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O'REILLY v. WYMAN

September 22, 1969

John O'REILLY et al., Plaintiffs,
v.
George K. WYMAN, in his capacity as Commissioner of the New York State Department of Social Services and the New York State Department of Social Services, Defendants



The opinion of the court was delivered by: MOORE

MOORE, Circuit Judge.

The complaint attacks the constitutionality of an amendment to the New York Social Services Law, section 367-a(4) *fn1" , effective July 1, 1969 and seeks a declaration of its invalidity and an injunction against its enforcement.

Prior to July 1, 1969 plaintiffs, by order to show cause based upon the complaint and certain affidavits, sought the convocation of a three-judge court "for the purpose of hearing and determining an application for a preliminary injunction."

 On July 2, 1969, after hearing testimony and oral argument and reading plaintiffs' brief in support of their motion for a temporary restraining order, Judge Motley granted the order restraining the defendants from putting into effect section 367-a(4) and requested the convocation of a three-judge court. This court was accordingly designated. In view of the restraining order still in effect, no action has been taken under section 367-a(4) nor experience gained as to the factual consequences of its operation.

 The Amendment, Section 367-a(4)

 Before the amendment was enacted, all persons receiving out-patient care, who qualified as medically indigent, were entitled to free medical care, services and supplies, namely, 100% of such charges were paid for by the State. By virtue of the amendment, two income categories were established, the amounts depending on the number in the family, (1) public assistance level and (2) a level higher than public assistance, but which qualifies a person for medical benefits as medically indigent. For those persons (the medically indigent who are not on welfare) the State by the amendment provided for 100% of hospital care but only 80% of out-patient care, the patient being required to pay the remaining 20%. The amendment is referred to as the co-insurance amendment.

 To ascertain eligibility in these categories certain administrative procedures and factual investigations are necessary. It is these administrative details, primarily the determination of medical indigency on an annual basis and the alleged 30-day period for determining whether a patient is entitled to 100% out-patient coverage, which plaintiffs attack as potentially creating constitutional and/or statutory defects in the amendment.

 Jurisdiction

 First, the fundamental question of jurisdiction must be resolved. The defendant New York State Department of Social Services is not a "person" within the meaning of Section 1983 of 42 U.S.C. and there is no jurisdiction as to this Department. Rosado, etc. v. Wyman, etc., 414 F.2d 170, 2 Cir., decided July 16, 1969, and cases cited therein. Although Judge Hays in Rosado believed that the attack on a State statute was, or should be, against the State and that, because the suit was not based on action taken by the Commissioner under the statute, the Commissioner as an individual was not within the scope of Section 1983, here the plaintiffs assert threatened action under the statute by the Commissioner. Furthermore, in Rosado Chief Judge Lumbard was of the view that the district court "did have pendent jurisdiction over the statutory claim in the sense of judicial power.", 414 F.2d, at p. 180 but indicated that "the three-judge court might well have dismissed the pendent claim" and that "from the standpoint of judicial convenience and economy" the three-judge court could have disposed of the claims before it. 414 F.2d, at p. 181.

 Accordingly, we assume jurisdiction over the Commissioner for the limited purpose of resolving the only question currently before us, namely, the granting or the denial of a preliminary injunction. Do these facts presently before us disclose such a clear and present danger of illegal action about to be taken as to justify the granting of the extraordinary relief of restraining enforcement of a law enacted by the State Legislature pursuant to its powers to legislate with respect to the State's welfare program? Since the law has not as yet been applied because of the restraining order, plaintiffs are forced to base their fears of violation upon the way they believe Section 367-a(4) "will be administered." Such anticipated (in their opinion) administration "violates the requirements of Title XIX of the Social Security Act, 42 U.S.C.A. § 1396a et seq. (Supp. 1969)" (GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS) which requires the State to "have submitted, and had approved by the Secretary of Health, Education, and Welfare, State plans for medical assistance." Section 1396. Comprehensive details as to what the State plans must provide are set forth in sections 1396a through 1396f.

 "[It] is not the wisdom of the law that * * * [the plaintiffs] here challenge. Rather [they claim] the law, as construed by the State administrators, is in conflict with the federal requirement that subsistence income is to be saved for the necessities of life - food and shelter - and not to be used for medical payments." Plaintiffs further narrow the issue by conceding that "On its face, the co-insurance amendment conforms to the federal requirement that an individual may not be required to pay the 20% co-insurance fee where to do so would require him to 'spend down' below the public assistance level * * *". Their complaint is that "the computation of available excess income for co-insurance purposes * * * will be made on an annual basis." (Pltfs' Memo. p. 17). Thus, they say, "The length of time over which income is deemed available under the New York co-insurance requirement clearly violates federal law." They cite a federal regulation, which relates to subsistence level income and refers to reasonable evaluation of income and resources (34 Fed.Reg. 1321, Chapter II, 45 C.F.R. § 248.21(4) as being "preferably of not more than 3 months, but not in excess of 6 months, ahead * * *"). Using this provision, providing for initial eligibility for medical assistance, plaintiffs argue that "As an absolute maximum, only six months' income can be deemed available, and it is preferred that only three months' income be considered." In addition plaintiffs invoke New York's requirements for determining income for Medicaid applicants namely, "only the excess income for the month or months in which care or services are given shall be considered as available for payment." (18 NYCRR § 85.4(e)(iii)).

 Plaintiffs cite no statute or regulation which requires that "available income" for co-insurance be determined on an annual basis. There is testimony of Albert F. Moncure, who is asserted to be in charge of implementing the new amendments, which tends to support the inference that an annual calculation may be used. (Tr. p. 104-06). But his testimony is vague and inconclusive and does not state explicitly that "available income" to pay specific medical bills incurred in a particular month is to be calculated on a yearly basis. He affirms only that one must co-insure until "excess" income is used up. No reference is made to borderline cases on which the plaintiffs so heavily rely.

 Also vague and inconclusive on yearly determination is Exhibit 1, a letter from defendant Wyman to the Commissioners of Social Services, which states "* * * persons are subject to cost sharing until their income is reduced to a public assistance level."

 In short, we have been shown no requirement, either statutory or regulatory, that "available income" for co-insurance must be determined on a yearly basis, as opposed to a shorter period. Moreover, if the State improperly determines "available income", or threatens to do so, which has not been proven to us, presumably there are adequate administrative or State remedies which are available. The medical assistance program challenged here is a State program, which is not yet in its incipiency, and recourse should ...


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