Justia Iowa Supreme Court Opinion Summaries

The Supreme Court dismissed this direct appeal brought by the Iowa Department of Human Services (HDS) from a district court ruling requiring Iowa's Medicaid program to pay for sex reassignment surgery for two transgender adults and affirmed the denial of fees on cross-appeal, holding that the appeal was moot.Petitioners, adult transgender Iowans who were denied preauthorization for sex reassignment surgeries through the Medicaid program, appealed their managed care organization's denial of coverage to DHS. DHS affirmed the denials. The district court reversed, concluding that Iowa Code 216.7(3), an amendment to the Iowa Civil Rights Act (ICRA) violated the guarantee of equal protection under the Iowa Constitution. DHS appealed, but, thereafter, agreed to pay for Petitioners' surgeries. The Supreme Court dismissed the direct appeal as moot and affirmed the district court's order denying any fee award, holding that the court erred in denying Petitioners' request for attorney fees. View "Vasquez v. Iowa Dep't of Human Services" on Justia Law

The Supreme Court reversed the judgment of the district court concluding that the Iowa Department of Human Services (DHS) was entitled to a detailed accounting and all of the residual funds The Center for Special Needs Trust Administration, Inc. had retained from Steven Muller's trust subaccount, holding that the district court erred.The Center for Special Needs Trust Administration, Inc. acted as trustee over a pooled special needs trust subaccount for the benefit of Muller. After Muller died, the Center retained all residual funds in his trust subaccount. DHS sought judicial intervention to obtain a detailed accounting of the retained funds. The district court decided in favor of DHS and ordered the Center to pay DHS all of the funds it had retained from the subaccount. The Supreme Court reversed, holding that the Center provided an adequate accounting, and therefore, the district court lacked authority to grant the relief it provided to remedy the Center's alleged failure to account for the retained funds. View "In re Medical Assistance Pooled Special Needs Trust of Steven Muller" on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment for the Center for Special Needs Trust Administration, Inc., as trustee of a polled special needs trust held for the benefit of Scott Hewitt, and dismissing this action brought by the Iowa Department of Human Services (DHS) claiming it was entitled to a detailed accounting, holding that the trustee provided an adequate accounting.Title XIX of the Social Security Act required that the funds remaining in Hewitt's trust subaccount when he died must first be used to reimburse the state for its Medicaid expenditures. DHS filed a petition to invoke jurisdiction over the irrevocable trust, claiming that it was entitled to a detailed accounting to ensure that the funds retained by by the pooled special needs trust were used for a proper purpose. The district court granted summary judgment for the Center, concluding that no further accounting was required absent evidence that the Center breached its duties as trustee. The Supreme Court affirmed, holding that DHS was not entitled to relief on its claims of error. View "In re Medical Assistance Pooled Special Needs Trust Of Scott Hewitt" on Justia Law

The Supreme Court affirmed the ruling of the district court against Defendant and in favor of Plaintiff finding breach of contract and breach of implied covenant of good faith and fair dealing, holding that the district court erred.Defendant, a managed care organization, entered into a contract with Plaintiff, a dentist, to deliver dental services to Medicaid participants as a member of Defendant's network. Defendant later sent Plaintiff a "notice of non-renewal" of the provider contract. Plaintiff sued, and the district court ruled that the provider contract did not allow Defendant to terminate Plaintiff through non-renewal of the provider contract. At issue was whether Defendant properly ended a provider contract that automatically renewed for successive one-year terms by sending a notice of non-renewal. The Supreme Court affirmed, holding that the district court correctly determined that Defendant possessed no right to terminate by non-renewal. View "Colwell v. MCNA Insurance Co." on Justia Law

The Supreme Court affirmed the judgment of the district court affirming the position of the Iowa Department of Human Services (DHS) determining that transfers made by Petitioners, nursing home residents, to a pooled special needs trust were for less than fair market value and required a delay in Petitioners’ eligibility for Medicaid benefits, holding that the district court and DHS correctly construed and applied federal law requiring the delay in Medicaid benefits for long-term institutional care.Federal eligibility requirements provide that state ensure that Medicaid benefits are reserved for persons who lack financial means and have not transferred personal asserts that could pay for their care. Petitioners, at age sixty-five, transferred more than one-half million dollars to a pooled special needs trust. The Supreme Court held that the district court and DHS properly interpreted federal law effectively requiring Petitioner’s to tap their pooled trust assets first to pay for their nursing home care. View "Cox v. Iowa Department of Human Services" on Justia Law

