Source: http://openjurist.org/362/f3d/190
Timestamp: 2016-07-24 10:49:15
Document Index: 490771289

Matched Legal Cases: ['§ 1396', '§ 1396', '§ 03', '§ 10', '§ 1396', '§ 1396', '§ 1396', '§ 601', '§ 1396', '§ 1396', '§ 1396', '§ 1396', '§ 209', '§ 1396', '§ 2624', '§ 602', '§ 1396', '§ 303', '§ 1396', '§ 1396', '§ 1396', '§ 1396', '§ 1396', '§ 3308', '§ 1396', '§ 1983', '§ 1232', '§ 1320', '§ 1396']

362 F3d 190 Rabin v. Wilson-Coker | OpenJurist
362 F. 3d 190 - Rabin v. Wilson-Coker HomeFederal Reporter, Third Series362 F.3d
362 F3d 190 Rabin v. Wilson-Coker 362 F.3d 190
Ronni RABIN, individually and as a representative of all persons similarly situated, Maritza Avila, individually and as a representative of all persons similarly situated, Jane Doe, Ronald Green, individually and as representatives of all persons similarly situated, Wende Qallab, individually and as a representative of all persons similarly situated, Plaintiffs-Appellants,v.Patricia WILSON-COKER, in her official capacity as Commissioner of the Connecticut Department of Social Services, Defendant-Appellee.
No. 03-7572.
The statute central to this appeal, 42 U.S.C. § 1396r-6, provides that families who were eligible for Aid to Families With Dependent Children ("AFDC"), a former welfare program, "in at least 3 of the 6 months immediately preceding the month in which such family becomes ineligible for such aid, because of hours of, or income from, employment of the caretaker relative," will remain eligible for Medicaid for a period of up to a year. See 42 U.S.C. § 1396r-6(a)(1), (b)(1). Each of the individual plaintiffs has earned income and was terminated from Medicaid when Connecticut enacted a statute reducing its Medicaid eligibility limits. See 2003 Conn. Acts § 03-02 § 10(g) (Reg.Sess.). Connecticut contends that the transitional medical assistance ("TMA") benefit is unavailable to plaintiffs because they lost their eligibility due to the new income limits and not due to income from employment. After reviewing the statutory scheme, the legislative history of the TMA provision and its purposes, and the relevant cases, we conclude that plaintiffs lost their eligibility for Medicaid because of "income from employment" within the meaning of the federal statute and therefore remain eligible for TMA.
Medicaid is a joint federal-state program under which the federal government pays a portion of a state's expenses for providing medical assistance to persons who are unable to afford insurance provided that the state's plan for granting assistance has been approved by the Centers for Medicare and Medicaid Services ("CMS"), a federal agency within the United States Department of Health and Human Services ("HHS"). Rodriguez v. City of N.Y., 197 F.3d 611, 613 (2d Cir.1999). In order to win approval from CMS, the state plan must comply with the requirements of the Medicaid Act, 42 U.S.C. § 1396 et seq., and its implementing regulations. Wisconsin Dep't of Health and Family Servs. v. Blumer, 534 U.S. 473, 479, 122 S.Ct. 962, 151 L.Ed.2d 935 (2002).
Medicaid eligibility is categorical. To receive benefits, applicants must show both that they are needy and that they fall into one of the many categories set forth in 42 U.S.C. § 1396a(a)(10)(A). Until Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 ("PRWORA"), two of the most significant eligibility categories were families who received AFDC, a cash assistance program for families with dependent children, and families with dependent children who would be eligible for AFDC if it were not for income and resources and who meet state income eligibility standards for Medicaid. See 42 U.S.C. §§ 1396a(a)(10)(A)(i)(I), 1396a(a)(10)(C), 1396d(a)(i),(ii).
