Status Report: Litigation Concerning Home and Community Services for People with Disabilities Gary A. Smith 7420 SW Bridgeport Road #210 Portland, OR 97224 (503) 924-3783 December 27, 2004 [email protected]

I. Introduction The past six years have seen a flood of lawsuits  want but cannot obtain home and community ser- concerning home and community services for people vices also have filed several lawsuits. The plaintiffs with disabilities. Many lawsuits challenge state poli- in these lawsuits include individuals who are in cies that limit access to Medicaid home and commu- nursing or other long-term care facilities but want nity services. Others aim at securing community ser- to be in the community as well as persons who face vices in the most integrated setting for institutionalized institutionalization absent community services. persons as provided by the Americans with Disabilities  Community Placement of Institutionalized Per- Act (ADA). Still others challenge state policies that sons. These lawsuits principally (but not exclu- prevent individuals with disabilities from obtaining the sively) revolve around persons served in publicly- full range of community services. operated institutions who could be supported in the This periodic report compiles information tracks the community. status of lawsuits that revolve around home and  Limitations on Medicaid Home and Community community services for people with disabilities. We Benefits. These lawsuits challenge state policies caution that the report is not necessarily inclusive of that adversely affect the scope and quality of all lawsuits in this arena. The report tracks three broad Medicaid services for people with disabilities in the categories of lawsuits: community. Some lawsuits concern the adequacy  Access to Medicaid Home and Community Ser- of state payments for community services. Others vices. These lawsuits challenge state policies that challenge state restrictions on the scope of services prevent people with disabilities from promptly available through the Medicaid program. obtaining Medicaid home and community services. In the following sections of this report, the issues that Most of these lawsuits have involved people with have prompted these lawsuits are discussed and the developmental disabilities who are waiting for lawsuits are summarized, including their current status. services. Individuals with other disabilities who

II. Access to Medicaid Home and Community Services A. Medicaid Home and Community Services nursing facilities, intermediate care facilities for the The Medicaid program underwrites more than one-half mentally retarded (ICFs/MR) and other institutional of the costs of long-term services for people with settings. Federal Medicaid law (Title XIX of the Social disabilities of all ages. Because the Medicaid program Security Act) requires that every state include nursing looms so large in the provision of long-term services, facility services in its Medicaid program. Since 1971, it has attracted a high volume of litigation. states also have had the option to offer ICF/MR services. Initially, ICF/MR services were concentrated In the past and still today, the majority of Medicaid in state-operated institutions. Now, the majority of long-term dollars have paid for institutional services in ICF/MR residents are served by non-state providers

This report is updated and reissued periodically as developments warrant. When you receive an update, discard the previous version because the report is cumulative. Sources of information for this report are described in the references section. Changes since the October 4, 2004 update are highlighted in yellow. The report has links to materials available on the Internet that provide additional information concerning a topic or lawsuit. With each update, these links are checked to confirm that they work. The report is distributed at no charge and only by e-mail; it may be freely shared. To receive the report directly, e-mail the author. The

1 Home and Community Services Litigation Status Report: December 27, 2004 report also is posted on HSRI’s web-site (http://www.hsri.org/index.asp?id=news). Please e-mail the author if there are developments concerning the lawsuits summarized here or new litigation of interest not described here.

2 Home and Community Services Litigation Status Report: December 27, 2004 and the number of public institutions has decreased. vices, most states have not kept pace with upward spi- (Prouty et al, 2004) raling demand for long-term services. (Smith, 1999) Medicaid home and community services include home Demographic and other factors lie behind rising de- health care, personal care/assistance provided as a mand for community services. Since the supply of Medicaid state plan benefit, and home and community- community services has not kept pace with demand, based services (HCBS) furnished under federal the result has been wait listing individuals for services waivers. All states must provide home health in their and a backlog of persons in nursing facilities and other Medicaid programs. States may elect to provide institutional settings who cannot return to the commu- personal care/assistance and/or operate HCBS waiver nity. Mounting frustration over the shortage of programs. community services has boiled over into litigation. The HCBS waiver program allows a state to offer Under Medicaid law, there is an entitlement to the community services as an alternative to institutional institutional services included in a state’s Medicaid services (e.g., nursing facility and ICF/MR) to persons program. Lawsuits about access to Medicaid long-term who meet institutional eligibility criteria. A state may services aim to establish that Medicaid beneficiaries offer services that it could provide but has elected not with disabilities have access to community services on to offer under its regular Medicaid program (e.g., equal footing with “entitled” institutional services. personal care) and other services that cannot be offered Until six years ago, there had been relatively little as regular Medicaid benefits but aid individuals to litigation concerning Medicaid home and community remain in the community. Federal law (§1915(c) of the services or the operation of HCBS waiver programs. In the arena of developmental disabilities services, the Social Security Act) allows a state to select the th services that it wishes to offer in an HCBS waiver 1998 11 U.S. Circuit Court of Appeals decision in the program and target waiver services to specific groups Doe v. Chiles lawsuit held that a state cannot of Medicaid beneficiaries (e.g., individuals with simultaneously limit access to entitled ICF/MR developmental disabilities). (ASPE, 2000) A state also services. This decision (described below) triggered can limit the number of persons who participate in an lawsuits elsewhere that challenged states’ authority to HCBS waiver program. restrict access to Medicaid services by people with developmental disabilities. In 1999, the U.S. Supreme While institutional spending still dominates Medicaid Court issued its landmark Olmstead v. L.C. ruling that long-term services, states have substantially boosted Title II of the American with Disabilities Act requires spending for home and community services. For more states to make diligent efforts to serve individuals in than a decade, spending for Medicaid home and com- the most integrated setting. The decision sparked munity services has grown more rapidly than institu- lawsuits to secure community services for tional services. Between 1990 and 2003, HCBS waiver institutionalized persons as well as other individuals expenditures increased more than ten-fold, reaching who potentially face institutionalization absent $18.6 billion. The share of Medicaid long-term ser- community services. While there are differences vices devoted to home and community services was 1 among the lawsuits, at heart their common aim is to 33% in 2003 compared to a little over 10% in 1990. ensure that individuals with disabilities who need In developmental disabilities services, HCBS waiver long-term services can obtain them promptly in the spending surpassed ICF/MR institutional spending in community rather than in only institutional settings. 2001. 2 (Prouty et al., 2004) Several critical factors lie behind lawsuits to expand B. Legal Issues access by people with disabilities to Medicaid home Lawsuits in this category assert that federal Medicaid and community services. The most important is that law obliges a state to furnish Medicaid home and growing numbers of individuals with disabilities want community services to eligible individuals when to remain in and be supported in their own homes and needed, challenging the premise that states have the communities rather than institutional settings. Despite authority to restrict the availability of services. 3 In the expansion of Medicaid home and community ser- many cases, the U.S. Supreme Court’s Olmstead ruling also serves as the grounds for pleadings that the ADA 1 For information concerning 2003 Medicaid long-term services spending nationwide and by state, go to: hcbs.org/browse.php/topic/35/ofs/10/ 2 In 2003, HCBS waiver expenditures for persons with 3 A thorough discussion of the legal issues is in: Jane Perkins developmental disabilities reached $14.1 billion compared to and Manju Kulkani (May 2000) “Fact Sheet: Addressing Home $11.5 billion for ICF/MR services. There were about 402,000 and Community-based Waiver Waiting Lists through the HCBS waiver participants with developmental disabilities Medicaid Program.” This article is located at compared to 107,000 ICF/MR residents. (Prouty et al., 2004) healthlaw.org/pubs/200005FactSheet_hcbw.html. 3 Home and Community Services Litigation Status Report: December 27, 2004 dictates that states must furnish home and community Since the Gonzaga decision was handed down, there services in the most integrated setting. have been several decisions concerning the question of In most cases, these lawsuits have been filed in federal whether Medicaid law confers individually enforce- court, although some have been filed in state court able rights. In at least three lawsuits concerning home when violations of state law are alleged. Federal Medi- and community services for people with disabilities caid law does not specifically provide for a benefici- (the Pennsylvania Sabree et al. v. Houston and Utah ary’s seeking relief through the federal courts for D.C. v. Williams “waiting list” lawsuits as well as the alleged violations of Medicaid law. Federal law California Sanchez v. Johnson lawsuit concerning pay- requires that a state operate an administrative appeals ments for community services), district courts found process (called Fair Hearing) through which a person that federal Medicaid law does not confer individually may appeal adverse decisions concerning eligibility or enforceable rights, based on their application of the services. Otherwise, if a state does not comply with Gonzaga decision. However, other courts have ruled Medicaid law and regulations, the principal federal that Medicaid beneficiaries continue to have individu- remedy is to withhold or deny payments to the state. ally enforceable rights under at least some key provi- sions of Medicaid law.5 Going forward, the In order to bring suit in federal court, plaintiffs rely on fundamental question of whether individuals can seek provisions of the U.S. Constitution and/or federal law relief through the federal courts for alleged violations in seeking relief. In particular, the Civil Rights Act of of Medicaid law likely will continue to be litigated. 1871 (42 U.S.C. §1983) grants citizens a private right of action to seek relief in federal court when state offi- While claimed violations of federal Medicaid law vary cials are alleged to violate the Constitution or federal by lawsuit, they often include: law. Dating back many years, federal courts – includ-  Reasonable Promptness. §1902(a)(8) of the Social ing the U.S. Supreme Court – have affirmed that law- Security Act and associated federal regulations man- suits involving Medicaid services can be brought in date that a state promptly determine the eligibility of federal court law so long as the plaintiffs seek prospec- persons who apply for services. The regulatory stan- tive relief from alleged violations and federal law dard for processing Medicaid applications for long- confers individually enforceable right. As a result, term care is no more than 90-days. Federal courts lawsuits assert that, by not furnishing community have ruled that §1902(a)(8) bars a state from wait services to eligible individuals, a state violates a right listing individuals for entitled Medicaid services set forth in federal Medicaid law and/or the ADA. rather than providing them right away. In Doe v. Usually, these lawsuits also seek certification as a class Chiles, for example, the court held that this action complaint because, in addition to the named provision requires a state to furnish ICF/MR ser- plaintiffs who allege that their rights have been vices promptly once an application has been ap- proved and, thereby, wait-listing individuals violated, there are other individuals in the same 6 situation. Class action certification is the subject of a indefinitely violates the intent of §1902(a)(8). separate determination by the court.  Comparability. §1902(a)(10) of the Social Security In defense, some states have claimed “sovereign Act requires a state to make Medicaid services immunity” from these lawsuits under the provisions of 5 th th In particular, the federal District Court for Massachusetts the 11 Amendment to the U.S. Constitution. The 11 recently ruled that the Medicaid Act’s reasonable promptness Amendment bars suits against states in federal court. (§1902(a)(8) of the Social Security Act), comparability With rare exceptions, federal courts have rejected this (§1902(a)(10)(B)), and reasonable standards (§1902(a)(17)) defense in lawsuits involving Medicaid. confer individually enforceable rights. The court specifically rejected the reasoning in the Sabree decision that found that the More recently states have challenged the premise that entire Medicaid Act was unenforceable. See article at: Medicaid law confers individually enforceable rights healthlaw.org/pubs/courtwatch/200404.masscourt.html. that fall under the protections of §1983. These chal- Similarly, the 2nd Circuit also recently held (in the Connecticut lenges are based on the 2002 U.S. Supreme Court Rabin v. Wilson-Coker lawsuit – decision at: Gonzaga University v. Doe decision that spelled out caselaw.lp.findlaw.com/data2/circs/2nd/037572p.pdf) that 4 Medicaid Act provisions are individually enforceable, the more stringent conditions for §1983 complaints. Gonzaga decision notwithstanding. The 2nd Circuit based its Relying on this decision, states have argued that fed- ruling in part on provisions of §1123 of the Social Security Act eral Medicaid law only governs a state’s overall (the so-called “Suter Fix”) that specifically provides that a administration of its Medicaid program and does not provision of the Act cannot be found unenforceable solely grant beneficiaries individually enforceable rights. because it is included in a part of the statute that spells out state plan requirements. See article at: 4 See article at healthlaw.org/pubs/courtwatch/200404.tma.html. healthlaw.org/pubs/courtwatch/200206gonzaga.html 6 This decision is at laws.findlaw.com/11th/965144man.html. 4 Home and Community Services Litigation Status Report: December 27, 2004

