Protective Order on Confidentiality s1

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS Western Division ______) ROSIE D., et al., ) ) Plaintiffs ) ) v. ) Civil Action No. ) 01-30199-MAP ) MITT ROMNEY, et al., ) ) Defendants ) ) ______)

PLAINTIFFS' TRIAL MEMORANDUM

1 I. Introduction This is a case about children with serious psychiatric disabilities and emotional disturbances who need, but are not receiving, medically necessary, home-based mental health services. As set forth in the Complaint, home-based services include comprehensive assessments, case management, crisis services, behavioral supports and specialists, and clinical teams that are planned, arranged, and monitored by an integrated treatment team. The mental health treatment sought by the plaintiff class1 is covered by Medicaid and is provided under the Medicaid programs of many other States.2 Although proven to be effective, both in Massachusetts and elsewhere, it is available as a Medicaid- covered service to only a limited number of children in a few selected cities in Massachusetts, as part of two demonstration programs.3 Longstanding plans to expand these or similar programs statewide have never been implemented, a procedure to allow individuals to request these services have never been utilized, and data demonstrating the effectiveness of these services has never resulted in a concerted effort to offer this treatment to Medicaid-eligible children throughout the Commonwealth.4 As a result of the defendants’ actions and inactions, thousands of Medicaid-eligible children in Massachusetts with serious emotional, behavioral or psychiatric disabilities are

1 On March 29, 2002, the Court certified a class consisting of all current or future Medicaid- eligible residents of Massachusetts under the age of twenty-one who are or may be eligible for, but are not receiving, intensive home-based services, including professionally acceptable assessments, special therapeutic aides, crisis intervention, and case management services.

2 The home-based services sought in this case are not dependent on the existence or scope of federal waivers, since these services are all Medicaid-covered treatments that must be made available to all needy children under EPSDT, regardless of whether a State has a waiver.

3 As more fully discussed below, the Mental Health Services Program for Youth (MSHPY) and the Coordinated Family Focused Care (CFFC) are the only two programs that offer home-based services to children in the Commonwealth.

4 The Massachusetts MHSPY program began generating data in 1998 that indicated that home-based services resulted in significant improvements in childrens’ functional abilities and a reduction in their need for hospitalization or other out-of home placements. Similar findings were generated by ORC-MACRO, in its federally-funded evaluation of similar programs throughout the country.

2 being denied medically necessary, home-based mental health services.5 Hundreds of children each year remain unnecessarily institutionalized (“stuck”) in psychiatric facilities and residential programs, costing over $20,000,000 in medically unnecessary hospitalization. If they received home-based services, many of them could remain in their homes, attend their local schools, and grow up in their own communities. II. The Law: The Medicaid Act and Its EPSDT Mandate The Complaint asserts three claims under EPSDT and Medicaid: (1) Count I - EPSDT -- 42 U.S.C. §§ 1396a(a)(10)(A), 1396a(a)(43)(A), 1396d(a)(4)(B), 1396d(r)(5): (2) Count II - Reasonable Promptness -- 42 U.S.C. § 1396a(a)(8); and (3) Count III - Equal Access and Quality of Care -- 42 U.S.C. § 1396a(a)(30)(A).6 A. The History and Purpose of EPSDT In 1989, frustrated with the inability of States to provide adequate health services for children, Congress significantly broadened the EPSDT provisions of the Medicaid Act. See § 1905(r) of the Social Security Act, codified at 42 U.S.C. § 1396d(r). The 1989 amendments require States “to provide Medicaid coverage for any services” ‘identified as medically necessary through the EPSDT program’.” Rosie D. v. Swift, 310 F.3d 230 (1st Cir., 2002)(citing 135 Cong. Rec. S6899, 6900 (daily ed. June 19, 1989)). See also, e.g. H.R. Conf. Rep. 101-386, p. 453, 1989 U.S.C.C.A.N. 3018, 3056 (“States are required to provide any service that a State is allowed to cover with Federal matching funds under Medicaid that is required to treat a condition identified in the screen, whether or not the service is included in the State’s Medicaid plan.”)(emphasis added). Thus, as a result of the 1989 amendments, States must both provide a comprehensive package of preventive services and expand the services under their EPSDT program to include “[s]uch other necessary health care, diagnostic services, treatment, and other measures” to correct or ameliorate physical and mental illnesses. See 42 U.S.C. § 1396d(r)(5) (emphasis added).

