## Facts

- Non-citizen New York residents who were financially eligible for Medicaid were denied benefits based on immigration status, including pregnant women not classified as “permanently residing under color of law” (PRUCOL).
- Federal and local officials applied a policy interpreting the Medicaid Act to limit non-PRUCOL pregnant women to coverage for “emergency medical conditions,” excluding routine prenatal care.
- Congress enacted the Omnibus Budget Reconciliation Act of 1986 (OBRA 1986), adding 42 U.S.C. § 1396b(v), which restricted federal financial participation for certain nonqualified aliens to treatment of emergency medical conditions, including emergency labor and delivery.
- The district court ruled the Secretary of Health and Human Services’ prenatal-care exclusion was not authorized by the Medicaid statute and issued an injunction against enforcement of that policy.
- After OBRA 1986, the Secretary sought reconsideration and argued § 1396b(v) required denial of nonemergency prenatal care to non-PRUCOL women and conflicted with the injunction.
- The district court rejected that contention, and the Secretary appealed.

## Issues

1. Whether OBRA 1986 and 42 U.S.C. § 1396b(v) require or clearly authorize categorical denial of Medicaid-funded prenatal care to non-PRUCOL pregnant women, limiting coverage to emergency labor and delivery.
2. Whether the Secretary’s interpretation excluding prenatal care is entitled to Chevron-type deference.
3. Whether OBRA 1986 required vacatur or modification of the existing injunction protecting access to prenatal care for the plaintiff class.

## Decision

- The Second Circuit rejected the Secretary’s argument that § 1396b(v) mandated denial of routine prenatal care to non-PRUCOL women.
- The court held the Secretary’s interpretation was not entitled to deference, citing inconsistency in the agency’s positions and a lack of a persuasive, expertise-based justification within the statutory scheme.
- The court concluded OBRA 1986 did not clearly compel the restrictive prenatal-care policy urged by the Secretary.
- The court left the district court’s relief in place, effectively affirming rejection of the Secretary’s prenatal-care exclusion as applied to the plaintiff class.

## Legal Principles

- Limits on federal Medicaid reimbursement for certain nonqualified aliens under 42 U.S.C. § 1396b(v) do not, without clear statutory direction, compel categorical denial of nonemergency services such as prenatal care.
- Chevron-type deference is unwarranted where an agency interpretation is materially inconsistent over time and not supported by a convincing explanation grounded in statutory administration.
- Courts will not treat later-enacted statutory language as overturning an established judicial understanding absent clear evidence of congressional intent to do so.

## Conclusion

The Second Circuit held that OBRA 1986’s emergency-care reimbursement limitation did not clearly require exclusion of Medicaid-sponsored prenatal care for non-PRUCOL pregnant women and that the Secretary’s contrary interpretation was not entitled to deference, leaving in effect the injunction protecting prenatal-care access for the class.


Lewis v. Grinker, 965 F.2d 1206 (2d Cir. 1992)