PRWORA abolished the AFDC program and established a new cash assistance program for families, Temporary Assistance to Needy Families ("TANF"). See 42 U.S.C. § 601 et. seq. Nevertheless, Congress continued to define eligibility by reference to the former AFDC program. See 42 U.S.C. § 1396(a)(10)(A), (C). Congress resolved the apparent inconsistency of defining categorical eligibility by reference to the repealed AFDC program by enacting 42 U.S.C. § 1396u-1, which provides that for purposes of PRWORA's TMA provision, a person will "be treated as receiving aid or assistance" under AFDC, the repealed program, if she meets income and resource standards and other eligibility requirements in effect in 1996. 42 U.S.C. § 1396u-1(b)(1)(A). Congress also gave the states the option of creating either higher or lower income limits within the following parameters: (1) the income level could be no lower than the level in effect under the 1988 state plan; (2) income and resource levels could be increased "by a percentage that does not exceed the percentage increase in the Consumer Price Index for all urban consumers"; and (3) the states could change their methods for counting income and resources to make those methods "less restrictive" than the 1996 methods. 42 U.S.C. § 1396u-1(b)(2). As we have seen, Connecticut originally chose the third option and thereby created a generous program for its needy families.
The TMA program also has a long history. In 1972, Congress provided that families who became ineligible for AFDC due to "increased income from employment" would remain eligible for Medicaid for four months. Pub.L No. 92-603 § 209, 86 Stat. 1329 (1972) (codified as amended at 42 U.S.C. § 1396a(e)(1)(A)). In 1984, the Eighth Circuit considered the meaning of Section 209's reference to "increased income from employment." Phillips v. Noot, 728 F.2d 1175, 1177 (8th Cir.1984). The Phillips plaintiffs had been terminated from AFDC — and Medicaid — because they were no longer eligible for an income disregard that allowed AFDC recipients to keep the first thirty dollars and an additional one-third of their earned income. Id. at 1176-77. Their incomes had not increased. Id.
The Eighth Circuit found Section 209's TMA language ambiguous because "increased income from employment" could refer either to actual income from employment or to income that was countable under the applicable eligibility standards. Id. at 1177. Thus, the court turned to the legislative history of the TMA statute and found that "[t]he clear primary purpose of the provision was to remove a work disincentive: loss of Medicaid benefits" and that a secondary purpose was preventing "sudden loss of medical care." Id. Although the court also acknowledged that the purpose of limiting the earned income disregard "was undoubtedly to cut federal spending," it found this purpose irrelevant to construing the language of the separate statutory provision authorizing TMA, explaining that "[t]he fact that in 1981 Congress sought to cut the budget in no way imposes a general rule that all statutes involving expenditures must be construed in favor of spending less." Id. at 1178.
In probable reaction to Phillips, Congress added a new section to the AFDC statute which granted families who lost AFDC as a result of the expiration of the thirty and one-third disregard a minimum of nine months of transitional Medicaid. Pub.L. 98-369 § 2624, formerly codified at 42 U.S.C. § 602(a)(37)(1985). This section effectively adopted the specific holding of Phillips and extended its duration.
Four years later, Congress adopted 42 U.S.C. § 1396r-6 and suspended the operation of Section 1396a(e)(1)(A) for as long as Section 1396r-6 remains in effect. See Pub.L. No. 100-485 § 303, 102 Stat. 2385; 42 U.S.C. § 1396a(e)(1)(B). Section 1396r-6 dropped Section 1396a(e)'s reference to "increased" income. See id. Section 1396r-6 provides:
Notwithstanding any other provision of this subchapter, each State plan approved under this subchapter must provide that each family which was receiving aid pursuant to a plan of the State approved under [the AFDC requirements] in at least 3 of the 6 months immediately preceding the month in which such family becomes ineligible for such aid, because of hours of, or income from, employment of the caretaker relative... or because of section 602(a)(8)(B)(ii)(II) of this title (providing for a time-limited earned income disregard), shall ... remain eligible for assistance under the plan ... during the immediately succeeding 6-month period....
