An Indiana appeals court rules that a Medicaid recipient cannot lodge a federal civil rights suit against the state Medicaid agency or its head for imposing a penalty on her transfer to a special needs trust because she is suing for damages, not injunctive relief. Indiana Family and Social Services Administration v. Anderson (Ind. Ct. App., No. 19A-PL-3039, Sept. 3, 2020).
In 2015, Bonnie Anderson entered a nursing home and applied for Medicaid, which was approved. In 2016, her farm was placed in an irrevocable special needs trust. After Ms. Anderson passed away, the state sent notice that it was imposing a transfer penalty for the transfer to the special needs trust.
Ms. Anderson’s representative appealed the state’s decision. The administrative law judge (ALJ) overturned the decision, and the state appealed. Ms. Anderson’s representative requested that she be reimbursed for the $80,000 the trust had paid to her nursing home. The Medicaid agency withdrew its request for agency review of the ALJ’s decision. Ms. Anderson’s representative filed a lawsuit against the Medicaid agency and the Secretary of Indiana Family and Social Services Administration in federal court under 42 U.S.C. § 1983, seeking damages. The Medicaid agency filed a motion to dismiss, arguing that Ms. Anderson lacked standing because she hadn’t exhausted her administrative remedies. The trial court denied the motion, and the state appealed.
The Indiana Court of Appeals reverses in part and affirms in part. The court rules that Ms. Anderson has standing because once the Medicaid agency “issued the dismissal and stated it would take no further action, [Ms.] Anderson had exhausted her administrative remedies.” However, the court holds that Ms. Anderson cannot sue the Medicaid agency under 42 U.S.C. § 1983 because it is an administrative agency of the state and she cannot sue the Secretary of Indiana Family and Social Services Administration under 42 U.S.C. § 1983 because she is suing for damages, not injunctive relief.
For the full text of this decision, go to: https://www.in.gov/judiciary/opinions/pdf/09032001ef.pdf
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