available on a “comparable” basis to all eligible in- qualified persons with mental disabilities in less dividuals. In some lawsuits, plaintiffs claim that, by restrictive settings” and “a waiting list that moved at a furnishing community services to some but not all reasonable pace.” However, the Court qualified its eligible persons, a state violates this provision. decision by stipulating that a state would not be  Freedom of Choice. §1915(c)(2)(C) in the federal deemed to violate Title II if achieving compliance HCBS waiver program statute requires that a state forced it to make a “fundamental alteration” in its programs. Courts are grappling with the question of permit an individual to choose between receiving 9 waiver and institutional services. In some com- what constitutes a fundamental alteration. plaints, plaintiffs claim that, under §1915(c)(2)(C) C. Lawsuits Involving Individuals with of the Social Security Act, a person meets the eligi- Developmental Disabilities bility requirements for institutional services has the There has been a high volume of lawsuits that chal- right to select waiver services instead. In other lenge wait listing individuals with developmental dis- words, a person’s eligibility for entitled institutional abilities for Medicaid home and community services. services translates into an entitlement for HCB States have experienced a substantial increase in the waiver services. However, pursuing this claim runs number of individuals seeking community services and up against the authority of a state to limit the num- have had difficulty keeping pace with this especially ber of individuals served in HCBS waiver programs. strong service demand. In addition, over the past  Right to Apply. §1902(a)(3) of the Social Security several years, many states have limited or reduced Act affords individuals the right to apply for ser- ICF/MR services in favor of expanding waiver vices and have a decision rendered concerning their services. But, the total supply of ICF/MR “beds” and applications. If a person’s application is denied, then HCBS waiver “slots” often has not kept up with the individual must be afforded the right to appeal. demand, resulting in individuals queuing up on waiting In some cases, plaintiffs argue that the practice of lists. In some states, waiting lists have grown quite waiting listing individuals for services instead of de- large. States also have limited their expenditures by termining their eligibility short-circuits this funda- capping both the number of persons who receive mental protection.7 Often, there is an accompanying waiver services and the number of ICF/MR beds. The claim that a state’s policies also violate the due combination of ICF/MR bed limits and HCBS waiver process protections in the U.S. Constitution. “slot” caps can mean that neither type of service is Alleged violations of Medicaid law frequently are readily available to eligible individuals. Waiting lists accompanied by claims of violations of Title II of the are a highly visible issue in nearly all states, thereby ADA and §504 of the Rehabilitation Services Act of explaining why there have been so many lawsuits to 1973. Title II requires public entities to provide ser- secure services for persons with developmental vices in the “most integrated setting” appropriate to a disabilities. person’s needs. Plaintiffs often assert that Title II man- As noted, in March 1998, the 11th U.S. Circuit Court of dates that individuals have access to community Appeals handed down a watershed ruling in the Flor- services on equal footing with institutional services ida Doe v. Chiles litigation that made it clear that and, by making institutional but not community ser- federal Medicaid law does not allow a state to wait list vices available, a state violates the ADA. Claimed individuals for ICF/MR services indefinitely. Florida §504 violations are similar except that this statute had sought to limit the availability of both ICF/MR dictates that recipients of federal funds furnish services and HCB waiver services. The Court ruled that in the “least restrictive setting.” ICF/MR services were no different than any other non- The U.S. Supreme Court’s Olmstead decision8 directly waiver Medicaid service and, hence, must be furnished concerned Title II of the ADA. While the litigation with reasonable promptness to eligible applicants. revolved around the denial of community placement of Also, the court rejected the state’s attempt to justify two institutionalized individuals, the Court expressed limiting services due to budget limitations, noting that the view that a state would not violate Title II if it had courts had repeatedly found that “inadequate state a “comprehensive, effectively working plan for placing appropriations do not excuse noncompliance.” The Doe decision triggered lawsuits elsewhere since it 7 In addition, by not permitting the person to apply, it is frequently alleged that a state violates the individual’s due process rights under the U.S. Constitution’s 14th Amendment. 9 See Sara Rosenbaum and Joel Teitelbaum. (2004). Olmstead 8 This decision is at supct.law.cornell.edu/supct/html/98- at Five: Assessing the Impact. Kaiser Commission on Medicaid 536.ZS.html. For more about the decision, go to the Atlanta and the Uninsured. Available at: Legal Aid Society website:. atlantalegalaid.org/impact.htm kff.org/medicaid/kcmu062104pkg.cfm. 5 Home and Community Services Litigation Status Report: December 27, 2004 spoke to the impermissibility of wait listing  In many cases, the lawsuit involves individuals who individuals for Medicaid services. receive no services at all and are seeking HCBS The 11th Circuit decision spoke directly to ICF/MR but waiver services (e.g., KY, TN, UT); not HCB waiver services. Most developmental  Other lawsuits involve persons who already par- disabilities waiting list lawsuits have been filed by ticipate in the waiver program but have been wait people who seek HCBS but are wait-listed. In many of listed for or denied some services offered in the these lawsuits, plaintiffs are attempting to establish the program, most often residential services (e.g., CT, principle that a person’s eligibility for ICF/MR MA, WA); services also extends to “equivalent” or “ICF/MR  In a few lawsuits, the plaintiffs seek ICF/MR ser- level” services under the HCBS waiver program. vices in small community group homes as opposed to HCBS (e.g., CO); and, In the West Virginia Benjamin H litigation (described below), the district court confronted a situation where  In other lawsuits, plaintiffs also include individuals a state had a moratorium on the development of new who reside in ICFs/MR or large public institutions ICF/MR beds, nearly all available HCBS waiver slots who are seeking HCBS instead as well as persons in were filled and only persons in crisis were offered the community waiting for services (e.g., NM, TX) services. Other individuals had little or no prospect of Status of Lawsuits receiving services in the near term. The court ruled As of December 2004, lawsuits seeking community that “Medicaid provides entitlements” and the state’s services for people with developmental disabilities had restrictions on the availability of services violated the been filed in twenty-five states. Each lawsuit is reasonable promptness requirement. The court rejected summarized below. Presently, waiting list lawsuits in the state’s defense that it lacked the funds to provide ten states (AL, CO, CT, KY, NE, OH, PA, TX, UT, the services because, in the court’s view, allowing this WA) remain active. Settlements have been reached in defense would permit states to “easily renege on their eleven lawsuits (DE, FL, HI, IL ME, MA, MT, OR, part of the Medicaid bargain by simply failing to TN, VA and WV). appropriate sufficient funds.” In short, the court found that the state could not impose limits on the overall Settlement agreements spell out steps to resolve the number of people who could receive either ICF/MR or central issues in a fashion satisfactory to each side. HCB waiver services. The court ordered the state to The court must approve the agreement after implement a plan to eliminate the waiting list and conducting a “fairness hearing.” Agreements require ensure that individuals could exercise free choice in executive and legislative branch concurrence, selecting between institutional and community including an agreement to secure additional funds. In services.10 Developmental Disabilities Lawsuits The Doe decision held that a state could not waitlist individuals for ICF/MR services and the Benjamin H decision spoke to the situation where a state had cut off access by limiting both ICF/MR and HCB waiver services. Federal court rulings in some other lawsuits11 have pointed in the same direction as the Benjamin H ruling: namely, a person’s eligibility for entitled ICF/MR services extends to home and community services. But, it is still far from settled that individuals who are not receiving services but qualify for ICF/MR services are entitled to HCBS. Developmental disabilities waiting list lawsuits vary with respect to the plaintiffs’ situations and the ser- vices they seek. In particular: the settlements, states typically have consented to increase the number of individuals who receive Medicaid HCBS over a multi-year period (e.g., three 10 See National Health Law Project (1999). “West Virginia to five years). Depending on the case, the agreement Court Orders End to Home Care Waiting Lists” at may address other related issues. Settlements also set www.healthlaw.org/pubs/199907benjamin.html . out how the parties will interact during the agreement’s 11 E.g., Prado-Steiman et al. v. Bush (see below) 6 Home and Community Services Litigation Status Report: December 27, 2004 implementation, the circumstances that might void the 3. Arkansas: Tessa G. v. Arkansas Department agreement (e.g., not securing funds to implement the of Human Services et al. agreement), and how disputes will be resolved, Filed in June 2003 in the U.S. District Court for including returning to court if need be. Eastern Arkansas, this lawsuit (03cv493) challenged 1. Alabama: Susan J. et al. v. Riley et al. Arkansas’ practice of wait listing individuals for its HCBS waiver program for people with disabilities This complaint (00-CV-918) was filed in July 2000 in rather than allowing them to submit an application. In U.S. District Court for Middle Alabama on behalf of Arkansas, the state’s practice had been to place six plaintiffs with mental retardation. The lawsuit al- individuals seeking services on a “request list.” The leges that Alabama has failed to furnish ICF/MR or lawsuit was not brought as a class action. HCBS waiver services to eligible individuals. The plaintiffs were wait-listed for HCBS waiver services. The plaintiff argued that the state violated §1902(a)(8) The plaintiffs argue that Alabama’s limiting the num- of the Social Security by not giving her the ber of persons who receive Medicaid long-term opportunity to apply for services and have her applica- services violates: (a) the requirement that services tion acted on promptly. The plaintiff also alleged must be furnished with reasonable promptness per violations of: (a) §1915(c)(2) of the Act for short cir- §1902(a)(8) of the Act; (b) the requirement that ser- cuiting her freedom to choose between ICF/MR and vices be furnished to all eligible individuals on a waiver services; (b) denying her access to the Medi- comparable basis, as provided in §1902(a)(10)(B) of caid Fair Hearing process under §1902(a)(3); and, (c) the Social Security Act; and, (c) the 14th Amendment to violating the procedural due process component of the th the U.S. Constitution by depriving individuals of their 14 Amendment to the U.S. Constitution right to services. At hearing, the court indicated that it was strongly The state moved to dismiss the complaint, arguing inclined to order the state to provide an application to that: (a) waiver services differ from other Medicaid all individuals on the request list. The state conceded services and, thus, are not subject to the same require- that federal law required that individuals be allowed to ments; (b) states have the authority to limit the number apply for services and have their applications acted of individuals served through an HCBS waiver pro- upon promptly. It also agreed to offer waiver services gram; and, (c) the plaintiffs have no enforceable right to individuals on the request list up to its CMS under federal or state law to the services they are seek- approved participant cap. Reportedly, there were 1,000 ing and, thereby, an action cannot be brought in federal available “slots” as a result of additional funding court. This lawsuit was quiet until recently. In June approved by the Arkansas legislature in its last session. 2004, the court denied the state’s motion to dismiss Based on the state’s willingness to voluntarily comply, and ordered the state to answer the plaintiff complaint. the Court dismissed the case in August 2003. The case is now slated to go to trial in October 2005. 4. Colorado: Mandy R. et al. v. Owens et al. 2. Alaska: Carpenter et al. v. Alaska Private attorneys filed this class action complaint Department of Health and Social Services (00cv01609) in the U.S. District Court for Colorado in A private attorney filed this lawsuit on behalf of 15 August 2000. The complaint asserts that Colorado has individuals in January 2001 in the U.S. District Court violated federal Medicaid law, the ADA, §504 of for Alaska. The lawsuit asserted that Alaska violated Rehabilitation Services Act of 1973, and the U.S. federal Medicaid law, the ADA, §504 of the Constitution by failing to provide ICF/MR residential Rehabilitation Act, and the 14th Amendment to the U.S. services with reasonable promptness to eligible Constitution by wait listing indefinitely eligible individuals. The plaintiffs specifically seek ICF/MR children and adults with developmental disabilities. small group home services rather than services via The complaint argued that Alaska violated the ADA Colorado’s HCBS waiver program. In Colorado, only integration mandate as well as Medicaid’s reasonable a handful of individuals are served in ICFs/MR. promptness requirement. The plaintiffs also alleged Almost all individuals receive Medicaid residential that Alaska violated federal requirements by services through the state’s Comprehensive Services improperly processing Medicaid applications and not HCBS waiver program. The Arc of Colorado supports giving individuals the opportunity to appeal adverse this lawsuit.12 The state filed a motion to dismiss in decisions about service authorization or changes in September 2000. services. The plaintiffs did not seek class certification. In March 2002, Judge Richard P. Matsch ruled on the In March 2002, the Court accepted a stipulated accumulated motions in the case. His rulings on four agreement by the parties to dismiss the suit. 12 See statement at thearcofco.org/waitinglist.html 7 Home and Community Services Litigation Status Report: December 27, 2004 motions were of particular interest. First, he denied the assuring that services actually are furnished to eligible state’s motion to dismiss the claim that Colorado is persons. The plaintiffs asked the Court to summarily violating the §1902(a)(8) reasonable promptness re- find the state in violation of §1902(a)(8) and §1902(a) quirement, relying on the opinion handed down by the (10) of the Social Security Act for failing to furnish 10th Circuit Court of Appeals in the New Mexico ICF/MR services with reasonable promptness and Lewis litigation (see below). Second, Matsch granted a providing them to some but not all eligible persons. motion by the Colorado Association of Community The plaintiffs asked the Court to take up their ADA Centered Boards (CACCB) to intervene. CCBs are and §504 claims after deciding the ICF/MR non-profit agencies designated in Colorado law to pro- entitlement question. Plaintiffs urged the court to apply vide or arrange for community services for individuals the ADA and §504 to remedy the alleged Medicaid Act with developmental disabilities. The CACCB inter- violations by directing the state to sponsor small vened because the outcome of the litigation could have ICF/MR group homes that meet the ADA integration a substantial impact on CCBs. In its motion to standard. intervene, the CACCB introduced the new claim that In September 2003, Judge Matsch ruled on the out- Colorado violates §1902(a)(30)(A) of the Social standing summary judgment motions. He denied the Security Act because the state’s payments for plaintiffs’ motions for summary judgment. At the same community services are inadequate and have caused time, he denied the state’s motion to dismiss the plain- their quality to erode. Under federal judicial rules, an tiffs claims that Colorado has violated §1902(a)(8) and intervener may raise new claims germane to the §1902(a)(10) of the Social Security Act. These claims litigation. The CACCB also claimed that wait listing are at the center of the question of whether Colorado’s individuals violated federal Medicaid law. However, it policies violate Medicaid law. Matsch also denied the argued that this violation should be remedied by state’s motion to dismiss the CACCB claim that expanding waiver services rather than ordering the Colorado’s payments for community services violate state to furnish ICF/MR services. §1902(a)(30). With respect to the Medicaid violations, Third, Judge Matsch denied the plaintiffs’ motion to Matsch found that a more complete presentation of the certify the complaint as a class action. Matsch ruled facts at trial was necessary before he could rule. that the plaintiffs (who seek ICF/MR group home ser- However, Matsch dismissed the plaintiffs’ ADA Title vices) were not necessarily representative of the class II of the ADA and §504 claims, ruling that these as proposed (which would have included individuals claims were not “viable” and rejecting the plaintiffs’ who may want different types of services). Matsch also argument that Colorado’s policies run afoul of the observed that, if the plaintiffs prevail, systemic change Olmstead decision, pointing out that “Olmstead does would follow, thereby making class certification not stand for the proposition that a state must create, unnecessary. Last, he denied the plaintiffs’ motion for expand, or maintain programs for the purpose of pre- a preliminary injunction, principally on two grounds. venting disabled individuals from becoming He noted that it was unclear that the plaintiffs would institutionalized.” He also rejected the plaintiffs’ prevail on the merits. Second, he pointed out that the proposition that he should consider the plaintiffs’ ADA relief sought by the plaintiffs would cause major and §504 claims when fashioning remedies for the changes in the Colorado Medicaid program and have a Medicaid violations, pointing out each claim must major budgetary impact. Matsch decided that he did stand on its own merits. not have a basis to issue a preliminary injunction. In April 2002, the plaintiffs appealed the denial of class Trial took place the first week of June 2004. As of this action certification to the 10th Circuit, which did not update, the court had not handed down a decision. take the appeal because the case had not run its course 5. Connecticut: Arc/Connecticut et al. v. at the district court level. O’Meara and Wilson-Coker In July 2002, the state filed a summary judgment This complaint (01-cv-1871) was filed in October motion to dismiss the plaintiffs’ claims. The state ar- 2001 in U.S. District Court for Connecticut by gued in part that it had no affirmative responsibility to Arc/Connecticut against the Commissioners of the develop ICFs/MR but instead that its role was akin to Departments of Mental Retardation (DMR) and Social an “insurer,” limited to paying for services once deliv- Services (the state’s Medicaid agency) on behalf of ered. In August 2002, the plaintiffs filed a motion for persons with mental retardation wait-listed for partial summary judgment. In a brief accompanying Medicaid home and community-based waiver services. the motion, the plaintiffs attacked the state’s reasoning, The plaintiffs include persons who receive some arguing that the state’s responsibilities under Medicaid waiver services but are wait listed for principally law extend beyond mere claims payment and include 8 Home and Community Services Litigation Status Report: December 27, 2004 residential services and persons who do not receive persons; (b) §1902(a)(8) by not furnishing services any waiver services at all. with reasonable promptness and denying persons the The lawsuit challenges several state policies. A central opportunity to apply; (c) §1915(c)(2)(C) by not giving issue is plaintiffs’ allegation that Connecticut has individuals a choice between institutional and waiver restricted waiver services based on available funding. services; (d) §1915(c)(1) and §1915(c)(4) for limiting The plaintiffs argue that this practice violates federal services under the HCBS waiver program to those policy which requires that waiver participants receive available and funded rather than providing the services the full range of services offered in a state’s program needed by each person; (e) the ADA by not permitting that are necessary to meet their needs. The state is al- ICF/MR residents to apply for the waiver program leged to have wait listed individuals who receive day until they already have been placed in the community and other supports for waiver residential services. In and operating its Medicaid program in a fashion that support, the plaintiffs pointed to January 2001 policy does not afford equal access to covered benefits; (f) guidance contained in the Centers for Medicare and §1902(a)(3) for not giving individuals the opportunity Medicaid Services (CMS) Olmstead Letter #4.13 to appeal decisions concerning their services; and, (g) Among its provisions, the CMS letter spelled out the the plaintiffs’ due process protections under the U.S. requirement that HCBS waiver participants must be Constitution. furnished any covered service that they require within In August 2004, the state filed a new summary judg- a reasonable period. The plaintiffs also allege that the ment motion that asked the court to throw out the state masks the operation of the waiver program in a plaintiffs’ claims. The state contends that the issues in fashion that results in individuals and families not the present litigation were no different than those set- being allowed to apply for the program and thus tled in a similar case (Birks v. Lensink) about ten-years leaving them unaware of its benefits. Finally, the ago which established the state’s current priority wait- plaintiffs argue that, unless Connecticut is directed to ing list system. In addition, the state argues that the change how it operates its program, individuals face Medicaid Act does not confer individually enforceable the prospect of waiting years for services. rights on the plaintiffs, especially with respect to In August 2002, the Court ruled on two pending mo- HCBS waiver services. The state also questions the tions. In February 2002, the plaintiffs filed a motion to applicability of the ADA, contending that the ADA extensively amend their original complaint. The cannot serve as the basis for requiring a state to expand amended complaint included additional alleged viola- services and that the integration mandate only applies tions of federal Medicaid law and regulations, espe- to institutionalized persons. cially surrounding the state’s administration of its Recently, Arc/CT reported that an agreement has been waiver program. The state objected, arguing that this reached to settle the lawsuit. The agreement must be would broaden the subject matter of the original com- approved by the Connecticut Legislature before it can plaint. The Court accepted the amended complaint be submitted to the district court for approval. Until since it was submitted on a timely basis. In June 2002, the Legislature acts, details of the agreement are not fifteen more individuals asked to be included as plain- available. However, Arc/CT has noted that “… while tiffs. Again, the state objected but the Court decided to the additional resources that will be committed by the allow the individuals to join the case. In September State will bring relief to a minimum of 1,250 people 2002, the state moved to dismiss the complaint. In over the five-year period of implementation, the criti- October, the court denied the state’s motion. cal changes in the way the system treats and interacts In January 2003, the court granted class certification, with individuals and families will be the lasting legacy thereby expanding the lawsuit’s scope to all 1,700 of the settlement….While we didn’t get everything we individuals on the state’s waiting list. The class in- had hoped for, the compromises we did achieve will cludes all persons eligible for DMR services who have go a long way to improving the lives of many hun- applied for and are eligible for the waiver program or dreds of individuals and their families who have been would be eligible if they had the opportunity to apply. waiting far too long.” In February 2003, the plaintiffs filed a second 6. amended complaint.14 The second amended complaint alleges that the state has violated: (a) §1902(a)(10)(B) of the Social Security Act by not making Medicaid services available on a comparable basis to all eligible

13 Located at: cms.hhs.gov/states/letters/smd11001.pdf 14 Located at: arcct.com/WaitingListComplaint0203.htm. 9 Home and Community Services Litigation Status Report: December 27, 2004

7. Delaware: The Arc of Delaware et al. v. 42 U.S.C. §1983; and, (e) §1915(c)(2)(C) of the Social Meconi et al. Security Act by not providing a choice between In April 2002, nine individuals – joined by The ARC ICF/MR or waiver services. of Delaware, Homes for Life Foundation, and Dela- In September 2003, the parties announced that they ware People First – filed a class action complaint (02- had arrived at a preliminary agreement to dismiss the cv-255) against the Delaware Department of Health lawsuit. In April 2004, the plaintiffs submitted a notice and Social Services and its Division of Developmental of dismissal to the court. This notice was based on a Disability Services (DDDS) in the U.S. District Court Memorandum of Understanding (MOU) agreed to by for Delaware. The lawsuit charged that Delaware the parties. The MOU provides for the state to fund 79 failed to serve more than 1,180 individuals who were new community residential placements in FY 2005, eligible for but denied access to Medicaid HCBS including placements for 24 Stockley residents. It also waiver and/or community ICF/MR services. The Pub- provides that the state will submit a federal application lic Interest Law Center of Philadelphia and Commu- to establish a new waiver program to provide supports nity Legal Aid Society Disability Law Program for persons who live with their families. The agree- (Delaware’s P&A agency) represent the plaintiffs. ment also commits the state to collaborate with the The plaintiffs included individuals who live with aging plaintiffs to improve waiting list management and caregivers along with residents of Stockley Center needs assessment as well as take other steps to (Delaware’s public institution) assessed as appropriate strengthen community infrastructure. The MOU also to return to the community. The complaint alleged that provides that the state will continue to place additional these individuals have waited many years for services Stockley residents and seek increased funds to expand but had little prospect of receiving them any time soon. home and community services. In August 2004, the The proposed class included: (a) all individuals on the court approved the settlement. DDDS’ waiting list for community residential services; 8. Florida: John/Jane Doe v. Bush et al./Wolf (b) all individuals receiving DDDS services eligible Prado-Steiman et al. v. Bush et al. for but not receiving HCBS waiver or ICF/MR In 1992, a class action complaint was filed (as Doe v. services; and, (c) all institutionalized persons who Chiles et al.) on behalf of individuals who had been qualified for services in the community. wait-listed for ICF/MR services. The Doe complaint The plaintiffs argued that Delaware operates its service asserted that Florida violated federal Medicaid law by system in violation of Medicaid law, the ADA and the not furnishing ICF/MR services with reasonable U.S. Constitution, thereby leading to the “denial of promptness to eligible Medicaid recipients with devel- necessary care and services, inappropriate placement opmental disabilities. In March 1998, the U.S. 11th Cir- in state institutions, restraint [of] ... liberty without due cuit Court of Appeals upheld the District Court’s 1996 process, unnecessary and needless deterioration and ruling that wait listing individuals for ICF/MR services regression in health status, the loss of opportunities to violated federal Medicaid law (see above). A second maximize self-determination and independence, and complaint – Prado-Steiman (98cv06496) – was filed the loss of opportunities to live in integrated settings by The Advocacy Center (Florida’s P&A agency). This and to receive programs and services development in complaint directly challenged Florida’s policies in accordance with professional standards.” operating its HCBS waiver program for people with The plaintiffs claimed that Delaware violated: (a) developmental disabilities (especially by not furnish- §1902(a)(8) of the Social Security Act by failing to ing services that had been identified as needed) and provide Medicaid services with reasonable promptness was amended to contest the state’s wait listing and denying individuals the opportunity to apply for individuals. In August 2001, the District Court ap- services; (b) Title II of the ADA and §504 of the Reha- proved a settlement agreement in the Prado litigation bilitation Act by not furnishing services in the most that provided that all individuals waiting for services integrated setting. The complaint also alleged that in July 1999 would receive services by 2001 and for Delaware does not have a “comprehensive effectively the state to make substantial changes in the operation working plan” for placing qualified persons in less of its waiver program. restrictive settings and was not moving its waiting list Led by Governor Jeb Bush, Florida has undertaken a at a reasonable pace, as provided by the Olmstead major expansion of its HCBS waiver program for peo- decision; (c) §1902(a)(10) of the Social Security Act ple with developmental disabilities. Since Bush took by not providing Medicaid services in adequate office in 1998, funding for developmental disabilities amount, duration and scope; (d) the Due Process services has tripled and now exceeds $1 billion. Clause of the 14th Amendment to the Constitution and Between 1998 and 2001, the number of persons 10 Home and Community Services Litigation Status Report: December 27, 2004 participating in Florida’s HCBS waiver program for In April 2000, the state and plaintiffs forged a settle- people with developmental disabilities doubled from ment agreement15 wherein the state agreed to increase 12,000 to 24,000. Among its other provisions, the the number of individuals served in the state’s HCBS Prado settlement agreement includes an “operational waiver program by approximately 700 individuals over definition” of how the state will comply with the the three-year period ending June 30, 2003. By June reasonable promptness requirement. 2002, approximately 560 additional individuals had While Florida has made major strides in expanding been served. The agreement also provided that the community services, new issues have arisen since the state would not change its eligibility policies but settlement was reached, including the emergence of a would make other changes, including employing “post-Prado” waiting list that reportedly has reached person-centered planning methods to identify the 14,000 individuals. These individuals sought services supports that individuals should receive. after July 1999 and, hence, are not covered by the Disability Rights Center. In September 2003, the settlement. Governor Bush’s FY 2005 budget included Disability Rights Center completed its evaluation of funds to serve an additional 3,200 persons. the implementation of the settlement agreement. As a In March, 2002, the Advocacy Center filed a 20-page result of this evaluation, the Center filed a new class Notice of Material Breach of the Prado settlement, action complaint (03-00524) seeking declaratory and injunctive relief based on its view that the state has not contending that systemic problems have led to the au- 16 thorization of services that are “less than necessary to complied with the Makin settlement agreement. In provide services in the community and in small facili- essence, the Center alleges that the state policies and ties.” The letter outlined deficiencies in the Florida practices have caused 300 Makin class members class service system in eighteen areas including: provider to remain on the waiting list. The Center contends that development and access in various geographic areas, the state furnished services to individuals who sought quality assurance, service delivery timelines, and due services after the settlement agreement rather than to process. Florida’s Office of the Attorney General de- the class members and, in FY 2002, reverted funds that nied that the state had broken the terms of the agree- could have been used to serve the class members. ment in “any material or systemic way.” Following Moreover, the Center argues that some class members attempts to mediate the issues, in July 2003 the Advo- are not receiving the full range of services that they cacy Center moved for the court to continue its require. The plaintiffs claim that the state’s policies jurisdiction, based on material breach of the settlement and practices violate: (a) the ADA; (b) §504 of the agreement. In March 2004, the court rejected the Rehabilitation Act; (c) the Constitution’s procedural plaintiffs’ motion, finding that none of the specific al- due process provisions; (d) §1902(a)(8) of the Social leged breaches warranted the court’s continued Security Act; (e) §1915(c)(2)(A) by furnishing jurisdiction. inadequate waiver services; and, (f) provisions of Hawai’i state law. The plaintiffs are asking the court to 9. Hawai’i: Makin et al. v. State of Hawai’i/The order the state to move individuals – including class Disability Rights Center et al. v. State of members – off the waiting list at a reasonable pace, Hawai’i et al. defined as furnishing services to them within six Makin. In December 1998, the Hawaii Disability months and also rule that the state’s failure to adopt a Rights Center – state’s P&A agency – filed this class comprehensive plan that assures the waiting list moves action complaint (98cv997) on behalf of 700 wait- at a reasonable pace is unlawful. The parties are listed individuals in the U.S. District Court for continuing to explore a possible settlement. Absent a Hawai’i. The complaint alleged that the state’s practice settlement, trial is scheduled for July 2005. of wait listing individuals for HCB waiver services 10.Illinois: Bruggeman et al. v. Blagojevich et. violated federal Medicaid law and the ADA. The state al. challenged the applicability of the ADA, arguing that the U.S. Supreme Court’s Olmstead decision dealt This lawsuit (00-cv-5392) (formerly Boudreau v. with only institutionalized persons. The district court Ryan) was filed in September 2000 by a private attor- rejected this argument by reasoning that the lack of ney in the U.S. District Court for of Northern Illinois community services would leave institutionalization as on behalf of five named plaintiffs with developmental the only option available to individuals. 15 The lawsuit and agreement are at hawaiidisabilityrights.org/General_NewsDetail.aspx?nid=1009. 16 At: hawaiidisabilityrights.org/Forms/SMComplaint10.01.03(web).d oc. A press release describing the complaint is at: hawaiidisabilityrights.org/General_NewsDetail.aspx?nid=1018 11 Home and Community Services Litigation Status Report: December 27, 2004 disabilities eligible for but not receiving Medicaid In July 2002, another amicus brief was filed by the long-term services. The complaint alleged that Illinois American Civil Liberties Union (ACLU) of Illinois, does not furnish Medicaid services to eligible Equip for Equity (the Illinois P&A agency), and a individuals with reasonable promptness nor afford coalition of Centers for Independent Living. This brief individuals freedom of choice to select between also argued for reinstating the ADA claim and that the ICF/MR and HCB waiver services. The suit also district court paid insufficient attention to the interplay alleged violations of other provisions of the Social of Illinois’ policies and their impact on access to Security Act, the ADA, §504 of the Rehabilitation Act services in the most integrated setting in dismissing the and the 14th Amendment to the U.S. Constitution. The ADA claim. The brief urged the Circuit to “leave for plaintiffs asked the court to “issue preliminary and another day the many larger legal questions … permanent injunctive relief requiring the Defendants regarding whether the Illinois system for providing … to offer the Plaintiffs the full range of ICF/MR services … complies with federal law.” services or HCB waiver services and other services for In October 2002, the state replied, again arguing that which they are eligible within 90 days or some other the plaintiffs lacked standing to bring suit and also that specifically defined, reasonably prompt period." there was no enforceable federal requirement that In response, the state moved to dismiss, claiming individuals receive services in close proximity to their immunity under the 11th Amendment and challenging families. Next, the defendants asserted that their only the plaintiffs’ other claims. In May 2001, siding with responsibility under federal Medicaid law was to the state, the court dismissed the plaintiffs’ ADA claim “provide appropriate rates of payment” but not to because the complaint was filed against public officials ensure that individuals receive necessary services. whereas Title II of the ADA speaks to the policies of a Finally, the state asserted that it had not waived 11th “public entity.” However, the court rejected the state’s Amendment rights and urged dismissal of the lawsuit arguments concerning the other claims, including on sovereign immunity grounds. sovereign immunity. In April 2003, the Circuit decided that the district court In February 2002, the court dismissed the lawsuit, erred in concluding the plaintiffs lacked standing to deciding that the plaintiffs’ main claim was their lack pursue their Medicaid claims but upheld the lower of access to residential services near their families. The court decision to reject these claims, ruling that federal court was persuaded by the state’s arguments that (a) law did not dictate that services be available near the federal law does not require that a state arrange for individual’s family home. The Circuit also conceded services on the basis of proximity to family and (b) the that its previous ruling that suits brought under the services the plaintiffs sought might be available ADA must be filed against public entities rather than elsewhere in Illinois. The court also ruled that the state officials had been in error, based on decisions plaintiffs lacking standing to bring the lawsuit. elsewhere. In March 2002, the plaintiffs appealed the dismissal to But, the Circuit ruled that the district court had not the 7th Circuit Court of Appeals. In June 2002, the adequately considered plaintiff claims when it ruled plaintiffs submitted their brief to the Circuit Court.17 that the plaintiffs lacked standing to sue under the The plaintiffs asked the Circuit to review the district Rehabilitation Act. The Circuit set aside the dismissal court’s rulings on the Medicaid, ADA, and Rehabilita- of the plaintiffs’ Rehabilitation Act and ADA claims. tion Act claims and argued that facts unearthed during The Circuit remanded the lawsuit and “commended” trial showed that the state was not in compliance with to the district court the Olmstead decision, especially federal law. In June 2002, the U.S. Department of pointing to that part of the decision that provided "if... Justice (USDOJ) Civil Rights Division submitted an the State were to demonstrate that it had a amicus brief. The brief focused only on the district comprehensive, effectively working plan for placing court’s dismissal of the ADA claim. The brief noted qualified persons with mental disabilities in less that the dismissal was based on a previous 7th Circuit restrictive settings, and a waiting list that moved at a ruling that USDOJ contended was in error. USDOJ reasonable pace not controlled by the State's endeavors argued that there was ample support for the to keep its institutions fully populated," the state would proposition that individuals may sue public officials not be violating Title II.18 not just public entities in federal court to enjoin In July 2004, the parties announced that they had violations of the ADA. arrived at a stipulated settlement of the lawsuit. The details of this settlement are not available but 17 This brief and others filed in this case are available at ca7.uscourts.gov/briefs.htm. To obtain the briefs, enter case 18 The opinion is on the 7th Circuit’s web site at: number 02-1730. ca7.uscourts.gov/op3.fwx. Enter case number 02-1730. 12 Home and Community Services Litigation Status Report: December 27, 2004 reportedly its scope is limited to the provision of 12.Maine: Rancourt et al. v. Maine Department services to the named plaintiffs. The court then of Human Services et al. dismissed the case. In August 2001, a complaint (01-CV-00159) was filed 11.Kentucky: Michelle P et al. v. Holsinger et al. in the U.S. District Court for Maine on behalf of three adults with developmental disabilities waiting for ser- In February 2002, the Kentucky Division of Protection vices was filed against the Maine Departments of Hu- and Advocacy filed a lawsuit (02-CV-00023) in the man Services (the Medicaid agency) and Behavioral U.S. District Court for Eastern Kentucky on behalf of and Developmental Services (which administers four people with mental retardation and their family Maine’s HCBS waiver program). The lawsuit charged caregivers against the state’s Cabinet for Health that the state did not furnish services to people with Services along with the Departments for Medicaid developmental disabilities in a “reasonably prompt” Services and Mental Health and Mental Retardation. manner. Class-action certification was sought on be- The lawsuit charges that Kentucky has improperly wait 19 half of 1,000 adults with developmental disabilities listed individuals for Medicaid services. The who were not receiving timely services. plaintiffs also sought class action certification on behalf of an estimated 1,800 wait-listed persons. In In November 2001, the court denied the state’s motion th recent years, the Kentucky legislature has substantially to dismiss the lawsuit on 11 Amendment sovereign boosted funding in order to reduce the waiting list but immunity grounds. The court portrayed the state’s ar- a long waiting list remains. guments for dismissal as “while intellectually intrigu- ing, are a didactic exercise in historical legal formal- The plaintiffs argue that, even though they are eligible isms, apparently inspired by the musings of Justice for ICF/MR level services, they have been wait-listed Scalia ….” The Court pointed to previous 1st Circuit and have indefinite prospects for receiving services. decisions that affirmed federal court jurisdiction in They also complain that even individuals in emergency these types of lawsuits. In May 2002, the Court certi- status are unable to receive services promptly despite fied the class action over the state’s objections. The their priority status. The complaint claims that Ken- state petitioned the 1st Circuit to review the class action tucky is violating: (a) §1902(a)(10)(A) of the Social certification. In July 2002, the 1st Circuit rejected the Security Act for failing to provide ICF/MR level ser- petition. vices to all Medicaid beneficiaries who are eligible for them; (b) §1902(a)(8) for failing to furnish services In May 2003 the parties filed a joint motion asking the with reasonable promptness; (c) §1902(a)(10)(B) for court to approve a settlement that they had worked out. 20 making ICF/MR level services available to some In July 2003, the court approved the agreement. The Medicaid beneficiaries but not all; (d) Title II of the agreement is effective January 2004 and the court will ADA and §504 of the Rehabilitation Act by failing to retain jurisdiction through December 2006. For pur- serve individuals in the most integrated setting; and, poses of the agreement, the class is defined as: “all de- (e) §1915(c)(2)(C) by not giving eligible individuals a velopmentally disabled individuals who: (1) are cur- practical choice between ICF/MR or other available rent or future recipients of Medicaid in the State of alternatives through the HCBS waiver program. Maine; (2) are no longer entitled to receive benefits and services through the Maine public school system; In March 2002, the District Court granted class certifi- and (3) are eligible to receive intermediate care facili- cation and ruled in plaintiffs’ favor on other motions ties and/or other services for the mentally retarded, or over state objections. The class is “all present and care under the Home and Community-Based Waiver future Kentuckians with mental retardation and/or Services for Persons with Mental Retardation.” related conditions who live with caretakers who are eligible for, and have requested, but are not receiving The agreement provides that the state will furnish Medical Assistance community residential and/or Medicaid state plan day habilitation and case support services.” In June 2002, the 6th Circuit Court management services within 90-days to all individuals of Appeals denied the state's petition appealing the who had sought them in the past. The state must notify class certification. Trial had been scheduled for all Medicaid beneficiaries of the settlement. In the case January 2005. However, on December 15, 2004, the of individuals who newly qualify for services, the state filed a last-minute motion to dismiss, thus agreement provides for their receiving case manage- delaying the start of trial until the court disposes of this ment and day habilitation services within no more 225 motion. days. In the case of individuals who also qualify for the HCBS waiver program and who require “residen-

