Top Court Rejects Maine’s Challenge To ACA ‘Maintenance Of Effort’ Rule

WASHINGTON, D.C. — (Mealey’s) The Supreme Court on June 8 denied the State of Maine’s petition challenging mandatory continued Medicaid coverage for older children under the Patient Protection and Affordable Care Act’s maintenance of effort requirements, according to the docket (Mary C. Mayhew, in her capacity as Secretary of the Maine Department of Health and Human Services v. Sylvia M. Burwell, et al., No. 14-992, U.S. Sup. [lexis.com subscribers may access Supreme Court briefs for this case]).

In a petition for writ of certiorari, Mary C. Mayhew and Maine Department of Health and Human Services (DHHS) argued that the court should accept the case because it directly conflicts with National Federation of Independent Businesses v. Sebelius (132 S. Ct. 2566 [2012] [enhanced opinion available to lexis.com subscribers]). 

In 2012, DHHS sought to amend its Medicaid plan to drop coverage for 19- and 20-year-old children of low-income families, which it had covered since 1991.  The move was an effort to meet constitutional requirements that the state maintain a balanced budget. 

NFIB

The U.S. Department of Health and Human Services (HHS) denied the amendment, finding that it violated the maintenance-of-effort (MOE) provision in 42 U.S. Code Section 1396a(gg), a portion of the Patient Protection and Affordable Care Act (ACA).  Section 1396a(gg) requires states accepting Medicaid funding to maintain eligibility standards for children until Oct. 1, 2019. 

The DHHS and its secretary, Mary Mayhew, filed a petition for review with the First Circuit U.S. Court of Appeals.  DHHS argued that the HHS’s disapproval was unconstitutional under NFIB and violated Maine’s right to equal sovereignty under Shelby County v. Holder (133 S. Ct. 2612 ([2013]) [enhanced opinion].  Maine Attorney General Janet T. Mills joined the action as an interested party-intervener and argued that the denial was constitutional. 

A panel of the First Circuit affirmed. 

The panel said the plurality in NFIB reasoned only that Congress’ tying of all Medicaid funds to acceptance of the new Medicaid system was unduly coercive.  Under NFIB, Congress may still incentivize certain conduct or regulations by withholding funds.

 The panel also rejected Maine’s argument that Section 1396a(gg) singled out certain states for disparate treatment and thus violated Shelby County. 

Petition

In their petition, the plaintiffs argued that NFIB “laid to rest” any idea that Congress may use its spending powers to turn pressure into compulsion.  

Mandating coverage for 19- and 20-year-olds is not the type of basic change to Medicaid condoned by NFIB, the plaintiffs argued.  And while Maine previously covered 19- and 20-year-old children, NFIB means that the government cannot make such coverage mandatory, as it has here, the plaintiffs argued. 

Clifford H. Ruprecht, Christopher T. Roach and Geraldine G. Sanchez of Roach, Hewitt, Ruprecht, Sanchez & Bischoff in Portland, Maine, represent DHHS.  Alisa B. Klein, Beth S. Brinkmann, Mark B. Stern, Stuart F. Delery, William B. Schultz, Janice L. Hoffman and Susan Maxson Lyons of the U.S. Department of Justice in Washington represent the government.  Christopher C. Taub and Mills of the Maine Attorney General’s Office in Augusta, Maine, represent Mills.

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