Elder Law

Martha C. Brown, Esquire
Alicia Albus, Esquire

When an individual does not exhaust her administrative remedies, and because the state has an important interest in administering Medicaid benefits, the federal court does not have jurisdiction. Hudson v. Campbell (8th Cir., No. 10-3025,  December 15, 2011)

Ms. Hudson applied for MO HealthNet benefits, but her application was denied on the grounds that she had transferred property. Hudson requested and was granted a hearing. The hearing was originally scheduled, but was continued to allow the Division’s eligibility specialist to obtain counsel.

During the continuance, Hudson received a notice of case action indicating that the Division was relying upon a different reason for denying Hudson’s application for MO HealthNet benefits. Because the hearing officer believed that he lacked subject matter jurisdiction to hear an appeal from the withdrawn reason for denial, Hudson was informed that she needed to file a second hearing request. Her original request for hearing was withdrawn at the Division’s request. Hudson did not file a second hearing request but instead filed this §1983 action in the Western District of Missouri seeking declaratory and injunctive relief.

It is from the district court’s dismissal of this action that Hudson now appeals.

The court relied on the Younger decision which held that, absent extraordinary circumstances, federal courts should not enjoin pending state criminal matters. See Younger v. Harris, 401 U.S. 37 (1971). The Supreme Court later extended Younger abstention to state noncriminal judicial proceedings, including administrative proceedings, if the proceeding: (1) involves an ongoing state judicial proceeding, (2) implicates an important state interest, and (3) provides an adequate opportunity to raise constitutional challenges in the state proceeding. Middlesex County Ethics Commission v. Garden State Bar Association, 457 U.S. 423 (1982).

Missouri law provides for administrative, circuit court, and appellate review of Medicaid eligibility decisions, see §§ 208.080, 208.100, and 208.110, RSMo, remedies that Hudson had not yet exhausted, and thus Hudson’s underlying state proceeding is ongoing.

Hudson argues that Missouri has no important state interest in administering its Medicaid program because Medicaid involves a pervasive federal regulatory scheme. While Medicaid is regulated at the federal level, states are still given broad discretion to adopt standards for determining the extent of medical assistance requiring only that such standards be reasonable and consistent with the objectives.

Finally, Missouri law provides for administrative, circuit court, and appellate review of Medicaid eligibility decisions, an appellate process that would allow Hudson to raise her due process claims in the Missouri courts.

Because all three elements for Younger abstention are satisfied, the Federal Court does not have jurisdiction.