19 More information is at 20 A description of the agreement and its full text are located at: kypa.net/community/Olmstead/waitinglist_1.html. drcme.org/rancourt.html 13 Home and Community Services Litigation Status Report: December 27, 2004 tial training services,” the agreement defines “reason- vices to an additional 1,975 individuals at a pace of able promptness” as starting services in no more than 375 – 400 persons per year. Individuals who do not 18-months. This timeframe reflects the state’s experi- receive residential services right away would receive ence concerning the amount of time it takes to develop “interim services” (in-home, family support and other a licensed residential setting that matches the needs services) until residential services became available. and preferences of an individual, although state The parties also agreed to procedures for preparing officials note that often less time is required. However, residential and interim service plans. Over the five- the agreement does not require the state to expand the year period 2002 – 2006, the state committed $355.8 waiver program over and above the already approved million in total funding to expand services. Since the number of slots. settlement was arrived at, each year additional funds have been appropriated in accordance with the 13.Massachusetts: Boulet et al. v. Cellucci et al. agreement. This class action complaint was filed in March 1999 (originally as Anderson v. Cellucci) by private attor- 14.Montana: Travis D. et al. v. Eastmont Human neys on behalf of the plaintiffs and their families who Services Center were dissatisfied with the state’s pace in reducing its Filed in 1996 by the Montana Advocacy Program (the waiting list. The complaint asserted that Massachusetts state’s P&A agency), this complaint alleged that Mon- violated federal Medicaid law and the ADA by failing tana violated federal Medicaid law, the Americans with to provide residential services with reasonable prompt- Disabilities Act integration mandate and the U.S. ness to otherwise eligible individuals and by wait- Constitution by failing to provide community services listing them indefinitely. While the state had reduced to residents of the state’s two public MR/DD the waiting list, the plaintiffs sought to accelerate the institutions and individuals in the community at risk of expansion of residential services. institutionalization. In July 2000, the District Court issued a summary Court action stalled for a variety of reasons, including judgment in the plaintiffs’ favor, ruling that the state off and on settlement negotiations between the parties, was required to furnish Medicaid residential services the ill-health of the presiding judge, and a one-year with reasonable promptness. But, the Court certified a stay pending the U.S. Supreme Court’s Olmstead narrower class than proposed by the plaintiffs who had decision. In August 2001, the presiding judge declared asked that it include all individuals wait listed for all the pending motions moot, deciding that starting Medicaid residential services along with persons who over with a fresh set of motions would expedite the would be eligible for them in the future. The Court case. The parties submitted new briefs in May 2002. narrowed the class to individuals already participating The lawsuit was narrowed to a class of an estimated in the HCBS waiver program who were wait listed for 200 individuals served at Montana’s two public residential services or wait listed persons not served in institutions (Eastmont Human Services Center and the waiver program who could be accommodated un- Montana Developmental Center (MDC)) since August der its participant cap. The Court directed the state to 1996. The remaining claims concerned community furnish residential services to class members within integration under the ADA, the Rehabilitation Act, and 90-days or, if not feasible, to propose a plan to comply the U.S. Constitution. Meantime, in its 2003 session, with the reasonable promptness requirement. the Montana legislature approved the closure of In November 2000, the parties agreed in principle to a Eastmont and the Center closed in December 2003. settlement. In January 2001, the court approved a set- The parties arrived at a mediated settlement agreement tlement agreement. The agreement modified the class that gained preliminary court approval in February to include all individuals wait listed as of July 2000, 2004.21 The agreement provides that the state will regardless of whether the person was receiving or move 45 MDC residents into community living would be eligible to receive HCB waiver services. The arrangements over the next four years. MDC currently modified class had 2,437 members, including 1,961 serves approximately 90 individuals. In addition, the waiting for out-of-home residential services only, 266 state agreed to: (a) seek to repeal a Montana law that waiting for both residential and non-residential ser- allows court commitment of individuals who have vices (e.g., day services), and 210 waiting for non-resi- “near total care” requirements. This law has been a dential services only. Under the agreement, the state leading source of new admissions to state facilities; (b) committed to provide residential services to 300 more commit $200,000 annually for crisis prevention and individuals in FY 2001 using already appropriated intervention services to help maintain people in the funds. Over the next five years (FY 2002 – 2006), the 21 The settlement agreement and related materials are located on state agreed to seek funding to provide residential ser- Montana Advocacy Program website at: www.mtadv.org/. 14 Home and Community Services Litigation Status Report: December 27, 2004 community and reduce crisis admissions to MDC; (c) regulations that require assisting individuals to achieve make improvements in MDC services; (d) improve its critical life outcomes; and, (f) the U.S. and Nebraska community quality assurance program; and, (e) take Constitutions and federal Medicaid law by not additional steps to strengthen community services for providing adequate due process protections and the individuals with developmental disabilities. right to a Medicaid Fair Hearing. 15.Nebraska: Bill M. et al. v. Department of By way of relief, the plaintiffs want the court to direct Health and Human Services et al. the state to prepare and implement a comprehensive In May 2003, six individuals with developmental effective working plan that moves the waiting list at a disabilities filed suit (03-cv-03189) against the Ne- reasonable pace, immediately provide waiver services braska Department of Health and Human Services in to eligible individuals up to the number of waiver slots the U.S. District Court for Nebraska. The lawsuit presently available, expand the program to serve more charges that Nebraska has impermissibly wait listed persons over the next three years, and revamp its individuals for waiver services and, furthermore, that service authorization mechanism. the state’s policies result in inadequate services being In July 2003, the state filed a motion to dismiss the furnished to potentially a large percentage of waiver ADA and §504 claims. The state argued that it enjoys participants. The plaintiffs are represented by private sovereign immunity protection against lawsuits attorneys and Nebraska Advocacy Services, the state’s brought under the ADA and has not discriminated P&A. Class action certification also is sought for: against individuals under either the ADA or §504. All present and future individuals with developmental Furthermore, it asserted that the ADA, §504 and the disabilities in Nebraska who are eligible for Medical Olmstead decision do not require a state to increase its Assistance Home and Community-Based Services but spending for community services. Since none of the either are not receiving funding for such services, or are defendants are institutionalized, the state argued that not receiving sufficient funding for such services to rea- they can make no Olmstead-related claims. sonably achieve the purpose of the service, assure the In August 2003, the plaintiffs replied to the state’s class member’s health and safety, or ensure progress motion to dismiss. They argued that, by accepting fed- toward independence, interdependence, productivity eral Medicaid funds, the state waived sovereign immu- and community integration. nity. They also disputed the state’s interpretation of the The lawsuit alleged that about 800 individuals were Olmstead decision on several grounds, including the waiting for services in Nebraska. In addition to seek- state’s assertion that it applies only to institutionalized ing services for these individuals, the lawsuit chal- persons. The plaintiffs also filed an amended lenges the state’s methods for authorizing services complaint. under its program. The state uses assessment results to In October 2003, the state filed another motion to dis- set the number of hours of services a person may re- miss. The state reiterated its arguments concerning the ceive. The plaintiffs contend that this method is flawed ADA and §504 claims and again asserted sovereign because it leads to a large but unknown percentage of immunity. In addition, the state contended that individuals not receiving enough hours of services to plaintiffs’ grievances were more properly addressed meet essential health and safety needs and/or make through state administrative appeals processes, which progress in achieving their individual goals. are subject to state judicial review. The state also The plaintiffs claim that the state violates: (a) the ADA disputed the validity of plaintiffs’ claims under federal and §504 of the Rehabilitation Act because the waiting Medicaid law. Finally, the state argued that claims list does not move at a reasonable pace and Nebraska based on Nebraska state law are outside the does not have an effective working plan as called for jurisdiction of federal courts in litigation brought in the Olmstead decision; (b) §1902(a)(8) of the Social under the provisions of §1983. Security Act by denying individuals the opportunity to In early November 2003, the plaintiffs replied to the apply for the waiver program and not providing ser- state’s motion to dismiss, disputing each of the state’s vices with reasonable promptness; (c) §1902(a)(10)(B) arguments. Later in the month, the state filed its reply because the state’s service authorization mechanism brief, reasserting its arguments in support of dismissal. impermissibly restricts the amount, duration and scope of services; (d) §1915(c)(2)(A) because the mechanism In July 2004, the plaintiffs filed their motion for class does not assure the health and welfare of waiver certification. The plaintiffs estimate that the class now participants [N.B., The plaintiffs also allege that the includes 1,400 individuals who waited for services for state violates the requirements spelled out in CMS more than 90 days and 2,200 persons who are Olmstead Letter #4]; (e) Nebraska state law and

