Lettie Sexton, ex rel. Appalachian Regional Healthcare, Inc. v. Kentucky Cabinet for Health and Family Services, et al.

The Medicaid program, established pursuant to Title XIX of the Social Security Act, provides coverage of medical care for the poor. By design, beneficiaries of the program will have no liability for the cost of their care or nominal cost-sharing responsibility. Instead, the cost of care is paid by the state Medicaid agency, which receives reimbursement for a substantial portion of its costs from the federal government. To protect beneficiaries’ right to fair decisions about their care, the United States Code and numerous federal regulations require that a state agency participating in the Medicaid program must provide a state “fair hearing” to any individual whose claim for coverage under the state Medicaid plan is denied. In the present case, the Kentucky Supreme Court found that Ms. Sexton has no standing to enforce that right because she received the care in question and could not be held personally liable for the cost. Until this decision, no court has ever held that a Medicaid beneficiary’s standing to enforce her right to a state fair hearing requires her to have personal financial liability or to go without needed care. The question presented is: Whether 42 U.S.C. § 1396a(a)(3) requires a state participating in the Medicaid program to provide a “fair hearing” to a beneficiary when coverage of his or her medically necessary services is denied, regardless of whether the beneficiary has any risk of personal liability.