5 An estimated 10,000 children in Massachusetts suffer from emotional disabilities. Approximately 3,000 of these children are inappropriately detained in psychiatric facilities, congregate care settings, or are denied access to services. At any given time, up to 100 children are needlessly “stuck” in hospitals and other facilities, due to a lack of available community and home-based programs.

6 Since the plaintiffs’ Opposition to the Defendants’ Motion for Summary Judgment addressed the latter two claims, this memo will focus on the plaintiffs’ EPSDT claim.

3 Congress adopted the amendments in response to the continued failure of States to provide for aggressive preventive and ameliorative services for the Nation’s most economically disadvantaged children. Legislators emphasized that “[t]he EPSDT benefit is, in effect, the Nation’s largest preventive health program for children.” See, e.g., H.R. Rep. No. 101-247 at 398 (1989), 1989 U.S.C.C.A.N. 1906, 2124. EPSDT’s preventive purpose is evident from its name: the “early” identification, diagnosis, and treatment of physical and mental conditions to ameliorate their effects, in order prevent treatable and manageable health conditions from creating permanent disabilities. 42 U.S.C. § 1396d(a)(4)(B) and § 1396d(r). Although EPSDT is commonly known for its periodic and interperiodic screening requirements, its most significant aspects derive from its broad treatment mandate. Expanded treatment serves the preventive purpose of the EPSDT program, since it ensures early access to treatment before physical and mental health conditions become severe and disabling. B. The State's Obligation Under EPSDT EPSDT requires that States not only provide all Medicaid-covered services but also undertake affirmative efforts to find, screen, and treat children with long term and chronic conditions. See 42 U.S. C. §§ 1396a(a)(43) and 1396d(r). See generally, State Medicaid Manual §§ 5010-5360. CMS’ State Manual, which is binding on the States and imposes the conditions of participation in the Medicaid program, explains and expounds on this mandate. It describes in detail the content, methods, and schedule for the screening process for mental health conditions,7 §5123(A)(1); establishes an obligation both to further assess and diagnosis conditions identified by the screening process, § 5124(A); and incorporates a broad command to treat such conditions early and comprehensively, providing whatever services that are necessary both to prevent and to ameliorate the condition, § 5124(B).8 The Manual also imposes on States the responsibility to ensure that there is an accessible and adequate

7 Screening must occur consistent with a prescribed periodic schedule, but also whenever needed “to determine the existence of suspected physical or mental illnesses or conditions.” § 5140(B).

8 All services must be provided consistent with professional standards and professional judgments of knowledgeable clinicians. § 5310(C). Services should be coordinated by case managers to ensure access, appropriateness, and timeliness. §§ 5310(D), 5330.

4 network of providers to deliver needed services, § 5220(B);9 that there is effective coordination with other State agencies and governmental programs, including local educational authorities, § 5230; and that there are procedures that ensure effective monitoring of the State’s EPSDT program, § 5310. The monitoring process must “assure that recipients receive the services … and assure that services covered under Medicaid are available.” § 5310(A) (emphasis added). Finally, the State must have in place processes and procedures for effectively informing recipients of all covered services and for demonstrating that all needed services were, in fact, provided. § 5320.2. Two distinct aspects of EPSDT are relevant to the treatment component of the statute. The first is the range of diagnostic treatments and services to which children are entitled under EPSDT. This range encompasses all forms of medical assistance which fall within the very broad federal definition of medical assistance found at 42 U.S.C. §§1396d(a) and 1396d(r). See Conf. Comm. Rep. to Accompany H.R. 3299, Omnibus Budget Reconciliation Act of 1989, Title VI. These provisions enumerate literally dozens of classes of medical assistance, each one of which can encompass hundreds of sub-classes of reimbursable procedures. The second distinctive aspect of EPSDT is its special medical necessity standard, which is used to measure when covered services actually will be provided.10 The broad definition of what is a covered and required EPSDT service, in terms of both the classes of treatments and the procedures within classes, means that services which might not be covered for Medicaid-enrolled adults are nevertheless required for Medicaid- eligible children. Moreover, the special definition of medical necessity – with its unique preventive focus -- constrains both the State’s discretion not to offer a type of treatment, as

9 This means that, in those portions of the State in which the infrastructure is insufficient to support the timely provision of services, the State has the obligation not only to cover what is needed but to affirmatively create accessible services.

