Hamby v. Neel

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
ELECTRONIC CITATION: 2004 FED App. 0139P (6th Cir.)File Name: 04a0139p.06 Decided and Filed: May 17, 2004
Before: BATCHELDER, MOORE, and CLAY, Circuit
UNITED STATES COURT OF APPEALS Judges.
FOR THE SIXTH CIRCUIT _________________
_________________
COUNSEL
LARNCE HAMBY , X
ARGUED: Sue A. Sheldon, OFFICE OF THE ATTORNEY
Plaintiff-Appellee, - GENERAL, Nashville, Tennessee, for Appellants. Lenny L.
-
- Nos. 01-5653/5930 Croce, RURAL LEGAL SERVICES OF TENNESSEE, Oak
BETTY OOTEN , - Ridge, Tennessee, for Appellees. ON BRIEF: Sue A.
Intervenor Plaintiff-Appellee, > Sheldon, OFFICE OF THE ATTORNEY GENERAL,
, Nashville, Tennessee, for Appellants. Lenny L. Croce,
- RURAL LEGAL SERVICES OF TENNESSEE, Oak Ridge,
NORA HYSLOPE, - Tennessee, for Appellees.
Intervenor Plaintiff-Appellee, -
- CLAY, J., delivered the opinion of the court, in which
v. - MOORE, J., joined. BATCHELDER, J. (pp. 27-34),
- delivered a separate dissenting opinion.
-
C. WARREN NEEL, - _________________
Commissioner, Tennessee -
Department of Finance and - OPINION
Administration; MARK - _________________
REYNOLDS, Deputy -
- CLAY, Circuit Judge. This is a consolidated appeal. In
Commissioner, Bureau of - Case No. 01-5653, Defendants, C. Warren Neel, the
TennCare, - Commissioner of the Tennessee Department of Finance and
Defendants-Appellants. - Administration, and Mark Reynolds, the Deputy
- Commissioner of the Bureau of Tennessee’s Medicaid
N Demonstration Project (“TennCare”), appeal from the district
court’s order entered on April 27, 2001, granting summary
Appeal from the United States District Court judgment in favor of Plaintiffs, Larnce Hamby, Betty Ooten,
for the Middle District of Tennessee at Nashville. and Nora Hyslope. In Case No. 01-5930, Defendants appeal
No. 98-01023—William J. Haynes, Jr., District Judge. from the district court’s order entered June 8, 2001, denying
Defendants’ motion to stay the district court’s April 17, 2001
Argued: January 31, 2003
1
Nos. 01-5653/5930 Hamby v. Neel, et al. 3 4 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
order. For the reasons set forth below, we AFFIRM the On July 5, 2001, Defendants timely filed a notice of appeal
district court’s orders. from the district court’s June 8, 2001 order (Case No. 01-
5930). This Court consolidated the two appeals on July 26,
STATEMENT OF FACTS 2001, and conducted oral argument on January 31, 2003.
Thereafter, on February 24, 2003, Plaintiffs filed a motion to
Procedural History dismiss the appeals for lack of jurisdiction. By order issued
on April 11, 2003, this Court denied the motion to dismiss.
Plaintiffs brought this action under 42 U.S.C. § 1983 and
the Fourteenth Amendment of the United States Constitution, Facts
challenging the TennCare program’s handling of their
applications for coverage under the program when Plaintiffs A. TennCare Enrollment and Eligibility
were denied coverage.
The Tennessee Department of Health (“TDH”) administers
Plaintiff Hamby commenced this action in October of 1998. the TennCare program for the State of Tennessee. TENN.
Plaintiffs Ooten and Hyslope requested and were granted CODE ANN . § 71-5-104. The TennCare program is a federal
permission to intervene in the action in 1998 and 2000, waiver plan under the Medicaid Act approved by the
respectively. Thereafter, Plaintiffs and Defendants filed Secretary of Health and Human Services under 42 U.S.C.
cross-motions for partial summary judgment. On April 13, § 1315. The waiver eliminated certain requirements for
2001, the district court issued an order granting Plaintiffs’ eligibility for medical benefits under the Medicaid Act.
motion for partial summary judgment, thereby awarding
TennCare benefits to Plaintiffs from the date of their original Under the TennCare program, Tennessee provides medical
applications, and denying Defendants’ motion for partial assistance to eligible persons through managed care
summary judgment. The district court modified its order on organizations rather than through traditional fee-for-service
April 27, 2001 and May 10, 2001, changing a sentence in the arrangements with providers. TennCare coverage is extended
order and providing a correct citation to a regulation. to three groups of individuals: (1) existing Medicaid
beneficiaries and those who meet Medicaid’s financial and/or
Defendants timely filed a notice of appeal on May 11, 2001 medical eligibility requirements; (2) the uninsured; and (3)
(Case No. 01-5653). Pending appeal, Defendants filed a the uninsurable. TENN. COMP. R. & REGS. 1200-13-12-.02(2)
motion to stay the district court’s April 27, 2001 order. By (a) 2 and 3. The TennCare regulations define uninsured
order entered on June 8, 2001, the district court denied the persons as:
motion to stay. On July 2, 2001, Defendants moved this
Court for a stay pending appeal. This Court denied the [A]ny person[s] who as of March 1, 1993 . . . did not
motion to stay on August 9, 2001, insofar as the motion have coverage under an individual health insurance
sought a stay of an injunction requiring Defendants to policy or who did not have (either directly or through a
approve benefits under the TennCare program to Plaintiffs as family member) coverage under, or access to, employer-
of the date of their first applications. However, this Court sponsored health insurance or to another government
granted a stay pending appeal of all other aspects of the plan, and continues to lack this access . . . .
district court’s April 17, 2001 order.
Nos. 01-5653/5930 Hamby v. Neel, et al. 5 6 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
TENN. COMP. R. & REGS. 1200-13-12-.01(36). Persons However, if an application is denied, the TennCare
eligible for TennCare coverage as uninsureds can enroll regulations require that written notice to the applicant include
during periods of open enrollment. TENN. COMP. R. & REGS. the following:
1200-13-13-.03(1)(d). The open enrollment period continues
until the program reaches 85% of the maximum enrollment 1. An explanation of the reasons for the Bureau’s
cap for that year. TENN. COMP. R. & REGS. 1200-13-13- actions, including a brief statement of the factual basis
.03(1)(d). and the rule or contract provision relied upon by the
Bureau;
The TennCare regulations define uninsurable persons as 2. An explanation of the circumstances under which the
“[A]ny person[s] who are unable, because of an existing TennCare applicant can request an appeal; and
medical condition, to purchase health insurance, but who 3. An explanation of the TennCare applicant’s right to
meets the guidelines of the [program].” TENN. COMP. R. & submit documents or other information in support of a
REGS. 1200-13-12.-.02(35). Persons eligible for TennCare request for appeal.
coverage as uninsurables can enroll at any time. TENN.