15 Home and Community Services Litigation Status Report: December 27, 2004 receiving inadequate community services or at risk of the community with their family and friends,” thereby having their services reduced. putting them “at risk of being provided with inade- quate, inappropriate or overly restrictive programs and In August 2004, the court denied the state’s motion to th th dismiss the case. In September 2004, the state services”; (d) the 5 and 14 Amendments to Consti- th tution and 42 U.S.C. §1983 for abridging the plaintiffs’ appealed this decision to the 8 Circuit Court of th Appeals (04-3263). The district court has suspended due process rights; and, (e) the 14 Amendment for further proceedings until the 8th Circuit hands down a violating individuals’ right to equal protection by serv- ruling. Briefs have been submitted but no date has ing some individuals but wait-listing others. been set for oral argument. In April 2002, the court denied the plaintiffs’ petition for injunctive and declaratory relief. The plaintiffs’ 16.New Hampshire: Cuming et al. v. Shaheen et al. petition included six requests that covered class certification and called for the state to offer all eligible In January 2002, the Disabilities Rights Center (the plaintiffs community services within 90 days. The state’s P&A agency) filed a class action complaint in court concluded that the petition did not meet New Hillsborough County Superior Court, arguing that Hampshire’s tests for such relief. Deciding that the New Hampshire failed to provide adequate com- “proposed class members’ claims… include claims munity-based services for people with developmental that extend far beyond those of the named plaintiffs,” disabilities. The suit alleged that there are “well over the court also denied class certification. 500 individuals” in the proposed class, including 325 Medicaid-eligible individuals wait-listed for services In a subsequent proceeding, the court reversed itself and a large number of persons who receive inadequate concerning class certification. But, then in March or inappropriate services. The plaintiffs demanded that 2003, the court again decided to deny certification, the state furnish a “comprehensive array” of ruling that the proposed class was too broad and likely individualized community services. included individuals whose service needs were different and therefore might have different interests. The suit charged the state has not developed an adequate system of community services and programs, The plaintiffs appealed the denial of class certification “including sufficient numbers of ICF/MR and other to the New Hampshire Supreme Court, which refused community living arrangements that meet the individu- to hear the appeal. The plaintiffs then filed a motion to alized needs of persons with developmental disabili- voluntarily withdraw the lawsuit “without prejudice.” ties...” The suit asked the court to order the state to fur- The motion to dismiss was granted but with prejudice. nish improved services not only for the wait listed per- The plaintiffs appealed this decision to the state sons but also for individuals who receive services but Supreme Court. (Priaulx, 2003). have been “…left to languish in inappropriate and, 17.New Mexico: Lewis et al. v. New Mexico sometimes, overly restrictive placements.” The plain- Department of Health et al. tiffs expressed dissatisfaction with the state’s attempts This lawsuit (99-00021) was filed in January 1999 in to develop programs and services for this group, the U.S. District Court for New Mexico by the state’s portraying such efforts “piece-meal and inadequate.” P&A agency with the support of The Arc of New This lawsuit suit was filed in state rather than federal Mexico. The class action complaint alleged New court and relies both on state and federal law as its Mexico violated federal Medicaid law and the ADA by basis. In particular, the suit claims that the state is vio- failing to provide Medicaid services in the community lating: (a) New Hampshire law (RSA 171-A:13) which to eligible individuals with disabilities, thereby caus- provides that “every developmentally disabled client ing them to go without services or forcing them to has a right to adequate and humane habilitation and accept institutional services. The proposed class in- treatment including psychological, medical, voca- cluded: (a) people with developmental disabilities tional, social, educational or rehabilitative services as wait-listed for HCB waiver services; (b) persons his condition requires to bring about an improvement served in ICFs/MR who would benefit from waiver in condition within the limits of modern knowledge”; services; (c) persons served in nursing facilities who (b) §1902(a)(8) for waiting listing otherwise eligible want community services; and, (d) persons with persons and §1902(a)(3) for failing to provide a Fair disabilities in the community who seek access to the Hearing for individuals whose claim for Medicaid ser- state’s HCBS waiver program for persons who are vices has not been acted upon with reasonable prompt- aged or disabled. ness; (c) Title II of the ADA for not having developed In April 2000, the court rejected the state’s motion to a sufficiently comprehensive program so that all per- dismiss the lawsuit on sovereign immunity grounds sons with developmental disabilities can “remain in 16 Home and Community Services Litigation Status Report: December 27, 2004 and upheld the plaintiffs’ right to access to waiver beyond such limits. Thus, the court’s ruling did not services with “reasonable promptness.” In May 2000, require that the state expand its program to serve all the state asked the 10th U.S. Circuit Court of Appeals people on the waiting list. The court noted that the to reconsider of its immunity claim. Under federal state had in the past not made full use of all available judicial rules, an appeal based on a sovereign funds and admonished the state to step up its efforts to immunity claim stays further lower court action until diligently deploy its resources to serve as many indi- the appeal is decided. Finally, in August 2001, the 10th viduals as possible each year. 22 Circuit denied the state’s appeal. The plaintiffs submitted a proposed order to im- In September 2001, the state filed a new motion to plement the ruling. In October 2003, the state chal- dismiss the complaint, arguing that the lawsuit was lenged the proposed order, which asked that the court moot because all the original named plaintiffs either to enter a permanent injunction to require that the state were receiving waiver services or deceased. The state comply with applicable federal laws. The state argued also challenged the P&A’s standing to pursue this that its policies met the parameters that the court litigation in its own right. In November 2001, the P&A spelled out in its August 2003 ruling. The state also filed a counter brief, arguing that it had standing under contended that the proposed order went beyond the federal law to pursue the lawsuit and filed a motion to court’s ruling because it would require the state to amend the original complaint. serve more people in its waiver programs than the In July 2002, the plaintiffs submitted a motion for funds appropriated by the legislature. The state counter summary judgment, contending that the “case presents proposed that the court enter judgment in its favor. a simple, straight forward question of law: Are the In November 2003, the plaintiffs replied that the state Defendants required to provide Medicaid waiver had misconstrued the court’s August 2003 order. They services to all eligible individuals with reasonable asserted that the order provided that: (a) the state must promptness? The law is clear and unequivocal: the promptly determine the eligibility of applicants rather defendants are so required.” In support, the plaintiffs than entering their names into a registry for future pointed out that 2,600 individuals were wait listed for consideration when waiver slots become available and the state’s HCBS waiver program for people with (b) the state must serve all eligible individuals until it developmental disabilities. The program served 2,300 reaches its federally-approved participant cap, individuals and has a federally approved cap of 3,200. irrespective of whether the legislature has earmarked There were 2,500 persons wait listed for the state’s the necessary dollars. HCBS waiver program for individuals who are In February 2004, the court entered its judgment. The disabled or elderly; that program served 1,500 indi- court ordered the state to allocate waiver slots as soon viduals or 450 fewer than the federally-approved as they become available and determine an “cap.” The plaintiffs also noted that the average period individual’s eligibility for waiver services within 90 that persons with developmental disabilities must wait days. It also ordered that the state provide waiver ser- for services was worsening and might reach 60- vices within 90-days of finding that a person is eligible months. The plaintiffs argued that these facts were for waiver services. It also ordered the state to spend ample evidence that New Mexico did not furnish all funds appropriated for waiver services within the waiver services with reasonable promptness. The year appropriated. New Mexico advocates expect that plaintiffs also took the state to task for not properly 300 – 500 individuals will come off the waiting list as taking applications for HCB waiver services. Instead, a result of this decision. individuals are assigned to a “Central Registry” and eligibility is only determined once their name comes In September 2004, the plaintiffs filed a motion for the up. The state portrayed individuals on the Registry as court to hold the state in contempt. The plaintiffs argue having “applied to be considered” for waiver services that the state is violating the court’s order to offer rather than actual applicants. The plaintiffs argued this waiver services up to the federally approved practice violates Medicaid law. participant limit for each waiver program. In October 2004, the state responded, arguing that the plaintiffs In August 2003, the court granted the plaintiffs’ motion misunderstood the court’s February ruling and that the for summary judgment, ruling that the state had not state’s obligation to furnish waiver services goes only furnished waiver services with reasonable promptness. so far as the funds it has available. The state urged the However, the court decided that the Medicaid reason- court to dismiss the plaintiff’s new motion. able promptness requirement extends only so far as there were available funds and waiver slots but not 18.Ohio: Martin et al. v. Taft et al. Filed by Ohio Legal Rights Services (OLRS - the 22 Decision is at: http://laws.findlaw.com/10th/002154.html 17 Home and Community Services Litigation Status Report: December 27, 2004 state’s P&A agency) in 1989, this class action com- the implementation of the consent decree until plaint (89cv0362) alleges that Ohio violates Medicaid December 2008. A fairness hearing was scheduled to law as well as the ADA by failing to provide integrated take place in September 2004. residential services to all persons with developmental The proposed settlement unleashed a torrent of protest. disabilities eligible for them. In 1993 the court rejected Dozens of objections to the settlement were filed with the state’s motion to dismiss the ADA claim on the th the court over the summer. The objections to the set- basis of an 11 Amendment sovereign immunity de- tlement revolve around the proposed elimination of fense, holding that Congress, in this instance, had the ICF/MR services from the Ohio Medicaid program. authority to abrogate immunity. In 1998, the parties The objectors, many of whom are ICF/MR residents agreed to a motion to stay further district court pro- and their guardians, believe that this step will under- ceedings in the hope that an agreement could be mine their entitlement to these services under federal worked out to expand services. However, in July 2000, law. The objectors petitioned the court to decertify the OLRS filed a motion for partial summary judgment class, arguing that the agreement and the plaintiff asking the Court to find that the state is violating the attorneys do not adequately represent their interests. ADA integration mandate because its Medicaid waiver The high volume of objections led the court to cancel waiting list is not “moving at a reasonable pace.” the scheduled fairness hearing. In response, the state In September 2002, the Court ruled on various and the plaintiffs filed “points of clarification” con- motions. The Court denied the state’s motion to dis- cerning the agreement and, in October 2004 filed a miss on sovereign immunity grounds and upheld some memorandum in opposition to dissolving the class, of the plaintiffs’ claims. However, the Court turned instead urging the court to proceed with the fairness down the plaintiff motion for partial summary judg- hearing. The state and the plaintiffs contended that the ment. The Court urged the parties to settle the lawsuit, settlement maintains the ability of individuals to con- which has dragged on for more than a decade. tinue to reside in their current living arrangements but would clear the way for Ohio to come into compliance In June 2004, the parties announced that they had 24 arrived at a settlement agreement.23 The class affected with the ADA’s integration mandate. by this agreement includes: “[A]ll mentally retarded or More recently, additional plaintiff objectors have filed developmentally disabled Ohioans who are, or will be, motions to dissolve the class. The controversy con- in need of community housing and services which are cerning the proposed settlement has continued to normalized, home-like and integrated, and a subclass grow.25 On December 21, 2004, Governor Taft who, in addition to being members of the class, are or announced that the state was withdrawing its objec- will be, Medicaid recipients.” The agreement focuses tions to decertifying the class.26 If the class is dis- on the provision of community-integrated services to solved, the proposed settlement would be nullified. individuals who reside in state-operated residential The Taft Administration expressed its view that the centers, nursing homes, and large ICFs/MR. policy changes incorporated in the settlement Under the terms of the agreement, Governor Taft, in agreement are more properly addressed in the his FY 2006 and FY 2007 executive budget, agreed to legislative arena. propose “... the elimination of intermediate care 19.Oregon: Staley et al. v Kulongoski et al. facilities for the mentally retarded under the State of Ohio’s Medicaid [state] plan.” If the legislature Filed in January 2000, this complaint (00cv00078) approves legislation authorizing this action, the state alleged that the state violated federal Medicaid law and then will submit a waiver request to the U.S. the ADA by failing to furnish Medicaid long-term ser- Department of Health and Human Services that will vices to otherwise eligible individuals with develop- afford all ICF/MR residents the right to choose the mental disabilities with reasonable promptness. In setting in which they receive services. The agreement September 2000, the parties agreed to settle the law- also provides that the state will earmark HCBS waiver suit. The U.S. District Court for Oregon approved the slots to support the community transition of ICF/MR settlement agreement in December 2000. and nursing facility residents with developmental disabilities. The state also has agreed to survey state 24 Some of the materials filed by the state and plaintiffs are developmental center and ICF/MR residents to located at: olrs.ohio.gov/asp/olrs_MartinSettle.asp . 25 See olrs.ohio.gov/asp/pub_NewsNov04.asp#controversy for a determine the number who want to transition to the discussion of the controversy from the perspective of Ohio community. The court would retain jurisdiction over Legal Rights Services. Lawsuit materials also are located at: www.opra.org/. 23 The settlement agreement and associated press releases are 26 See: located at: olrs.ohio.gov/asp/olrs_MartinSettle.asp. odmrdd.state.oh.us/Includes/Press_Releases/MartinDecert.pdf 18 Home and Community Services Litigation Status Report: December 27, 2004

The settlement agreement was designed to implement preserves the network of support brokerages that the Universal Access Plan. The Plan provided that all Oregon created for individuals who receive support eligible adults would receive at least a basic level of services. The parties agreed that the modified supports. The parties agreed that the settlement would settlement was preferable to re-opening the litigation. include not only the named plaintiffs but also “all other In January 2004, the court gave its final approval to similarly-situated individuals with developmental the modified agreement because the affected class disabilities under the federal Medicaid program.” The members raised no objections. settlement extended to 2007 and provided that the state would increase community funding by a cumulative 20.Pennsylvania: Sabree et al. v. Richman total of $350 million. Under the agreement, the In May 2002, the Philadelphia-based Disability Law number of persons receiving “comprehensive services” Project and two private attorneys filed a class action (including 24-hour residential services) would grow by complaint (02-CV-03426) in the U.S. District Court for 50 per year over and above the number of individuals Eastern Pennsylvania against the Department of Public who receive such services due to emergencies. The Welfare on behalf of four individuals who contend that state also agreed to furnish comprehensive services to the state had improperly wait listed them for ICF/MR all individuals in crisis. The number of persons services. The complaint was filed in reaction to a pro- receiving “support services” (defined as “in-home and posed reduction of the dollars committed to reducing personal supports costing up to $20,000 per year”) Pennsylvania’s community waiting list. The lawsuit is would increase by 4,600 over the agreement’s six-year sponsored by the Pennsylvania Community Advocacy period. Also, the agreement called for making Coalition. The Sabree lawsuit is the fourth in Pennsyl- additional investments in system infrastructure. vania concerning individuals wait listed for services. In its 2001 session, the Oregon Legislature funded the The plaintiffs’ Sabree complaint was brief. It argued first two-years of the settlement. Also, to implement that Pennsylvania has not furnished ICF/MR services the plan, Oregon launched a new “self-directed support as required under its Medicaid state plan to eligible services” waiver program. But, Oregon experienced a individuals with reasonable promptness, in violation of steep drop in state revenues, leading to deep cuts in §1902(a)(10)(A) (by not making entitled ICF/MR ser- spending. In August 2002, the Oregon Advocacy Cen- vices available to all eligible persons) and §1902(a)(8) ter (the state’s P&A agency) warned that it was pre- of the Social Security Act. The plaintiffs sought class pared to return to court to seek relief under the mate- action certification. The proposed class would include rial breach provisions of the settlement if budget cut- “all Pennsylvanians with mental retardation living in backs led the state not to fund the agreement. In Febru- the community who are entitled to, in need of, but not ary 2003, the state imposed a moratorium on enroll- receiving appropriate residential and habilitative pro- ments in its waiver programs. By then, about 3,000 grams under the Medical Assistance program.” individuals were participating in the supports waiver. The state filed motions to dismiss the complaint and in In October 2003, the parties presented a modified set- opposition to class certification. The state argued that tlement agreement to the court. The modified agree- the complaint did not satisfy the test for bringing a ment recognized that Oregon’s severe budget crisis lawsuit under §1983 because there is no federally en- meant that the agreement’s timetable could not be forceable individual right to ICF/MR services in small followed. Under the modified agreement,27 the state community residences and the reasonable promptness was given until 2011 to fully implement the original requirement applies in the “aggregate” but not to indi- agreement. The pace of expansion of both viduals. In July 2002, the plaintiffs urged the Court to comprehensive and support services will be slower but deny the motion to dismiss, arguing that ICF/MR ser- the agreement still provides that by the time it ends all vices are an individual entitlement under federal law eligible individuals would receive at least support and citing several federal court decisions that declared services. The modified agreement provides for an reasonable promptness was an enforceable individual additional 500 persons to receive support services each right. The plaintiffs also argued that Congress had year through June 2007, when the number of persons affirmed the enforceability of these rights. served is expected to reach 5,122 individuals In January 2003, the district court dismissed the compared to 3,112 in June 2003. The agreement lawsuit, accepting the state’s arguments. The court provides that all eligible persons will receive support based its dismissal on: (a) its view that Medicaid law services by June 2009. The modified agreement also does not confer an individually enforceable right to 27 Information concerning the modified settlement agreement as services and, hence, the action does not meet the crite- available on the Oregon Advocacy Center’s website: ria for bringing a lawsuit under §1983. The court ruled www.oradvocacy.org/staley2003.htm. 19 Home and Community Services Litigation Status Report: December 27, 2004 that the Medicaid Act has an “aggregate” focus (e.g., People First. In March 2001, People First of Tennes- whether the state is following its overall plan) rather see filed another class action complaint (01cv00272), an “individual focus;” (b) the availability of a also in the U.S. District Court for Middle Tennessee. mechanism for individuals to appeal adverse decisions This complaint asserts that the state: (a) has failed to (the Fair Hearing process) and, thereby, an action provide ICF/MR or HCB waiver services with reason- cannot be brought under §1983, based on the Supreme able promptness; (b) violates the ADA by failing to Court’s Gonzaga decision; and, (c) in any case, the make reasonable modifications and accommodations court found that federal Medicaid law does not require so that individuals (including institutionalized persons) that a state furnish ICF/MR services in small commu- are served in the most integrated setting; (c) does not nity group homes, and, thus, the plaintiffs cannot comply with §1902(a)(10) of the Social Security Act assert a right to such services. The court concluded since it has not made ICF/MR or waiver services that the “individuals referenced [in the lawsuit] are available to all eligible persons; (d) has denied indi- merely beneficiaries, not persons entitled to privately viduals the right to apply for or be made aware of enforce the statute.” The court also concluded that only Medicaid services; (e) has discriminated against peo- the federal government could sue the state over the ple with disabilities by not permitting all otherwise operation of its Medicaid program. eligible persons to obtain services for which they are In January 2003, the plaintiffs appealed the dismissal entitled, in violation of the ADA; (f) violates §1902(a) rd (3) of the Social Security Act and the Due Process to the 3 Circuit Court (03-1226). Ilene Shane, director th of the Disabilities Law Project said, “We’re appealing Clause of the U.S. Constitution’s 14 Amendment by because we believe it’s not a correct decision. If this not providing individuals written notice of denial of decision were to be followed, it would reverse 30 years Medicaid services, thereby preventing them from of jurisprudence where people with disabilities have exercising their appeal rights; (g) has denied litigated their rights.” Several organizations filed individuals free choice in receiving HCB waiver or amicus briefs in support of the appeal, including ICF/MR services; and, (h) violates the Individuals with AARP, Arc US, Families USA, and others. A three- Disabilities Education Act by denying Medicaid judge panel heard oral arguments in September 2003. payment for services to which school-age children are entitled. In May 2004, the Circuit Court handed down a The complaint alleged that approximately 2,000 “precedential” opinion in this appeal.28 In a nutshell, persons with developmental disabilities were waiting the Circuit Court reversed the district court ruling. The for waiver services in Tennessee. The plaintiffs Circuit ruled that – the Gonzaga decision contend that the state has given insufficient attention to notwithstanding – federal Medicaid law conferred a growing backlog of people who need community individually enforceable rights under the Social Secu- services because most new resources are committed to rity Act provisions that were the basis of the lawsuit’s placing residents out of state-operated institutions to legal claims. The court reversed the district court comply with court orders in earlier institutional treat- decision. ment lawsuits (People First v. Clover Bottom, et. al On November 29, 2004, the plaintiffs filed an and United States of America v. State of Tennessee). amended complaint with the court, reasserting their Status. In May 2003, the presiding judge asked the right to receive ICF/MR services with reasonable parties to consider consolidating both cases. The court promptness. arranged for a mediator and halted further activity 21.Tennessee: Brown et al. v. The Tennessee pending the outcome of mediation. The court also Department of Mental Health and denied both sets of plaintiffs’ and the state’s motions Developmental Disabilities and Rukeyser & for summary judgment. People First of Tennessee v. Neal et al. In February 2004, the Court gave its provisional Brown. Filed in July 2000 by the state’s P&A agency, approval to separate settlement agreements in both this class action complaint (00cv00665) alleges that cases.29 These agreements are described below. A Tennessee has violated federal Medicaid law by not fairness hearing was held in April 2004 to hear furnishing ICF/MR or HCB waiver services with rea- objections to the agreements. In June 2004, the Court sonable promptness to otherwise eligible individuals gave its final approval to the agreements. with developmental disabilities. The complaint esti- mated that about 850 individuals were wait listed for Brown Settlement. Under the terms of this agreement, waiver services. the state has agreed to formulate and seek federal ap-

28 The opinion is at: ca3.uscourts.gov/opinarch/031226p.pdf 29 Both agreements are located at: www.tpainc.org/. 20 Home and Community Services Litigation Status Report: December 27, 2004 proval of a new Self-Determination HCBS waiver failed to “provide the plaintiffs and other Texans with program to serve individuals wait listed for services. mental retardation and developmental disabilities with The aim of the agreement is to eliminate or substan- community-based living options and services to which tially reduce the waiting list. The new waiver program they are legally entitled that meet their needs.” The would provide up to $30,000 in services to each person lawsuit asks the court to direct Texas to expand and designed to give individuals (or, their families, if Medicaid home and community-based waiver services. appropriate) latitude in selecting and directing their By way of background, THHSC is the Texas Medicaid services. This funding is to be supplemented, if neces- Agency; TDMHMR operates the state’s Medicaid sary, by additional short-term crisis and/or one-time home and community-based services (HCS) waiver diversion dollars to provide temporary additional ser- program for persons with mental retardation; TDHS vices. The agreement provides that the new program operates the Community Living Assistance and Sup- would serve 600 individuals in its first year of opera- port Services (CLASS) Medicaid waiver program for tion and an additional 900 persons in the second year. persons with developmental disabilities other than Beyond the second year, the parties will reach agree- mental retardation. Advocacy Inc., the state’s P&A ment concerning further expansion of the program to agency, filed the complaint. address unmet needs. The agreement directs the state to offer services through the new waiver program on a The complaint charges that about 17,500 people with priority basis to individuals who are in crisis or have mental retardation are wait listed for the HCS waiver urgent needs. In the event that a person’s needs cannot program (which presently serves about 4,600 indi- be met through the self-determination waiver, the viduals) and another 7,300 individuals have requested individual will have the option to choose services but not received CLASS waiver services (the program through another waiver program. serves about 1,800 individuals). The plaintiffs seek certification of a class that would include “all persons The agreement also provides for the further expansion eligible to receive Medicaid waiver services, who have of the state’s current HCBS waiver program. More- requested but not received waiver services with over, persons who remain on the waiting list are to reasonable promptness.” The class also would include receive $2,280 per year in “consumer-directed sup- 11,000 individuals served in ICFs/MR who “are eligi- port” funding. The agreement also commits the state to ble to be considered for the kind of residential services implementing a Medicaid targeted case management that will enable them [to] become more fully inte- program to specifically support individuals on the grated into the community.” This class is the largest waiting list. The agreement provides for additional proposed in a waiting list lawsuit to date. improvements in community services infrastructure. The complaint charges that the state is violating: (a) People First Settlement. This settlement agreement §1902(a)(10)(A) of the Social Security Act by failing acknowledges and complements the Brown settlement. to make ICF/MR-level services available in an ade- The focus of this agreement is to “assure that all Ten- quate amount, duration and scope to all eligible per- nessee citizens who might be eligible for waiver sons; (b) §1915(c)(2)(C) by failing to provide indi- services are given a reasonable opportunity to learn of viduals a choice between institutional and home and the availability of waiver services and to apply for community-based services; (c) §1902(a)(8) by (i) not them.” The state has agreed to conduct a public infor- allowing individuals to apply for waiver services and mation campaign to provide information to individuals instead wait listing them and (ii) not furnishing ser- who might be Medicaid-eligible regarding the waiver vices to eligible individuals with reasonable prompt- programs. The state also is to compile information ness; (d) the 14th Amendment to the U.S. Constitution concerning the number of individuals with mental by not affording individuals equal protection; (e) the retardation who are eligible for Medicaid waiver ser- Due Process Clause of the U.S. Constitution; (f) the vices but not receiving them. ADA and §504 of the Rehabilitation Act by failing to 22.Texas: McCarthy et al. v. Hawkins et al. provide services in the most integrated setting. The In September 2002, eleven individuals and The Arc of state filed a motion to dismiss. In March 2003, the Texas filed a class action complaint (02-cv-600) in the court granted the state’s motion to transfer the lawsuit United States District Court for Eastern Texas against to the Western District of Texas. (03-CV-231) the Commissioners of the Texas Health and Human In May 2003, the Western District court issued an Services Commission (THHSC), the Texas order that addressed eleven motions filed by both Department of Mental Health and Mental Retardation sides. First, the court denied the state’s motion to (TDMHMR) and the Texas Department of Human Ser- dismiss The Arc of Texas as a plaintiff in the litigation. vices (TDHS). The complaint charges that Texas has The court, however, granted the state’s motions to 21 Home and Community Services Litigation Status Report: December 27, 2004 dismiss the plaintiffs’ claims with respect to most September 2004, the state petitioned for the appeal to provisions of Medicaid law, including comparability, be heard en banc by the full Circuit Court. On HCBS waiver program freedom of choice, and reason- December 8, 2004, this petition was denied and the able promptness. With respect to these claims, the case remanded to the district court for further action. court held that states were authorized to limit the num- However, the state has advised the district court that it ber of persons who participate in a waiver program is weighing pursuing an appeal of the Circuit Court and, thus, individuals cannot assert an enforceable decision to the U.S. Supreme Court. right to such services once the waiver participant limit had been reached. But, the court turned down the 23.Utah: D.C. et al. v. Williams et al. state’s motion to dismiss the plaintiffs’ claims con- In December 2002, the Utah Disability Law Center cerning due process under Medicaid law and the U.S. (the state’s P&A) filed suit (02cv01395) against the Constitution as well as the ADA and §504 claims. The Utah Department of Health and the Division of Ser- court found that, with respect to these claims, the vices for People with Disabilities in the U.S. District plaintiffs had individually enforceable rights and, Court for Utah on behalf of nine individuals and the hence, could seek redress in federal court under the Arc of Utah challenging the wait listing of persons provisions of §1983. In this part of the decision, the with developmental disabilities for waiver services. court relied heavily on the Olmstead decision, al- The plaintiffs allege that wait listing violates federal though it noted that the fundamental alteration defense Medicaid law, the ADA, and §504. Class certification might stand as a substantial barrier to the plaintiffs’ is sought for roughly 1,300 individuals who have been ultimately prevailing. The court also turned down the found to have an immediate need for services but have state’s sovereign immunity claims. been wait listed. In June 2003, the state appealed the parts of the deci- Plaintiffs contend that the state has: (a) refused to pro- sion that ran against it to the 5th Circuit Court of vide medically necessary waiver services to individu- Appeals (03-50608), once again claiming that sover- als; (b) failed to operate its Medicaid program in the eign immunity insulates the state from lawsuits based best interest of recipients, as required in §1902(a)(19) on the ADA and §504. As a result, district court of the Social Security Act; (c) not operated its Medi- proceedings are stayed until the Circuit disposes of the caid program to assure that services are sufficient in state’s interlocutory appeal. The court allowed the U.S. amount, scope and duration; (d) violated §1915(c)(2) Department of Justice to intervene on behalf of the (C) by not making waiver services available to plaintiffs. In its brief, 30 USDOJ urged the court to turn individuals who qualify for ICF/MR services; (e) down the appeal, arguing that it is well-established that violated §1902(a)(8) of the Act by not making services states may be sued in federal court for alleged available with reasonable promptness; (f) violated the violations of both the ADA and §504. A coalition of ADA’s integration mandate by placing individuals at national organizations, including ADAPT, The Arc of risk of institutionalization; and, (g) violated §504 of the United States, the American Association of People the Rehabilitation Act. The plaintiffs seek declaratory with Disabilities and others, also petitioned the court and injunctive relief in the form of an order that the to file amici brief on behalf of the plaintiffs. The court state to develop a plan to serve wait listed individuals. heard oral arguments in April 2004. In January 2003, the state filed a motion to dismiss the In August 2004, the three-judge panel handed down a complaint, contending that: split 2-1 decision. This decision solely addressed the “ [the] plaintiffs lack standing because they have no relatively narrow issue of whether state officers are protected right to HCBS waiver services. Specifi- proper defendants in a lawsuit brought under Title II of cally, plaintiffs possess no protected right to HCBS 31 the ADA. Texas had argued that only public entities waiver services because of the upper limit [on the could be sued under Title II. The panel ruled that state number of participants] and other Medicaid limita- officers could be sued in their official capacity, a ruling tions placed on HCBS waiver services, and the sub- that is consistent with similar rulings in other cases. stantial discretion granted [the state] in administering The panel refused to hear the state’s arguments to and providing HCBS waiver services.” dismiss the remaining claims, deciding that such issues The state argued that, because federal law allows it to were not a proper subject in an interlocutory appeal. In limit the number of individuals served in its waiver 30 The brief is at: usdoj.gov/crt/briefs/mccarthy.pdf. program, people wait-listed for the program cannot 31 Opinion is at: have an enforceable right to waiver services. Since caselaw.lp.findlaw.com/data2/circs/5th/0350608pv2.pdf. For a they lack such a right, the state contended that the discussion of this decision, see: reasonable promptness requirement does not apply. healthlaw.org/pubs/courtwatch/200409.fifthcircuit.html 22 Home and Community Services Litigation Status Report: December 27, 2004