10 EPSDT stands in contrast to adult Medicaid coverage rules, which authorize States to exercise considerable discretion over medical necessity standards. States’ discretion to define medical necessity is constrained by certain broad principles applicable to all populations. The first requires that a State’s medical necessity standard be reasonable. 42 U.S.C. §1396a(a)(17)(A). The second insists that the State standard be consistent with the purpose of the particular Medicaid benefit at issue. 42 C.F.R. §440.230. The third prohibits States from arbitrarily discriminating on the basis of a condition. Id. The interaction of these principles with EPSDT’s preventive purpose and mandated coverage leads to the unique medical necessity requirements which govern EPSDT.

5 well as individualized decisions concerning needed treatment under its EPSDT program. This heightened standard of medical necessity expands the already broad scope of required coverage under the program. C. The Judicial Enforcement of EPSDT Every court which has addressed the issue has found that, pursuant to the EPSDT provisions of the Act, the State is obligated to provide all necessary treatment to children. S.D. v. Hood, 391 F.3d 581 (5th Cir. 2004) (State is obligated under EPSDT to provide all Medicaid-covered services to children, regardless whether that service is included in the State Plan and despite CMS’ approval of a Plan that lacked such services for adults); Collins v. Hamilton, 349 F.3d 371, 376, n.8 (7th Cir. 2003) (Under EPSDT, State is required to provide residential treatment to children who need this level of care; State does not have discretion to exclude this service and only offer the treatment in an inpatient program); Pediatric Specialty Care, Inc. v. Ark. Dep’t of Human Servs. II, 364 F.3d 925 (8th Cir. 2004) (State’s attempt to limit early childhood intervention services violates both EPSDT and equal access provisions of the Medicaid Act); Pediatric Specialty Care, Inc. v. Ark. Dep’t of Human Servs. I, 293 F.3d 472, 480 (8th Cir. 2002) (State must pay for costs of treatment found to ameliorate conditions discovered by EPSDT screenings if such treatments are listed in section 1396d(a)); Pereira v. Kozlowski, 996 F.2d 723, 725-26 (4th Cir. 1993) (“In section 1396d(r)(5), the Congress imposed upon the states, as a condition of their participation in the Medicaid program, the obligation to provide to children under the age of twenty-one all necessary services, including transplants.”); Pittman v. Sec. of Fla. Dep’t of Health & Rehab. Servs., 998 F.2d 887, 891 (11th Cir. 1993) (the 1989 amendments removed a State’s discretion to deny treatment found to be “medically necessary” for individuals under the age of twenty-one). The most recent district court decision on EPSDT is particularly instructive. In Pediatric Specialty Care, Inc. v. Ark. Dep’t of Human Servs., No. 4:01CV00830WRW, slip op. (E.D. Ark., Feb. 7, 2005), Judge William Wilson held that Arkansas’ prior authorization procedure that limits access to early intervention services violates EPSDT’s mandate requiring that all needed services be provided promptly. In addition, he concluded that the State does not have discretion to exclude an entire type of non-experimental treatment under EPSDT, and cannot fail to cover a type of treatment unless it is “never, or generally never, of

