Charles F.

Dingman
cdingman@preti.com
207.791.3288

September 14, 2018

SENT VIA EMAIL

The Honorable Seema Verma

Administrator
Centers for Medicare and Medicaid Services
200 Independence Avenue, SW
Washington, DC 20201

RE: Maine State Plan Amendments TN No. 18-0006, 18-0007, expanding

eligibility under the Affordable Care Act

Dear Administrator Verma:

I'm writing on behalf of Maine Equal Justice Partners (“MEJP”), a legal services
organization in Maine that represents many low-income individuals who seek coverage under the
Medicaid Program, pursuant to a law enacted in November 2017, Maine I.B. 2017, ch. 1,
codified at 22 MRSA § 3174-G(1)(H) (hereinafter the “Expansion Act” or “Act”)1. This duly
adopted statute directs that Maine elects, as of July 2, 20182, to participate in the expansion of
Medicaid provided by 42 USC § 1396a(a)(10)(A)(i)(VIII), adding coverage of all adults under
65 with incomes up to 133% of the federal poverty level (effectively 138% with a federal
disregard). The individuals newly covered by this subdivision VIII are referred to here as the
“Expansion Group.”

MEJP writes in support of expeditious approval of the SPA submitted to you by the State
of Maine on September 4, 2018, and to object to a letter dated August 31, 2018, from Governor
Paul LePage of Maine to you and others, incorporated by reference in the SPA filing, in which
the Governor urges CMS to reject its filed State Plan Amendment. MEJP submits that there are
no obstacles to CMS approving the SPA as submitted, that the effective date of the SPA should
be revised to July 2, and that it would be inconsistent with established federal law for CMS to
fail to approve the SPA, with the July 2 effective date, expeditiously.

I. MAINE’S SPA TO IMPLEMENT MEDICAID EXPANSION UNDER THE

ACA SHOULD BE APPROVED AS A MATTER OF COURSE.

While the Governor and the Commissioner have in various ways sought to characterize the SPA
filed on September 4 as extraordinary or somehow premature due to a shortage of state funds, the
facts are that the State of Maine, by a fully sufficient and self-executing popular vote, has elected
to provide Medicaid coverage to the Expansion Group. Under Maine’s Constitution, Article 4,

1
http://www.mainelegislature.org/legis/bills/getPDF.asp?paper=IB0002&item=2&snum=128.
2
As further discussed in Part III below, the effective date of the Expansion Act was January 3, 2018. The Act provides that coverage of the
expansion group takes effect 180 days thereafter, or July 2, 2018. 22 M.R.S. § 3174(G)(1)(H), as enacted by I.B. 2017, ch. 1, sec. A-3.

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Part Third, Section 19, initiated bills acted upon by the voters in an election become law without
further, separate action on the part of the Legislature. The executive powers of the Governor do
not extend to vetoing any such measure. The Expansion Act, which specifically authorized
enrollment, eligibility, and coverage of the Expansion Group, legally authorizes and directs the
State to cover members of the Expansion Group. While the Governor in his letter argued that
some further act of the Legislature is necessary to specifically appropriate amounts associated
with the Expansion Act, there is no constitutional or statutory provision requiring any such
separate act.

Given that Maine chose to cover this eligibility group and enacted a law to do so, the
Social Security Act leaves no question that this group is now a required part of the Plan. The
Expansion Group is specified under Section 1396a(a)(10)(A)(i), which lists individuals for
whom a State Plan must make medical assistance available. This is in contrast to Section
1396a(a)(10)(A)(ii), which lists additional persons who may be covered by a Medicaid Plan “at
the option of the State”. 3 In short, by the terms of the Social Security Act, CMS has no
discretion as to whether a state may or may not cover this group. Rather, CMS must approve a
SPA establishing eligibility for the Expansion Group, and a claim for FFP related to that
expansion, as a matter of routine administration of the Medicaid program.

The Governor’s letter to you refers to ongoing State Court litigation concerning his
administration’s delay or refusal to implement Maine’s valid statutory election to expand
Medicaid. Noting certain references to federal Medicaid law in a concurring opinion in State
Court, the Governor implies that CMS needs to consider in detail the state of the controversy
between the Governor and the Legislature concerning exactly how and when to appropriate
additional funds as expenses under Maine’s Medicaid Program accrue. Such considerations,
however, have no part in the ordinary review and approval of State Plan Amendments, and CMS
historically has not undertaken to involve itself in the particulars of a state’s budgetary process
for funding its Medicaid Program.

