Texas Medicaid must comply with 1996 consent decree, court says

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From http://health.cch.com/news/medicaid/080206a.asp

Texas must comply with 1996 consent decree, court says

The Texas Medicaid agency's motion to end or change a 1996 consent

decree was properly denied, the 5th Circuit Court of Appeals has

ruled. The court rejected Texas' claims that the purpose of the order

has been accomplished because its early and periodic screening,

diagnosis and treatment (EPSDT) program is now administered according

to federal requirements. Rather, the state must establish that there

has been a substantial change in the factual circumstances since the

entry of the order, and despite its good-faith efforts, the change

has made compliance more onerous than the parties contemplated.

Battle over consent decree. Medicaid law requires that states make

comprehensive services available to all eligible children so that

developmental delays or " defects " can be corrected or ameliorated and

to notify recipients of the availability of the services. The 1996

consent decree set forth detailed requirements for the state's

implementation and administration of the EPSDT program.

In 1998, the plaintiffs asked the district court to enforce its

order. The court found that the state had violated multiple

provisions of the order in that many requirements had never been

implemented. The court rejected the agency's argument that the

Eleventh Amendment to the U.S. Constitution barred it from ordering

the agency to take any action that required expenditure of state

funds. The state appealed to the Fifth Circuit, which agreed with the

district court. The state agency asked the Supreme Court to review

the case.

In 2004, the Supreme Court upheld the lower court decisions, and

ordered the state to comply with federal law. The Supreme Court also

stated that its ruling had no bearing on the court's power to modify

the decree.

Texas then asked the district court to end the consent decree either

statewide or in all urban areas of the state. The agency made no

argument and offered no proof of any attempt to comply with the 1996

order. The district court denied the request because Texas failed to

meet the requirements for modification: (1) a substantial change in

the factual or legal circumstances that made compliance more

burdensome; (2) the decree was unworkable because of unforeseen

obstacles to compliance; or (3) enforcement of the order without

modification would harm the public interest, despite a good faith

effort to comply. The agency appealed again.

Court of Appeals decision. The state made the same arguments to the

5th Circuit as it had to the district court. The court ruled that the

district court had applied the appropriate legal standard. The

consent decree required more than " mere compliance " with federal law.

Further, the state could be excused from the obligations of the

consent decree only after it had made a good faith effort to comply.

Noting that the agency stated in its court filings that it did not

claim to have made an effort to comply, the court upheld the district

court's denial of the state's request.

SOURCE: Frazar v. Ladd, 5th Cir., July 20, 2006.

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