COMP. R. & REGS. 1200-13-12-.03(1) (b) 2. TENN. COMP. R. & REGS. 1200-13-12-.11(3)(b). Furthermore,
an applicant may appeal the denial of TennCare coverage
To enroll in the TennCare program, an applicant must within 30 days after the date of the notice of denial. TENN.
answer a series of written questions and submit the completed COMP. R. & REGS. 1200-13-12-.11 (3) (a).
forms to the TennCare Bureau. The same application is used
for both uninsured and uninsurable applicants. Applicants are B. Plaintiff Hamby’s Application Process
not required to reflect on the application whether they are
seeking medical insurance as an uninsured or uninsurable In 1995, Hamby, then sixty-one years old, was treated for
person. skin cancer and testicular cancer. Hamby applied for
TennCare coverage in December of 1995. Because Hamby
The TennCare regulations state that enrollment in the had not yet received a response from the TennCare Bureau
program is complete when the “person eligible for enrollment regarding his December 1995 application, Hamby completed
has selected a managed care plan from those available in the and mailed a second application to the Bureau in February of
area where the person resides, the application has been 1996.
approved by the Bureau of TennCare, and when any
applicable premiums have been paid.” TENN. COMP. R. & On his applications, Hamby stated that he had not been
REGS. 1200-13-12-.03(1). The regulations further provide turned down for a health insurance policy other than Medicaid
that “[e]nrollment shall be deemed complete retroactive to the or Medicare. The TennCare Bureau denied both of Hamby’s
date of the original application, if that application is applications. The TennCare Bureau sent Hamby a written
approved.” TENN . COMP. R. & REGS. 1200-13-12-.01(1). notice, dated March 20, 1996, which provided in part:
This is consistent with the Medicaid regulations and waiver
that require approval of medicaid coverage up to three months THIS IS WHY WE THINK YOU DO NOT QUALIFY
from the date of the approved application. FOR TENNCARE.
Nos. 01-5653/5930 Hamby v. Neel, et al. 7 8 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
Your [February 1996] application was received after the TennCare enrollment during the first three months of each
end of an open enrollment period. calender year until enrollment reached 95% of the enrollment
.... cap applicable for that year, and that Hamby had filed his
February 1996 application during the open enrollment period
If you or someone in your family has lost or cannot get of that year, when the total enrollment was less than 85% of
health insurance because of a medical condition, fill in the maximum enrollment of 1.5 million.
the attached appeal form and return it to us. You and
your family members may qualify for TennCare because On September 4, 1998, the Commissioner’s designee
you are uninsurable. Uninsurable people can enroll in reversed the ALJ’s order. The designee concluded that
TennCare at any time. Hamby’s enrollment date should have been based on his third
.... application of June 12, 1996 because Hamby responded on
his December 4, 1995 and February 15, 1996 applications that
There are three ways to qualify for TennCare. We only he had never been denied other medical insurance. The
checked one way. You may also be eligible if you are designee also concluded that Hamby’s first two applications
uninsurable (you lose or cannot get health insurance were submitted after enrollment for coverage as an uninsured
because of a medical condition you have) or if you person was closed. Hamby did not appeal or request for a
qualify for Medicaid. hearing concerning the denial of his December 1995 and
.... February 1996 applications.
REMEMBER! Even if you are not eligible for TennCare C. Plaintiff Ooten’s Application Process
or Medicaid . . . you can apply later if the facts about you
change. On July 2, 1998, Ooten, then forty-nine years old, had a
heart attack and was taken to Roane County Medical Center
(J.A. at 211-12.) in Harriman, Tennessee. While in emergency care, Ooten’s
daughter completed a TennCare application for Ooten and
In June of 1996, Hamby sent a third application to the submitted it to the hospital. After her release from the
TennCare Bureau, in which he indicated that he had been hospital, Ooten called the TennCare Bureau to inquire about
denied health insurance. Hamby’s third application was her application. The TennCare Bureau informed Ooten that
received by the TennCare Bureau on June 12, 1996. The her application had been denied and advised her to submit a
TennCare Bureau later informed Hamby that he was enrolled new application together with a denial letter from an
in the program effective June 12, 1996. insurance company. The TennCare Bureau later sent Ooten
written notice, dated July 23, 1998, which provided in part:
In June of 1997, Hamby filed an appeal and declaratory
ruling requesting that his enrollment relate back to the date of THIS IS WHO IN YOUR FAMILY DOES NOT
his original application in December of 1995. On June 12, QUALIFY AND WHY WE THINK THEY DO NOT
1998, the Administrative Law Judge (“the ALJ”) issued an QUALIFY:
order finding Hamby eligible for TennCare coverage based on Betty S. Ooten ###-##-#### [Social Security Number]
his second application submitted in February of 1996. The This person(s) denied for the reason listed below.
ALJ reasoned that the Commissioner was required to open
Nos. 01-5653/5930 Hamby v. Neel, et al. 9 10 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
Your application was received during a period of closed (J.A. at 609.) On cross-examination, Bost conceded that a
enrollment. person can have an existing medical condition that they know
makes them uninsurable and cited personal circumstances.
.... Bost also conceded that applicants are not asked if they are
YOU HAVE THE RIGHT TO REQUEST A unable, because of an existing condition, to obtain health
REASSESSMENT insurance. Bost testified that applicants may respond
Do you think we are wrong for turning you down for differently to the question “have you been denied insurance?”
TennCare? if they were asked about existing medical conditions.
You have the right to ask for a reassessment to tell us
why. The ALJ issued an order on May 3, 1999, denying Ooten’s
request that her date of eligibility relate back to the date of her
(J.A. at 499.) original application. Ooten filed a petition for appeal. As of
the date of this appeal, Defendants had not yet ruled on
On July 21, 1998, Ooten filed another application with a Ooten’s administrative appeal.
denial letter from a private insurance company. This
application was received by the TennCare Bureau on July 24, D. Plaintiff Hyslope’s Application Process
1998. The TennCare Bureau enrolled Ooten in the program
effective July 24, 1998. On July 28, 1998, Ooten requested Hyslope, suffering from diabetes, submitted an application
a reassessment of her original application and informed the for TennCare coverage on May 14, 1999. Hyslope indicated
TennCare Bureau that she could not get medical insurance in her application that she had not been denied health
because she had a preexisting medical condition; a 70% insurance. The TennCare Bureau denied Hyslope’s
blockage in her arteries. Ooten’s request for reassessment application because it was received during a period of closed
was referred to a formal hearing. enrollment. The TennCare Bureau sent Hyslope written
notice dated June 9, 2000, which was identical to the written
At a hearing held on February 3, 1999, Dena Bost, an notice sent to Ooten.
officer of the TennCare Bureau, testified as follows on direct
examination: Thereafter, on June 12, 1999, Hyslope requested
reassessment of her denied application. On July 22, 1999, the
Q. Can you explain why TennCare denied the July 2nd TennCare Bureau affirmed the denial of Hyslope’s
application? application. The written notice provided in part:
A. The July 2nd application did not indicate that Ms.
Ooten had been turned down for other insurance, We want you to know that it is still possible that you are
and there was no attachment indicating that either. eligible for TennCare.