Neither applicable federal regulations, nor any letters or other instructions issued by CMS
to State Medicaid Directors, envision that states will provide initial or ongoing proof of
particular budgetary allocations or appropriations. Rather, as required by 42 USC §1396a(a)(2),
State Plans must broadly undertake and assure that the non-federal share of the costs of the
Medicaid Program will be borne by the state, and that any potential for shortfalls in local funding
will be addressed by the state. Maine has complied with these requirements in its existing State
Plan. See attached Exhibit 1, displaying that page of the State Plan, as transmitted to CMS and
approved by CMS in 1982. No change or review of that undertaking has been proposed, nor is it

3
While National Federation of Independent Business v. Sebelius, 567 U.S. 519(2012) held that Congress could not
constitutionally empower the Secretary of Health and Human Services to withhold federal funds from a state
Medicaid program as a penalty for failing to add the expansion group, the only constitutional limitation placed on
Medicaid expansion was the removal of this threat of withdrawal of federal funds as a means of insisting on state
participation. NFIB v. Sebelius, 567 U.S. at 585-586. The Court explained that it was not in any other respect
“rewriting the Medicaid Expansion.” Id. at 586. Thus, the provision of the Social Security Act adding the expansion
group stands as a required portion of the Medicaid Program. Federal law reserves no discretion to the Secretary to
refuse participation to a state that chooses expansion.

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required when filing an eligibility SPA or claiming FMAP. Moreover, it would contravene
Maine’s Expansion Act, which requires coverage of the Expansion Group effective July 2, 2018,

It would be an extraordinary departure for CMS to begin examining the specifics of state
budgetary support for each expenditure arising under a state’s Medicaid Program. Not only
would such a deviation from past practice offend the fundamental character of the state-federal
partnership envisioned by the Medicaid provisions of the Social Security Act, but such a practice
would be unwise and impractical. Such unprecedented federal intrusion into the workings of
state government fiscal and legal affairs runs completely counter to the spirit of the principles of
federalism that underlie the program. CMS has no authority or expertise to wade into these
quintessentially state law issues. Nor would such action be consistent with the Supreme Court’s
ruling in NFIB v. Sebelius, a case that recognized the limits of Congressional intrusion into state
fiscal matters and, to avoid coercive effect, allowed states to avoid fiscal penalties for refusing
the ACA expansion.4 Conversely, it follows that when a state makes the expansion choice, CMS
should approve and facilitate that choice, rather than second-guessing the workings of state
government.

II. ALL NECESSARY STATE ACTION HAS BEEN TAKEN TO PROVIDE FOR
STATE PARTICIPATION TO THE FULL EXTENT OF THE NON-FEDERAL
SHARE OF MEDICAID COSTS.

As discussed above, CMS need not and should not involve itself in comprehending or
resolving the controversies pursued in the Governor’s letter, and we therefore do not address
them in detail here. We do note that the most potentially alarming assertions in the Governor’s
letter are incorrect. Maine is both capable of funding and on track to fund the necessary
expenditures.

The Governor’s assertion that the Legislature has not made available “one penny” is
contrary to fact in two important respects. First, without segregating funds by eligibility group,
the Legislature had, as part of its ongoing biennial budget process, appropriated and allocated
funds to the entire Medicaid program providing ample funding for expansion until long after the
next Legislature convenes. P.L. 2017, c. 284, § , pp. 349-352 (eff. July 4. 2017)5 Secondly, the
Legislature also explicitly considered and acted favorably on a bill to appropriate the entire
amount estimated by the Governor to be necessary for the additional costs of expansion6, but the
Governor vetoed that bill.7 Thus, the Legislature has demonstrated its full readiness to provide
necessary funding for Maine’s Medicaid program.

4
See the discussion at note 3.
5
Available at http://www.mainelegislature.org/legis/bills/getPDF.asp?paper=HP0281&item=57&snum=128. Public
records of proceedings in 2018 after the Expansion Act took effect show that nonpartisan Legislative staff
determined these funds would suffice for the Medicaid program including the expansion group through at least May
2019. The next Legislature convenes in January 2019.
6
http://legislature.maine.gov/LawMakerWeb/dockets.asp?ID=280063763.
7
http://www.maine.gov/tools/whatsnew/attach.php?id=802051&an=1.

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III. THE EFFECTIVE DATE, LEFT UNCERTAIN IN THE COMMISSIONER’S

FILING, MUST BE JULY 2, 2018.