6 sufficient medical necessity”. See also Memisovski v. Maram, 2004 WL 1878332 (N.D.Ill, August 23, 2004) (State must ensure effective methods of informing recipients, and provide all Medicaid-covered services to children); John B v. Menke, 176 F. Supp. 2d 786 (M.D. Tenn. 2001) (developmental screenings must be offered and behavioral health services must identified as needed by such screens must be provided). Specifically, courts have entered orders requiring States to provide medically necessary, home-based services, to establish policies and procedures to facilitate access to such services, to inform eligible children and their families of their entitlement to these services, and to properly screen and assess children for these services. See J.K. v. Eden, No. CIV-91-261-TUC-JMR (D.Ariz., Mar. 20, 2001) (settlement requiring Arizona, acting through its Medicaid managed care organization, to offer a wide range of home-based services), implementing prior decision, J.K. Dillenberg, 836 F.Supp. 694 (D.Ariz. 1993); Emily Q. v. Banta, 208 F.Supp.2d 1078 (E.D.Ca. 2001) (California must offer therapeutic behavioral services to children with serious psychiatric disabilities who need behavioral training); Risinger v. Concannon, 201 F.R.D. 16 (D.Me. 2001) (allowance of class certification), 117 F.2d Supp. 61 (D.Me. 2000) (denial of motion to dismiss), (2002 settlement requiring Maine to provide case management, in-home aides, and other home- based services for children); Chilsolm v. Hood, 133 F.Supp.2d 894 (E.D.La. 2001) (Lousiana must provide psychological and behavioral support services to children with serious emotional disturbance; such services are covered under Medicaid as preventive and rehabilitative services pursant to 42 U.S.C. § 1396a(a)(13)); Kirk v. Houstoun, 2000 U.S. Dist. LEXIS 8768 (E.D.Pa., June 23. 2000) (Pennsylvania must provide behavorial health rehabilitative services, including home-based services with behavior specialists). III. The Evidence of Massachusetts' Noncompliance with EPSDT The plaintiffs' Complaint, filed on October 28, 2001, documents both the existence of a children's mental health crisis in Massachusetts that even the defendants acknowledge, as well as the virtual absence of home-based services for children who need this type of treatment and who often are needlessly institutionalized due to its unavailability in Massachusetts. As the evidence at trial will demonstrate, the situation has not changed much since 2001, despite the filing of the lawsuit; voluminous evidence that the defendants understand the benefits of home- based services, but have failed to make this treatment available to children throughout the

7 Commonwealth; and comprehensive expert reviews demonstrating that thousands of children need, but are not receiving, this treatment. The plaintiffs’ eighteen expert reports also demonstrate that home-based services are a widely-used and effective treatment which is strongly endorsed and funded by the federal government; that many States provide home-based services as part of their EPSDT program, as a covered Medicaid service; and that Massachusetts could reallocate current resources wasted on unnecessary hospitalization and residential placement to fund home-based services for over a thousand children. A. Home-based Services 1. Home-based services are a well-accepted and effective treatment for children with serious emotional disturbance.

The principles and program requirements for home-based services were initially developed under the auspices of the federal government, through NIMH’s Children and Adolescent Service System Program (CASSP) in the early 1980s. Demonstration programs were implemented throughout the country, and a comprehensive evaluation was undertaken of many of these programs by SAMHSA in the 1990s. The Robert Wood Johnson Foundation funded and evaluated similar pilot programs of home-based services, which it called mental health service programs for youth (MHSPY). Recent reports of the Surgeon General and the President's Commission on Mental Health point to home-based services as one of the most useful treatments for children with serious emotional disturbance. See Burns Rep. at 2-4. While home-based programs may differ somewhat in design, they all operate consistent with the same principles, provide a basic array of services, and deliver treatment pursuant to an integrated treatment planning process. Based upon these standard features, experts have defined home-based services as follows: Home and community-based services are a well-established behavioral health intervention for children designed to meet the child’s needs in his/her home and home community. They may be provided in the child’s natural or foster home, or in the community where the child lives. The planning and provision of home and community-based services require a specific, individualized process that focuses on the strengths and needs of the child and the importance of the family in supporting the child. Home and community-based services incorporate several discrete clinical interventions, including, at a minimum, comprehensive strength-based assessments, crisis services, case management, clinical teams, and individualized supports including behavioral specialists. These services must be provided in a flexible manner with sufficient duration, intensity, and frequency to address the child’s needs.

