Article by Molly Teague
The Constitution’s Spending Clause authorizes Congress to place conditions on the grant of federal funds to states. Congress has used this power to create a number of significant programs, including Social Security and Medicaid. At the time Congress enacted these programs—in 1935 and 1965, respectively—the United States Supreme Court understood it to be “the duty of the courts to be alert to provide such remedies as are necessary to make effective the congressional purpose.” Therefore, Congress, operating under the presumption that the Court would provide a remedy to those whose rights under the statutes were violated, did not expressly include a private enforcement mechanism authorizing program beneficiaries to bring suit.
In 1975, the Supreme Court rejected the prevailing presumption that a remedy was available to individuals harmed by violations of federal law, and set forth instead a number of factors to determine “whether a private remedy is implicit in a statute not expressly providing one.” Over time, the Supreme Court has continued to chip away at the enforceability of rights secured both by the Constitution and federal statutes. This shift has been especially striking—and disruptive—for litigants seeking to ensure state compliance with federal benefits programs. Medicaid, one of the largest such programs, provides a leading example of how beneficiaries have been limited in their ability to enforce rights guaranteed by federal law.
Medicaid, like many other “cooperative federalism” programs enacted pursuant to Congress’s Spending Clause authority, is implemented via intergovernmental agreements between states and the federal government. While Medicare is a national program with clear statutory language that creates a robust federal entitlement, Medicaid is implemented at the state level and lacks both explicit entitlement-creating language and a direct path to federal judicial review. The federal agency sets minimum criteria that states must follow in exchange for federal funding, and state legislatures and agencies fill in the details of the state’s Medicaid program via state statutes and regulations. Today, proponents justify leaving Medicaid implementation to the states as “laboratories of democracy.” In reality, however, Medicaid’s structure is an “artifact of a history” that reflects political dealing, prejudice toward the poor, and existing bureaucratic machinery, rather than a belief that the program would be best served by state experimentation. The nature of the Medicaid program—a decentralized, “weak entitlement” without an explicit enforcement mechanism—leaves beneficiaries vulnerable.
Indeed, Medicaid’s “historical trajectory as a rights-creating law that grants individuals access to the courts mirrors the philosophical and political trajectory of the courts themselves.” As courts have shifted away from presuming that every right has a remedy, Medicaid beneficiaries have been increasingly sidelined in their efforts to privately enforce the requirements the federal Medicaid program imposes on states. Beneficiaries of Spending Clause programs like Medicaid have had some success bringing suits under 42 U.S.C. § 1983. However, as discussed in subpart II.B, the Supreme Court has narrowed that avenue in recent decades, gradually closing the courthouse door to millions of Americans who rely on such programs. Because there is no longer a presumption that Spending Clause programs provide a remedy, the Supreme Court evaluates whether each individual Medicaid provision private litigants seek to enforce “unambiguously” confers a private right of action—that is, whether it is “‘phrased in terms of the persons benefited’ and contains ‘rights-creating,’ individual-centric language with an ‘unmistakable focus on the benefited class.’” Indeed, the Supreme Court confronted this question once again only last term, when it considered whether Medicaid’s “free choice of provider” provision “unambiguously” creates rights enforceable under § 1983. This trend reflects the broader shift away from private enforcement of federal statutes in federal courts, beyond the context of Spending Clause programs. This shift is significant not only for the individuals directly harmed by violations of law, but for all program beneficiaries and stakeholders because private enforcement can, as a general matter, even out structural power imbalances, allow affected members of the public to leverage their personal experience with the regulatory scheme, and facilitate democratic deliberation.
As federal courts have grown less and less accessible via private enforcement, some scholars have begun to turn their attention to private enforcement in state courts. Though litigants have long sought to vindicate their rights in state courts, “[s]cholarship on U.S. litigation and civil procedure has scarcely studied the role of private enforcement in the states.” Scholars have long debated the relative competency of state and federal courts, particularly with respect to adjudicating federal issues and effectuating federal law and rights. But there are remarkably few accounts of how state courts approach evaluating rights established under federal law. The adjudication of such claims is particularly complicated in the context of cooperative federalism programs like Medicaid, where a state court confronts competing sources of law from Congress, the federal agency, the state legislature, and the state agency.
There is, nevertheless, a limited body of work that provides valuable insight into how state courts adjudicate federal claims under cooperative federalism programs like Medicaid. For example, Josh Bendor and Miles Farmer have described how state courts engaging in judicial review of actions taken under cooperative federal programs tend to apply state law while federal courts adjudicating similar cases tend to apply federal law; however, neither court typically explains its choice or acknowledges that other standards might apply. And Abbe Gluck has reported that the level of deference applied to the states implementing federal statutes like Medicaid varies across federal circuit courts and made the case that different interpretive canons may be appropriate depending on the role of state actors in different intra-statutory federalism arrangements. However, no scholar has provided a comprehensive account of how private litigants use state administrative law in state courts to vindicate rights established under cooperative federalism programs or of how state courts approach those cases.
This Article supplements the scholarly discourse on state courts and cooperative federalism by providing an account of how Medicaid beneficiaries, applicants, and providers use state administrative law to vindicate their rights under the Medicaid program and how state courts approach reviewing state agency action in the cooperative federalism context. This Article reports that Medicaid litigants use state courts as a forum for suits against state agencies that have violated both state and federal law. State courts faced with such claims look to the interpretation of the implementing state agency, the federal Medicaid agency, and other courts—both state and federal—to help them interpret the state and federal laws at issue. The findings from this Article can inform how scholars and litigants alike think about judicial review of cooperative federalism programs more broadly. This is significant because the reach of cooperative federalism programs is tremendous. Cooperative federalism touches everything from human health to environmental protection to telecommunications, and has been an essential form of governance since its historical rise during the New Deal Era. And, crucially, once granted to states, the power to implement federal programs often becomes entrenched.
In Part II of this Article, I provide an overview of the Medicaid program. In subpart II.A, I chronicle the creation of Medicaid and its implementation at the state and federal level. In subpart II.B, I discuss the myriad ways that compliance with federal Medicaid requirements is enforced, albeit inadequately, and consider state administrative law as a potential enforcement alternative. In Part III, I report the results of my analysis of state-court Medicaid case law across all fifty states and the District of Columbia and propose two categories of litigation into which most state-court suits fall. Specifically, litigants—who are typically Medicaid beneficiaries, applicants, or providers—seeking to vindicate their rights under the Medicaid program, argue either that the challenged agency action violates federal law (the “federal law model,” described in subpart III.A), state law (the “state law model,” described in subpart III.B), or both. There is significant variation between cases within each of the models, largely because litigants may allege that an agency violated state administrative law, a state or federal Medicaid statute or regulation, another federal statute like the Americans with Disabilities Act (ADA), or even the state or federal constitution. In Part IV, I explore how state courts hearing these challenges grapple with competing sources of legal authority, both state and federal, and interpretations thereof. Finally, in Part V, I provide lessons that can inform the litigation strategy of state-court Medicaid litigants.
About the Author
Molly Teague, Special Assistant Attorney General, Energy and Environment Bureau, Massachusetts Office of the Attorney General.
Citation
100 Tul. L. Rev. 329