TMA next resurfaced in 1996 as part of PRWORA. 42 U.S.C. § 1396u-1(c)(2) states:
For continued medical assistance in the case of individuals (and families composed of individuals) described in subsection (b)(1)(A) of this section who would otherwise become ineligible because of hours or income from employment, see sections 1396r-6 and 1396a(e)(1) of this title.
Because Section 1396a(e)(1)(B) suspends Section 1396a(e)(1)(A)'s operation with respect to individuals and families who become ineligible for aid between April 1, 1990, and September 30, 2003, as did plaintiffs, Section 1396r-6 is the sole applicable section for determining plaintiffs' TMA eligibility.
On March 28, 2003, the appellants and two additional plaintiffs, who had no income from employment, filed a civil rights complaint in the United States District Court for the District of Connecticut. Their claims included one based on defects in the notice of termination and another alleging violation of 42 U.S.C. §§ 1396r-6(a)(1) and 1396u-1(c)(2). On the same day, plaintiffs requested preliminary injunctive relief and class certification. Based on the uncontested allegation "that the notice of termination mailed to affected individuals on or about March 10 is defective," Chief Judge Chatigny granted a temporary restraining order.
On April 14, 2003, Wilson-Coker moved for summary judgment on plaintiffs' claim that they were entitled to TMA under Sections 1396r-6(a)(1) and 1396u-1(c)(2). She principally argued that plaintiffs are not eligible for TMA because their terminations resulted from reduced eligibility levels rather than "income from employment."
Chief Judge Chatigny dismissed plaintiffs' complaint, finding that plaintiffs were not terminated from Medicaid because of income from employment. Rabin v. Wilson-Coker, 266 F.Supp.2d 332, 335, 340 (D.Conn.2003). The judge first found that the phrase "income from employment" was ambiguous because [i]t could apply to plaintiffs, who cease to be eligible because their income exceeds the new HUSKY A income eligibility limit established by Public Act 03-02. Alternatively, it may apply only if the triggering event causing a loss in eligibility is an increase in income, a condition that was explicitly stated in the predecessor statute to §§ 1396u-1(c)(2) and 1396r-6.
Judge Chatigny also found that defendant's reading of the statute best served the legislative purposes of PRWORA: "to (1) provide healthcare to the most needy, (2) control healthcare expenditures, (3) provide states with maximum flexibility in designing Medicaid programs, and (4) protect states from unanticipated costs resulting from changes in the business cycle." Id. at 340. In addition, he found defendant's interpretation to be "consistent with the main purpose of TMA, which is to assure people that if they go to work, or their salaries increase, they will not lose their health insurance coverage." Id. He reasoned that although "[i]t is possible that when a state lowers an income eligibility limit to reduce Medicaid expenditures, some of the affected individuals may stop working to avoid losing benefits, ... there is no indication Congress intended to require states confronted with budget deficits to provide TMA to persons in that situation in order to encourage them to keep working." Id.
Finally, he relied on CMS's interpretation of the statute to protect only those recipients who become ineligible due to increased earned income. Id. Despite the tentative nature of this interpretation, he found that it "still give[s] the best indication of how CMS interprets the statute." Id.
A statute is ambiguous if its terms are "susceptible to two or more reasonable meanings." Natural Res. Def. Council v. Muszynski, 268 F.3d 91, 98 (2d Cir.2001). We determine whether a statutory provision is ambiguous "by examining its language, the context in which the language is used, and the broader context of the statute as a whole." Freier v. Westinghouse Elec. Corp., 303 F.3d 176, 197 (2d Cir.2002), cert. denied, 538 U.S. 998, 123 S.Ct. 1899, 155 L.Ed.2d 824 (2003).
