Opinion ID: 4707402
Heading Depth: 3
Heading Rank: 3

Heading: Beneficiary Choice and MLTC Competition

Text: The district court cited “choice on the part of the potential Medicaid enrollee, and the possibility of competition among MLTCs as to the quantity and quality of care each proposes to offer,” as additional reasons for its conclusion that Bellin lacks a constitutionally protected property interest in the initial determination of her care services hours. Bellin, 457 F. Supp. 3d at 423. These aspects of New York’s Medicaid scheme have no legitimate bearing on whether Bellin has a constitutionally protected property interest. The fact that a beneficiary can seek out another MLTC and go through the same evaluation process does not affect whether the regulatory scheme “meaningfully channel[s] official discretion by mandating a defined administrative outcome.” Kapps, 404 F.3d at 113. If we were to hold otherwise, states could dodge the dictates of the Due Process Clause by having multiple firms “compete” to assess beneficiaries’ entitlement to a particular amount of a benefit and to provide that benefit, even if in practice those “competing” assessments yielded the same outcomes and the competition was largely illusory. 23 The fact that beneficiaries can opt to seek initial 23In other words, one cannot infer “choice” and “competition” from the presence of multiple MLTCs to which a beneficiary may apply. The number of available MLTCs varies by region, and federal law requires states to ensure only that two managed care organizations are available to any given enrollee, subject to certain exceptions. See 42 U.S.C. § 1396u-2(a)(3). Meanwhile, the same structure that is designed to generate cost savings in the managed care model may also create incentives for providers not to offer adequate care to high-needs beneficiaries in hopes that those beneficiaries choose the competition. Recall that MLTCs are paid a flat capitation per beneficiary. When considering a high-needs beneficiary such as Bellin, MLTCs may have an incentive not to take her on as a patient—and therefore an incentive not to offer an attractive or even adequate number of personal care hours. See 2003 Interim Report at 20-21 (explaining that MLTCs are “paid a predetermined amount per member per month” and that, although regional rates vary based on broad enrollee demographic and other factors, MLTCs ultimately bear the risks associated with covering the costs of “all needed medical services” for any single enrollee through these payments). The Medicaid and CHIP Payment and Access Commission, a non-partisan federal legislative agency, has observed that 29 offers of personal care service levels from multiple MLTCs, and that these MLTCs may provide different initial determinations, does not preclude finding that Bellin plausibly alleged beneficiaries have a constitutionally protected property interest in the initial determination of the care hours they will receive. B. Constitutionally Adequate Protections The State argues that, even if Bellin has a constitutionally protected interest in the amount of personal care services she receives, New York’s procedures for reviewing MLTCs’ initial offers of such hours “are constitutionally adequate.” State Br. 55; see Furlong, 156 F.3d at 395 (“The issue of what constitutes a substantive property interest is analytically distinct from the issue of what procedures must be followed if such interest is to be taken away.”). In keeping with our general practice, however, we decline to reach this question as it was not addressed by the district court. See Booking v. Gen. Star Mgmt. Co., 254 F.3d 414, 418-19 (2d Cir. 2001) (explaining that, although it has “broad discretion” to address such questions, the Court generally does not reach questions not addressed by district court). The State contends that it raised the constitutional adequacy of process argument in his motion to dismiss to preserve it for our consideration on appeal. We leave it to the district court to decide whether on remand, before discovery proceeds, the State (or RiverSpring) may challenge the adequacy of Bellin’s allegations regarding the inadequacy of current procedural protections. “[c]apitated plans may also seek to enroll as many healthy patients as possible and discourage participation of disabled or high utilizing enrollees.” MEDICAID & CHIP PAYMENT & ACCESS COMM’N, Managed care’s effect on outcomes, https://www.macpac.gov/subtopic/managed-careseffect-on-outcomes/ (last visited July 10, 2021). We do not mean to suggest that this is how RiverSpring or any other MLTC in New York operates in practice—only that one cannot safely infer beneficiary “choice” and “competition” as would be relevant here from the fact that beneficiaries may seek service offers from multiple MLTCs. 30