This case was the companion interlocutory appeal with facts that mirrored Iowa Dep’t of Human Servs. v. DeWitt Bank and Trust Co., decided on the day of this opinion. As in DeWitt Bank, the Iowa Department of Human Services filed an application for relief against defendant healthcare providers under Iowa Code 249A.44. The district court appointed a receiver. Bank Iowa, a lender that held perfected security interests in Defendants’ property, intervened and challenged the receiver’s applications for fees and expenses. The district court concluded that receivership expenses should be paid out of property in which the Bank had prior lien interests. The Supreme Court reversed based on the reasoning set forth in DeWitt Bank, holding that Iowa follows the common law rule that a receiver may be charged against a third party’s security interest only to the extent the secured creditor has received a benefit from the receivership or the secured creditor has consented to the receivership. Remanded. View "Iowa Dep’t of Human Servs. v. Morse Healthcare Servs., Inc." on Justia Law

DeWitt Bank & Trust Company (Bank) held perfected security interests on real and personal property of Community Care, Inc. (CCI). When the Iowa Department of Human Services (DHS) determined that CCI had committed Medicaid fraud, DHS filed an application for injunctive relief under Iowa Code 249A.44. The district court enjoined CCI from transferring property or taking action inconsistent with DHS’s right to recover overpayments of medical assistance from CCI. CCI subsequently ceased operations, and the district court appointed a receiver for CCI. The Bank sought clarification that the receiver’s fees and expenses would not be paid out of CCI assets in which the Bank had a prior perfected security lien. The district court denied substantive relief, concluding that Iowa law requires the expenses of the receiver to be paid before secured creditors. The Supreme Court reversed, holding (1) Iowa law does not authorize a receiver to be paid out of assets that are subject to a prior perfected line; and (2) rather, Iowa follows the common law rule that the costs of a receiver may be charged against a third party’s security interest only to the extent the secured creditor has received a benefit from the receivership or the secured creditor has consented to the receivership. View "Iowa Dep’t of Human Servs. v. Cmty. Care, Inc." on Justia Law

Plaintiffs, several nursing homes approved by the Iowa Department of Human Services (DHS) as Medicaid providers, submitted annual reports disclosing their income and expenses to DHS. DHS used the reports to calculate the Medicaid per diem reimbursement rates for the nursing homes. Some of the facilities' expenses were disallowed by DHS, and DHS reduced reimbursement rates accordingly. The facilities appealed the adjustments. The director of human services upheld the action. The district court affirmed. The court of appeals reversed, concluding that the DHS rules did not support its decision that the disputed costs were not allowable. The Supreme Court affirmed, holding that DHS's exclusion of the facilities' lab, x-ray, and prescription drug costs from the nursing homes' reports was based on an incorrect interpretation of its rules.View "Sunrise Ret. Cmty. v. Iowa Dep't of Human Servs." on Justia Law

Arnold and Vesta Melby were trustors of separate irrevocable trusts. Both Arnold and Vesta received Medicaid benefits. After the Melbys’ deaths, the Iowa Department of Human Services notified Arnold’s estate that it would seek reimbursement for all Medicaid expenses it had paid on behalf of Arnold and Vesta. The Department then filed an application in the estate seeking a judgment declaring the Melbys had interests in the corpus of their trusts that should be counted as assets available for repayment of the Department’s Medicaid claim. The district court concluded (1) the Melbys’ interests in the trusts were limited to their right to receive the net income from the trusts’ assets, and (2) the Department’s right to recover the Medicaid payments could be enforced against such income, but not against the corpus of the trusts. The Supreme Court reversed, holding (1) the Department’s right to recover Medicaid payments under the facts of this case extended beyond the Melbys’ net income interests; and (2) the district court erred in determining the scope of medical assistance for which recovery was authorized by the general assembly. Remanded. View "In re Estate of Melby" on Justia Law

The Employment Appeal Board (Board) denied Willie Hall's application for unemployment insurance benefits. Hall filed a petition for judicial review. The district court affirmed the decision of the Board and assessed costs against Hall. The court of appeals affirmed. The Supreme Court reversed the portion of the judgment as it related to court costs, holding (1) pursuant to Iowa Code 96.15(2), any individual claiming benefits shall not be charged fees of any kind, including court costs, in a proceeding under the statute by a court or an officer of the court; and (2) therefore, the district court erred by requiring that Hall pay court costs. View "Hall v. Employment Appeal Bd." on Justia Law