).  A state may not arbitrarily deny or reduce the
amount, duration, or scope of a required service to an otherwise eligible recipient
“solely because of the diagnosis, type of illness, or conditio n.”  42 C.F.R. 440.230(c).
Whether or not organ transplantations are a service that is required to be funded
by the states, in accordance with the federal Act, has been the subject of some debate.
Before 1985, the Medicaid Act contained no provision specifically covering organ
transplantations.  In 1985, however, Congress amended the Medicaid Act to add a
provision specifically referring to them. In essence, the amendment merely delineates
conditions for federal funding of organ transplants.  See 42 U.S.C. § 1396b(i)(1).  For
example, 42 U.S.C. § 1396b(i)(1) provides that a state must have written standards
which embody the state’s Medicaid plan regarding the coverage of organ transplants.
-27-
11
The organ transplant provision, 42 U.S.C. § 1396b(i)(1), specifically provides:
“(i) Payment for organ transplants . . . .  Payment under the preceding provisions
of this section shall not be made – 
(1) for organ transplant procedures unless the State plan provides for
written standards respecting the coverage of such procedures and
unless such standards provide that – 
(A) similarly situated individuals are treated alike; and
(B) any restriction, on the facilities or practitioners
which may provide such procedures, is consistent
with the accessibility of high quality care to
individuals eligible for the procedures under the State
plan.”
12
COMAR 10.09.06.04 reads, in relevant part:
“Covered Services.
The Program covers the following services:
A. Inpatient hospital services:
(8) Organ transplantations in hospitals that are
designated by the Secretary as national transplantation
referral centers.”
Those state standards must guarantee that similarly situated individuals are treated
alike, and any restrictions which the state imposes must assure accessibility of high
quality care to all eligible individuals.  Ibid.11  Maryland, however, has made it clear,
through COMAR 10.09.06.04, that the state will fund organ transplantations.12
Furthermore, “‘once a state has adopted a policy to cover a category of organ
transplants, it may not arbitrarily or unreasonably deny services to an otherwise eligible
Medicaid recipient.’” Dexter v. Kirschner, 984 F.2d 979, 984 (9th Cir. 1992), quoting
Meusberger v. Palmer, 900 F.2d 1280, 1282 (8th Cir. 1990).
As the Court has stated, once Maryland elected to participate in the federal
-28-
Medicaid program, it agreed to comply with all mandates provided in the federal
Medicaid Act and other related provisions.  The federal requirement most relevant to
this appeal is that participating states are required to administer periodic medical
screenings to persons under 21, and to provide medically necessary treatment for such
ailments and conditions that are discovered during those screenings.  The federal
program makes no mention of utilizing an “appropriateness” analysis in determining
whether a medicaid-eligible child should receive medically necessary treatments
provided through EPSDT services.  Nevertheless, the Maryland medicaid provision
regarding preauthorization of services, COMAR 10.09.06.06C, requires that medically
necessary treatment for a medicaid-eligible child must also be “appropriate,” which is
beyond the dictates of federal law.  The federal guidelines allow states no discretion
to use an “appropriateness” test in deciding whether a person under 21 can receive
medically necessary treatment. Therefore, because the provision imposes additional
criteria upon qualified recipients, which illegally denies services to those who would
normally receive medically necessary treatment, we agree with the plaintiffs that
COMAR 10.09.06.06C is partially invalid under federal law.
JUDGMENT OF THE COURT OF SPECIA L
APPEALS 
REVER S ED, 
AND 
CASE
REMANDED TO THAT COURT WITH
D I R E C T I O N S 
T O  
R E V E R S E  
T H E
JUDGMENT OF THE CIRCUIT COURT FOR
HOWARD COUNTY AND REMAND THE
CASE TO THE CIRCU IT COURT FOR
-29-
FURTHER PROCEEDINGS CONSISTENT
WITH THIS OPINION. COSTS IN THIS
COURT AND IN THE COURT OF SPECIAL
AP P EALS 
TO 
BE 
PAID  
BY 
THE
RESPONDENT.