Q. Why did TennCare approve the July 24th Other ways you may be able to get TennCare:
application? 1) . . . .
A. A denial letter from an insurance company denying
her coverage on the basis of her medical condition 2) . . . .
was attached to that application, and she indicated
that she had been denied.
Nos. 01-5653/5930 Hamby v. Neel, et al. 11 12 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
3) Apply for TennCare again if you cannot get health all reasonable inferences in the light most favorable to the
insurance because of health problems. Include an non-moving party. Williams v. Int’l Paper Co., 227 F.3d 706,
insurance company letter which states a medical reason 710 (6th Cir. 2000). Nevertheless, “[t]he moving party need
why you cannot get health insurance . . . . If the letter is not support its motion with evidence disproving the
from an insurance agent, it must be on the agent’s nonmoving party’s claim, but need only show that there is an
letterhead. It must be dated within the last 12 months absence of evidence to support the nonmoving party’s case.”
prior to your TennCare application. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
Moreover, constitutional questions are questions of law
(J.A. at 794.) (emphasis in original). subject to de novo review. Johnson, 241 F.3d at 509.
Hyslope requested a hearing on July 28, 1999. While Analysis
awaiting a hearing, Hyslope sent a second application, dated
August 23, 1999, to the TennCare Bureau. In the application, Plaintiffs contend that TennCare’s eligibility and
Hyslope responded “yes” to the question “have you been enrollment process violates their Due Process rights under the
denied health insurance?” The TennCare Bureau approved Fourteenth Amendment because the process does not provide
Hyslope’s second application effective August 30, 1999. On adequate notice that, upon applying, applicants must identify
November 4, 1999, a telephone hearing was held. Hyslope themselves as either uninsured or uninsurable persons, nor
was not represented by counsel at the hearing. does the process express that such a distinction is
determinative of their eligibility for coverage. The Plaintiffs
The ALJ affirmed the denial of Hyslope’s first application also contend that they were denied a meaningful hearing, in
on November 8, 1999, finding that Hyslope did not submit an violation of their Due Process rights, because of Defendants’
insurance denial letter with the application. On November 10, policy to determine a claimant’s “unininsurable” status by
1999, Hyslope requested a reconsideration of the denial of her focusing upon the receipt of an insurance company’s letter of
first application. Hyslope stated that she had to go to the rejection rather than the Plaintiffs’ medical condition.
hospital due to an ulceration on her toe and that she almost
lost her foot due to diabetes. The Commissioner’s designee Defendants argue that Plaintiffs have no legitimate claim of
affirmed the denial of Hyslope’s first application on May 2, entitlement to have their denied TennCare applications treated
2000. as applications for coverage as uninsurable individuals since
Plaintiffs did not indicate on their denied applications that
DISCUSSION they were uninsurable or were applying as uninsurables.
Defendants contend that because Plaintiffs did not submit
Standard of Review insurance denial letters, the TennCare Bureau had no
indication whatsoever that Plaintiffs had existing medical
We review a district court’s grant of summary judgment de conditions that rendered them uninsurable. Defendants assert
novo. Johnson v. Econ. Dev. Corp., 241 F.3d 501, 509 (6th that Plaintiffs did not inform the TennCare Bureau of their
Cir. 2001). A moving party is entitled to summary judgment existing medical conditions until they submitted subsequent
as a matter of law when there are no genuine issues of applications which the TennCare Bureau approved.
material fact. Id.; Fed. R. Civ. P. 56(c). When determining Defendants therefore argue that Plaintiffs are entitled to
a summary judgment motion, we view the evidence and draw TennCare coverage as of the date they submitted approvable
Nos. 01-5653/5930 Hamby v. Neel, et al. 13 14 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
applications and not the date they actually became such as state law–rules or understandings that secure
uninsurable. We disagree with Defendants for the following certain benefits and that support claims of entitlement to
reasons. those benefits.
I. Due Process Rights Id. at 576. Thus, the first issue we must decide is whether
Plaintiffs have a legitimate claim of entitlement to have their
The district court concluded that “Plaintiffs have a denied TennCare applications treated as applications for
‘substantive interest’ in TennCare or Medicaid benefits and coverage as uninsurable individuals such that due process
if they meet the program’s requirements, each of the Plaintiffs requirements are invoked. See id.has ‘a legitimate claim of entitlement’ that gives rise to
procedural and substantive due process rights.” Plaintiffs, like other Tennessee citizens, have a right to
apply for and enroll in the TennCare program as uninsurable
It is well established that the requirements of substantive persons at any time. See TENN. COMP. R. & REGS. 1200-13-
and procedural due process apply to the deprivation of 12-.03(1)(b). The TennCare regulations provide that
interests encompassed by the Fourteenth Amendment’s enrollment in the TennCare program is complete when the
protection of liberty and property. Bd. of Regents v. Roth, “person eligible for enrollment has selected a managed care
408 U.S. 564, 571 (1972) (holding that a professor did not plan from those available in the area where the person resides,
possess a property interest in his teaching position where it the application has been approved by the Bureau of
was subject to a limited term appointment such that no TennCare, and when any applicable premiums have been
legitimate claim to re-employment existed). The United paid.” TENN. COMP. R. & REGS. 1200-13-12-.03(1). The
States Supreme Court established a standard, in Roth, for TennCare regulations further provide that “[e]nrollment shall
determining whether a person has a property interest: be deemed complete retroactive to the date of the original
application, if that application is approved.” TENN. COMP. R.
The Fourteenth Amendment’s procedural protection of & REGS. 1200-13-12-.03(1). Finally, TennCare non-
property is a safeguard of the security interests that a Medicaid applicants, if denied, “will be given an opportunity
person has already acquired in specific benefits. These to have an administrative hearing before the Commissioner
interests–property interests–may take many forms. regarding the denial of their applications.” (J.A. at 583.)
.... Unsuccessful TennCare applicants must be notified in
writing, which must contain: “(1) [a]n explanation of the
To have a property interest in a benefit, a person clearly reasons of the Bureau’s actions, including a brief statement of
must have more than an abstract need or desire for it. He the factual basis or the rule or contract provision relied upon
must have more than a unilateral expectation of it. He by the Bureau; (2) [a]n explanation of the circumstances
must, instead, have a legitimate claim of entitlement to it. under which the TennCare applicant can request an appeal;
.... (3)[a]n explanation of the TennCare applicant’s right to
submit documents or other information in support of a request
Property interests, of course, are not created by the for appeal.” TENN. COMP. R. & REG . 1200-13-12-.11(3)(b).
