Tennessee Loses Fight Against Medicaid Benefits for Refugees

(CN) – The Tennessee General Assembly cannot sue the federal government to block the requirement to provide Medicaid benefits to refugees, the Sixth Circuit ruled Wednesday.

The Volunteer State’s Republican lawmakers alleged in 2017 that the threat to cut off Medicaid funding if Tennessee refused to provide benefits to refugees constitutes coercion in violation of the 10th Amendment. They also asserted a violation of the Constitution’s spending clause.

After hearing oral arguments in March, the Sixth Circuit judges ruled unanimously Wednesday that the Legislature lacks standing to sue because it did not allege an injury.

According to the opinion by U.S. Circuit Judge Danny Boggs, the lawmakers also lack authority to file the suit on behalf of the state of Tennessee.

If a state fails to comply with the Medicaid Act, the U.S. Department of Health and Human Services can withhold Medicaid reimbursement funds. This amount has ranged from $4 billion to $7 billion in recent years, representing 17 to 21% of Tennessee’s overall budget.

Medically needy refugees can qualify for Medicaid benefits as soon as they arrive in the United States, and they can receive coverage for up to seven years.

According to the General Assembly’s lawsuit, the state paid more than $31 million in 2015 on Medicaid coverage for refugees.

A year later, the Legislature passed a bill directing the state attorney general to file the lawsuit. Then-Governor Bill Haslam did not sign it, saying he trusted the attorney general “to determine whether the state has a claim in this case or any other.”

Attorney General Herbert Slatery III declined to file the lawsuit, saying the lawmakers’ theories “are unlikely to provide a viable basis for legal action.”

The General Assembly moved forward with the legal action, claiming the federal government coerced Tennessee into funding the Refugee Resettlement Program under the threat of losing Medicaid funding.

A federal judge in Jackson, Tennessee, granted the State Department’s motion to dismiss, and the lawmakers appealed to the Sixth Circuit.

In his 26-page opinion, Boggs stated that the General Assembly lacks standing to sue, rejecting the argument that its power to appropriate funds has been “completely nullified.”

“Because Tennessee voluntarily participates in Medicaid, and is required, as a condition of receiving federal funding, to cover individuals who satisfy the eligibility criteria (including refugees), the General Assembly has appropriated funds for the state share of Medicaid,” the judge wrote. (Parentheses in original.)

He added, “The General Assembly has not identified an injury that it has suffered, such as disruption of the legislative process, a usurpation of its authority, or nullification of anything it has done.”

Boggs also ruled that individual legislators like plaintiffs Senator John Stevens and State Representative Terri Lynn Weaver lack standing because the larger legislative body does.

In addition, the judge said the General Assembly cannot sue on behalf of Tennessee because the attorney general has exclusive authority to file federal lawsuits on the state’s behalf.

“While the General Assembly may have the authority to sue in its own name in federal court to vindicate an injury to its own rights, provided it can satisfy the essential jurisdictional requirements, we conclude that SJR 467 did not amend the Tennessee law that provides that the Attorney General has the exclusive responsibility to litigate on behalf of the state in federal court,” the ruling states.

During oral arguments, Boggs was joined on the panel by U.S. Circuit Judges R. Guy Cole Jr. and Julia Smith Gibbons. Wednesday’s ruling states the Gibbons was unable to participate in the decision.

Attorney John Bursch of the Thomas More Law Center represented the Legislature, while Samantha Chaifetz argued on behalf of the State Department.

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