## Facts

- Michigan’s Medicaid program covered incontinence products (e.g., diapers and catheters) for eligible recipients.
- The Michigan Department of Community Health implemented a single-supplier contract with one vendor to provide all Medicaid-covered incontinence products statewide.
- Medicaid recipients, through their legal guardians, filed a certified class action challenging the single-supplier arrangement.
- Plaintiffs relied on Medicaid’s freedom-of-choice provision, which requires state plans to allow eligible individuals to obtain covered assistance from any qualified provider willing to furnish the service.
- Michigan asserted that a statutory exception allows single-source contracting through competitive bidding for “medical devices,” contingent on federal approval.
- The federal agency approved Michigan’s approach treating incontinence products as “medical devices” for purposes of the exception.

## Issues

1. Whether Medicaid’s freedom-of-choice provision, 42 U.S.C. § 1396a(a)(23)(A), creates an individual right enforceable under 42 U.S.C. § 1983.
2. Whether incontinence products may be treated as “medical devices” under 42 U.S.C. § 1396n(a)(1)(B), permitting a single-supplier contract consistent with the statute, and whether the agency’s interpretation warrants Chevron deference.

## Decision

- The Sixth Circuit reversed the district court’s summary judgment and injunction.
- The court held the freedom-of-choice provision creates an individual right enforceable under § 1983.
- The court held the term “medical devices” in the exception is ambiguous and may reasonably include incontinence products.
- The court deferred to the administering agency’s approval and interpretation under Chevron and concluded Michigan’s single-supplier contract fell within the statutory exception.

## Legal Principles

- A federal statute may create rights enforceable under § 1983 when it uses rights-creating, mandatory language focused on benefiting individuals and lacks a remedial scheme that forecloses § 1983 enforcement.
- Medicaid’s freedom-of-choice provision is phrased in mandatory terms and centers on eligible individuals’ ability to choose among qualified providers, supporting § 1983 enforceability.
- Under Chevron, when Congress has not clearly defined a statutory term, courts uphold the responsible agency’s reasonable interpretation.
- Agency approval of a state Medicaid waiver or plan amendment is relevant evidence of the agency’s interpretation in applying statutory exceptions to general Medicaid requirements.

## Conclusion

The Sixth Circuit recognized Medicaid beneficiaries’ enforceable § 1983 right to provider choice under the freedom-of-choice provision but held that Michigan’s single-supplier contracting for incontinence products was permissible because “medical devices” is ambiguous and the agency reasonably interpreted the exception to include those products.


Harris v. Olszewski, 442 F.3d 456 (6th Cir. 2006)