Constitution. Rather they are created and their
dimensions are defined by existing rules or Both the Supreme Court and this Court, have analyzed
understandings that stem from an independent source various scenarios that involve a legitimate claim of
Nos. 01-5653/5930 Hamby v. Neel, et al. 15 16 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
entitlement, giving rise to a property interest. Roth, 408 U.S. Second, we were guided by Roth’s holding that “property
at 576-79; Flatford v. Chater, 93 F.3d 1296, 1304 (6th Cir. interests are created and their dimensions are defined by an
1996); Banks v. Block, 700 F.2d 292, 296-297 (6th Cir. 1983). independent source,” meaning that the determination of the
These cases have been instructive to this Court in determining existence of a property right protected by due process is
what constitutes a property interest warranting due process controlled by the statute creating and defining that right. Id.;
scrutiny, and what does not. see also Goldberg, 397 U.S. at 254. Therefore, this Court
held in Banks that the expectancy of entitlement to a
In Roth, the Supreme Court rejected the plaintiff’s claim continuous receipt of food stamps was an abstract, unilateral
holding that he had no property interest in re-employment, but one, and would not rise to the level of a property interest, due
merely a unilateral expectation, which would not constitute a to the Food Stamp Act’s limited certification period of
legitimate claim of entitlement rising to the level of a eligibility, much like the one-year teaching contract in Roth,
protected constitutional right. 408 U.S. at 578. The Court which established no property interest beyond the term of the
stated that the limited “terms of respondent’s appointment [as assigned period. Banks, 700 F.2d at 297.1
a professor] secured absolutely no interest in re-employment
for the next year.” Id. The Court compared this claim to that With Roth’s property interest claim of re-employment
of a welfare recipient’s legitimate claim of continuous subject to a limited and defined employment contract, and
entitlement to his or her welfare benefits for which they had Bank’s food stamp recipient’s property interest claim of
not yet shown eligibility, but were entitled to do so. Id. at continuous benefits subject to a limited certification period,
577 (citing Goldberg v. Kelly, 397 U.S. 254 (1970)). the difference between the denial of due process rights in
those two instances and the affirmation of a welfare
This Court, in Banks, used the Supreme Court’s recipient’s property interest in Goldberg, lies in the continuity
determination in Roth, as instructive guidance in determining of entitlement. Id. In Goldberg, welfare recipients
the property interest in a plaintiff’s expectancy of continuous challenged existing aid termination procedures, where under
receipt of food stamp assistance. 700 F.2d at 296. We stated the statute involved, recipients were not allowed to appear
that Roth was instructive in two respects. Id. First, this Court and present evidence prior to termination of their supposedly
held that the plaintiff’s “unilateral expectancy in the continuous welfare benefits. 397 U.S. at 254. The Supreme
continuous receipt of food stamps is not enough to create a Court held that such a procedure violated due process
constitutionally protected interest,” because the Food Stamp
Act’s explicit terms did not “justify a reasonable expectancy
of entitlement” beyond the “expiration of the assigned
1
certification period.” Id. at 292-297. In Banks, the Food Contrary to the dissent’s analysis, a property interest is neither
Stamp benefit recipients were “eligible for only a limited predicated upon whether an individual has “earned ” the benefits in
‘certification period,’ defined as the ‘period for which question, nor up on the existence an ind ividual’s contribution towards that
benefit. Instead , the Sup reme Court has m ade clear tha t the rights
households shall be eligible to receive authorization cards.’” bestowed upon individuals with legitimate property interests are defined
Id. at 294 (quoting 7 U.S.C. § 2012(c)). Banks differs from by the language of intent found in the federal or state statute creating such
Goldberg in this respect; whereas Goldberg’s continuous benefits, to then aid the particular plaintiff in question. Atkins v. Parker,
welfare benefit receipt was a legitimate claim of entitlement, 472 U.S. 115, 128 , 105 S.Ct 2520 (1985) (reiterating the Court’s
the limited nature of Banks’ Food Stamp awards was merely determination that “[f]ood- stamp benefits, like the welfare benefits at
issue in Go ldberg v. K elly, [], ‘are a matter of statutory entitlement for the
a unilateral expectation. persons qualified to receive them.’”) (internal citations omitted).
Nos. 01-5653/5930 Hamby v. Neel, et al. 17 18 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
concepts since recipients were entitled to benefits, on a Moreover, Defendants do not even contend that Plaintiffs
continuous basis, so long as they remained eligible. Id. were not uninsurable persons at the time of their original
applications. Rather, Defendants contend that because
Since TennCare is a waiver created under the Medicaid Plaintiffs did not submit insurance denial letters with their
Act, 42 U.S.C. § 1315, medical assistance to “uninsured” and original applications, Defendants properly denied Plaintiffs’
“uninsurable” individuals is partially federally funded. The claims of entitlement to TennCare coverage. However,
Medicaid Act does not subject its recipients to a limited because Defendants’ applications did not inform Plaintiffs of
duration of services so long as the eligibility requirements are this presumption and because none of Defendants’ regulations
met; and if challenging a discontinuance, up until the explaining uninsurable eligibility criteria stated that an
exhaustion of all appeals. 42 C.F.R. §§ 431.230(a) and insurance denial letter must be submitted with the application,
431.232(d). Furthermore, this Court has previously held that Plaintiffs were justified in believing their original applications
a social security claimant has a property interest in benefits would be considered in light of the relevant laws and
for which he or she hopes to qualify. Flatford, 93 F.3d regulations that would grant Plaintiffs medical coverage
at1304 (based on the holding in Richardson v. Perales, 402 provided they were eligible. Therefore, given Plaintiffs’
U.S. 389, 398 (1971), in which the Court accepted the eligibility, we hold that Plaintiffs have a legitimate claim of
proposition that petitioner’s claim to benefits gave him a entitlement to TennCare coverage as of the date of their
protectable property interest). Since Medicaid is a program original applications.
established by Title XIX of the Social Security Act, 42 U.S.C.
§ 1396, et seq., we find that Plaintiffs likewise have a II. Procedural Due Process
property interest in the TennCare coverage for which they
hope to qualify. Id.2 Additionally, it is well-established that a possessory interest
in property invokes procedural due process, which would
Based solely on Plaintiffs’ negative responses to the require adequate notice and a meaningful hearing prior to any
question “have you been denied health insurance” and their attempt to deprive the interest holder of any rights. Thomas
failure to submit insurance denial letters with their original v. Cohen, 304 F.3d 563,576 (6th Cir. 2002) (citing Fuentes v.
applications, the TennCare Bureau presumed that Plaintiffs Shevin, 407 U.S. 67, 87 (1972)); see also Mathews v.
applied for coverage as uninsured persons only, and that Eldridge, 424 U.S. 319 (1976) (holding that a claim of
Plaintiffs did not have an existing medical condition that entitlement to social security benefits triggers due process
prevented them from obtaining health insurance elsewhere. protection).
