Medicaid Eligibility Determinations: are “Wall Street Ethics” Ubiquitous?

Introduction: as someone who worked in law and compliance for Wall Street banks, I know a good deal about “Wall Street ethics” (or lack thereof) and I will assume that the reader has a good sense of this oxymoron. When I left the world of finance to open a solo law practice I expected somewhat higher standards in other sectors of the economy.

A recent discussion of ethical standards of government attorneys on the National Academy of Elder Law Attorneys (NAELA) website started with the following tale from a member attorney in a mid-western state (paraphrasing):

“My client was denied Medicaid benefits. He appealed, and was again twice denied at the two levels of administrative appeal. I took an appeal from the Medicaid determination to the local state court and filed a brief. I was soon contacted by the state attorney general’s office which recognized the validity of my arguments and offered a settlement. This gentlemen did not want to see the case litigated to a decision in my favor because of the fear of setting a precedent which others would learn about and follow.

The settlement was simple, my client would be accepted into Medicaid and would receive all of the benefits which he had been wrongly denied by the state agency (sounds very good), but, my client and I would be required to keep the settlement confidential.”

What is most troublesome about this story is the author’s comment that his client’s circumstances are commonplace, and the state Medicaid agency’s policy to deny benefits in similar cases is routinely made.

Thus many deserving Medicaid applicants are being denied benefits unfairly, and the state attorney general’s office sanctions this abuse.

The author goes on to say that he was so troubled by the ethical dilemma of agreeing to keep the settlement confidential that he contacted the head of the bar association’s legal ethics division, the Inspector General’s office and the Ethics Commission. All of these legal ethics watchdogs were unable to see an ethical problem.

The author did not reveal the circumstances which led to his client’s unfair denial of benefits, and I can’t blame him as his primary duty is to his client, and by agreeing to the confidentiality obligation he is obtaining for his client exactly what his client sought.

A telling, if cynical, response from a senior NAELA member was, “What’s the problem? Your client got what he wanted and you got paid. You have no obligation to some vague concept of the common good.”

As for the ethics of the attorneys representing the government, the same cynic wrote: “Government lawyers have no higher calling than private practice lawyers…”

I’m afraid I have to agree with the cynic.