Manatt Represents Medicaid Health Plans of America in 7th Circuit Court of Appeals

On June 6, 2024, Manatt Health Partners Michael Kolber and Stephen Libowsky filed an amicus brief on behalf of the Medicaid Health Plans of America (MHPA) in the U.S. Court of Appeals for the Seventh Circuit in support of the petitions for rehearing or rehearing en banc filed by the Illinois Department of Healthcare and Family Services (HFS) and by several managed care organizations in Saint Anthony Hospital v. Whitehorn.    

In this case, the Seventh Circuit originally ruled in 2022 that, under certain circumstances when a Medicaid provider believes it has not been paid timely by a Medicaid managed care organization, the provider could sue the state under 42 U.S.C. § 1983 to enforce a provision of the Medicaid statute that requires state Medicaid agencies to incorporate a timely payment provision in their contracts with managed care organizations. HFS petitioned the Supreme Court to review the Seventh Circuit’s decision, and MHPA filed an amicus brief, authored by Manatt, supporting that petition, in 2023. The Supreme Court granted the petition to hear the case, vacated the Seventh Circuit’s decision and remanded back to that court to reconsider in light of the Supreme Court’s recent decision interpreting the right of action under § 1983, Health & Hospital Corp. of Marion County v. Talevski. On April 25, 2024, the Seventh Circuit reaffirmed its holding from 2022, in a new opinion. On June 30, HFS and four managed care plans that intervened as defendants in the case petitioned the Seventh Circuit to reconsider the decision.

MHPA has an interest in maintaining and expanding managed care’s benefits and to prevent policy changes that undermine Medicaid managed care. MHPA has an overall perspective of how the Medicaid managed care system operates. That perspective is crucial to understanding how the panel’s decision impacts the efficient and cost effective administration of benefits for millions of people who rely on Medicaid for their health care.

The brief highlights that this case should have been a routine reimbursement dispute between a hospital and the health plans with which it contracted. An Illinois hospital alleged that Medicaid MCOs failed to pay claims timely in accordance with their contracts. The panel decision encourages litigants to abandon the effective and well-established path to resolve these disputes—suits or arbitrations for contract damages, state administrative remedies, or both—in favor of an unprecedented opportunity to litigate contract disputes as purported infringements of federal rights by the State.

Read the full brief here.



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