A. Adequate Notice
2
In Gonzaga University v. Doe, the Supreme Court in holding that The district court concluded that Defendants’ notices “did
a plaintiff may bring a priva te cause of action for “the deprivation of any not inform Plaintiffs that they could offer proof of an existing
rights, privileges, or immunities secured by the C onstitution and laws” condition to qualify as uninsurable, a basic element of this
under 42 U.S.C. § 1983, found that the determination of a private
plaintiff’s private rights simply require a determination as to whether or status under TennCare rules” or “that a second application
not Congress intended to confer individual rights upon a class of will undisputably result in a loss of any benefits under their
beneficiaries. 536 U.S. 273, 285-87 (2002); see also C alifornia v. Sierra first application.”
Club, 451 U .S. 287, 294 (198 1) (determining whethe r or no t a statute
“confer[s] rights on a particular class of persons”).
Nos. 01-5653/5930 Hamby v. Neel, et al. 19 20 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
The Supreme Court’s standard applied to a notice inquiry coverage as uninsurable persons, and the consequences of not
when establishing the constitutionality of a process which appealing and filing new applications.
may be determinative of the finality of parties’ rights requires
that “notice [be] reasonably calculated, under all In Gonzalez v. Sullivan, 914 F.2d 1197, 1203 (9th Cir.
circumstances, to apprise interested parties of the pendency of 1990), the Ninth Circuit reviewed the sufficiency of notices
the action and afford them an opportunity to present their by the Secretary of Health and Human Services (the“HHS”)
objections.” Mullane v. Cent. Hanover Trust Co., 339 U.S. concerning denial of applications for social security disability
306, 314 (1950). The Supreme Court further clarified the benefits. The HHS’s initial notices of denial provided:
standard for adequate notice in Goldberg. 397 U.S. at 268(requiring that notice be reasonably calculated to inform the If you believe that this determination is not correct, you
recipient of the action to be taken and an “effective may request that your case be reexamined. If you want
opportunity to be heard”). this reconsideration, you must request it no later than 60
days from the date you receive this notice. You may
Defendants argue that the TennCare Bureau provided make your request through any Social Security office. If
Plaintiffs with adequate written notices that (1) their additional evidence is available, you should submit it
applications were denied because the applications were with your request. Please read the enclosed leaflet for a
received during a period of closed enrollment; (2) they had a full explanation of your right to question the
right to appeal and seek assistance in appealing; and (3) they determination made in your claim. If you do not request
had a right to request a hearing within 30 days from the date reconsideration of your case within the prescribed time
of the notices. Defendants point out that the forms necessary period, you still have the right to file another application
for appealing were included with the notices. at any time.
We find that although Defendants’ notices adequately Id. The Ninth Circuit held that the HHS’s notices violated a
informed Plaintiffs of TennCare’s denial of their applications, claimant’s right to procedural due process because the notices
the notices failed to inform Plaintiffs that (1) their did not “clearly indicate that if no request for reconsideration
applications were denied because they were not considered is made, the determination is final.” Id. The Ninth Circuit
uninsurable persons; (2) their applications were rejected reasoned:
because the applications were incomplete due to a lack of
proof of a previous insurance denial; (3) if an appeal of a Requiring notices to accurately state how a claimant
denied application was not pursued, applicants would be might appeal an initial decision does not impose a
barred from a claim of benefits originating from the date of significant financial or administrative burden on the
their original applications; and (4) if applicants did submit Secretary . . . . Moreover, the form of the notice[s] used
new applications with insurance denial letters, the second here is sufficiently misleading that it introduces a high
claim would cut off eligibility based on the first applications. risk of error into the disability decisionmaking process .
Because Defendants failed to include such information in the . . . One of the fundamental requirements of procedural
notices, Plaintiffs were not adequately advised of the reasons due process is that a notice must be reasonably calculated
for denial of their applications, their right to appeal, the to afford parties their right to present objections.
existence of a presumption that Plaintiffs did not apply for
Id.Nos. 01-5653/5930 Hamby v. Neel, et al. 21 22 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
This Court, in Day v. Shalala, has followed the Ninth Second, the denial notices did not advise the applicants of
Circuit’s views regarding the sufficiency of notice. 23 F.3d the consequences of not appealing and filing new
1052, 1066 (6th Cir. 1994) (stating that “[w]e join the Ninth applications. Again, all three Plaintiffs were told to re-apply
Circuit in finding this particular notice form . . . inadequate). to TennCare upon receiving their denial letters, instead of
In Day, the notice of an applicant’s denial was similar to that appealing. There was no notice given that a new application
of Gonzalez. Id. at 1065-66. Plaintiffs argued that the denial would cut off eligibility for the benefits requested by
of a disability benefits notice and the accompanying Plaintiffs’ first applications.
explanatory leaflet failed to make clear the crucial distinction
between appealing a determination and reapplying for Like the notices in Gonzalez and Day, we find the notices
benefits. Id. The Court agreed that a claimant who reapplied here to be constitutionally inadequate inasmuch as they failed
rather than appealed might encounter limitations on the to adequately advise Plaintiffs of their rights to properly apply
payment of retroactive benefits if eventually approved, which as “uninsurable” persons, to be fully informed as to why they
would be calculated from the date of the new application were denied as “uninsurable” applicants, and not merely
rather than the date of the initial, unappealed one. Id. “uninsured” applicants, and to the consequences of re-
applying after a denial instead of appealling such decisions.
In the instant case, Plaintiffs argued that Defendants’ We therefore hold that Plaintiffs were given constitutionally
notification attempts violated due process in two separate inadequate notices in violation of procedural due process.
ways. First, TennCare’s denial notices failed to advise
applicants of its reasons for denial and of their right to appeal. B. Meaningful Hearing
There is no mention of an applicant’s status as an
“uninsurable applicant,” when the applicant is issued a denial. The district court concluded that Plaintiffs “were not
All three Plaintiffs received denial letters from their original allowed to show an existing medical condition that makes
applications stating that they failed to enroll within the open them unable to obtain health insurance.”
enrollment period, which is a requirement for “uninsured”
applicants only. Since there was no section of the application Defendants argue that Plaintiffs were not denied
itself that required an applicant to specify under which status meaningful hearings because they were represented by
they wished to enroll, all applications that did not have an counsel, obtained significant discovery from Defendants, and
insurance letter attached indicating a recent denial, or an were given the opportunity to raise legal challenges to the
answer in the affirmative as to whether or not they have TennCare coverage eligibility criteria which resulted in the
previously “been denied insurance,” were categorically denial of their applications. We disagree.
