TO LOSE MEDICAID FUNDS
TO: Public Health
- From: Jack W Cannon
- Billy J Williams
- Friday, November 20, 1998
The following analysis should be forwarded to the office
of any Governor stating a willingness to sign on to the tobacco industry
The Master Settlement Agreement released November 14,
1998 obligates all Settling States, "to settle and resolve with finality
all Released Claims against the Participating Manufacturers and related
"Released Claims" is defined for both past and
future conduct as, "Claims directly or indirectly based on, arising
out of or in any way related to, in whole or in part, the use of or exposure
to Tobacco Products." (1)
This Agreement further prohibits the State's subdivisions
from seeking similar relief on behalf of the general public. Such subdivisions
include: municipalities, counties, parishes, villages, unincorporated districts,
hospital districts, public entities, public instrumentalities, public educational
institutions and even taxpayers. (2) In other words, no entity representing
any subdivision of a state can ever seek redress for any claims that could
arise from the use of or exposure to tobacco products. This is a contractural
relationship whose very design serves the singular purpose of imposing
discriminatory sanctions against individuals with disabilities caused by
or exacerbated by environmental tobacco smoke.
Through the American's with Disabilities Act (ADA), the
U.S. Congress specifically outlawed such contractural arrangements.
29 C.F.R. section 1630.6(a) prohibits public entities
from entering into a contractual relationship that has the effect of discriminating
against its own employees or applicants with disabilities.
- 29 C.F.R. section 1630.6.
- Contractural or other arrangements.
(a) In general. It is unlawful for a covered entity to
participate in a contractural or other arrangement or relationship that
has the effect of subjecting the covered entity's own qualified applicant
or employee with a disability to the discrimination prohibited by this
Congress has also provided for appropriate sanctions to
enforce this provision.
Section 504 of the Rehabilitation Act, which covers federal
financial assistance, was amended by Congress in 1992 to provide for Section
504 the same standards as those of Title I of the ADA. The application
of those standards to Section 504 was upheld by the U.S. Court of Appeals
for the Third Circuit (3).
The U.S. Supreme Court has held that Medicaid is federal
financial assistance for purposes of Section 504 of the Rehabilitation
Act. (4) This means that the withholding of Medicaid funding (and other
funding) to the states is an appropriate and legal mechanism for enforcement
of the ADA.
Any state abiding with the provisions of the MASTER SETTLEMENT
AGREEMENT exposes itself to the very real and likely scenario of losing
not only its Medicaid funding but also funding from other federal financial
- (1) MASTER SETTLEMENT AGREEMENT, II, (nn) (1,2)
- (2) MASTER SETTLEMENT AGREEMENT, II, (pp)
- (3) Shiring v. Runyon, 90 F.3d 827, 831-32 (3rd Cir.
- (4) Alexander v. Choate, 469 U.S. 287, 105 S.Ct. 712