Missouri Sues Federal Government Over Medicaid Contraceptive Disallowance

The Missouri Department of Social Services (DSS) filed a complaint Friday against the U.S. Department of Health and Human Services (HHS) for disallowing nearly $500,000 in reimbursement for contraceptive drugs Missouri provided to Medicaid-eligible individuals. The suit, proceeding in the District of Columbia District Court, takes issue with the HHS’ final decision and seeks to set it aside for violations of the Administrative Procedure Act (APA).

The DSS’ complaint explains how parts of the Medicaid program work with regard to federal reimbursement for prescribed birth control. The filing states that for decades, the state “has claimed all contraceptive pharmaceuticals for reimbursement at the 90 percent federal match rate for family planning.”

In 2012 and 2013, the HHS Office of Inspector General (OIG) reviewed Missouri’s family planning drug claims made in 2009 and 2010. The OIG concluded that the state “‘received at least $487,351 in unallowable Federal reimbursement.’” The auditors reportedly found so because the contraceptives “may have been prescribed for another (non-family planning) purpose.”

The DSS asserted that the OIG’s report was flawed because it did not follow the methodology set forth by the applicable financial review guidelines. Rather, the OIG auditors allegedly “selected a random sample of prescribed contraceptive drug claims and then contacted the prescribing providers to determine ‘whether the drug on the sampled claim was prescribed for a family planning purpose.’”

The DSS argued that the Social Security Act “does not support a distinction between reimbursement for contraceptives expressly prescribed for family planning purposes and those that may have been prescribed for other purposes.” Furthermore, it argues, the claimed requirement contradicts customary medical practice, intrudes on patient privacy, impedes access to contraception, and contravenes congressional intent.

The decision, the DSS contends, violates the APA because it was arbitrary, capricious, an abuse of discretion, and misaligned with both the substance and purpose of the Social Security Act. The complaint requests that the court undo the HHS’ decision and reverse the disallowance.  

The plaintiff is represented by Brown & Peisch PLLC.