Commonwealth of Massachusetts v. Kathleen Sebelius, et al

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Before Lynch, Chief Judge, Boudin and Howard, Circuit Judges.

LYNCH, Chief Judge. The Commonwealth of Massachusetts, by the administrator of “MassHealth,” its state Medicaid program, appeals from a dismissal of its lawsuit against federal officials for failure to state a claim under Fed. R. Civ. P. 12(b)(6). The Commonwealth claims that the federal Centers for Medicare & Medicaid Services (CMS) and associated entities violated the federal Medicaid statute when they refused to allow the Commonwealth to recover reimbursement directly from CMS in four cases of “retroactive dual eligibility.”

In each of these four cases, an individual who received Massachusetts Medicaid funds to pay for medical services was later deemed retroactively eligible for federal Medicare funds for the period in which the individual received those services. The state is trying to secure reimbursement for its past Medicaid payments by directly petitioning the federal government for reimbursement rather than going back to the providers of services, whom the Medicare program clearly recognizes as appropriate claimants. This dispute is not over whether the Commonwealth should ultimately be reimbursed by Medicare, but whether it has chosen a permissible mechanism to recover reimbursement. Cf. Massachusetts v. United States, 522 F.3d 115, 129 n.8 (1st Cir. 2008).

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