denied. Once Plaintiffs eventually sent a previous insurance
letter indicating a denial, they were approved; however, the Although Plaintiffs timely appealed the denial of their first
benefits were not retroactive to the date of the first applications, the TennCare Bureau continued to deny
application. Applicants eligible for TennCare’s benefit were Plaintiffs coverage because Plaintiffs failed to indicate on
not adequately informed as to how to fully receive the their applications that they had been denied health insurance
benefits to which they were entitled, at the time they were and failed to attach insurance denial letters to their
entitled to them, nor were they fully apprised of the reasons applications. When the TennCare Bureau received Plaintiffs’
for denial as “uninsurable” applicants. subsequent applications with attached insurance denial letters,
it treated the applications as separate applications for
Nos. 01-5653/5930 Hamby v. Neel, et al. 23 24 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
coverage as uninsurable individuals. Plaintiffs’ subsequent the Supreme Court made it clear that heightened scrutiny of
applications, filed before their requests for reassessment, were a statute could not be triggered by merely asserting a claim
ignored by the TennCare Bureau for purposes of reassessing that the challenged statute contained an irrebuttable
their first applications. In sum, because Plaintiffs stated on presumption. See Weinberger v. Salfi, 422 U.S. 749, 777
their first applications that they had not previously been (1975)).
denied health insurance, Defendants disallowed them from
demonstrating at a hearing that they had existing medical In Weinberger, the Court reviewed the Social Security
conditions that made them unable to obtain health insurance, Administration’s duration-of-relationship requirement that
thus evidencing their “uninsurable” status, before denying irrebuttably presumed that if a marriage did not precede the
coverage under the original application. See Friedrich v. wage earner’s death by nine months, the marriage was entered
Sec’y Health & Human Servs., 894 F.2d 829, 837 (6th Cir. into for the purpose of securing Social Security benefits. The
1990) (finding that the touchstone of procedural due process Court upheld the requirement, finding that “the Due Process
is the fundamental requirement that an individual be given the Clause can be thought to impose a bar only if the statute
opportunity to be heard in a meaningful manner). We manifests a patently arbitrary classification, utterly lacking in
therefore hold that Plaintiffs were denied a meaningful rational justification.” Id. at 768. The Court explained that
hearing in violation of procedural due process. the plaintiffs’ “only constitutional claim is that the test they
cannot meet is not so rationally related to a legitimate
The dissent’s dismissive suggestions that a ruling in legislative objective that it can be used to deprive them of
Plaintiffs’ favor would make a constitutional issue out of benefits available to those who do satisfy that test.” Id. at
every bureaucracy’s faulty paperwork, is only partly true. 772. The Court reasoned that the irrebuttable presumption
Because statutory language bestows legitimate rights upon an analysis was inappropriate because the plaintiffs’
individual, and those rights are entitled to procedural due noncontractual claim to receive funds from the public treasury
process, only those bureaucracies which engage in practices did not deserve heightened constitutional protection. Id.
that violate an individual’s rights, procedurally or otherwise,
will have themselves created a constitutional problem. In Kirk v. Secretary of Health and Human Services, 667
F.2d 524, 534 (6th Cir. 1981), we recognized that the
III. Constitutionality of Defendants’ Irrebuttable irrebuttable presumption analysis is inapplicable to challenges
Presumption to aspects of social welfare programs. To challenge the
constitutionality of Defendants’ alleged presumption,
The district court concluded that Defendants’ policy and Plaintiffs must prove that Defendants’ presumption is not
practice of requiring an insurance denial letter to demonstrate rationally related to a legitimate state objective. Id.; see also
eligibility for TennCare coverage as an uninsurable person Weinberger, 422 U.S. at 772.3
constitutes an unconstitutional irrebuttable presumption.
Defendants argue that the district court’s conclusion is 3
The Court in Kirk recognized that no irrebuttable presum ption exists
erroneous because Cleveland Bd. of Educ. v. LaFleur, 414 where the plaintiffs have the opportunity to present the evidence upon
U.S. 632 (1974), was the last line of cases in which the which the ultimate decision is derived. Nevertheless, the Court goes on
Supreme Court ventured into the irrebuttable presumption to say that absent proof of a failure to present evidence, a plaintiff’s “on ly
analysis. Shortly after its decision in Cleveland Bd. of Educ., constitutional claim is that the test they cannot meet is not so rationally
related to a legitimate legislative objective that it can be used to deprive
Nos. 01-5653/5930 Hamby v. Neel, et al. 25 26 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
Here, Defendants argue that their presumption that the invalidity under the Due Process Clause where there are
Plaintiffs did not apply for TennCare coverage as uninsurable other reasonable and practicable means of establishing the
persons because they responded “no” to the question “have pertinent facts on which the state’s objective is premised.”
you been denied health insurance?” and because they had Vlandis v. Kline, 412 U.S. 441, 451 (1973); see also
failed to attach insurance denial letters to their applications is Weinberger, 422 U.S. at 776-77 (criticizing portions of the
rationally related to the legitimate state goals of (1) extending Vlandis ruling on other grounds; however, reiterating the
medical benefits to those persons most in need of them; (2) validity of statutory restrictions, so long as Congress “could
verifying that applicants are unable to purchase health [have] rationally [] concluded both that a particular limitation
insurance due to existing medical conditions; and (3) or qualification would protect against its occurrence, and that
discouraging health insurance carriers from cost-shifting their the expense and other difficulties of individual determinations
enrollees to the publicly-funded TennCare program. justified the inherent imprecision of a prophylactic rule.”).
Defendants’ enrollment process is not rationally related to
We find that Defendants’ presumption is not rationally their proffered legitimate state goals. In fact, there are
related to legitimate state goals because applicants, who have alternative reasonable and practical means by which
not been previously refused health insurance but have existing TennCare can administer its medical benefits, such as
medical conditions that make them unable to obtain health modifying the application so as to eliminate the solicitation of
insurance, will be excluded from TennCare coverage simply vague or ambiguous information regarding the applicant’s
because they provided a negative response to the question insurance coverage history, instead opting for direct and
“have you been denied health insurance?” A negative concise information; or modifying the initial denial process
response to that question is not conclusive of an applicant’s by encouraging the immediate supplementation of the
status and should not be determinative of their approval or application before a decision is made or there is an immediate
disapproval. The apparent justification for Defendants’ appeal, rather than suggesting re-application. We therefore
presumption is administrative convenience. By asking “have hold that Defendants’ current process is not rationally related
you been denied health insurance,” Defendants seek to to legitimate state goals.
eliminate the need for an individualized determination which
may be more time consuming and expensive. However, CONCLUSION
Defendants’ “interest in administrative ease and certainty
cannot, in and of itself, save the conclusive presumption from For the forgoing reasons, we AFFIRM the district court’s
order in Case No. 01-5653; and AFFIRM the district court’s
order in Case No. 01-5930.
them of benefits available to those who do satisfy that test. Weinberger,[]
422 U.S.[ at 772].” 667 F .2d at 533 . The Court then dismissed the
plaintiffs’ claim because they could not argue “successfully that the
guidelines [were] so unrelated to a legitimate legislative goal as to violate
this ‘rationa l relationship’ test.” Id. In the instant action, this Court will
not affirm the district court’s characterization of Defendants’ enrollment
process as an unconstitutional irre buttab le presump tion; however, we
dispute Defend ants’ assertion that the current proc ess is rationally related
to their p roffered legitimate state goals.
