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Court ruling: Medicaid recipients can challenge D.C.’s unexplained denials of prescription drugs

June 8, 2012: More than 50 million Americans are covered by Medicaid, and most of them have no access to any other health insurance coverage.  All too often, when a person who relies on Medicaid gets a prescription from a doctor and goes to a pharmacy to get the prescribed medicine, the government denies coverage and refuses to pay for it.  When this happens, federal law requires the government to provide written notice of the reasons for the denial, as well as notice of the individual’s right to a hearing.  Written notice allows people to correct the problem that caused the denial — often a bureaucratic error of some sort.  Unfortunately, the District of Columbia routinely fails to provide written notice, in violation of the law.

Five Medicaid recipients in D.C. filed a class action suit against the District, seeking to correct this ongoing problem.  The U.S. District Court for the District of Columbia dismissed the case, N.B. ex rel. Peacock v. District of Columbia, holding that the plaintiffs lacked standing to sue, either because they had not suffered an injury, the injury was not caused by the D.C. government, or the injury could not be redressed by the court.  The plaintiffs appealed to the D.C. Circuit Court of Appeals.
In December 2011, the Public Justice Center joined several other organizations in filing an amicus brief in the D.C. Circuit in support of the plaintiffs.  The brief provided important contextual information on how the Medicaid prescription drug program actually works in practice.  It explained that the bureaucratic process known as “prior authorization,” which many states and the District use in an attempt to save money on prescription drugs, often results in confusing denials of medication that a doctor has prescribed and that a patient may urgently need.  And it explained that the failure to provide written notice of the reasons for a denial injures Medicaid recipients by making it much harder for them to fix the underlying problem and get the medicine they need.  The brief was written by Rochelle Bobroff of the National Senior Citizens Law Center and Sheldon Toubman of New Haven Legal Assistance.
On June 8, 2012, the D.C. Circuit issued a favorable decision, reversing the district court.  In its opinion, the court relied on the amicus brief’s explanation of how the prior authorization process makes it likely that the plaintiffs will be subjected to unexplained denials of prescription medication again in the future.  The court recognized that the plaintiffs are legally and practically injured by the D.C. government’s failure to provide written notice of reasons, and so they have the right to bring suit to force the government to comply with the law.  The case now heads to the trial court for further proceedings.  

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