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Monmouth Medical Center v. Kwok

Decided: March 26, 1982.

MONMOUTH MEDICAL CENTER, A NON-PROFIT CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
HAU KWOK; COUNTY OF MONMOUTH; STATE OF NEW JERSEY; DEPARTMENT OF HUMAN SERVICES; ANN KLEIN, AS COMMISSIONER OF THE DEPARTMENT OF HUMAN SERVICES; DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES; THOMAS M. RUSSO, AS ACTING DIRECTOR OF THE DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, DEFENDANTS-RESPONDENTS



On appeal from Division of Medical Assistance and Health Services.

Botter, Antell and Furman. The opinion of the court was delivered by Antell, J.A.D.

Antell

Defendant Hau Kwok, an illegal alien, was admitted on an emergency basis to plaintiff hospital on January 1, 1978 to be treated for a stroke. He was confined until March 17, 1978 when he was discharged and thereafter deported by the United States Immigration Service to Hong Kong. His hospital bill of $16,523.55 has not been paid.

In the Law Division plaintiff sued, among others, the State of New Jersey under the New Jersey Medical Assistance and Health Services Act (Medicaid), N.J.S.A. 30:4D-1 et seq. , for

payment of plaintiff's claim for services rendered Kwok. Prior thereto plaintiff had informally notified the state agencies involved of its intention to file a claim for payment on behalf of Kwok and was told that Medicaid coverage was not provided for illegal aliens. N.J.A.C. 10:94-3.2, promulgated by the State Division of Medical Assistance and Health Services (DMAHS), the agency through which the Medicaid program is administered, provides:

The applicant must be a resident of the United States who is either a citizen or an alien lawfully admitted for permanent residence or otherwise permanently residing in the United States under color of law.

The State conceded that under the foregoing regulation, had formal application for payment been made by plaintiff, it would surely have been denied. Based on the unmistakable import of the regulation and the State's concession, the Law Division concluded that the requirement of final state action had been satisfied -- a determination which the State does not here challenge. The only issue projected in the Law Division on cross-motions for summary judgment was, therefore, as to the constitutionality of the regulation. Recognizing that original jurisdiction to review the validity of any rule promulgated by a state agency rests with the Appellate Division, R. 2:2-3(a), the trial judge acted under R. 1:13-4(a) to order the matter transferred to this court for adjudication.

Plaintiff urges that we declare the Medicaid regulation invalid on the ground that it "is discriminatory and in contravention of the equal protection clause of the United States Constitution." A brief statement of the legislative and administrative circumstances surrounding the regulation is necessary.

The Medicaid program is jointly funded by State and Federal Governments and enables participating states to furnish assistance to individuals whose economic resources are insufficient to meet the cost of necessary medical care. States wishing to participate in the program must submit a plan for approval by the Secretary of Health and Human Services (HHS), and upon approval the state becomes entitled to federal financial assistance for funding the program. 42 U.S.C.A. §§ 1396 et seq.

Under the Medicaid program in New Jersey the Commissioner of the Department of Human Services is authorized to issue through DMAHS all rules, regulations and administrative orders necessary to secure maximum federal financial participation for the program. N.J.S.A. 30:4D-7. Obviously, to obtain HHS approval the state plan must be prepared in accordance with federal regulations. "Although participation in the Medicaid program is entirely optional, once a State elects to participate, it must comply with the requirements of Title XIX." Harris v. McRae , 448 U.S. 297, 301, 100 S. Ct. 2671, 2690, 65 L. Ed. 2d 784, 794, reh. den. 448 U.S. 917, 101 S. Ct. 39, 65 L. Ed. 2d 1180 (1980). Also see Monmouth Medical Center v. State , 80 N.J. 299, 302-303, cert. den. 444 U.S. 942, 100 S. Ct. 297, 62 L. Ed. 2d 308 (1979). However, a participating state is not required under Title XIX to pay for those medical services for which federal reimbursement is unavailable. Harris, supra , 448 U.S. at 309, 100 S. Ct. at 2684.

With regard to citizenship requirements for Medicaid eligibility, federal regulations provide for the payment of benefits only to otherwise eligible residents of the United States who are either citizens or "[a]liens lawfully admitted for permanent residence or permanently residing in the United States under color of law, including any alien who is lawfully present in the United States under section 203(a)(7) or section 212(d)(5) of the Immigration and Nationality Act." 42 C.F.R. § 435.402. The clear intent and purpose of the foregoing federal limitation is ...


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