Patient Protection Act Clarifies the Meaning of “Medical Assistance”

To: Health Advocates
From: Jane Perkins, National Health Law Program
Gene Coffey, National Senior Citizens Law Center
March 31, 2010
Patient Protection Act clarifies the meaning of ?medical assistance?
The Patient Protection and Affordable Care Act (PPA), Pub. L. No. 111-148,
includes a provision that clarifies the meaning of ?medical assistance? in the federal
Medicaid Act. The clarification confirms the original intent of Congress that states, in
providing ?medical assistance,? must operate their programs to ensure that beneficiaries
actually receive covered services with reasonable promptness, not simply be
reimbursed if they manage to acquire services on their own.
The clarification responds to a recent spate of federal court decisions that
focused exclusively on the Medicaid Act?s reference to medical assistance as payment
and held that states had no responsibility under the Act other than to pay bills. This
radical reading of the federal law conflicted with legislative history, rendered numerous
other Medicaid statutory and regulatory provisions meaningless, and ignored over 40
years of case history enforcing provisions of the Medicaid Act.
Section 2304 of the PPA amends the Medicaid Act, 42 U.S.C. § 1396d(a), Social
Security Act § 1905d(a), to provide that:
The term ?medical assistance? means payment of part of all of the cost of the
following care and services or the care and services themselves, or both, (if
provided in or after the third month before the month in which the recipient makes
application for assistance?.?
Explanation of the provision
We have quoted the legislative history of the provision fully below. We have
prepared and inserted a number of footnotes into the history to explain the
congressional references. The reader must understand that the footnotes do not
appear in the actual legislative history.
The House Energy and Commerce Committee, which has jurisdiction over

Medicaid, explained the need for the clarification as follows:

The term [?medical assistance?] is expressly defined to refer to payment
but has generally been understood to refer to both the funds provided to pay for
care and services and to the care and services themselves. The Committee,
which has legislative jurisdiction over Title XIX of the Social Security Act, has
always understood the term to have this combined meaning. [1] Four decades of
regulations and guidance from the program?s administering agency, the
Department of Health and Human Services, have presumed such an
understanding and the Congress has never given contrary indications.[2]
Some recent court opinions have, however, questioned the longstanding
practice of using the term ?medical assistance? to refer to both the payment for
services and the provision of the services themselves.[3] These opinions have
read the term to refer only to payment; this reading makes some aspects of the
rest of Title XIX difficult and, in at least one case, absurd.[4] If the term meant
only payments, the statutory requirement that medical assistance be furnished
with reasonable promptness ?to all eligible individuals? in a system in which
virtually no beneficiaries receive direct payments from the state or federal
governments would be nearly incomprehensible.[5]
Other courts have held the term to be payment as well as the actual
provision of the care and services, as it has long been understood.[6]The Circuit
Courts are split on this issue and the Supreme Court has declined to review the
question. To correct any misunderstandings as to the meaning of the term, and
to avoid additional litigation, the bill would revise section 1905(a) ? [text of
amendment omitted]?. This technical correction is made to conform this
definition to the longstanding administrative use and understanding of the term. It
is effective on enactment.
H.R. Rep. No. 299, 111th Cong., 1st Sess. 2009, at 649-50, 2009 WL 3321420 (Oct. 14,
2009). (footnotes added).
Conclusion
The clarifying revision in no way changes the responsibilities states assume
when they accept federal Medicaid funds, as those responsibilities have until lately been
universally understood. See 42 U.S.C. §§ 1396a(a)(32) (discussing payments under
the program), 1396b (setting forth comprehensive payment rules between the federal
and state governments). The clarification also does not require states to directly
provide medical services by establishing state-owned or operated facilities or employing
providers. It does, however, re-affirm the states? obligations as commonly understood

prior to the recent circuit court decisions.

1 For example, when amending the Early and Periodic Screening, Diagnosis and Treatment
(EPSDT) provisions in 1989, the House Committee stated that ?[t]he EPSDT benefit is, in effect,
the Nation?s largest preventive health program for children? and that the EPSDT provisions
require that ?each state must provide, at a minimum, ? EPSDT services.? H.R. Rep. No. 247,
101st Cong.,1st Sess. 398-399 (1989), reprinted in 1989 U.S.C.C.A.N. 2124-25 (emphasis
added). Accord S. Rep. 89-404, S. Rep No. 404, 89th Cong., 1st Sess. 1965, reprinted in 1965
U.S.C.C.A.N. 1943, 1950-51 (stating that ?best interest of recipient? provision, 42 U.S.C. §
1396a(a)(19), was included ?in order to provide some assurance that ? the State will not
administer the provisions for services in a way which adversely affects the availability or the
quality of the care to be provided?).
2 See, e.g., 42 C.F.R. § 440.210(a) (?A State plan must specify that, at a minimum, categorically
needy recipients are furnished the following services?.?); Id. at § 440.220 (same, with respect
to medically needy beneficiaries); Id. at § 440.230(a) (requiring state to ?specify the amount,
duration, and scope of each service that it provides?) (emphasis added).
3 See Equal Access for El Paso v. Hawkins, 562 F.3d 724, 728 (5th Cir. 2009) (finding
reasonable promptness provision only required state to make reasonably prompt payments for
services received and did not require state to take steps to ensure that recipients actually
receive prompt medical care and services); Okla. Chap. of the Am. Acad. of Pediatrics v.
Fogerty, 472 F.3d 1208, 1215 (10th Cir. 2006), cert. denied, 552 U.S. 813 (2007); Mandy R. v.
Owens, 464 F.3d 1139 (10th Cir. 2006), cert. denied, 549 U.S. 1305 (2007); Westside Mothers
v. Olszewski, 454 F.3d 532 (6th Cir. 2006) (remanding to allow plaintiffs to re-plead complaint);
Bruggeman v. Blagojevich, 324 F.3d 906, 910 (7th Cir. 2003) (dicta, stating that ?statutory
reference to ?assistance? appears to have reference to financial assistance rather than to actual
medical services?).
4 For example, 42 U.S.C. § 1396a(a)(23) requires that a state must ?provide that (A) any
individual eligible for medical assistance may obtain such assistance from any institution,
agency, community pharmacy, or person, qualified to perform the service or services
required?.?). In this context, ?medical assistance? can only mean services, for if it also meant
payment, the statute would require participating providers to make payments to eligible

individuals. This ignores that Medicaid is a vendor payment program that, for the most part,

does not make direct payments to individuals; and, it is absurd. Similarly, § 1396a(a)(65),
which requires states to ?issue provider numbers for all suppliers of medical assistance
consisting of durable medical equipment,? would mean that the state would issue provider
numbers for suppliers of payments consisting of medical equipment. Again, an absurd result.
5 See 42 U.S.C. § 1396a(a)(8).
6 See, e.g., Bryson v. Shumway, 308 F.3d 79 (1st Cir. 2002); Doe v. Chiles, 136 F.3d 709 (11th
Cir. 1998); see also, e.g., Katie A. v. Los Angeles Co., 481 F.3d 1150, 1162 (9th Cir. 2007);
Brown v. Tennessee Dept. of Finan. & Admin., 649 F.Supp.2d 780, 798-99 (M.D. Tenn. 2009)
(finding State attempt to use medical assistance as payment argument was ?a revisionist view
of the litigation?).

 

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