Also, absent a right to waiver services, the state argued foreign to the statutory and regulatory Medicaid that plaintiffs do not have standing to bring suit under scheme, and indeed are inimical to it in that they §1983. With respect to the plaintiffs’ claim that the establish additional unapproved barriers for otherwise state is violating §1915(c)(2)(C) by not giving eligible persons to obtain assistance to which they are individuals eligible for ICF/MR services a choice of entitled under federal law.” Especially at issue was a waiver services, the state argued that it is only June 1999 directive by the Department of Medical obligated to inform individuals of “feasible Services that restricted the circumstances when alternatives, if available under the waiver.” If services additional services (including residential services) are not available, then a “feasible alternative” does not would be provided. The directive limited new or exist. The state also asserted that the Supreme Court’s expanded services only when a person no longer can Olmstead ruling does not apply because “plaintiffs are remain in the family home due to caregiver incapacity not being held in institutional placements against their or other critical situations. The complaint argued that will, [and hence] the ADA and Rehabilitation Act are this and other policies led to impermissible wait listing inapplicable.” Lastly, the state argued that, in order to of persons for services for which they were otherwise serve all wait-listed individuals, it would be forced to eligible. In September 2001, the state agreed to change make a “fundamental alteration” by having to shift its policies so that individuals would receive all the funds away from other programs in order to meet the services that they have been determined to require. As needs of the plaintiffs. The state pointed out that ADA a result, the plaintiffs agreed to dismiss the lawsuit. regulations as well as the Olmstead decision “allows 25.Washington: The Arc of Washington State et states to resist modifications that entail a ‘fundamental al. v. Lyle Quasim et al. & Boyle et al. v. alteration’ of the state’s services and programs.” Braddock In March 2003, the plaintiffs filed a memorandum op- The Arc of Washington State. Filed in November posing the motion to dismiss. They contended that the 1999 in the U.S. District Court for Western HCBS waiver program is no different than any other Washington, this class action complaint (99cv5577) Medicaid service and, therefore, the state cannot charged that Washington violated Medicaid law and waitlist individuals. The plaintiffs also disputed the the ADA by failing to provide long-term services with state’s Olmstead interpretation, pointing out that other reasonable promptness to persons with developmental courts had found that the integration mandate applies disabilities. The complaint alleged that there are sev- to both individuals who are institutionalized and eral thousand individuals with developmental disabili- persons at risk of institutionalization. ties in need of Medicaid funded services but not In August 2003, the court addressed the pending receiving them and current Medicaid recipients who motions. It decided to grant class certification. How- could benefit from additional services. ever, the court threw out the plaintiffs’ Medicaid In rulings in this lawsuit, the court decided that: (a) claims, following the district court’s reasoning in the eligibility for ICF/MR services is not sufficient to Pennsylvania Sabree lawsuit that the Medicaid Act establish an entitlement to waiver services but (b) does not grant individually-enforceable rights based on Medicaid law requires services to be furnished with the Supreme Court’s Gonzaga decision. The court then reasonable promptness. In December 2000, the Court took up the state’s motion to dismiss the ADA and granted the state’s motion for summary judgment to §504 Rehabilitation Act claims. It rejected the state’s dismiss the plaintiffs’ ADA claims. The plaintiffs argument that such claims can be pursued only by claimed that the ADA requires that, if a state makes institutionalized persons and ruled against the motion waiver services available to some individuals, it must to dismiss the claims. It also rejected the state’s furnish services to all similarly situated individuals. sovereign immunity defense. Trial is scheduled for The Court ruled that the ADA cannot be the basis for March 2005. ordering a state to increase the number of individuals 24.Virginia: Quibuyen v. Allen and Smith who receive waiver services because such an order would constitute a “fundamental alteration.” Filed in December 2000 in the U.S. District Court for Virginia by a coalition of attorneys, this complaint In April 2001, the parties reached a settlement and sub- 32 alleged that the state impermissibly wait-listed mitted it to the court in August. The agreement individuals already enrolled in the state’s HCBS hinged on action by the Washington legislature to waiver program rather than furnishing the additional authorize $14 million in funding to expand services in services that they required including residential ser- FY 2003 and annualize these dollars to $24 million in vices. The complaint argued that Virginia imposed limits on services to waiver participants that “…are 32 The agreement is at arcwa.org/lawsuitsettlement1.htm. 23 Home and Community Services Litigation Status Report: December 27, 2004 future years. The legislature approved the first exclusively on the alleged problems that current installment. The agreement also called for the parties waiver participants have in accessing the full range of to identify additional dollars to serve more individuals CAP services. The proposed class is composed of all in the next biennium. Some 1,800 individuals were current or future CAP participants. expected to benefit from the agreement. Specifically, the complaint alleged that the state has: However, in December 2002, the court rejected the (a) violated §1902(a)(8) of the Social Security Act by settlement agreement.33 Washington Protection and not advising waiver participants of the availability of Advocacy Services (WPAS, which represents institu- CAP services, failing to instruct them on how to re- tionalized individuals in two other lawsuits) and quest such services and not approving or providing Columbia Legal Services (which represents individu- needed services; (b) violated the requirement that the als in the Boyle v. Braddock litigation described state put into place necessary safeguards to protect the below) objected to the settlement. Both parties argued health and welfare of participants; (c) failed to provide that the agreement did not assure that the class or arrange for appropriate assessments; (d) not fur- members (including individuals they represent) would nished necessary services with reasonable promptness; receive the services that they require. The court was (e) not permitted participants to exercise free choice of persuaded by these arguments and expressed providers; (f) failed to provide participants with ade- additional reservations about the settlement. As a quate written notice and an opportunity for a Fair result, the court rejected the settlement, dissolved the Hearing when their service requests are denied, class, and lifted its stay on proceedings. reduced or terminated; and, (g) deprived individuals of their property interest in Medicaid services without In June 2003, the court dismissed the lawsuit entirely, th following much the same reasoning upon which it dis- due process of law in violation of the 14 Amendment. missed the Boyle lawsuit. The court decided that The Proceedings in this case were stayed while the court Arc of Washington State did not have standing to bring weighed the settlement agreement in Arc of Washing - the lawsuit. In moving for dismissal, the state argued ton State v. Quasim. When the court rejected that set- that the case was no longer “ripe” for decision because tlement, it lifted the stay on proceedings. State officials the state was in the process of changing its waiver pro- declared to the court that waiver policies had changed gram. The court accepted this argument. Next, as it to make it clear that lack of funding “… is not a valid had in dismissing the Boyle lawsuit (see below), the reason to deny a needed service to someone on the … court decided that the plaintiffs had not exhausted their waiver.” They also declared that they had made administrative remedies. Finally, the court ruled that numerous other changes to waiver policies that ad- its intervening into how the state administers its pro- dressed issues raised by the plaintiffs. grams would cause “needless conflict with the state’s The state opposed class certification and raised other administration of its own regulatory scheme.” In July objections to the lawsuit. The state argued that it had 2003, the Arc of Washington appealed the dismissal to th already made in CAP in response to a CMS review the 9 Circuit (03-35605). The parties completed the that addressed the plaintiffs’ issues. Also, the state submission of briefs to the Circuit in February 2004. In asserted that it was in the process of converting CAP July 2004, the state moved that the Circuit dismiss the to four separate waiver programs and, hence, appeal. This case has been consolidated with Boyle for certifying the class with respect to the CAP program purposes of oral argument. would be inappropriate.34 The state also argued that Boyle v. Braddock. This class action complaint there is no right of private action to enforce individual (01cv5687) was filed by Columbia Legal Services in claims for Medicaid services in any event. Finally, December 2001 in the U.S. District Court for Western because each person’s situation should be addressed Washington. The complaint alleges that Washington individually, the state contended that class certification has failed to furnish or make available the full range of would be inappropriate. services offered through the Community Alternatives In April 2003, the court dismissed the case after deny- (HCBS waiver) Program (CAP) to program ing class certification. The court concluded that the participants. The plaintiffs cited examples of issues in question were the proper subject of state ad- individuals not receiving necessary services or not ministrative procedures, which also provide for state being informed of the array of services offered in the judicial review in Washington. The plaintiffs countered program. This complaint somewhat paralleled the Arc that the issues in dispute were more properly addressed of Washington State v. Quasim complaint but focused in a class action context and they appealed the dismissal (03-35312) to the 9th Circuit Court. This case 33 The Court’s decision is located at arcwa.org/arc_lawsuit_12- 2-02.htm. 34 CMS has since approved this change. 24 Home and Community Services Litigation Status Report: December 27, 2004 has been consolidated with Arc of Washington State for filed by nursing facility residents who want to be in the purposes of oral argument. community as well as persons with disabilities are at Proceedings on both Arc of Washington State and risk of nursing facility placement due to the lack of Boyle have been suspended for the time being while home and community services. the parties explore mediation. 1. Florida: Dubois et al. v. Rhonda Medows et al. 26.West Virginia: Benjamin H. et al. v. Ohl In April 2003, three individuals with traumatic brain or This class action complaint (99-0338) was filed in spinal cord injuries filed a class action complaint (03- April 1999 in the U.S. District Court for the Southern CV-107) in the U.S. District Court for Northern Flor- District of West Virginia and alleged that West Virginia ida against the Florida Agency for Health Care violated federal Medicaid law and the ADA by failing Administration and the Florida Department of Health to provide Medicaid long-term services with reason- alleging that the state has violated Medicaid law and able promptness to eligible individuals. In July 1999, the ADA by failing to provide them Medicaid-funded the court quickly granted the plaintiffs’ motion for a long-term services in the community. These individu- preliminary injunction based on its finding that the als had sought but not received community services plaintiffs were likely to prevail at trial based solely on through Florida’s Brain or Spinal Cord Injury (BSCI) 35 the requirements of Medicaid law. The state was HCBS waiver program. The lawsuit alleges that there ordered to develop a plan that would eliminate waiting are 226 (and possibly more) individuals impermissibly lists; establish reasonable time frames for placing wait-listed for services. One of the plaintiffs resides in persons in the waiver program; allow persons to a nursing facility; the other two plaintiffs are in the exercise their freedom of choice in selecting community but at risk of institutionalization. The institutional or home based care; and, develop written plaintiffs are represented by Southern Legal Counsel, a policies to inform persons of the eligibility process Gainesville non-profit public interest law firm and along with policies and forms to afford proper notice National Health Law Project attorneys.37 and an opportunity for a fair hearing when applications for ICF/MR level services are denied or not acted on Thee plaintiffs point out that they all have sought but with reasonable promptness. been denied BSCI services due to lack of funds even though it is alleged that only a little more than one-half In March 2000, the court approved agreements be- of the program’s approved slots are used. As a result, tween the parties to address the topics spelled out in 36 they have been unnecessarily segregated in nursing the preliminary injunction. West Virginia agreed to homes or put at imminent risk of segregation. The increase the number of individuals with developmental complaint charges that Florida has violated: (a) the disabilities who receive HCB waiver services by 875 ADA for failing to provide individuals with disabilities over a five-year period. The parties also agreed on re- services in the most integrated setting and not vised procedures concerning service applications and administering its waiting list so that it moves at a giving individuals proper notice concerning the reasonable pace; (b) §504 of the Rehabilitation Act; (c) disposition of their applications. The state also submit- §1902(a)(8) of the Social Security Act for not making ted an application to HCFA to renew its HCBS waiver home and community services available with program, incorporating policy changes based required reasonable promptness; (d) §1915(c)(2)(C) for failing by the agreement and boosting the number of persons to give individuals the choice between institutional and served. This request was approved in December 2000. HCB waiver services; and, (e) the U.S. Constitution The court dismissed this case in August 2002 but and Medicaid law by not affording the plaintiffs the retained jurisdiction to enforce its orders. opportunity to apply for services. Class certification D. Lawsuits Involving Individuals with also was sought. Other Disabilities In May 2003, the state moved to dismiss the lawsuit, In addition to the lawsuits concerning individuals with contending that, although its federally-approved HCBS developmental disabilities, there also have been sev- waiver application had 300 “slots,” the state had the eral lawsuits filed on behalf of individuals with other latitude not to use all of them if appropriations were disabilities who also are seeking community services. not sufficient. In addition, the state argued on various In general, the legal issues raised in these lawsuits grounds that, even if slots were available, it was not parallel those in lawsuits concerning persons with necessarily the case that the plaintiffs would be next in developmental disabilities. These lawsuits have been line to receive services. The state also objected to the 35 The decision is at: healthlaw.org/pubs/199907benjamin.html 37 Background information concerning the suit is at: 36 The settlement order is at healthlaw.org/docs/benh_order.pdf. newswise.com/articles/2003/4/SLC.PIL.html 25 Home and Community Services Litigation Status Report: December 27, 2004 plaintiffs’ ADA and Rehabilitation Act claims. failure to furnish services in the most integrated In June 2003, the plaintiffs opposed the state’s motion settings and its utilization of discriminatory criteria to dismiss. The plaintiffs argued that the state’s motion and methods of administration in its programs; (b) was flawed in several respects, including raising issues §1915(c)(2)(C) of the Social Security Act for failing to that more properly should be addressed at trial. The provide timely and adequate notice to individuals who plaintiffs pointed out that their claims might be might benefit from waiver services and provide remedied if the state had a comprehensive working individuals freedom of choice between institutional plan for placing individuals in the community and a and waiver services; and, (c) §1902(a)(8) of the Social waiting list that moved at a reasonable pace, as Security Act for failing to promptly provide provided in the Olmstead decision. community services to individuals. In March 2004, the court ruled on various motions. In April 2003, the state answered the complaint, Specifically, the court denied the state’s motion to dis- denying that its policies violated the plaintiffs’ rights. miss, finding that each of the plaintiffs’ claims had The state also argued that the complaint did not state a potential merit. The court also approved class certifica- claim for relief that the court could grant. tion, defining the class as: “All individuals with trau- In August 2004, the plaintiffs filed a class certification matic brain or spinal cord injuries who the state has motion. The proposed class would include all persons already determined or will determine to be eligible to with physical disabilities who: (1) are qualified to re- receive BSCI Waiver Program Services and have not ceive long-term health-care and supportive services received such services.” under Medicaid and state-funded programs adminis- The lawsuit is being mediated. On December 23, 2004, tered by the [state], and, (2) would prefer, and are the parties reported to the court that they expected to qualified (with or without reasonable accommoda- finalize a settlement agreement in February 2005. tions) to receive such services in a more integrated setting than a nursing home … but (3) are either 2. Georgia: Birdsong et al. v. Perdue et al. unnecessarily confined and segregated in nursing In January 2003, private attorneys filed a class action homes, or on community-based services waiting lists complaint (03-CV-288) in the U.S. District Court for that do not move at a reasonable pace.” Northern Georgia on behalf of individuals with physi- Also in August, the state filed a motion to dismiss the cal disabilities who reside in nursing homes or are at plaintiffs’ Medicaid Act and Title II ADA claims. With risk of nursing home placement if not furnished com- respect to the Medicaid Act claims, the state argued munity services. The plaintiffs contend that Georgia’s that, based on the Supreme Court’s Gonzaga decision, policies cause them to be unnecessarily segregated the plaintiffs do not have standing because the when they could be supported in the community. The Medicaid Act does not create individually enforceable complaint alleges that “[i]n the three and one-half rights. With regard to the ADA, the state contended years since the Olmstead v. L.C. decision, the State has that Congress exceeded its authority when it enacted made no significant effort to operate its long-term care Title II and thus its provisions cannot be applied to the services in an even-handed manner so that persons administration of the state’s waiver programs. This who need [home and community-based] services have challenge to the constitutionality of Title II has this option.” The Olmstead decision, of course, prompted the U.S. Department of Justice to intervene revolved around the unnecessary institutionalization of as an amicus. Georgians with disabilities. In September 2004, the plaintiffs responded to the The plaintiffs are persons who have severe physical state’s motion to dismiss the Medicaid Act and ADA disabilities and, except in one instance, reside in nurs- Title II claims. They argued that the Medicaid Act pro- ing facilities. They assert that, with appropriate sup- visions at issue clearly include “rights creating” lan- ports, they could live in the community. Georgia oper- guage and, therefore, satisfy the Supreme Court’s tests ates two HCBS waiver programs – the Community for bringing action under §1983. They also contended Care Services Program and the Independent Care that Congress did not exceed its authority in enacting Waiver Program – for persons with disabilities. The Title II and, thus, Title II is applicable to Medicaid plaintiffs are wait listed for these programs; however, services. the waiting lists are quite lengthy. In their complaint, the plaintiffs contend that Georgia spends about five 3. Indiana: Inch et. al. v. Humphrey and Griffin times as much on institutional as community services. In July 2000, the Indiana Civil Liberties Union filed The plaintiffs allege that Georgia’s policies violate: (a) this class action lawsuit in Marion County Superior ADA and §504 of the Rehabilitation due to the state’s Court on behalf of individuals with disabilities who 26 Home and Community Services Litigation Status Report: December 27, 2004 reside in nursing homes or who are at risk of nursing These lawsuits are similar. Both were filed in response home placement but want to live in integrated settings to state actions narrowing eligibility for Medicaid with services from Indiana’s HCB waiver program for long-term services in order to reduce state spending to individuals who are elderly or disabled. The Indiana address budget deficits. In each instance, the state Family and Social Services Administration is the raised the threshold level of assessed functional im- defendant. The lawsuit alleged that 2,000 individuals pairment necessary to qualify for Medicaid long-term with disabilities are either on waiting lists for commu- services. This caused individuals with disabilities and nity services or suffering “unjustified institutional older persons to lose eligibility. Predominantly but not isolation” and, hence, experiencing discrimination pro- exclusively, the persons affected by these actions are hibited by the ADA. The complaint pointed out that supported in the community through the HCBS waiver Indiana spends less than 9% of its elderly and disabled program rather than nursing facilities. In both cases, budget to support individuals in integrated home and the plaintiffs challenge whether the state’s modified community settings. It further alleged that new standards for determining eligibility are reasonable enrollments in the state’s community programs had under the provisions of §1902(a)(17) of the Social been closed for two years and new applications were Security Act and whether the state properly terminated not being taken. The plaintiffs argued that people in the services of these individuals. In both cases, federal nursing home facilities or at risk of nursing home courts are being asked to rollback the cuts. placement must be given the choice of waiver services Oregon. Eligibility for long-term services has been rather than de facto limited to institutional services. based on an assessment mechanism. There are 17 The plaintiffs sought preliminary and permanent “levels” of assessed need. In February 2003, as part of injunctions to enjoin the state from continuing its efforts to balance its budget, the state cut off ser- violations of the ADA and direct that Medicaid eligible vices to individuals who qualified for long-term ser- individuals be offered community services. vices at lower levels of assessed need. This action In June 2003, the parties arrived at a settlement that caused several thousand individuals to potentially lose applies to all nursing facility residents eligible for their eligibility; most of whom were receiving waiver Indiana’s HCBS waiver program and individuals at services. The state, however, provided that these imminent risk of nursing facility placement. The state individuals could ask for a reassessment. This resulted has agreed to expand the waiver program to serve an in services being restored for many but not all indi- additional 3,000 individuals and provide more viduals. In the budget for the current biennium, the information about community services to nursing Legislature directed that services be resumed for indi- facility residents. This settlement reflects Indiana’s viduals in all but six levels of need. However, the net plan to reduce the use of nursing facilities in favor of effect of these changes still was to narrow eligibility expanding community services. In addition, the for Medicaid long-term services and cause individuals “settlement sets out specific criteria for assessing the to lose services. In implementing these cuts, the community support needs of class members and Oregon Department of Human Services amended its requires the state to develop a quality assurance plan HCBS waiver program to incorporate these changes. for completing these assessments and discharges.” In response to the eligibility reduction, the Oregon (Priaulx 2003) Advocacy Center filed suit in February 2003 in the In December 2000, a second class action complaint U.S. District Court for Oregon (03-227) to enjoin the was filed in St. Joseph County Superior Court (South state from terminating benefits to affected individuals. Bend) on behalf of individuals with developmental OAC argued that the state’s assessment process was disabilities placed in nursing facilities due to the lack flawed and, consequently, failed to constitute a of HCB waiver services. In September 2004, this reasonable standard for determining eligibility under lawsuit was settled. The state agreed to provide waiver federal law. OAC also argued that the state had not services to 450 nursing facility residents with properly notified individuals that their eligibility developmental disabilities over the next eight years. It would be terminated. In June 2003, the court turned is estimated that there are about 1,900 nursing facility down the request for a preliminary injunction. The residents with developmental disabilities statewide. In court reasoned that Oregon was free to reduce its addition, the state agreed to meet face-to-face with the HCBS waiver program because it is optional. In addi- guardians of these residents to provide them with tion, relying on the Gonzaga decision, the court information about community alternatives. decided that affected individuals did not have an 4. Kentucky: Kerr et al. v. Holsinger et al. enforceable right to services. Immediately, OAC ap- Oregon: Watson et al. v. Weeks et al.