8 Significantly, treatment outcomes from the federal demonstrations, the MHSPY pilots, and many state home-based programs have proven uniformly positive. Programs have consistently reported improvements in child functioning, school attendance and performance, and treatment engagement. They simultaneously reflect a decrease in hospitalization, out of home placements, and involvement with juvenile justice agencies. These findings are documented in reports to Congress from SAMHSA, numerous program and state reports, and the professional literature, all of which will be presented at trial. Two national experts on children's mental health services submitted reports that describe the evolution of home-based services, discuss state and national outcome data, and review the literature on the effectiveness of home-based services. Dr. Robert Friedman, the director of one of two, federally-funded research and training centers on children's mental health services, provides an overview of home-based services, a description of each element of home-based services, and the program data and research on their effectiveness. As he explains, because of their success, "[h]ome-based services have become commonplace across the country." Friedman Rep. at 7. Dr. Barbara Burns, one of the pre-eminent children’s mental health researchers, catalogues the professional literature on the effectiveness of home-based services in treating children with serious emotional disturbance.11 Burns Rep. at 9-12. 2. Other States provide home-based services as part of their Medicaid program and EPSDT benefit.

Based upon the enormous success of these early initiatives, many States have adopted, expanded, and implemented home-based services to children with serious emotional disturbance. The defendants did an informal survey of some of these States, and documented that their Medicaid agencies cover home-based services. Chris Koyanagi, the policy director of a national backup center in Washington, conducted a much more formal study, using Medicaid documents voluntarily provided by virtually every State.12 Both studies demonstrate that many

11 Both Drs. Friedman and Burns also convincingly refute the findings of the single researcher who has questioned the effectiveness of a system of care model, noting that Dr. Bickman never even pretends to evaluate the effectiveness of the treatments which are offered to children, but rather focuses his analysis on the overall system and administrative mechanisms for organizing that treatment.

12 Ms. Koyanagi's expert report describes her study, and documents the relevant categories of Medicaid-covered services that States use to fund home-based services.

9 States cover home-based services as part of their State Plans or EPSDT benefit, including neighboring States like Rhode Island and Maine, Pennsylvania and New Jersey, Delaware, and the District of Columbia, as well as States like Arizona that contract with the very same company (Value Options) which provides behavioral health services to many of the neediest children in Massachusetts.13 Prominent psychiatrists and program directors have submitted expert reports that describe the services provided by, and the significant outcomes of, the Medicaid-covered home- based programs in their States. See Kamradt Rep. at 2-3 (Wisconsin), Nace Rep. at 12-14 (Pennsylvania), and Greer Rep. at 3-6 (Rhode Island). Finally, Carl Valentine, who is a nationally-recognized Medicaid consultant to over thirty States, describes the specific home- based treatments that are covered Medicaid services in the States with which he has worked, including the comprehensive assessments, crisis services, case management, behavior specialists, and clinical supports that are sought in this case. B. Massachusetts' Fails to Provide Home-based Services. 1. Massachusetts does not include home-based services as a covered Medicaid service for children.

It is indisputable that Massachusetts, either pursuant to its MCO contracts or as part of its fee for service option, does not include home-based services as a Medicaid covered treatment. It cannot be found in any list of covered services, it does not have a billing or computer code, and it is not described in any notice, booklet or manual concerning Massachusetts' EPSDT program. Because the defendants have taken contradictory positions in this case,14 the plaintiffs

13 ValueOptions, which operates in Massachusetts under the name the Massachusetts Behavioral Health Partnership (MBHP), is "piloting" the CFFC program in five cities in the Commonwealth, although it provides a similar service to children everywhere in Arizona, as part of that State's EPSDT program.

14 At various points the defendants have alleged that they do not understand what home-based services are, while at other times they have contended that their MHSPY and CFFC demonstration programs, as well as their Medicaid-funded Family Stabilization Teams (FST) and Community Support Programs (CSP) do provide home-based services. Similarly, one of their experts, Dr. Leonard Bickman, asserts that there is no evidence that home-based services -- or any other mental health treatment for children -- are effective, while their other expert, Dr. Peter Metz proudly describes the outcomes of his home-based program, Worcester Communities of Care, as proving that this treatment is effective.