Plaintiffs, on the other hand, contend that Congress's deletion of the word "increased" before "income" means that if earned income plays a role in causing ineligibility for AFDC, TMA is available even if the recipient has experienced no change in his earned income. They cite White v. Martin, No. 02-4154-CV-C-NKL (W.D.Mo.2002), which, relying on Phillips, found that the TMA provision unambiguously confers TMA eligibility on caretaker relatives who become ineligible for AFDC because their unchanged earned income places them above new income eligibility limits. Slip op. at 12-13.
Where a statute is ambiguous, we must look to the canons of construction. Auburn Hous. Auth. v. Martinez, 277 F.3d 138, 143 (2d Cir.2002). At least three such canons are relevant in this case. First, "a statute is to be considered in all its parts when construing any one of them." Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 36, 118 S.Ct. 956, 140 L.Ed.2d 62 (1998). If drafters choose to use one word in part of a statute and omit it in another, "it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." Russello v. United States, 464 U.S. 16, 23, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983) (internal quotation marks omitted). Second, we must give "some significant measure of deference to CMS's interpretation of the statute." Community Health Ctr. v. Wilson-Coker, 311 F.3d 132, 137 (2d Cir.2002). Third, the interpretation given to the statute must be consistent with the congressional purpose for enacting it. Holloway v. United States, 526 U.S. 1, 9, 119 S.Ct. 966, 143 L.Ed.2d 1 (1999).
The first canon — an examination of how the statute in all of its parts fits together — favors plaintiffs' interpretation of Section 1396r-6. However, the section we must examine to understand the relevance of this canon is not Section 1396r-6 itself, but rather Section 1396a(e). Subsection (1)(a) of Section 1396a(e) provides that recipients who have become "ineligible for [AFDC] because of increased hours of, or increased income from, employment, shall, while a member of such family is employed, remain eligible for [Medicaid] assistance... for 4 calendar months." Subsection (1)(B), however, instructs that Subsection (1)(A) does not apply to persons who become ineligible for AFDC from April 1, 1990, to September 30, 2003. For these recipients, the agency must use Section 1396r-6. 42 U.S.C. § 1396a(e)(1)(B). Section 1396r-6(a)(1), of course, requires only that the recipient's ineligibility be caused by "income from employment." Congress's inclusion of "increased" in the temporarily suspended section, and its cross-reference to Section 1396r-6(a), which deleted the word "increased," in the immediately succeeding portion of the statute, strongly suggests that the omission in Section 1396r-6(a) was deliberate and meaningful.
Wilson-Coker, however, seeks a heightened and all but conclusive deference to CMS's interpretation based on Congress's re-adoption of the TMA without change within PRWORA after CMS adopted its interpretation of Section 1396r-6. We presume that Congress is "aware of an administrative or judicial interpretation of a statute and [has adopted] that interpretation when it re-enacts a statute without change." Lorillard v. Pons, 434 U.S. 575, 580, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978). However, Wilson-Coker's reliance on this principle is misplaced for two reasons. First, each of the cases she cites involves a published regulation, a consistent judicial interpretation, or an administrative interpretation of which Congress actually was aware. See id. (consistent judicial interpretations); Utah v. Evans, 536 U.S. 452, 454, 122 S.Ct. 2191, 153 L.Ed.2d 453 (2002) (Congress actually aware of Census Bureau's long-standing interpretation of statute); Bragdon v. Abbott, 524 U.S. 624, 631-32, 118 S.Ct. 2196, 141 L.Ed.2d 540 (1998) (published regulations); Connecticut Dep't of Income Maint. v. Heckler, 471 U.S. 524, 531-32 & n. 17, 105 S.Ct. 2210, 85 L.Ed.2d 577 (1985) (published regulations consistent with earlier less formal interpretations). We find no support in the cited cases for the proposition that we should assume Congress's awareness of an administrative interpretation that does not result from notice and comment rulemaking.