27 Home and Community Services Litigation Status Report: December 27, 2004 pealed the denial of the injunction to the 9th Circuit changes, it might have no other choice but to eliminate Court (03-35545).38 its HCBS waiver program. The magistrate judge assigned the case prepared In November 2003, the plaintiffs filed their motion for “Findings and Recommendations,” recommending that class certification and, in early December, responded the court dismiss all the plaintiff motions, based on the to the state’s motion to dismiss. The plaintiffs disputed optional nature of waiver services and the the state’s contention that the Medicaid Act does not interpretation that individuals do not have individually confer enforceable rights, citing 6th Circuit and other enforceable rights for Medicaid services. In June 2004, cases that ran counter to the state’s arguments. the district court accepted the magistrate judge’s In early January 2004, newly elected Governor Ernie findings and recommendations, dismissed the plaintiff Fletcher signed an emergency order to reverse many of motions and granted the state’s motion to dismiss. the changes that triggered the lawsuit. While encour- Meantime, because the state’s budget picture has aged by this step, the plaintiffs contended that the state brightened somewhat, in April 2004 the Oregon had not gone far enough. As a consequence, they Legislature approved restoring additional two levels of continued to press their case. In January 2004, the assessed need, effective July 2004. In August 2004, th plaintiffs moved for a preliminary injunction, asking the plaintiffs appealed the dismissal to the 9 Circuit the court to require the state to roll its policies back to (04-35704). those that were in effect prior to the April 2003 Kentucky. In January 2003, Kentucky made $250 change. In February 2004, the state filed a motion million in Medicaid cuts in order to balance its budget. opposing the injunction and submitted a proposed Among those cuts was an action to eliminate both order to the court to dismiss the lawsuit. nursing home and waiver services for individuals who In March 2004, the court ruled on the state’s motion to had a “low intensity level of care.” This cut took effect dismiss and the plaintiffs’ motion for a preliminary in April 2003 and was expected to reduce Medicaid injunction. The court denied the state’s motion, spending by $41 million. finding that federal Medicaid law provides the In October 2003, Kentucky Legal Services Programs plaintiffs with individually enforceable rights. The filed a class action complaint (03-68) in the U.S. Dis- court agreed with the plaintiffs’ contention that Medi- trict Court for Eastern Kentucky seeking preliminary caid’s comparability requirement (§1902(a)(10) (A) of and permanent injunctions to rollback the eligibility the Social Security Act) and statutory provisions con- change.39 Attorneys with the National Senior Citizens cerning the HCBS waiver program require that a state Law Center are assisting in this litigation. KLS alleges must make waiver services available to individuals that the change in program eligibility criteria resulted who qualify for nursing facility services. The court in about 200 nursing facility residents and 1,200 also agreed with the plaintiffs that “there is no prece- HCBS waiver participants who are elderly and/or dent that a state can alter eligibility for a mandatory disabled losing their eligibility. In addition, about 600 Medicaid service simply because the state does not waiver applicants have been denied services as a result wish to pay the price required to provide the service to of the change. As in the Oregon lawsuit, the plaintiffs all eligible recipients.” The court further observed that challenge the state’s method of assessing individuals “reducing benefits to qualified recipients by and whether the state’s procedures for terminating manipulating eligibility standards in order to make up benefits met Medicaid and Constitutional for budget deficits is unreasonable and inconsistent requirements. The claims in this lawsuit roughly with Medicaid objectives because it exposes recipients parallel those in the Oregon litigation. to ‘whimsical and arbitrary’ decisions …” The court In October 2003, the state moved to dismiss. In its then granted the plaintiffs’ motion for a preliminary motion, the state argued that the changes it made were injunction and ordered the immediate restoration of benefits to all persons who had lost them. In a separate well within the level of discretion afforded states in 40 their operation of the Medicaid program. In addition, order, the court also granted class certification. the state argued that the plaintiffs lack standing to 40 A related issue arose concerning the eligibility of persons bring suit in federal court because the Medicaid Act with mental disabilities who are served through the state’s does not confer enforceable rights. The state also “aged and disabled” waiver program. Reportedly, state officials contended that, if it were required to roll back the began to enforce a longstanding rule that such individuals cannot be served in the “aged and disabled” waiver program but 38 Both the state and OAC briefs are located at: must seek services through the state’s HCBS waiver program nsclc.org/news/03/07/appeal_watson.htm for persons with developmental disabilities. The lack of access 39 Various materials, including the original complaint can be to that program is the subject of the Michelle P. lawsuit dis- accessed at: nsclc.org/news/04/april/kentucky_preliminj.htm. cussed above. 28 Home and Community Services Litigation Status Report: December 27, 2004

In June 2004, the court gave its preliminary approval ties who are receiving Medicaid-funded services in to a settlement agreement that the parties had worked nursing facilities, or who are at imminent risk of being out. Under the agreement, the State committed to admitted to a nursing facility to receive such services, adopt revised regulations concerning eligibility for who have applied for Medicaid-funded services in the nursing facility and waiver services. The plaintiff at- community through one or more Medicaid-funded torney characterized these rules as more liberal than home and community-based waivers … , who have not the rules that had been in place prior to the April 2003 been determined ineligible for such community-based change that triggered the litigation. The revised rules services, and who have not received such Medicaid- also will permit the continuation of services to persons funded community-based services.” In the agreement, with mental retardation. The settlement also provides the state committed to eliminate the waiting list for for a re-evaluation of persons who were denied ser- waiver services by 2005. vices under the previous rules. In August 2004, the The agreement was later modified to delay the addition Court gave final approval to the settlement agreement of entitled personal care services to the Medicaid state but decided to retain jurisdiction in the case for a plan until July 2003; in exchange, the state agreed to period of two years. add 500 more “slots” to its three HCBS waiver pro- 5. Louisiana: Barthelemy et al. v. Louisiana grams for adults with disabilities. The Louisiana Nurs- Department of Health and Hospitals ing Home Association objected to the personal care In April 2000, five individuals (two with developmen- coverage but the court turned the objection aside. As a tal disabilities and three with physical disabilities) result of the expansion of HCBS waiver services, along with Resources for Independent Living filed a waiting lists have been reduced substantially. complaint (00cv01083) in the U.S. District Court for In 2003, DHH submitted a $38 million request to the Eastern Louisiana against the Louisiana Department of Louisiana legislature to fund the addition of personal Health and Hospitals (DHH) alleging that the state was care to the Medicaid state plan. But, the legislature violating the ADA and §504 of the Rehabilitation Act balked at this request. Instead, it appropriated $28 by restricting the availability of services to million, instructed DHH to delay adding personal care “unnecessarily segregated settings” (i.e., nursing facili- to the Medicaid state plan, and directed state officials ties). The plaintiffs with non-developmental disabili- to return to court to seek a modification of the ties sued for access to the state’s elderly and disabled settlement agreement to further expand HCBS waiver and/or personal care attendant waiver programs; the programs in lieu of adding personal care to the state plaintiffs with cognitive disabilities wanted access to plan. The Legislature expressed concern about the Louisiana’s developmental disabilities and personal long-range costs of adding a new entitlement to the care attendant waiver programs. The plaintiffs charged state’s Medicaid program. The plaintiffs warned that that Louisiana spends “90% of its Medicaid funds on they would regard failure to implement this part of the institutional services.” They asked the Court to: 1) settlement as a material breach. grant class action status to Louisianans with disabili- In July 2003, as directed by the legislature, the state ties who are unnecessarily institutionalized and 2) find filed a motion to amend the settlement agreement. The the state in violation of the ADA and §504 of the state proposed to expand waiver programs to serve an Rehabilitation Act. additional 2,000 individuals instead of adding personal In August 2001, DHH Secretary David Hood unveiled care coverage. In support, the state pointed out that a settlement agreement that provided for boosting state more class members would qualify for waiver services spending by $118 million over a four year period to than the state plan service because the waiver program provide community services to 1,700 more individuals has higher income eligibility thresholds. Also, the state and reduce waiting time for services to 90 days or less. argued that class members could access a wider range The settlement plan submitted by DHH, agreed to by of services through the waiver program. The state the plaintiffs and approved by the court addressed four argued that the proposed expansion was sufficient to broad areas: (a) reducing the waiting time for serve all remaining individuals waiting for services community-based services; (b) supporting people to and individuals who would be likely to seek services make informed choices about service options; (c) in the near to mid-term. Lastly, the state argued that adding a Medicaid state plan personal care services the legislature has shown a willingness to underwrite option; and, (d) instituting individualized long-term the costs of expanded waiver services and thereby care assessments through a new single point of entry using the waiver program to meet the needs of class system. The class certified for purposes of the members would provide stable funding. agreement is composed of: “all persons with disabili-

29 Home and Community Services Litigation Status Report: December 27, 2004

The Louisiana Advocacy Center (LAC), which repre- to court in July 2004 to demand that the state establish sents the plaintiffs, opposed changing the agreement. timelines for prompt action on requests for personal The plaintiffs argued that – absent an entitled personal care services. In August 2004, the state opposed the care benefit – there was a danger that waiting lists plaintiff motion that the court intervene to enforce the would reemerge in Louisiana. In August 2003, LAC agreement. The state argued that it had done all that filed a motion asking the court to enforce the was possible to expand services and court intervention settlement agreement. In its motion, LAC argued that was not appropriate. Later that month, the court there had been no material change that justified a refused to intervene. change in the agreement. The Center pointed out that 6. Michigan: Eager et al. v. Granholm et al. the coverage of personal care services had been ex- pressly included in the settlement agreement to ensure In March, 2002, six individuals and five advocacy that individuals have immediate access to services organizations filed a lawsuit (5-02-00044-DWM) in whether or not waiver slots were available. LAC also the U.S. District Court for Western Michigan seeking pointed out that the personal care benefit would to overturn the state’s freeze on enrollments to the provide more hours per week of services than were MIChoice Program, a Medicaid home and community- available through the waiver program and, based waiver program for persons with disabilities and furthermore, individuals served in the waiver program seniors otherwise eligible for nursing facility services. could also access state plan personal care benefits. The approved capacity of the MIChoice program is LAC urged the court to order the state to implement 15,000 individuals. As a result of an October 2001 state plan personal care services as rapidly as possible. freeze on enrollments, the plaintiffs contended that fewer than 11,000 individuals were participating in the National AARP filed an amicus brief in support of the program even though service demand remains high. LAC motion. In the meantime, nursing home interests The lawsuit was filed by Michigan Protection and filed a motion to intervene in support of the state’s Advocacy Services and the Michigan Poverty Law proposed modification, expressing concern that the Program with the support of a coalition of disability activating the personal care option might put their advocacy organizations. businesses at risk. In August 2003, the state replied to the plaintiff motion in opposition. The state reiterated The plaintiffs advanced two major legal claims. The that it was not seeking to escape its obligations but first is that the freeze on enrollments violates the ADA only to alter how services are provided. by forcing individuals to seek nursing facility care rather than receive services in the most integrated In September 2003, the court denied the state’s motion setting. The second claim was that Michigan – under to modify the settlement, directed it to comply with the the terms of the waiver program as approved – cannot settlement order and rejected the nursing home request close enrollments so long as fewer than 15,000 indi- to intervene. However, the court turned down the viduals participate. The plaintiffs also claim that plaintiffs’ request that the court enforce the settlement Michigan did not provide individuals a choice between agreement. DHH affirmed it would comply with the institutional and waiver services, not maintain a proper court order. The Legislature then gave DHH officials waiting list for the MIChoice program, and violated the go ahead to submit a Medicaid plan amendment to the reasonable promptness requirement. The add personal care but directed that DHH return to the proceedings were put on hold to give newly-elected Legislature for approval in the event that CMS Governor Granholm’s administration time to formulate required modifications in the plan amendment. its position concerning the litigation. The Governor After encountering some initial difficulties securing subsequently announced that she was reopening CMS approval of the plan amendment, the state got the program enrollments to a limited extent. go ahead to offer personal care in January 2004.41 State In December 2003, the parties submitted a proposed officials expected that 2,300 individuals would receive stipulated settlement agreement to the court. In part, personal care by June 2004. Reportedly, within three the agreement provides that the state will: (a) provide weeks of the program’s launch, the state had received for no less than $100 million in funding for MIChoice 1,000 applications.42 However, due to delays in in the current fiscal year, ask the legislature to approve processing applications, the Advocacy Center returned a change in Medicaid policy that would permit an additional $25 million to be allocated to MI Choice, 41 A press release announcing the initiation of the program is at: and pursue additional changes that might result in yet dhh.state.la.us/news.asp?Detail=216 42 another $25 million to be allocated to the program; (b) For more information concerning the “successes and distribute informational materials concerning MI challenges” stemming from this lawsuit, please go to advocacyla.org/whatsnew.html. Choice services to individuals receiving Medicaid 30 Home and Community Services Litigation Status Report: December 27, 2004 long-term care services and make them available to listed for the New Hampshire’s Acquired Brain Disor- future applicants; (c) ensure that individuals choosing der (ABD) “model” HCBS waiver program filed a between waiver and institutional services are provided class action complaint (99-cv-558) in the U.S. District information concerning the full-range of available Court for New Hampshire to gain access to community long-term services, including MI Choice; (d) adopt services. The plaintiffs alleged that the program is uniform medical/functional eligibility criteria that operated with “inadequate, capped funding through the apply equally to waiver and nursing facility services; HCB/ABI program, arbitrary limits [on] home health (e) develop procedures concerning the maintenance and other HCB services, and lack of coordination and utilization of waiting lists and obtain CMS between the various public and private agencies which approval for these procedures; (f) seek additional administer the Medicaid program.” funding for transitional services to individuals moving The plaintiffs argued that “states must ensure that ser- from nursing facilities to the community; and, (g) vices will be provided in a manner consistent with the establish a Medicaid Long Term Care Task Force in best interests of the recipients” and that a state’s Medi- order to develop options to expand the availability of caid program must be “sufficient in amount duration, home and community services and improve long-term and scope to reasonably achieve its purpose.” More- services. In February 2004, the Court approved the over, they argued that the state’s “administration of the settlement agreement. HCB/ABI program, which results in a failure to pro- 7. Mississippi: Billy A. and Mississippi vide [HCB] services to eligible Medicaid recipients in Coalition for Citizens with Disabilities v. a timely manner, defeats the purpose of the program Lewis-Payton et al. and is insufficient in the amount, duration, and scope In May 2002, the Coalition for Citizens with Disabili- to reasonably achieve its purpose.” The plaintiffs made ties filed a class action complaint (02cv00475) on be- additional claims, including: 1) failure to provide half of the five nursing facility residents in the U.S. needed Medicaid services in a “reasonably prompt District Court for Southern Mississippi alleging that manner;” 2) violation of the ADA by making mainly Mississippi’s policies lead to the unnecessary facility-based services available to eligible persons; th segregation of individuals with disabilities in nursing and, 3) the due process clause of the 14 Amendment homes by not making home and community services as well as other provisions of Medicaid law. available to them. The named defendants are the In October 2001, the court handed down a decision state’s Division of Medicaid and the Departments of concerning both parties’ motions for summary judg- Human Services and Rehabilitation Services. Plaintiffs ment.43 It dismissed two of the seven counts in the allege that the state is violating: (a) the ADA and §504 complaint, ruled in the plaintiffs’ favor on a third and of the Rehabilitation Act by failing to provide decided a fourth was moot. However, the court de- Medicaid services in the most integrated setting; (b) ferred judgment on three central issues: (a) whether the Medicaid Act by not informing individuals who wait listing individuals violates Medicaid law con- qualify for nursing facility services of feasible alter- cerning reasonable promptness; (b) whether New natives to institutionalization and thereby denying Hampshire’s policies are at odds with the ADA; and, them the freedom to choose home and community ser- (c) whether the state’s policies violate §504 of the vices as an alternative; (c) §1902(a)(8) of the Social Rehabilitation Act. The court rejected the state’s mo- Security Act by not providing services with reasonable tion to dismiss on 11th Amendment grounds. promptness; and, (d) §1902(a)(30)(A) by not making In December 2001, the court entered a final order. It payments for Medicaid services that are “consistent found that HCBS waiver services must be furnished with efficiency, economy, and quality of care and are with reasonable promptness and that individuals are sufficient to enlist enough providers.” (Priaulx, 2003). entitled to model waiver services until 200 persons are The court granted class certification in September served. Federal law provides that the Secretary of 2003. Trial was scheduled to begin in October 2004. Health and Human Services may not limit model However, the parties informed the court that they have waiver programs to fewer than 200 individuals. The arrived at a settlement agreement. The details of this order incorporated a stipulated agreement between the agreement, which has not been submitted to the court, parties that eligible individuals be enrolled in the pro- are not available. gram within twelve months of their date of eligibility. 8. New Hampshire: Bryson et al. v. Shumway The state appealed the district court ruling to the 1st and Fox Circuit Court of Appeals. In October 2002, the Circuit In December 1999, two persons with neurological 43 disabilities who reside in nursing facilities but are wait This decision is found at: nhd.uscourts.gov/ (by searching “opinions” for keyword “Bryson”). 31 Home and Community Services Litigation Status Report: December 27, 2004 ruled that the district court erred in its interpretation of to “medically needy” individuals. Washington State §1915(c)(10) of the Social Security Act.44 The district limits eligibility for this program to individuals who court interpreted the statute to require that a model are “categorically needy,” including persons whose waiver program must serve no fewer than 200 indi- income is less than 300% of the federal SSI benefit. viduals. The Circuit found that this provision instead Medically needy individuals (e.g., persons whose barred the Secretary of HHS from denying a state’s income exceeds categorically needy levels but who request to serve up to 200 individuals but that a state may spend down their income to qualify for Medicaid) could limit the number of individuals in a model may not participate in this program but they are eligi- waiver to fewer persons. The Circuit vacated the dis- ble for nursing facility services. In this instance, the trict court order that New Hampshire expand its pro- plaintiff had been participating in the COPES program gram to accommodate at least 200 individuals in its but a slight increase in his income caused his status to program. But, the Circuit also made it clear that the change to medically needy. The state initiated action to state was obligated to furnish waiver services to indi- terminate him from the COPES program and sug- viduals with reasonable promptness up to the limit it gested that the plaintiff seek care in a nursing facility. had established, characterizing the waiver participant The plaintiff filed suit, arguing that the state’s policy cap as a limitation on eligibility. The Court also violated the ADA because he could not continue to affirmed that the plaintiffs had standing to pursue their receive services in his own home. The complaint was claims in federal court under §1983. The Circuit certified as a class action. 45 remanded the case to the district court to determine In 2001, the district court ruled in the state’s favor. whether changes that New Hampshire had made in its The Court found that the state was exercising its pre- notice provisions complied with federal requirements rogative under the Medicaid Act to limit the services it and whether the state was operating the waiver provides to medically needy individuals. Under program in accordance with the reasonable promptness Medicaid law, the coverage of medically needy indi- requirement up to the participant cap. viduals is optional for the states. In addition, a state is Upon remand, the parties renewed their motions for not required to offer the same range of services to summary judgment. In March 2004, the court denied medically needy persons that it offers to categorically both motions. In its order, the court pointed out that needy beneficiaries. In light of this latitude, the district the 1st Circuit’s decision had effectively reduced the court decided that Washington’s policy did not violate legal issues to those that revolve around the ADA and the ADA. the principles laid down in the Olmstead decision. The In 2001, the plaintiffs appealed this decision to the 9th court noted that its task was now to sort out New Circuit (01-35689). In May 2003, a three-judge Circuit Hampshire’s policies in light of the Olmstead decision, Court panel reversed the decision by a 2-1 margin and a task that would require it to grapple with several remanded the lawsuit back to the district court for re- complex questions, including whether New consideration.46 The majority based its reversal on the Hampshire’s waiting list is moving at a reasonable ADA “integration mandate,” deciding that Washing- pace and the dividing line between “reasonable ton’s policy of offering only nursing facility services modifications” and “fundamental alteration.” The court indicated that it would not necessarily confine its 45 Another lawsuit challenging a state’s Medicaid financial consideration of these issues to the ABI waiver but eligibility policies for home and community-based services is might take into account the overall resources that Hermanson et al. v. Commonwealth of Massa chusetts et al (00- might be available to meet the plaintiffs’ needs. In cv-30156). This class action complaint challenged the state’s policy of applying more restrictive financial eligibility criteria denying the motions for summary judgment, the court to seniors than working age adults with disabilities. In essence, noted that neither party had presented sufficient Massachusetts permitted younger persons with disabilities to evidence to permit it to rule on the ADA/Olmstead qualify for Medicaid without spend down if their income did claims. Trial is scheduled to begin in May 2005. not exceed 133% of poverty but older persons faced spend down requirements when their income exceeded 100% of pov- 9. Washington: Townsend v. Quasim erty. As a consequence, older persons could less readily access Filed in the U.S. District Court for the Western District Medicaid personal assistance services than younger persons and, thus, the plaintiffs argued, were placed at greater risk of of Washington in 2000 (00-cv-00944), this lawsuit institutionalization. The plaintiffs claimed this policy violated challenged Washington State’s policy of not extending the ADA’s integration mandate and its non-discrimination pro- eligibility for its Medicaid Community Options Pro- visions. This lawsuit was settled in February 2003 when the gram Entry Services (COPES) HCBS waiver program state agreed to adopt more liberal financial eligibility criteria for older persons who need personal assistance. (Priaulx, 2003) 44 The Circuit Court decision is at ca1.uscourts.gov/cgi- 46 Decision is at: bin/getopn.pl?OPINION=02-1059.01A. caselaw.findlaw.com/data2/circs/9th/0135689P.pdf 32 Home and Community Services Litigation Status Report: December 27, 2004 to medically needy individuals would result in their needless segregation in institutional settings. However, a strong dissent was filed.47 The dissenting judge took the majority to task for failing to reconcile the ADA integration mandate with the latitude afforded states under the Medicaid Act and, implicitly, requiring Washington State to expand services by requiring the state to make what amounted to a fundamental alternation in its programs. Immediately, the state petitioned the Circuit for a rehearing en banc. This petition was rejected in June 2003. In January 2004, the parties entered into a stipulated settlement agreement. Under the terms of the agreement, court proceedings were stayed, contingent on the state’s securing federal approval of a new HCBS waiver program for persons who are medically needy. The state then secured funding for this program from the legislature and CMS approved the state’s waiver request. The new program was implemented in June 2004 and limits services to no more than 200 individuals. The plaintiffs reserved the right to reinstate the lawsuit if a waiting list for enrollment into the new waiver program emerges.