10 conducted a detailed review of all programs that arguably offer home-based services to children in Massachusetts. Two national experts on children's mental health services visited a wide array of mental health programs in the western, northeastern, southeastern, and MetroWest regions of the state, met with senior administrative and clinical staff, and read volumes of documents produced by the defendants on mental health services available in Massachusetts. They also interviewed a number of other key stakeholders, including families, advocates, hospital and residential directors, and providers. Using the description of home-based services set forth above, they evaluated which of the available programs constituted home-based services. They concluded that, with the exception of the MHSPY and CFFC demonstration programs that are restricted to a few hundred children living in a few selected cities, Massachusetts does not offer home-based services as an available treatment for Medicaid-eligible children with serious emotional disturbance. Beyer Program Review Rep. at 16-18; Kamradt Rep. at 18-19. 2. The two Medicaid-covered programs that the defendants allege offer offer home-based services are not adequate in duration and intensity to meet the needs of many children with serious emotional disturbance.

These same experts, as part of their program review, assessed the only Medicaid services that the defendants claim offer home-based services consistent with the above definition: FST and CSP. The defendants' own documents describe FST as limited to children in an acute psychiatric condition who either are at risk of hospitalization or recently discharged from a hospital. They also acknowledge that this program is limited in duration, and that the average period of treatment is a matter of weeks. CSP, while a bit longer, is also limited in duration and far less intense. It also does not include any clinical services or qualified clinical staff. Not surprising, the experts concluded that the significant and consistent limitations on these programs precluded them from serving children with serious emotional disturbance who needed home-based services for a long time, due to their ongoing need for treatment. Moreover, Dr. James Conroy, with the assistance of data managers from PricewaterhouseCoopers, analyzed the FST and CSP utilization data produced by MBHP. He found that, on average, FST is currently authorized for thirty-four days and CSP for fifty-five days. Even more disturbing, he reported that the average number of hours of FST and CSP actually had decreased (FST by 23% and CSP by 60%) since the filing of this lawsuit. Thus, the defendants own data confirms that these programs are basically short-term interventions to

11 address crisis situations, and not ongoing support services that qualify as the home-based services which many children need. Conroy Supp. Rep. at 5-6 3. The MHSPY and CFFC Programs 15 Massachusetts has long offered one home-based services program, but only for thirty- five children who happen to live in Cambridge and Somerville. The MHSPY project, originally funded by the Robert Wood Johnson Foundation, has been extraordinarily successful in treating children with serious emotional disturbance, improving their functioning, decreasing problem behaviors, avoiding out of home placement, and reducing costs. Despite the proven success of this program, national recognition of its accomplishments, and strong support for MHSPY amongst DMH and DSS officials, the Division of Medical Assistance and other defendants have refused to expand it as originally planned or as demonstrably needed. Only under the threat of the program’s closure did they finally agree to allow the program to serve 70 children. in response to this litigation, they developed another "demonstration" program to prove what was already known. They created another model (CFFC) for delivering many of the same services. By calling it another demonstration program, they claimed they could limit home- based services to five cities, and ignore children everywhere else. Predictably, data from CFFC indicates that home-based services result in improved child functioning, reduction in symptoms, and enhanced social supports for both the child and the family. But once again, despite promises that this program, like MHSPY, would be expanded if proven successful, there is no commitment, and in fact no plans, to do so anytime soon. 4. MassHealth’s new special request process is inadequate, unreasonable, ineffective and unused.

The defendants also responded to this lawsuit with a new regulation. They apparently recognized, as set forth in the Complaint, that MassHealth does not offer home-based services as part of the mental health services covered under its MCO and MBHP contracts. To remedy this EPSDT violation, MassHealth hastily promulgated a regulation allowing a clinician to

15 The plaintiffs are aware that both MHSPY and CFFC operate under a federal demonstration waiver, and that both programs are funded through a combination of Medicaid FFP and non-Medicaid revenue from other State agencies. However, the defendants’ decision to offer these programs under a waiver, and to combine funding from various sources, is irrelevant to their federal obligation under EPSDT to provide the home- based services that are offered through these programs to all Medicaid-eligible children, since these services are all covered services under the Medicaid Act.

