Patients can sue over Medicaid drug denials, appeals court rules

A group of patients say the District of Columbia is violating federal law by failing to explain denials of Medicaid coverage for their prescription drugs, and now the patients will have the right to take the district to court over the matter.

On June 8, the U.S. Court of Appeals for the District of Columbia said the patients have valid standing to sue the district over its medication denial practices. The plaintiffs claim that the D.C. Dept. of Health Care Finance is not telling patients the reasons behind coverage refusals nor providing an appeals process through which they can challenge the denials.

The Medical Society of the District of Columbia said the case’s allegations are concerning to physicians.

“When a physician writes a script, he or she expects that the Medicaid program is not going to put up roadblocks to wellness,” said Edward Shanbacker, executive vice president for the society. The organization was not involved with the case, but it contacted district officials in late June to discuss the issue in question. “Patient compliance with filling prescriptions is lower than anyone would like to see, so to aggravate that situation by putting up barriers for Medicaid recipients to appeal prescription denials is at best counterproductive,” Shanbacker said.

The Office of the Attorney General for the District of Columbia, which is representing the defendant in the lawsuit, declined to comment.

The plaintiffs, who are Medicaid patients, sued the district in 2010. They said they repeatedly had been turned down for Medicaid coverage at the pharmacy counter. Pharmacists cited an electronic computer system that indicates when prescriptions are not covered by Medicaid, the plaintiffs said. Being unable to challenge the denials have forced the patients to forgo necessary medications or pay out of pocket for the drugs, they added. The plaintiffs asked the court to require the DHCF immediately to change its denial processes to comply with federal law.

The U.S. District Court for the District of Columbia dismissed the lawsuit, saying the patients could not sue because they had not been injured. The appeals court reversed that ruling. Judges said the plaintiffs proved they were harmed by being unable to obtain their medication and that future injury is probable because of ongoing denials.

“The procedural rights at issue are undoubtedly designed to protect some threatened concrete interest of [the plaintiffs], namely [the] interest in timely receiving Medicaid prescription drug benefits,” the court said. “We have no doubt that injuries of this sort & satisfy the injury element of constitutional standing.”

The ruling allows the lawsuit to move forward in the lower court.

Doctors may play unwitting role in denials

The plaintiffs are pleased they finally can proceed with the complaint on its merits, said Bruce J. Terris, the patients’ attorney. He said the lawsuit is not about whether the denials are proper, but rather about the right to know the underlying reasons so that appropriate actions may be taken.

Some coverage denials are erroneous, he said, adding that if patients were aware of such a mistake, they could point this out to the district. In other instances, a doctor may have written a prescription without realizing that special permission from Medicaid was necessary before prescribing the drug. If made aware of this, patients could go back to their physicians, who in turn could seek such authorization, he said.

“The need to tell the patient what is happening is a basic right of people,” Terris said. “If the government turns you down for something, you should know the reason for it.”

In most examples, the coverage denials were not the district’s fault but stemmed from pharmacy errors or missteps by doctors, the district said in court filings. All of the prescription drug delays cited by patients were resolved months before their complaint was filed, the district added.

“This is not a case in which plaintiffs allege that the District of Columbia terminated their Medicaid eligibility without notice and an opportunity to be heard,” the district wrote in a court document. “Instead, it is a case in which plaintiffs did not receive on demand the prescription drugs they wanted, for various reasons, often having nothing or little to do with the district.”

The Medicaid program should be held to the same standard as local private health insurers, said Shanbacker, of the D.C. medical society. In recent years, the district has enacted laws to ensure due process rights to privately insured patients who are denied insurance claims, he said.

“Obviously it would be good public policy to provide those protections and those rights to Medicaid recipients,” he said.