47 The dissent is included in the file containing the majority opinion at the foregoing URL. 33 Home and Community Services Litigation Status Report: December 27, 2004

III. Community Placement of Institutionalized Persons

A. Overview these lawsuits revolve around the question of the standing of guardian parents to refuse consent for There is a long history of litigation concerning institu- community placement. The outcome of some of these tionalized persons with disabilities, dating back to the lawsuits has been to slow but not halt the closure of landmark Alabama Wyatt v. Stickney lawsuit in state facilities. 1970.48 In developmental disabilities services, this litigation revolved mainly around the conditions of B. Description of Lawsuits public institutions and their lack of adequate and appropriate services. Over time, this litigation increas- 1. Arkansas: Porter and Norman v. Knickreim et al. ingly came to focus on the question of the necessity of institutional placement and led to court directives to In October 2003, two residents of the Southeast place institutional residents in the community. There Arkansas Human Development Center filed suit (03- has been similar litigation concerning individuals CV-812) in the U.S. District Court for Eastern confined to state mental health facilities. Arkansas against state officials to challenge the constitutionality of the admission and discharge The U.S. Supreme Court’s historic 1999 Olmstead procedures at Arkansas’ six large institutions for decision ruled that the unnecessary segregation of in- persons with developmental disabilities. The plaintiffs dividuals with disabilities in institutions constitutes claim that the state’s not providing for judicial prohibited discrimination under the ADA. In its ma- hearings to determine whether they must continue to jority opinion, the Court concluded that Title II of the be confined at a Human Development Center violates ADA requires a state to place institutionalized persons the Due Process and Equal Protection clauses of the with disabilities in community settings when: (a) the 14th Amendment. Under Arkansas state law, the state’s treating professionals have determined that a parents of an individual with mental retardation may community placement is appropriate; (b) the transfer petition for their voluntary admission to a state facility from an institution to a more integrated setting is not and persons so admitted may be discharged at the opposed by the affected individual; and (c) the place- request of parents. However, there is no provision for ment can be reasonably accommodated, taking into judicial review of the continued placement of an account the resources available to the state along with individual at a facility. The plaintiffs are asking the meeting the needs of other persons. In the wake of the court to declare Arkansas’ policies unconstitutional Olmstead decision, there have been several lawsuits and to direct the state to institute appropriate judicial concerning persons served in public institutions. review procedures. This complaint was filed on behalf This part of the report tracks some of the lawsuits of the plaintiffs by the Arkansas Disability Rights where the issue of the community placement of insti- Center, the state’s P&A.49 In February, 2004, the court tutionalized persons has been engaged and where the turned aside the state’s motion to dismiss the lawsuit. principles set down by the Supreme Court are being While dismissing the plaintiffs’ Equal Protection adjudicated. In these lawsuits, Medicaid policy is claims, the court decided that there was a potential typically not the main focus of litigation, although the basis for their Due Process claims. In addition, the Medicaid program might help underwrite the costs of court permitted an association of Human Development community placement. Also included are lawsuits Center families to intervene. In March 2004, the concerning individuals with mental disabilities who plaintiffs filed a second amended complaint. In July reside in nursing facilities where issues concerning and August 2004, the plaintiffs and the state filed community placement have arisen. motions for summary judgment. We also acknowledge that there have been several In November 2004, the court ruled on the motions for lawsuits filed to oppose the community placement of summary judgment. It decided that Arkansas policies institutionalized persons with developmental disabili- concerning the admission of individuals met due ties. Many of these lawsuits have been filed in state process tests but ordered the state to develop post- court by institutional parent groups who are sometimes admission review procedures to ensure that individuals aligned with public employee associations. Often, admitted as a result of a parent/guardian petition would 48 It is worth noting that, in December 2003, the Wyatt case was not be unnecessarily confined in an HDC should it be dismissed 33-years after the complaint was originally filed. The determined that they would benefit from community court found that Alabama had satisfactorily implemented a settlement agreement that was entered into in 2000. For more 49 There is additional information at: information: bazelon.org/newsroom/12-15-03wyatt.htm. arkdisabilityrights.org/law/alerts.html 34 Home and Community Services Litigation Status Report: December 27, 2004 placement. settlement, however, does not stop the renovation of 2. California: Davis et al. v. California Health the facility, which began in November and is expected and Human Services Agency et al. to be completed in 2007. The plaintiffs have reserved 50 the option to refile elements of the lawsuit that involve In 2000, a class action complaint was filed in the the community placement of facility residents. This U.S. District Court for the Northern District of Cali- option might be invoked if sufficient community fornia on behalf of present and potential residents of alternatives are not provided. Laguna Honda Hospital (a 1,200-bed nursing facility in San Francisco). This lawsuit was triggered when 3. California: Capitol People First et al. v. plans were announced for a $400 million renovation of California Department of Developmental the facility. The complaint argued that the City and Services et al. County of San Francisco (which operates the facility) This class action complaint was filed in January 2002 along with several state agencies were violating in Alameda County Superior Court by California Pro- federal Medicaid law and the ADA by denying tection and Advocacy, Inc. on behalf of 12 individuals individuals with disabilities access to community ser- with developmental disabilities served in state Devel- vices and thereby forcing them to remain or become opmental Centers or other large congregate facilities institutionalized. Plaintiffs are represented by a (including nursing facilities), three community organi- coalition of disability and advocacy organizations. The zations and two taxpayers. The lawsuit was filed US Department of Justice also filed a friend of the against the Departments of Developmental Services, court brief in support of the plaintiffs. In August 2001, Health Services and Finance along with California’s the Court rejected San Francisco’s motion to dismiss Health and Human Services Agency and the 21 non- the lawsuit. The facility has been the subject of an profit Regional Centers that manage community ongoing investigation by USDOJ under the provisions services for people with developmental disabilities. of the Civil Rights for Institutionalized Persons Act The lawsuit charges that California has caused thou- (CRIPA). In April 2003, USDOJ wrote the City of San sands of individuals to be “needlessly isolated and Francisco that it had found the operation of the facility segregated” in large congregate public and private fa- did not comport with the principles enunciated by the cilities and further contends that the lack of appropri- Supreme Court in Olmstead decision. USDOJ faulted ate community services causes persons with disabili- discharge planning at the facility and noted that many ties to be put at risk of institutionalization. The plain- residents had been identified who could be served in a tiffs argue that California’s policies violate the state’s more integrated setting. It urged the City to increase Lanterman Act (especially its “integration mandate”) the availability of home and community services and and Constitution along with the ADA, federal make other changes. Absent resolution of these issues, Medicaid law, §504 of the Rehabilitation Act and the USDOJ warned that the Attorney General might federal Constitution. The Lanterman Act governs the institute a lawsuit to correct the deficiencies. delivery of services for persons with developmental In December 2003, the court gave preliminary disabilities and requires that all eligible persons be approval to settlement agreements between the plain- provided services. The plaintiffs have asked the court tiffs, the city and the state.51 Under the agreement, the to certify a class of “all Californians with city will launch a targeted case management program developmental disabilities who are or will be to assess current residents and potential admissions to institutionalized, and those who are or will be at risk of the facility to determine whether other community institutionalization in either public or private facilities, alternatives could be furnished to them instead. Also, including but not limited to, the Developmental the city agreed to furnish information about commu- Centers, skilled nursing facilities, intermediate care nity services to current residents and take additional facilities (ICF/DDs), large congregate care facilities, steps to encourage the use of community alternatives. psychiatric hospitals or children’s shelters.” If the class In addition, California will revamp its pre-admission is certified as proposed, it would include roughly 6,000 screening program for individuals with psychiatric persons residing in large congregate facilities and an disabilities to place greater emphasis on community estimated 400 individuals who are at risk of alternatives to nursing home placement. The institutionalization each year. According to the plaintiffs, some 1,000 of the 3,700 persons served at 50 The complaint is located at dredf.org/final.html. 51 A description of the settlement agreement along with the the state’s Developmental Centers have been recom- agreements are located on the Bazelon Center website at: mended for discharge to the community but continue bazelon.org/newsroom/1-5-04davis_settlement.htm . More to be inappropriately institutionalized. information also is available at: pai- ca.org/BulletinBoard/DavisvsLHHSettlement.htm. 35 Home and Community Services Litigation Status Report: December 27, 2004

The lawsuit asks the Court to order sweeping changes tiff claims alleging violations of the federal Medicaid in California’s services for people with developmental Act. The Court was persuaded by the state’s argument disabilities, including requiring the state to offer the that the Medicaid Act does not create a right of private full range of Medicaid home and community-based action for individual beneficiaries, concluding that the services to individuals and strengthening other dimen- Act “merely describes what states must do to ensure sions of community services.52. In March 2002, the continued [federal] funding and authorizes the Secre- court decided to treat the lawsuit as “complex litiga- tary to withhold or limit Medicaid payments to a state tion” (2002038715) and assigned it a division ex- in violation of [its] provisions.” In reaching this con- pressly charged with handling such cases. In clusion, the Court was persuaded by the federal district November 2002, the California Association of State court decision in the Utah DC v. Williams litigation Hospital Parent Councils for the Retarded (see above) where the Court decided that the applica- (CASH/PCR) and the California Association for the tion of the U.S. Supreme Court’s Gonzaga decision led Retarded (CAR) petitioned to intervene in the litiga- to the conclusion that the Medicaid Act does not con- tion. These associations are composed of parents of fer individually enforceable rights. Still to be decided individuals served in state-operated facilities. They are the plaintiffs’ other claims, including their claims sought intervenor status because they do not believe under the ADA and Rehabilitation Act as well as that the defendants will adequately represent the inter- federal and state constitutional claims. ests of institutionalized persons who might be endan- In December 2003, the Court clarified its November gered by community placement. This petition was op- decision. The Court decided that, while it could not posed by the plaintiffs along with some Regional use a writ of mandate to remedy any wrong under the Center defendants. In January, 2003, the Court gave Lanterman Act, there was the potential that it could the parents leave to intervene but confined the scope of use injunctive relief to remedy violations of the Act. In their intervention to the “parameters of the complaint.” addition, the Court gave the plaintiffs more time to The court admonished the intervenors not to attempt to fashion their petition for class certification. January enlarge the issues in the litigation and confine 2004, the state filed a motion arguing that injunctive themselves to two issues: “ensuring that the legal relief also could not be used to remedy violations of rights of parents to participate in the planning process the Lanterman Act and asked the court to dismiss and the ability of professionals to recommend claims based on the Act. In February 2004, the court placement in developmental centers are not adversely denied the state’s motion. Also, in February 2004, the affected by any judgment in this action.” plaintiffs filed their motion for class certification and a In August 2003, the state defendants (as distinct from hearing on the motion was scheduled for April 2004. the Regional Center defendants) filed a motion for In April 2004, the state petitioned the California Court summary adjudication concerning the plaintiffs’ of Appeal in San Francisco to stay proceedings in the Lanterman Act claim to enforce the Act through court- lawsuit until the court could review the lower court’s issued “writs of mandate.” The state argued that the Lanterman Act rulings. The Court of Appeal granted Lanterman Act creates only discretionary duties upon the stay. In its petition, the state once again argued that the state defendants and thereby the court cannot the Lanterman Act does not create a judicially compel action because the Act does not create a enforceable “mandate” that requires people with “mandatable duty” with respect to alleged violations. disabilities to be served in the least restrictive setting. In addition, the state filed a motion to throw out the Instead, the statute should be regarded as merely intent plaintiffs’ claim that the state’s policies violate the language with implementation of the Act left to state federal Medicaid Act. and regional center discretion. The Court of Appeal In November 2003, the court handed down tentative issued a writ vacating the lower court’s Lanterman Act rulings on the state’s motions. With respect to whether rulings. However, the Court gave the plaintiffs the the Lanterman Act creates a mandatable duty that leeway to amend their complaint to reinstate a courts can enforce through writ proceedings, the court violation of the Lanterman Act as a cause of action. decided in the state’s favor and dismissed this cause of In July 2004, the plaintiffs filed an amended com- action. However, the Court noted that its dismissal did plaint. They also petitioned the court to reinstate their not address “whether Defendants are in compliance claims of violations of the Medicaid Act, citing rulings with the Lanterman Act or whether it can be enforced in other cases that ran contrary to the court’s view that through other means.” The Court also dismissed plain- Medicaid beneficiaries do not have individually en- forceable rights, based on the Gonzaga decision. The 52.More information is at pai- State objected to the reassertion in of Lanterman Act ca.org/BulletinBoard/Index.htm#CPF 36 Home and Community Services Litigation Status Report: December 27, 2004 claims in the amended complaint. A hearing was held services. In December 2004, court held a fairness in late September concerning the reinstatement of the hearing concerning the proposed settlement. Medicaid Act claims and the state’s objections to the 5. Maryland: Williams et al. v. Wasserman et al. renewed Lanterman Act claims. This 1994 lawsuit (CCB-94-880) was filed in the U.S. 4. Florida: Brown et al. v. Bush et al. District Court for Maryland against Maryland Depart- This 1998 class action complaint (98cv673) was filed ment of Mental Health and Hygiene by institutional- in the U.S. District Court for Southern Florida and ized persons who had a traumatic brain injury or sought a declaratory judgment and permanent another developmental disability and were demanding injunction to prevent the state from unnecessarily that the state provide community services to them. The institutionalizing individuals with developmental dis- plaintiffs’ alleged that Maryland violated (a) the U.S. abilities in violation of the ADA integration mandate, Constitution by unnecessarily confining them to §504 of the Rehabilitation Services Act, Medicaid law, institutions and (b) the ADA by not furnishing them and the U.S. Constitution. In March 1999, the U.S. services in the most integrated setting. In 1996, the District Court for the Southern District of Florida certi- Court denied both parties’ motions for summary fied the Plaintiffs' proposed class of: "all persons who judgment. Finally, in September 2001, the court dis- on or after January 1, 1998, have resided, are residing, missed the lawsuit,53 finding that Maryland had made a or will reside in DSIs [Developmental Services Institu- good faith effort to (a) meet the needs of the plaintiffs tions] including all persons who have been transferred and (b) accommodate individuals in the community. from [institutions] to other settings, such as ICF, group This lawsuit was filed prior to the Olmstead decision. homes, or SNFs but remain defendant's responsibility; The district court’s final decision came after the and all persons at risk of being sent to DSIs." Olmstead decision and hinged in part on the court’s Florida appealed the class certification to the 11th Cir- view that ordering Maryland to step up its efforts to cuit. In 2000, The 11th Circuit agreed that the proposed support individuals in the community would cause a class was overly broad and remanded the case to the “fundamental alteration” in the state’s programs for district court with instructions to certify the class as individuals with disabilities. In arriving at this conclu- composed of “all individuals with developmental sion, the court noted that Maryland had substantially disabilities who were residing in a Florida DSI as of reduced the number of persons served in its institutions March 25,1998, and/or are currently residing in a and increased community services. With respect to the Florida DSI who are Medicaid eligible and presently plaintiffs, the court noted that the state had tried to ar- receiving Medicaid benefits, who have properly and range community services on their behalf, sometimes formally requested a community-based placement, and successfully but sometimes not. The court decided that who have been recommended by a State-qualified ordering the state to step up its efforts would lead to treatment professional or habilitation team for a less increased expenditures in the short run and thereby restrictive placement that would be medically and affect the state’s capacity to serve other individuals. In otherwise appropriate, given each individual's the court’s view, this result would lead to a particular needs and circumstances.” fundamental alteration and thereby exceed the After extended negotiations and with the assistance of parameters laid down by the Supreme Court. a mediator, the parties arrived at a settlement agree- 6. Massachusetts: Rolland et al. v. Romney et al. ment. In July 2004, a final proposed agreement was presented to the court for review. The agreement pro- In October 1998, a complaint was filed on behalf of vides that, by June 2005, the state will prepare a plan seven Massachusetts residents with mental retardation to close Gulf Coast Center and close the facility by and other developmental disabilities who were served 2010. Coupled with the closure of Community of in nursing facilities. The plaintiffs contended that they Landmark (another DSI located in Opa Locka) that is were denied alternative community placements or slated for June 2005, the agreement will reduce from “specialized services” mandated by the federal Nurs- four to two the number of facilities that Florida oper- ing Home Reform Amendments enacted in the ates. The agreement also provides for earmarking Omnibus Budget Reconciliation Act of 1987. The law HCBS waiver “slots” to accommodate the transition of directed that states arrange alternative placements for individuals from DSIs to the community, beginning in inappropriately placed residents with developmental FY 2005. disabilities or mental illnesses or, if the person opts to The September 2004 notice of the proposed settlement 53 To obtain this decision, go to agreement triggered numerous objections from groups mdd.uscourts.gov/Opinions152/SelectOpsMenu.asp, select and individuals interested in preserving institutional “query by case number” and enter CCB-94-880. 37 Home and Community Services Litigation Status Report: December 27, 2004 remain in a nursing facility, furnish specialized ser- This complaint was similar to Rolland v. Romney (see vices that addressed their impairments. The plaintiffs above) except that it included persons with a wider also alleged that the failure to provide such services range of cognitive impairments. The Court turned violated of Title II of the ADA. down the state’s motion to dismiss the suit on sover- In October 1999, the state agreed to offer community eign immunity grounds. The parties then settled. The residential services and specialized services to nursing state agreed to “assure the appropriate and timely home residents with developmental disabilities under community placement of individuals determined to not the terms of a mediated settlement agreement. The require nursing facility care. (Priaulx, 2003). state consented to underwrite community placements 8. New York: Disability Advocates, Inc. v. to class members (858 individuals) unless it was de- Pataki et al. termined that an individual could not “handle or bene- In July 2003, Disability Advocates, Inc.55 filed a fit from a community residential setting.” These place- complaint56 (03cv03209) in the U.S. District Court for ments would take place over a multi-year period. Eastern New York against Governor Pataki, the In 2000, the plaintiffs filed a motion asking the court Department of Health and Office of Mental Health to find the state in violation of the agreement con- claiming that the placement of individuals with mental cerning the provision of specialized services to indi- illnesses in large “adult homes” violates Title II of the viduals still residing in nursing facilities. In March Americans with Disabilities Act and §504 of the 2001, the court ruled that the state was required to fur- Rehabilitation Act by causing their needless nish specialized services sufficient to ensure “active institutionalization in substandard facilities when their treatment.” The court found that, if the services fur- needs could be more appropriately and effectively met nished by a nursing facility did not meet the active in integrated residential settings. In part, this lawsuit treatment standard, the Department of Mental Retar- was prompted by the revelations of substandard care in dation was obliged to furnish supplementary services. adult homes in a 2002 series of N.Y. Times articles. In May 2002, the court granted the plaintiffs injunctive “Adult homes” are facilities intended to provide room relief and ordered that all class members receive ser- and board, housekeeping, personal care and supervi- vices that meet the “active treatment” standard. The sion to residents. The costs of these facilities are st th state then appealed this ruling to the 1 Circuit on 11 underwritten by resident funds, including state SSI Amendment sovereign immunity and other grounds. supplement payments. Residents of such facilities in- In January 2003, the Circuit rejected the state’s ap- clude individuals with physical disabilities. In New peal.54 In a nutshell, the court held that, under federal York, there also are a large number of facilities where law, specialized services, including “active treatment” a high percentage of residents are persons with serious must be furnished to all individuals who need them. mental illnesses. Facilities are labeled “impacted The state also had argued that the nursing home reform homes” when 75% or more of the residents have a provisions did not confer a private right to action. The mental illness. The lawsuit targets 26 such facilities in court rejected this argument, holding that the legisla- New York City that have more than 120 beds where an tion in fact did confer a private right to action, estimated 4,000 persons with mental illnesses reside. enforceable through the federal courts. Statewide, it is estimated that 12,000 individuals with mental illnesses are served in such facilities. While 7. Michigan: Olesky et al. v. Haveman et al. adult homes nominally provide limited services to In September 1999, Michigan’s P&A agency filed a residents and are not classified as mental health complaint in state court on behalf of six individuals facilities, residents of these facilities also receive with developmental disabilities and/or mental illnesses Medicaid-funded health and mental health services served in nursing facilities but who wanted services in from other vendors. The plaintiffs charge that these the community. In June 2000, this litigation was re- services do not adequately or appropriately meet the ferred to the U.S. District Court for Western Michigan. needs of adult care home residents. The plaintiffs’ counsel estimated that there were 500 The plaintiffs charge that impacted adult homes are individuals with cognitive disabilities in nursing fa- cilities who could be served in the community. The 55 Disability Advocates, Inc. is an agency under the Protection plaintiffs alleged that Michigan was violating the and Advocacy for Individuals with Mental Illness Act. Co- “Nursing Home Reform Act of 1987” and the ADA. counsel include New York Lawyers for the Public Interest, Inc., the Bazelon Centger for Mental Health Law, MFY Legal Services and Urban Justice Center. 54 The decision is at laws.findlaw.com/1st/021697.html and 56 Go to discussed in greater depth in a Bazelon Center for Mental bazelon.org/issues/disabilityrights/nycomplaint/index.htm to Health Law release (bazelon.org/newsroom/2-3-03rolland.htm.) view the complaint and obtain additional information. 38 Home and Community Services Litigation Status Report: December 27, 2004 segregated institutional settings and as such fall under the Bazelon Center for Mental Health Law, the New the purview of the ADA, §504 and the Olmstead deci- York Legal Aid Society and the Urban Justice Center. sion. The plaintiffs point out that New York State also The plaintiffs are persons charged with violating the funds integrated “supported housing” living arrange- conditions of their parole or post-release supervision. ments that are better geared to meeting the needs of Typically, they committed technical parole violations. people with serious mental illnesses. However, The complaint alleges that these individuals have been supported housing is in short supply. Citing studies recommended for placement in a residential treatment conducted by the state, the plaintiffs allege that the program in lieu of incarceration. However, a dearth of costs of supporting individuals in supported housing available community treatment placements causes arrangements are no greater than the overall costs of them to be needlessly incarcerated. The complaint adult care homes (taking into account resident charges that the lack of residential treatment programs payments and other Medicaid services). Since results in these individuals languishing in jail, being residents could be served in a more integrated setting, sent to prison and fated to being trapped in a “vicious the plaintiffs are asking the court to order the state to cycle between jail and the streets.” The plaintiffs are expand the availability of supported housing as well as seeking relief in the form of New York State’s order the state to improve conditions in adult homes. expanding supervised housing programs that serve and In October 2003, New York Attorney General Spitzer treat individuals with co-occurring disorders, either in replied to the complaint, disputing nearly all the the form of community residences or supported hous- allegations made in the complaint. The state argued ing programs. The plaintiffs allege that the costs of that the plaintiffs lack standing to bring the complaint needlessly confining these individuals are substantial and also argued that the plaintiffs who reside in adult and the dollars spent on incarceration should be redi- homes have not been determined by the state’s treating rected to underwriting community services for them. professionals as appropriate for a more integrated 10.Oregon: Miranda B. et al. v. Kulongoski et al. community setting and, thus, do not fall under the am- bit of the Olmstead decision. Also, the state argued In December 2000, the Oregon Legal Center filed suit that the relief sought by the plaintiffs would lead to a (CV-00-01753) in the U.S. District Court for the Dis- fundamental alteration. Next, the state asserted an 11th trict of Oregon on behalf of ten state psychiatric Amendment sovereign immunity defense. Lastly, the institution residents, contending that the state’s own state argued that the complaint is barred – in whole or treating professionals had found these individuals to be in part – because the alleged violations fell outside the ready for community discharge but they continued to statute of limitations. Therefore, the state urged the be institutionalized due to the lack of suitable court to dismiss the complaint but has not yet filed a community placements. The plaintiffs alleged that the formal motion for dismissal. Over the past several state is violating Title II of the ADA, §504 of the months, proceedings have been dominated by disputes Rehabilitation Act and the 14th Amendment’s Due concerning discovery issues. Process Clause. In the plaintiffs’ view, this lawsuit revolved around issues analogous to those addressed in 9. New York: William G et al. v. Pataki et al. the Olmstead decision. The plaintiffs sought class In October 2003, a class action complaint (03-cv- certification. 08331) was filed in the United States District Court for The state moved for dismissal on various grounds, Southern New York alleging that New York State is including 11th Amendment sovereign immunity. In violating Title II of the ADA and §504 of the September 2001, the court denied the state’s motion Rehabilitation Act by failing to furnish treatment for dismissal. The state then appealed to the 9th Circuit services that would permit individuals with serious and Court of Appeals (01-35950). In May 2002, the 9th persistent mental illnesses who also have a chemical 57 Circuit decided to take the appeal. In May 2003, the addiction to be released from New York City jails. Circuit rejected the state’s appeal and remanded the The plaintiffs allege that they have been discriminated case back to the district court for further action.58 against because other similarly situated individuals who have a chemical addiction but no or minor mental In December 2003, the parties agreed to settle. In illness are released to community treatment programs January 2004, the court gave its preliminary approval more quickly. This complaint was brought on behalf of to the settlement. The agreement applies to the class as the plaintiffs by a coalition of organizations, including individuals who were civilly committed to an Oregon psychiatric hospital as of December 1, 2003, had not