12 request authorization and payment for any needed, but uncovered, Medicaid service. Consistent with their other efforts to deny children home-based services, the defendants did little to inform providers and clinicians of this regulation, did nothing to assist them in utilizing it, and, instead, made the entire special request process complicated and inaccessible. Not surprisingly, not one clinician has ever invoked it and not one child (or adult) has ever obtained services pursuant to this process. This outcome was entirely predictable. As Dr. Nace, an esteemed child psychiatrist, described in his expert report, even when Pennsylvania established a far more accessible special request process for home-based services, it was rarely used. Only when Pennsylvania's Medicaid agency, in response to a court-approved settlement in an EPSDT lawsuit similar to this one, finally made home-based services part of its standard Medicaid benefit -- with clear eligibility criteria, service descriptions, and billing codes -- were these services widely prescribed by clinicians. See Nace Rep. at 13. As Dr. Nace notes, the absence of service requests for a program that is not regularly covered and funded by Medicaid in no way indicates the treatment is not needed or widely accepted; it simply proves the adage that doctors do not prescribe treatment that is not available. C. Children with Serious Emotional Disturbance Need Home-based Services. There is no question that home-based services are needed by the plaintiffs and the class that they represent. Medical records, expert reviews, researchers, and testimony from treating physicians clearly demonstrate that thousands of children in Massachusetts with serious emotional disturbance need, but are not receiving, home-based services. The tragic circumstances of nine children who volunteered to be the named plaintiffs in this case are set forth in the Complaint. Since 2001, a few have been singled out and offered more intensive treatment options, but none have been provided with the home-based services requested in the Complaint. Significantly, those that have received a time-limited and minimalist version of home-based services -- mostly through other state agencies like DMH and not funded by Medicaid -- have substantially improved while receiving this treatment. Equally significantly, because these DMH programs were time-limited and ended long before the child's need for home-based services ended, these same children have been institutionalized, have clinically deteriorated, and remain at great risk of further crises. These children's treating physicians, as well as independent clinical experts, have confirmed that the plaintiffs need, but

13 are not receiving, home-based services. To test whether what is true for the named plaintiffs is also true for the class, the plaintiffs' experts conducted a comprehensive clinical review of a sample of classmembers. The clinical review was not designed to render definitive judgments of the needs of each child in the sample,16 but instead to present a picture of a larger group of children who were randomly selected, similarly situated, and generally representative of the class. Four experienced clinicians, assisted by a child psychiatrist, examined in detail the family and clinical background, current needs, and treatment of thirty-five children, who were randomly drawn by a research expert from a list of over three thousand children provided by the defendants, pursuant to a court order. The reviewers read volumes of medical records from the past several years, interviewed the child and a family member, met with a treating professional, and observed the child in a home or residential setting.17 Each expert generated a detailed report describing the strengths, treatment needs, and relevance of home-based services for each child in the sample, as well as for the named plaintiffs.18 See Reports of Marci White, Marty Beyer, Beth Whittaker, Narell Joyner, and Dr. James Greer. The findings of this clinical review are striking: over 90% of the children in the sample were found to have needed home-based services in the past, and over 70% were found to need them now.19 See Rogers Rep. at 8. The clinical review findings for the sample of children are informative of the needs of

16 As set forth in the Complaint, clinical judgments about whether a specific child needs and should be provided home-based services are best left to an individualized clinical judgments, based upon a comprehensive assessment process, that would be developed as part of any remedy in this case.

17 It is noteworthy that none of the defendants' experts, except Dr. Metz who runs his own home-based program in Worcester, ever met a child, spoke with a family member, interviewed a clinician, or visited a mental health program in the Commonwealth.

18 The coordinator of the review, Marci White, delineated the purpose, protocols, and process for the review, as well as its overall conclusions. Dr. James Greer, a child psychiatrist who is the medical director of a home-based program in Providence, Rhode Island, reviewed records and visited a subset of the sample, in order to validate the findings of the other reviewers and ensure consistency in their clinical judgments.