Nos. 01-5653/5930 Hamby v. Neel, et al. 27 28 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
_________________ Because the Supreme Court has assumed in Perales that
a social security applicant has ‘more than a unilateral
DISSENT expectation’ of a benefit, and because this assumption is
_________________ necessary to the holding in that case (that due process
applied) we proceed on the same basis. Thus we will
ALICE M. BATCHELDER, Dissenting. I respectfully assume that Flatford has a property interest in the
dissent. I would hold that the plaintiffs do not have a benefits he claims.
property interest in or a legitimate claim of entitlement to the
TennCare benefits prior to plaintiffs’ obtaining approval of Flatford, 93 F.3d at 1304-05 (internal citations omitted)
their applications, and that even if the plaintiffs could (emphasis added).
demonstrate such an interest, they have not demonstrated
either a procedural or a substantive due process violation. In Bd. of Regents v. Roth, 408 U.S. 564 (1972), the
Finally, I would hold that the irrebuttable presumption Supreme Court made it clear that a property interest is
doctrine has no rational application to this case. something in which an individual “must have more than an
abstract need or desire . . . . He must have more than a
It is not clear to me whether in the section entitled “Due unilateral expectation of it. He must, instead, have a
Process Rights” the majority opinion actually holds that the legitimate claim of entitlement to it.” Id. at 577. And
plaintiffs have demonstrated a substantive due process property interests, the Court emphasized, are not created by
violation, or holds only that the plaintiffs have demonstrated the Constitution but are creatures of independent sources such
that they have a property interest for the purposes of a as state law.1 Id.procedural due process claim. In my view, the plaintiffs can
demonstrate neither. Unlike the plaintiffs in Goldberg v. TennCare is a partially federally funded waiver plan created
Kelly, 397 U.S. 254 (1970), these plaintiffs were not already by the State of Tennessee under Medicaid. TennCare benefits
receiving benefits which the state intended to or did terminate are different from social security benefits, which are premised
without a pretermination hearing. And the majority’s on contributions paid into the system by the claimant during
conclusion that because TennCare is a program created under his or her years of employment. Although Medicaid is set up
the Medicaid Act, and Medicaid is a program established under the social security program, it is not a program that
under the Social Security Act, applicants for TennCare, like awards benefits that are in any sense “earned,” and TennCare,
applicants for social security, have a property interest in the which is established under Medicaid, is not a medical
benefits “for which they hope to qualify” is unwarranted. insurance program into which these plaintiffs have made
Contrary to the majority opinion’s claim, we did not hold in payments or contributions. Medicaid is a program that was
Flatford v. Chater, 93 F.3d 1296 (6th Cir. 1996), that enacted “for the purpose of providing federal financial
applicants for social security benefits have a property interest assistance to States that choose to reimburse certain costs of
in those benefits. Rather, based on the Supreme Court’s medical treatment for needy persons,” Harris v. McRae, 448
decision in Richardson v. Perales, 402 U.S. 389, 401-02
(1971), which in turn quoted the Court’s observation in
1
Flemming v. Nestor, 363 U.S. 603, 610 (1960), that the “right The majority opinion cites Atkins v. Parker, 472 U.S. 115 (1985),
to Social Security benefits is in one sense earned,” we said: where the property rights (food stamp bene fits) established by statute
were being taken away; unlike the situation here where no right has ever
been estab lished. See Atkins, 472 U.S. at 117-18.
Nos. 01-5653/5930 Hamby v. Neel, et al. 29 30 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
U.S. 297, 301 (1980), and a state is not required to provide duration of benefits to Medicaid recipients after they have
Medicaid services for which there is no federal financial been found to be eligible does not, as the majority opinion
participation. See id. The TennCare program is subject to holds, establish a continuity of entitlement in an applicant for
both state and federal funding limits, and the state law enrollment in the TennCare program, and the fact that
establishing the program provides that expenditures of state Medicaid is established under the Social Security Act does
funds for the program cannot exceed the amount appropriated not suffice to convert a TennCare applicant’s hope of
for it by the legislature. TENN. CODE ANN . § 71-5-109. becoming an enrollee into a legitimate expectation of
obtaining TennCare coverage. These plaintiffs have no
TennCare is not only limited in financial scope, it is limited property interest in the TennCare benefits they seek.2
to specific classes of recipients: material to this litigation are
those who are uninsured and those who are uninsurable. The Even if one could conclude that the plaintiffs have
program is further limited as to the former—they have a demonstrated a property interest, however, they have not
window of opportunity for applying for the insurance; no demonstrated that they have been denied due process, either
such limitation applies to the latter. In order to enforce those substantive or procedural. Turning first to substantive due
limitations, the State has empowered the Commissioner of the process, as this court has often observed, “[t]he interests
Department of Finance and Administration to designate the protected by substantive due process are of course much
place and manner in which applications for enrollment in the narrower than those protected by procedural due process.”
program are to be filed. The Commissioner requires that any Bell v. Ohio State Univ., 351 F.3d 240, 249-50 (6th Cir.
applicant who seeks enrollment in TennCare on the basis of 2003). The Supreme Court has made it clear how narrow
uninsurability must provide a letter from a private insurer those interests are:
stating that the applicant has been denied insurance coverage.
In short, only those applicants who are eligible by reason of Our established method of substantive-due-process
their being uninsured or uninsurable have any hope of analysis has two primary features: First, we have
becoming insured under TennCare; only those uninsurable regularly observed that the Due Process Clause specially
applicants who provide evidence of uninsurability may take protects those fundamental rights and liberties which are,
advantage of the open enrollment; and only a finite number of objectively, deeply rooted in this Nation’s history and
those will be enrolled in the program because of the funding
limitations.
2
The majo rity opinion’s reliance o n Sup reme Court precedent
These plaintiffs have demonstrated no more than a concerning private rights of action to buttress its conclusions as to
unilateral expectation that they would be able to enroll in the property rights is troubling. In Gonzaga University v. Doe, 536 U.S. 273TennCare program. They are not in the position of the (2002), the Sup reme Court discu ssed the determination of a cause of
Goldberg plaintiffs, whose existing benefits were about to be action under § 19 83. Gonzaga, 536 U.S. at 283 -84. T he Suprem e Co urt’s
discussion in California v. Sierra Club, 451 U .S. 287 (1 981), likewise
terminated without any opportunity for the plaintiffs to concerns a priva te right of action. Sierra Club, 451 U.S. at 294 (“Here,
establish their continuing eligibility for those benefits under the statute states no more than a genera l proscription of certain activities;
the statute. They are not in the position of the plaintiff in it does not unmistakably focus on any particular class of beneficiaries
Flatford, whose claim was for benefits from the social whose welfare Congress intended to further. Such language does not
security system into which he had paid during the years of his indicate an intent to provide for private rights of action.”) The majority
opinion provides no authority to support its apparent conclusion that
employment. The fact that Medicaid does not limit the property rights are the equivalent of private rights of action.