The SPA filed by the Acting Commissioner shows an effective date of September 4 but
also states in a note:

The effective date of coverage remains an unresolved issue of dispute in state

court. The applicant believes in no circumstance should any SPA be approved for
a period not covered by an adequate appropriation of funds, and requests that
CMS work with the state to update the proper effective date in the event the SPA
is approved. The fiscal impact described below reflects an effective date of
September 4, 2018.

Medicaid State Plan Amendment, SPA ID ME-18-0006, Print View, p. 4 (Sept. 4, 2018). As
noted in Part II above, however, there is no such “period not covered by an adequate
appropriation of funds,” because the Act takes effect without a specific appropriation, and, in any
event, adequate funds for state participation in the Medicaid program have been appropriated.

There is no current dispute about the effective date, and Maine’s right to FMAP
beginning on the currently determined effective date should be preserved. By its Order of
August 23, 2018, Maine’s appellate court, the Maine Supreme Judicial Court sitting as the Law
Court, ordered that the Superior Court’s June 4, 2018, order directing the Commissioner to file a
State Plan Amendment remained in effect. Maine Equal Justice Partners et al. v. Commissioner,
Dept. of Health and Human Services, 2018 ME 127, ¶11 (Me. August 23, 2018). The Superior
Court’s order was based among other things on a determination that the effective date of the
Expansion Act was January 3 (the same effective date shown on the face of the enacted law).
See Maine Equal Justice Partners v. Hamilton, Docket No. BCD-AP-18-02, Order on
M.R.Civ.P. 80C Appeal of Agency Action (June 4, 2018) at 5-7. The Expansion Act, in turn, is
explicit that the effective date of coverage is 180 days after the effective date, i.e. July 2, 2018.
22 M.R.S. §3174-G(1)(H).

The Commissioner left the effective date question open in the SPA filings, yet the filings
paradoxically both proposed a date no earlier than September 4 and invited CMS to resolve the
effective date question. However, the Commissioner states that she has filed the SPA with the
intent of complying with the Court’s order. That order, mirroring the Act itself, demands a State
Plan Amendment “ensuring MaineCare eligibility for people under 65 years of age who qualify
for medical assistance pursuant to 42 United States Code, Section 1396a(a)(10)(A)(i)(VIII).” Id.
at 13 (emphasis added). Because the Act specifically makes that eligibility effective July 2,
2018, the SPA should be effective on that day.

By contrast, using a later effective date could result in the unavailability of federal
financial participation as of July 2, with adverse fiscal consequences for the State of Maine.
Many people in the expansion group have already applied for coverage on the basis of the July 2
statutory date as validated by the lower court’s determinations regarding the effective date of the
statute. If the currently effective court order remains in force, CMS’s approval of a July 2

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effective date provides FFP for coverage provided as of that date. Using this date does not
preclude a different, later date from applying if Maine’s courts ultimately agree with the
Commissioner that the effective date should be later. In that event, there will be no expenditures
under the Act for the period from July 2 until the law is implemented, and no FMAP will be
claimed until that later date. The SPA can be revised to reflect that delay as well.

Thus, the risk of assigning a date later than July 2 at this juncture greatly exceeds any
rationale for leaving the effective date undetermined, or arbitrarily assigning a date of September
4, as portions of the SPA seem to suggest. Under these circumstances, the only reasonable
effective date to use in approving the SPA is July 2, 2018.

IV. CONCLUSION.

Maine Equal Justice Partners recognizes that it is unusual, and outside ordinary practice
and procedure, for affected parties other than the State Medicaid Agency to file in conjunction
with the submission of a SPA. This filing, and your careful consideration of it, is made
necessary by the unprecedented assertions that accompanied this State Plan Amendment filing,
asking you to reject it even though by court order the State of Maine is asking you to approve it.
CMS should process the filed State Plan Amendment without reference to the assertions by the
Executive Branch in opposition to expanding the Medicaid Program. Expanding the Medicaid
Program is by federal law a step that Maine is entitled to take, and the choice to take that step is
now the established law of the State of Maine.

Accordingly, consistent with federal Medicaid law, we urge you to approve the
September 4 SPA filings without delay and with a July 2 effective date.

Sincerely,

Charles F. Dingman
CFD:apl
Enclosures

Cc: [all cc’s on McGreal and LePage letters, plus Collins, King, Poliquin, and Pingree?]

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