Alabama sues CMS over alleged illegal administrative regulation

The state of Alabama on Nov. 3, 2008, sued CMS for what it called “illegal rulemaking” concerning a letter the agency sent to all states on October 28 setting guidelines for states to reimburse the federal government for amounts states gained from suits filed under a state Medicaid False Claims Act. In the suit, Alabama claims the requirements outlined in the letter (1) constitute illegal rulemaking in violation of the Administrative Procedure Act; (2) are in excess of CMS’ statutory authority; and (3) would violate state sovereignty.