19 The difference between the findings over time is due, in significant part, to the reality that several children's mental health condition deteriorated over the past several years, necessitating residential placement or hospitalization. At the time of the review, some of these children required continued structured placements before they could return to their families.

14 the class. See Rogers Rep. at 2.20 Since the review documented such a "dominant effect", its conclusions are particularly reliable when applied to the larger population. See Sutherland Rep. at 5-6. As all of the experts make clear, the selection process was adequate and appropriate given the purpose of this review. And in light of that purpose, the findings of the clinical review are instructive about the larger population of classmembers which they represent. D. Massachusetts Could Serve Over 1,000 Children With Existing Resources Finally, Carl Valentine, a nationally-recognized Medicaid expert, analyzed the fiscal cost to the Commonwealth of providing, and not providing, home-based children to children. To avoid disputes over calculations and data, he adopted the defendants own cost projections for its home-based services MHSPY pilot that were prepared by the national accounting firm, Mercer, Inc.21 Mr. Valentine also relied upon cost estimates for Massachusetts' premier and most expensive home-based program -- MHSPY -- both because these estimates were tested over time (as compared to the new CFFC program), because they reflected local costs, and because they have been reviewed for reliability by an a national accounting firm. Based upon MHSPY costs, and the undisputed cost of maintaining children in hospital when there was no clinical reason to do so, Mr. Valentine estimated that the Commonwealth could serve over a thousand children in home-based services simply by reallocating funds that currently are being wasted on unnecessary and inappropriate care. IV. Conclusion The defendants do not seriously dispute that home-based services are a useful treatment for children with serious emotional disturbance. Nor do they dispute that the demonstration

20 The defendants have launched various technical challenges to the process for selecting the sample. Most of their criticisms are the direct consequence of: (1) their resistance to providing information concerning children in the class, which necessitated several motions to compel; (2) the legal constraints of consent and confidentiality; (3) the refusal of DSS to afford access to information and its staff; and (4) the practical and economic realities of evaluating a sample of hundreds of children. See Rogers Rep. at 3-6.

21 Mercer is widely used by States to do actuarial analyzes of Medicaid expenditures and to assist State Medicaid agencies in justifying increased capitation rates to CMS. Massachusetts retained Mercer for just this purpose with respect to a capitation rate increase that it submitted to CMS for MHSPY. Mr. Valentine simply adopted the Mercer analysis, assuming that the defendants would not challenge their own consultant or the methods it used for the CMS submission from MassHealth. Ironically, they now seek to repudiate their own rate submission, through their academic expert, Michael Foster, although they apparently have not informed CMS of the defects of their own study.

15 programs that Medicaid has funded for over seven years have generated positive outcomes for these children and are widely acknowledged to be exemplary treatment approaches for children. Other state agencies, including DMH and DSS, have transformed their service network to emphasize home-based services as the preferable approach to treating their children. Yet the defendants, and particularly the State's Medicaid agency, has not followed suit, despite its federal duty under EPSDT to provide all treatments necessary both to prevent and to ameliorate mental illness, and despite its repeated promises to expand its two demonstration programs to other Medicaid-eligible children. Given the defendants' resistance to funding such services as part of the Medicaid program, this Court should find the defendants have violated their duties under EPSDT and the Medicaid Act by denying children in the Commonwealth access to home- based services.

RESPECTFULLY SUBMITTED BY THEIR ATTORNEYS,

/s/ Steven J. Schwartz Steven J. Schwartz Cathy E. Costanzo Center for Public Representation 22 Green Street Northampton, MA 01060 (413) 586-6024 BBO#448440 BBO#553813 James C. Burling James W. Prendergast John Rhee Hale and Dorr, LLP 60 State Street Boston, MA 02109 (617) 526-6000 BBO#065960

16 BBO#553073 BBO#650139 Frank Laski Mental Health Legal Advisors Committee 294 Washington Street Boston, MA 01208 (617) 338-2345 BBO#287560