Despite our rejection of Wilson-Coker's argument for Lorillard deference, we must still accord the CMS interpretation "considerable deference," with the exact degree of deference depending upon "the agency's expertise, the care it took in reaching its conclusions, the formality with which it promulgates its interpretations, the consistency of its views over time, and the ultimate persuasiveness of its arguments." Community Health Ctr., 311 F.3d at 138 (citing United States v. Mead Corp., 533 U.S. 218, 234-35, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001)). CMS, the agency charged with administering Medicaid, has acknowledged expertise in this area and its position has been consistent at least since 1991, when it promulgated the pre-printed form. The formality of CMS's interpretation is at an intermediate level between a published recommendation and an interpretation advanced only in litigation. However, there is no indication in the record of the process through which CMS arrived at its interpretation. Most significantly, there is no suggestion that CMS took into account the Eighth Circuit's view that — in light of the purposes of the TMA provision — it must be construed to include an increase in countable income even in the absence of an increase in actual income. See Phillips, 728 F.2d at 1178. Therefore, we cannot say with confidence that CMS's interpretation came about as the result of a reasoned process. In fact, CMS labels its interpretation as "tentative." CMS State Medicaid Manual § 3308.1. We therefore conclude that we will accord CMS's interpretation that degree of deference it reasonably deserves in light of the other canons of interpretation.
The district court found that CMS's interpretation best served the statutory purposes of PRWORA. Rabin, 266 F.Supp.2d at 340 (citing H.Rep. No. 104-651, at 1351-52, reprinted in 1996 U.S.C.C.A.N. 2183, 2410-11). PRWORA, however, neither created nor amended the TMA program; it simply continued it. Therefore, the purposes of PRWORA are not particularly relevant to interpreting Section 1396r-6. Cf. Phillips, 728 F.2d at 1178 (rejecting relevance of Act that limited the thirty and one-third disregard to four months — even though its primary purpose was to cut federal spending — because the Act "did not expressly modify § 1396a(e)(1), and we are unwilling to assume it was modified by implication").
The district court found that construing TMA not to apply when new income limits cause a recipient's ineligibility might motivate some parents to leave work, but that it could not assume that Congress wanted to prevent states from immediately enforcing new income limits during a fiscal crisis. Rabin, 266 F.Supp.2d at 340. In doing so, the district court weighed one of TMA's two identified purposes against the purposes of PRWORA. As we have indicated, we doubt the relevance of PRWORA's purposes in interpreting TMA. In addition, it is clear to us that both of Congress's purposes for creating and then liberalizing the TMA program are served by plaintiffs' interpretation and disserved by defendant's. Connecticut's abrupt termination of plaintiffs' medical insurance clearly contravened the second of the two purposes we have identified because it did not provide plaintiffs with a soft landing. Second, to an extent that is not knowable by us or by the district court, the elimination of medical coverage removes an incentive to work, and in the case of persons with serious illnesses may indeed prevent them from working altogether. Thus, we conclude that the purposes of the TMA provision clearly support plaintiffs' position.
Based on Section 1396u-1(c)(2), Wilson-Coker argues that plaintiffs are not eligible for TMA because they are not eligible for AFDC using 1996 income eligibility levels. Section 1396u-1(c)(2) provides: "For continued medical assistance in the case of individuals (and families composed of individuals) described in subsection (b)(1)(A) of this section who would otherwise become ineligible because of hours or income from employment, see sections 1396r-6 and 1396a(e)(1) of this title." Subsection (b)(1)(A) specifically references only the 1996 AFDC limits. Wilson-Coker's argument has merit only if we ignore the introduction to subsection (b)(1), which states that the entire section is "subject to paragraphs (2) and (3)." Paragraph (2) allows the state to use eligibility requirements less restrictive than those in effect in 1996. As the Eighth Circuit recently held, the introductory language of (b)(1) incorporates the alternative methodologies by reference. See Kai v. Ross, 336 F.3d 650, 654 (8th Cir.2003). When a state decides to use less restrictive requirements, those requirements are deemed to be the requirements of subsection (b)(1)(A).
