Court: Mandatory copayments by Medicaid recipients violate federal law

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A U.S. Circuit Court of Appeals in Arizona ruled that requiring state Medicaid recipients to pay copayments for medical care and prescription drugs violates federal law.

The mandatory copays, which range in price from $4 to $30, were implemented in 2003 to help the state's troubled Medicaid budget, The Arizona Republic reported. However, a class-action lawsuit caused a federal judge to suspend them. Among Medicaid beneficiaries affected by the mandated copays were childless adults, many of whom suffer from chronic illnesses such as heart disease, mental illness and asthma.

Under federal law, the Secretary of the U.S. Department of Health and Human Services has discretion over granting waivers to state Medicaid programs if they have “research or demonstration value.” In this case, the Secretary approved the waiver.

“The administrative record reveals that the purpose of Arizona's waiver application was to save money,” Judge Richard Paez wrote in his decision. “There is little, if any, evidence that the secretary considered the factors (federal law) requires [sic] her to consider before granting Arizona's waiver. Thus, the secretary's decision was arbitrary and capricious.”