Nos. 01-5653/5930 Hamby v. Neel, et al. 31 32 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
tradition, and implicit in the concept of ordered liberty, Finally, the majority opinion concludes that TennCare’s
such that neither liberty nor justice would exist if they requirement that applicants seeking to enroll in the program
were sacrificed. Second, we have required in as uninsurables must provide a letter from a private insurer
substantive-due-process cases a careful description of the establishing uninsurability, subjects those applicants to an
asserted fundamental liberty interest. unconstitutional irrebuttable presumption that they are not
uninsurable. This flies in the face of logic. An irrebuttable
Washington v. Glucksberg, 521 U.S. 702, 720-21 (1997). presumption is a presumption that as a matter of law can
Under no stretch of the imagination does the plaintiffs’ claim never be rebutted, regardless of the facts. But an applicant for
of entitlement to enrollment in TennCare rise to the level of TennCare who has not provided the required letter and is
a fundamental right or liberty implicit in the concept of therefore presumed not to be uninsurable, may rebut the
ordered liberty. Indeed, it is difficult to imagine liberty or presumption simply by providing the letter. It is true that an
justice being disturbed at all by the deprivation these applicant who is in fact not uninsurable will not be able to
plaintiffs claim, let alone ceasing to exist. obtain the letter, and hence will not, as a matter of fact, be
able to rebut the presumption. But the presumption as to that
While I do not think that the forms used by the TennCare applicant is irrebuttable only because it is true, not because
program provided applicants with the best or clearest notice the applicant, regardless of the actual facts, is not permitted
of the application requirements or the appeal procedures, I as a matter of law to rebut it.
believe any deficiencies in these forms fall well short of
depriving these plaintiffs of procedural due process. These The majority opinion’s reliance on Cleveland Bd. of Educ.
plaintiffs may have been confused by the application forms or v. LaFleur, 414 U.S. 632 (1974) (irrebuttable presumption
the denial letters, but even if that confusion was the fault of that every pregnant teacher is physically incapable after the
the TennCare Bureau, it does not rise to the level of a denial fifth or sixth month of pregnancy of continuing to teach), and
of due process. Contrary to the majority opinion’s finding, Vlandis v. Kline, 412 U.S. 441 (1973) (irrebuttable
the denial letters did advise plaintiffs that they had a right to presumption of nonresidency for any student who had lived
appeal, and, indeed, the letters invited the plaintiffs to call the outside the state during the year prior to his application for in-
telephone number provided in the letter if they had questions. state tuition rate) is entirely misplaced. In neither of these
To hold, as the majority opinion does, that forms utilized by cases were the plaintiffs permitted to avoid the application of
the bureaucracy deny due process to the individuals who are the presumptions by providing evidence to rebut them. The
to use them because those forms are confusing or are less plaintiffs before us here, on the other hand, could rebut the
clear than they might be, is to make a constitutional issue out presumption that they were not uninsurable simply by
of every dispute over an agency’s paperwork. Neither was providing TennCare with the required letter. The fact that
there any denial of a meaningful opportunity to be heard. they failed to do so or failed to do so timely, does not make
These plaintiffs not only received a hearing, they were the presumption irrebuttable.
represented by counsel and had the opportunity to raise their
legal challenges to the procedures. That those challenges In any event, the Supreme Court has explicitly declined to
were not successful does not mean that the plaintiffs were extend the principles annunciated in Vlandis and LaFleur, to
denied due process. “a noncontractual claim to receive funds from the public
treasury[, which claim] enjoys no constitutionally protected
status . . . .” Weinberger v. Salfi, 422 U.S. 749, 772 (1975).
Nos. 01-5653/5930 Hamby v. Neel, et al. 33 34 Hamby, et al. v. Neel, et al. Nos. 01-5653/5930
In that case, the Court upheld the constitutionality of a The TennCare requirement at issue here is designed to
provision of the Social Security Act that barred widows who ensure that only individuals who are in fact uninsurable are
had been married to their late husbands for less than nine eligible for TennCare’s open enrollment. Certainly the State
months from receiving certain social security benefits that has a legitimate desire to avoid abuse of the open enrollment
would normally be paid to widowed spouses. Rejecting the benefit, and certainly the State could rationally have
district court’s extension of the holdings of Stanley v. Illinois, concluded that requiring a letter establishing uninsurability
405 U.S. 645 (1972) (holding unconstitutional an irrebuttable would protect against such abuse. Unlike the indiscriminate
presumption that all unmarried fathers are unfit to raise their “nine-month rule” upheld in Weinberger, the TennCare rule
children), Vlandis, and LaFleur to the “nine-month rule,” the is imprecise only for that period of time until the individual
Court said that to apply the doctrine of those cases to the applicant submits the letter demonstrating his uninsurability.
eligibility rule would turn that doctrine “into a virtual engine It is difficult to envision a method of ensuring against abuse
of destruction for countless legislative judgments which have with which it would be easier for the applicant to comply.
heretofore been thought wholly consistent with the Fifth and
Fourteenth Amendments to the Constitution.” Id. at 771. The Finally, the challenged requirement is perfectly rational
“nine-month rule,” the Court concluded, would pass muster when one considers the definition of “uninsurable” that is
if it were legislatively reasonable: promulgated in the Tennessee regulations: “unable, because
of an existing medical condition, to purchase health insurance
[T]he question raised is not whether a statutory provision . . . .” TENN. COMP. R. & REGS. 1200-13-12-.02. The
precisely filters out those, and only those, who are in the TennCare Bureau does not determine whether an individual
factual position which generated the congressional is able to purchase health insurance from a private
concern reflected in the statute. Such a rule would ban carrier—the carrier does. The alternative would be for the
all prophylactic provisions, and would be directly TennCare Bureau to keep abreast of changes both in medical
contrary to our holding in Mourning [v. Family science and health insurance standards so as to be able to
Publications Serv. Inc., 411 U.S. 356 (1973)]. Nor is the make a conclusive guess as to whether or not a given
question whether the provision filters out a substantial individual would, if he applied for insurance, be able to
part of the class which caused congressional concern, or purchase it. It is difficult to imagine that such an approach
whether it filters out more members of the class than would be more applicant-friendly than the requirement
nonmembers. The question is whether Congress, its challenged by these plaintiffs.
concern having been reasonably aroused by the
possibility of an abuse which it legitimately desired to For all of the foregoing reasons, I dissent.
avoid, could rationally have concluded both that a
particular limitation or qualification would protect
against its occurrence, and that the expense and other
difficulties of individual determinations justified the
inherent imprecision of a prophylactic rule.
Id. at 777.