Medicaid Applicant's Case Against State Based on Disability Law Can Proceed

A U.S. district court in Arizona declines to dismiss an elderly Medicaid applicant's suit alleging that the state violated disability law when it refused to take into account her dementia when evaluating her share of the nursing home payments. Evangelical Lutheran Good Samaritan Society v. Betlach (U.S Dist. Ct., D. Ariz., No. CV-16-08169-PCT-JJT, Aug. 4, 2017).

Nursing home resident Polly Olson suffered from dementia that made it difficult to keep track of her finances. She received income from an annuity, but the annuity payments were sent to her residence and her daughter misappropriated the funds. When Ms. Olson applied for Medicaid benefits, the state approved her application. The state determined that Ms. Olson's share of the payments would be $1,736.67, based on a determination of Ms. Olson's monthly income, which included the annuity payments.

The nursing home became Ms. Olson's authorized representative and sued the state on her behalf, claiming the annuity payments should not be counted because she had dementia. The nursing home argued that the state violated the Americans with Disabilities Act as well as federal Medicaid law. The state filed a motion to dismiss, claiming immunity under the Eleventh Amendment and failure to state a claim.

The U.S. District Court, District of Arizona, denies the motion to dismiss, in part. According to the court, while the state can claim immunity from federal Medicaid law under the Eleventh Amendment, the state is not immune under federal disability law. The court holds that because the nursing home "essentially alleges that [the state] discriminated against Ms. Olson by failing to account for her disability in its application and benefits review processes," it has alleged sufficient facts to survive a motion to dismiss. The court dismisses the federal Medicaid claim, finding that Medicaid law does not give Ms. Olson a private right of action.

For the full text of this decision, click here.

Did you know that the ElderLawAnswers database now contains summaries of more than 2,000 fully searchable elder law decisions dating back to 1993? To search the database, click here.