For 15 years, Tennessee’s Medicaid program has operated under a federal consent decree. In recent years, however, the Volunteer State moved to vacate the decree on grounds that the State is now compliant with both the decree and the Medicaid statute.

Despite pressure from class action plaintiffs to leave the decree in tact, both a district court and the Sixth Circuit Court of Appeals believe that Tennessee is ready to reclaim the reins of its Medicaid program.

The Medicaid Act requires that TennCare (the Tennessee Medicaid program) administer an Early and Periodic Screening, Diagnosis, and Treatment program for all enrollees under the age of 21. As a part of this program, TennCare must offer two basic services: provide medical checkups to its enrollees on a regular basis and diagnose and treat any health problems revealed by those screens. TennCare must also conduct outreach to educate enrollees about these services.

In 1998, the plaintiffs filed a putative class action, alleging that TennCare had failed to fulfill these obligations. The parties quickly settled, and the district court entered the federal consent decree.

Eight years later, the Sixth Circuit held that one part of the Medicaid Act– 42 U.S.C. § 1396a(a)(30) – was unenforceable under §1983. Since that was one of the issues that prompted the consent decree, TennCare moved to vacate the decree under FRCP 60(b), arguing that the Sixth Circuit’s precedent had invalidated the parties’ assumption that the Medicaid Act created rights enforceable under §1983. The Sixth Circuit agreed in part, and remanded the matter to the district court in 2010.

The district court ultimately concluded that “compared with its performance in 1998, TennCare had dramatically improved the provision of medical services to its enrollees in every respect” and that the program was fully compliant. The court vacated the consent decree. This week, the Sixth Circuit affirmed that decision.

In a 27-page opinion affirming that decision, the appellate court noted:

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The district court’s handling of this case … was exemplary. The court conducted an exhaustive evidentiary hearing, reviewed 345 pages of proposed findings of fact and conclusions of law from the parties, and familiarized itself with thousands of pages of evidence already in the record. And on the basis of all of that evidence, the court found, in a thorough and carefully reasoned opinion, that TennCare had vastly improved its delivery of services to enrollees, and indeed become a national leader in its compliance with the Medicaid statute.

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