Defendant's final argument is that Sections 1396r-6 and 1396u-1 do not create individual rights enabling plaintiffs to sue under Section 1983. In large part, this argument relies on Gonzaga Univ. v. Doe, 536 U.S. 273, 276, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002), in which the Court determined that a provision of the Family Educational Rights and Privacy Act ("FERPA") was not designed to convey rights on individual plaintiffs and thus did not justify a suit under Section 1983. See also Taylor v. Vermont Dep't of Educ., 313 F.3d 768, 786 (2d Cir.2002). In Gonzaga, the Court held that "[o]nce a plaintiff demonstrates that a statute confers an individual right, the right is presumptively enforceable by § 1983." 536 U.S. at 284, 122 S.Ct. 2268. "For a statute to create such private rights, its text must be `phrased in terms of the persons benefitted.'" Id. (quoting Cannon v. University of Chi., 441 U.S. 677, 692 n. 13, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979)).
Id. at 279, 122 S.Ct. 2268 (quoting 20 U.S.C. § 1232g(b)(1)). The Court found the FERPA provision's focus to be "two steps removed from the interests of individual students and parents." Id. at 287, 122 S.Ct. 2268. That is, the statute only forbade the government from funding schools that demonstrated "a policy or practice" of disclosing student records. Consequently, the court found that the provision did not create individual rights. Id.
Section 1396r-6(a), however, does require the State Plan to provide that eligible applicants receive aid rather than directly requiring that all eligible persons receive the assistance. Wilson-Coker contends that this wording indicates that, as in Gonzaga, Congress focused on the aggregate requirement and the responsibilities of the various administrative actors rather than on the rights of the recipients. This argument fails because Congress has provided that "[i]n an action brought to enforce a provision of this chapter [which includes the Medicaid statutes], such provision is not to be deemed unenforceable because of its inclusion in a section of this chapter requiring a State plan or specifying the required contents of a State plan." 42 U.S.C. § 1320a-2.3 Section 1320a-2 precludes defendant from relying on the plan requirement language of Section 1396r-6.
Because all of the language of Section 1396r-6 except the "plan requirements" language, reflects Congress's intention to confer a right to TMA upon persons who meet the various eligibility requirements, we find that Section 1396r-6 can support a Section 1983 claim. The only relevant post-Gonzaga precedent from the Courts of Appeals supports this holding. See Gean v. Hattaway, 330 F.3d 758, 772-73 (6th Cir.2003) (finding that Medicaid recipients may bring a Section 1983 action for breach of the Medicaid Act's fair hearing provision assuming that they failed to receive complete and adequate medical benefits); Bryson v. Shumway, 308 F.3d 79, 88-89 (1st Cir.2002) (holding that Section 1396a(a)(8), which requires that state Medicaid plans provide that medical assistance "shall be furnished with reasonable promptness to all eligible individuals" supports a Section 1983 claim). Cf. Wilder v. Virginia Hosp. Assoc., 496 U.S. 498, 501-02, 512, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1990) (holding that 42 U.S.C. § 1396a(a)(13)(A), which requires states to make reasonable reimbursement to providers, was enforceable by the providers pursuant to Section 1983); Concourse Rehab. & Nursing Ctr. Inc. v. Whalen, 249 F.3d 136, 143-44 (2d Cir.2001) (holding prior to Gonzaga that Medicaid provision requiring nursing facilities to provide certain services was intended for the benefit of the recipients and not for the benefit of the facilities).
This section was enacted to overrule in partSuter v. Artist M., 503 U.S. 347, 112 S.Ct. 1360, 118 L.Ed.2d 1 (1992), which held a provision of the Adoption Act to be unenforceable by a private person in part because the provision merely required the States to have a plan in effect containing the provision. 503 U.S. at 358-59, 112 S.Ct. 1360.