An Overview of Medicaid Managed Care Litigation

This Issue Brief is intended as one of several in the Managed Behavioral Health Care Issue Brief Series that deals with managed behavioral health care from a purely legal point of view. Since the enactment of Medicaid in 1965, states have had the option of offering beneficiaries enrollment in managed care arrangements. With the advent of mandatory managed care reaching millions of beneficiaries (including a growing proportion of disabled recipients), the amount and scope of litigation involving Medicaid managed care plans can be expected to grow. A review of the current litigation regarding Medicaid managed care reveals two basic types of lawsuits: (1) those that challenge the practices of managed care companies under various federal and state laws that safeguard consumer rights, protect health care quality, and prohibit discrimination; and (2) suits that assert claims arising directly under the Medicaid statute and implementing regulations, as well as claims related to Constitutional safeguards that undergird the program