57 The complaint and a discussion of the lawsuit are at: 58 The decision is at: bazelon.org/newsroom/10-21-03rikers.htm. caselaw.findlaw.com/data2/circs/9th/0135950P.pdf. 39 Home and Community Services Litigation Status Report: December 27, 2004 been discharged within 90-days of a “ready-to-place” In April 2004, the Circuit Court handed down its determination by a treatment team, and had consented opinion.61 In what it characterized as a “precedential” to community treatment. The agreement provides that opinion, the court vacated the district court’s judgment the state will create 75 new community placements by and remanded the case back to the district for further June 2005 and establish a special $1.5 million fund to proceedings. The Circuit Court decided that, in order provide supplemental resources to facilitate the to establish a “fundamental alteration” defense under placement of individuals who have conditions that are Olmstead, a state had to demonstrate that it had a barriers to community reintegration. At least 31 comprehensive working plan in effect to assure that individuals are expected to be placed in the community going forward individuals would be served in the most by June 2005.59 In March 2004, the court approved the integrated setting. The Court expressed the view that settlement agreement and dismissed the case but budgetary and cost considerations alone were an insuf- retained jurisdiction to enforce compliance with the ficient to support a fundamental alteration defense. agreement. While acknowledging Pennsylvania’s prior efforts to reduce reliance on institutional settings and expand 11.Pennsylvania: Frederick L., et al. v. Department of Public Welfare et al. community services, the court pointed out that “past progress is not necessarily probative of future plans to In September 2002, the U.S. District Court for Eastern continue deinstitutionalizing.” The court observed: Pennsylvania ruled against the plaintiffs in the Frederick L. v. Department of Public Welfare class “ After all, what is at issue is compliance with two action complaint. The plaintiffs are residents of federal statutes enacted to protect disabled persons. The courts have held states throughout the country re- Norristown State Hospital who claim that their sponsible for finding the manner to integrate schools, continued institutionalization at a state facility – improve prison conditions, and equalize funding to despite recommendations for community placement – schools within the respective states, notwithstanding violates the ADA and § 504 of the Rehabilitation Act. the states’ protestations about the cost of remedial ac- The Court ruled that the plaintiffs’ circumstances fell tions. The plaintiffs in this case are perhaps the most within the criteria spelled out in the Olmstead deci- vulnerable. It is gross injustice to keep these disabled sion. However, the Court decided that accelerating the persons in an institution notwithstanding the agree- pace of community placement would lead to increased ment of all relevant parties that they no longer require expenditures and thereby potentially result in reduc- institutionalization. We must reflect that on that more tions in services to other individuals. The Court de- than a passing moment. It is not enough for DPW to give passing acknowledgment of that fact. It must be cided that this would constitute a “fundamental altera- prepared to make a commitment to action in a manner tion” and thus ruled that it could not grant relief under for which it can be held accountable by the courts.” the ADA. In reaching its decision, the Court relied in part on the decision handed down in the Maryland While not disagreeing with many of the findings made Wasserman v. Williams litigation (see above). by the district court, the Circuit directed the district court to request Pennsylvania to make “a submission In October 2002, the plaintiffs appealed this decision that the district court can evaluate to determine to the 3rd Circuit of Appeals (02-3721). In December whether it complies with this opinion.” 2002, fourteen former state mental health directors submitted an amicus brief on behalf of the plaintiffs.60 In September 2004, the District Court entered a They argued that the district court had adopted too judgment in favor of the state and dismissed the case.62 narrow a view concerning the financial implications of The court found that the state’s deinstitutionalization accelerated community placement by failing to take plan and planning process “deserve the protection of into account the potential to offset costs by employing the fundamental alteration defense.” The court rejected Medicaid funds to hold down the state’s costs of sup- the plaintiffs’ contention that the state’s plans were not porting individuals in the community. They pointed sufficiently concrete. The plaintiffs have appealed this out that the hospital was funded with state dollars judgment to the 3rd Circuit (04-3859). (federal law prohibits Medicaid funding of “Institu- 12. tions for Mental Disease”) but Medicaid funding could be used to underwrite the costs of community services. The Circuit heard oral arguments in October 2003.

59 The agreement is described in more detail in the Oregon 61 The opinion is available at: Advocacy Center’s newsletter, available at: caselaw.lp.findlaw.com/data2/circs/3rd/023721p.pdf. oradvocacy.org/staff/newslet/OAC2004Winter.pdf. 62 This decision is available at: 60 The brief is at: centerforpublicrep.org/page/94546 paed.uscourts.gov/documents/opinions/04D0294P.pdf 40 Home and Community Services Litigation Status Report: December 27, 2004

13.Pennsylvania: Pennsylvania Protection & abeyance pending the outcome of the Frederick L Advocacy v. Dept. of Public Welfare et al. appeal (see above). Following the decision in the In September 2000, Pennsylvania Protection and Ad- Frederick L appeal, the court lifted the stay on vocacy (PPA) filed suit (CV-00-1582) in the U.S. Dis- proceedings. PPA then filed its appellant brief in June trict Court for Middle Pennsylvania on behalf of the 2004. Oral arguments were heard in October 2004. residents of South Mountain Restoration Center 14.Other Litigation (SMRC), a state-operated nursing facility that serves elderly individuals who have severe mental dis- Other litigation in this arena has included lawsuits abilities, many of whom have experienced long-term concerning individuals who have a mental illness who institutionalization. PPA contended that SMRC resi- are served in state mental health facilities. Some of dents could be served in more integrated community these lawsuits include the Charles Q v. Houston and settings and, hence, their continued institutionalization Kathleen S v. Department of Public Welfare litigation violated both Title II of the ADA and §504 of the in Pennsylvania as well as certain California lawsuits. Rehabilitation Act. PPA petitioned the court to appoint Also in Pennsylvania, the Helen L. v. Dedario litiga- an independent expert to identify SMRC residents who tion raised “Olmstead”-like issues: namely, the access could be placed in the community and direct the of nursing facility residents to community waiver ser- vices (specifically personal assistance/ attendant care). Department of Public Welfare to commence a program rd of community placement. In 1995, the 3 Circuit Court of Appeals held that the state's failure to provide services in the most integrated In January 2003, the court ruled in the state’s favor setting appropriate to a person’s needs violated the and dismissed the lawsuit. In its ruling, the court noted ADA.63 Additionally, the Court held that the provision that both parties agreed that many SMRC residents of waiver services to the plaintiff would not could be served in the community. The state, however, fundamentally alter the nature of the waiver program argued that the costs involved in serving these indi- because the services the plaintiff needed were already viduals in the community would require a “funda- provided in the waiver program. mental alteration” in its programs for persons with mental disabilities because community placement would lead to net increased spending and, thereby, require shifting dollars from services provided to other individuals with mental disabilities to accommodate the placement of SMRC residents. The court was swayed by the testimony of a defense expert who calculated that the average costs of community placement would exceed average costs at SMRC and, further, that costs of community placement would not be completely offset by reduced expenditures at SMRC. Based on its reading of the Olmstead decision, the court decided that the predicted increase in expenditures necessary to pay for community placements but continue to operate SMRC, in fact, would cause a fundamental alteration. PPA had urged the court to take a broader view of the fundamental alteration question by considering not only the budget for services for persons with mental disabilities but also take into account the overall state budget and other spending within the Department of Public Welfare. The Court rejected this approach, again relying on its interpretation of the Olmstead decision that it should confine itself to the effects on the dollars allocated for services for persons with mental disabilities. In February 2003, PPA appealed the decision to the 3rd Circuit (03-1461). In November 2003, the Circuit Court agreed to a PPA request to hold this appeal in 63 This decision is at: ahcuah.com/lawsuit/federal/didario. 41 Home and Community Services Litigation Status Report: December 27, 2004

IV. Limitations on Medicaid Home and Community Services

A. Overview As in other dimensions of Medicaid law, issues have “Access to benefits” lawsuits revolve around whether arisen concerning whether §1902(a)(30)(A) confers Medicaid beneficiaries can obtain services and sup- enforceable rights. As discussed below, the district ports that they have been approved or are entitled to court found in the Sanchez v. Johnson litigation that receive. Litigation in this arena includes lawsuits that this provision is not enforceable through a §1983 ac- tion and dismissed the lawsuit. That decision is now on argue that low state payment rates prevent benefi- th ciaries from finding a personal assistant or other work- appeal to the 9 Circuit as is the decision in another ers to provide needed services. The Medicaid statutory California case (Clayworth) where a different district found that §1902(a)(30)(A) is enforceable. In March issues concerning the interplay among payments, ade- st quacy, quality, and access to benefits/services are dis- 2004, the 1 Circuit Court of Appeals handed down a ruling that §1902(a)(30)(A) is not enforceable, based cussed in detail in a National Health Law Project pa- 66 64 on the U.S. Supreme Court Gonzaga decision. This per. There have been many cases where the st availability and quality of services available through ruling is noteworthy because the 1 Circuit abandoned the Medicaid EPSDT for children with disabilities has its previous position that §1902(a)(30)(A) was en- been at issue.65 forceable and in light of its other post-Gonzaga deci- sions upholding the enforceability of various other These lawsuits contend that state policies or practices provisions of Medicaid law. Clearly, this dimension of concerning the operation of community programs con- Medicaid law is very unsettled. stitute barriers to individuals obtaining authorized services. In some cases, these barriers are alleged to B. Description of Lawsuits violate the ADA, either because they force individuals 1. Arizona: Ball et al v. Biedess et al. to accept institutional services due to a shortage of In January 2000, the Arizona Center on Disability Law community services while there is more generous state and the Native American Protection and Advocacy funding for institutional services, thereby discrimi- Agency filed a class-action complaint (00-cv-67) in nating against people who want community services. the U. S. District Court for Arizona arguing that In the Arizona and California lawsuits, the plaintiffs Medicaid payment rates for direct service also allege that state’s funding practices violate professionals (attendants) in the community are §1902(a)(30)(A) of the Social Security Act, which insufficient to attract enough providers to ensure that requires states to make payments for Medicaid ser- Medicaid services are available to persons with vices sufficient to ensure their availability to Medicaid disabilities.67 Among its other claims, the lawsuit beneficiaries. In particular, §1902(a)(30)(A) provides argues that the state is violating §1902(a)(30)(A) by that the “State plan for medical assistance must … failing to make payments sufficient to attract enough provide such methods and procedures relating to the providers to meet the needs of Medicaid recipients. … the payment for care and services under the plan … The plaintiffs also claim that the state also is violating as may be necessary … to assure that payments are other Medicaid requirements, including: 1) reasonable consistent with efficiency, economy, and quality of promptness; 2) amount, duration and scope; and, 3) care and are sufficient to enlist enough providers so freedom of choice. Also, the plaintiffs argue that that care and services are available under the plan at Arizona violates Title II of the ADA and §504 of the least to the extent that such care and services are Rehabilitation Act because the lack of sufficient available to the general population in the geographic community support workers puts individuals with area.” HCBS waiver programs are not exempt from disabilities at risk of institutionalization. The District §1902(a)(30)(A). Court granted class certification. The bench trial was conducted in October 2003. 64 Located at: healthlaw.org/docs/200009IssueBriefHCBC.pdf In August 2004, the court ruled in favor of the 65 There has been a high volume of litigation in the arena of plaintiffs, finding that Arizona violated §1902(a)(30) EPSDT benefits. There is considerable information about this litigation at healthlaw.org/children.shtml#EPSDT. Recently, the National Health Law Project released a very useful paper (Fact 66 This ruling concerned the Massachusetts Long Term Care Sheet: Medicaid Early and Periodic Screening, Diagnosis and Pharmacy Alliance v. Ferguson lawsuit. The ruling is available Treatment: Recent Case Developments – available at: at: laws.findlaw.com/1st/031895.html and is described in an healthlaw.org/pubs/200402.EPSDT.cases.pdf) that describes article at: healthlaw.org/pubs/200403.firstcircuit.html. many of important cases that concerning EPSDT and discusses 67 The complaint and related materials can be found at: trends in how courts have decided these cases. acdl.com/ball.html. 42 Home and Community Services Litigation Status Report: December 27, 2004

(A) by not providing enough attendants to meet the ADHS appealed the injunction to the 8th Circuit. In needs of Medicaid beneficiaries.68 Specifically, the June 2002, the Circuit ruled that Medicaid-eligible court found that Arizona’s payments were insufficient children have a right to early intervention services and to assure “equal access” and “quality of care.” The that ADHS “must pay part or all of the cost of court ordered that the state: must provide each treatment discovered by doctors who first diagnose beneficiary attendant care “without gaps in service” and evaluate the children.” 69 The Circuit decided that and offer a rate of pay that is sufficient to “attract federal law does not require ADHS to specifically enough health care workers to deliver all of the identify the services at issue in its Medicaid state plan. services for which the individual qualifies.” However, However, so long as the services are determined as the court stopped short of specifying the amount that necessary by a physician, it must pay for them since the state must pay. The court also ordered the state to federal law mandates that Medicaid-eligible children make additional improvements in its program. The receive physician-ordered services whether the state court ordered the parties to file schedules to carry out has formerly listed them or not. The Circuit also re- the directives contained in its order by September 30, minded “the state that it has a duty under §1902(a)(43) 2004. of the Social Security Act] to inform recipients about In late August 2004, the state filed a motion to request the EPSDT services that are available to them and that a new trial and asked for a stay in the proceedings, it must arrange for the corrective treatments prescribed pending its appeal of the decision to the 9th Circuit. In by physicians. The state may not shirk its responsibili- September, the state filed its appeal (04-16963). ties to Medicaid recipients by burying information Circuit Court action on the appeal is on hold pending about available services in a complex bureaucratic the district court’s disposition of the state’s request for scheme.” The Court remanded the case to the district a new trial. court to revise the injunction and consider the remaining plaintiff claims. 2. Arkansas: Pediatric Specialty Care, Inc. et al. v. Arkansas Department of Human Services In November 2002, the district court issued a new et al. order. The thrust of this order was to continue a revised injunction to compel the state to continue to In November 2001, the Arkansas Department of Hu- furnish the disputed services. In his order, Judge Wil- man Services (ADHS) announced plans to cut back son expressed chagrin concerning state actions, which Medicaid benefits due to budget shortfalls. Among in his view were attempts to end-run the injunction. other actions, ADHS proposed eliminating distinct The state then filed a motion asking for a modification state plan coverage of early intervention day treatment of the order, arguing that it had secured federal and therapy furnished to children with developmental approval for a Medicaid state plan amendment that disabilities ages 0-6. These services are furnished as complied with the 8th Circuit decision and the effect of part of the state’s Child Health Management Services the new order might be that the state would not receive (CMHS) program by specialized providers. Three of federal Medicaid funds for day treatment services these providers and three affected families filed suit in under the amended state plan. The plaintiffs countered, the U.S. District Court for Eastern Arkansas to enjoin arguing that the change in the Medicaid plan coupled ADHS against eliminating these early intervention with other state actions would have the effect of services. In December 2001, the district court granted sharply reducing access to the services or putting new a permanent injunction debarring ADHS from obstacles in the way of families’ obtaining the removing the listing of these services from the state services. The plaintiffs also asked that the Court to plan, reasoning that the federal requirements review changes that the state might propose in the concerning Early and Periodic Screening, Diagnosis future to ensure that they would not eliminate the and Treatment (EPSDT) mandated that these services disputed services. be provided so long as they had been ordered by a physician and would result in the “maximum reduction In December 2002, the district court modified its of medical and physical disabilities and restoration of order, finding that the latest order was not inconsistent th the child to his or her best functional level.” State with the 8 Circuit ruling. The court continued the officials argued that they had the “legal right to decide injunction directing the state to continue to provide the whether to include the services” in the state’s services and also applied the order to the federal Medicaid program. They also contended that the Centers for Medicare and Medicaid Services (CMS) services would continue to be available, although not and ordered CMS to continue to provide federal Medi- in the form of a distinct program. 69 Located at: 68 The decision also is located at: acdl.com/ball.html. caselaw.lp.findlaw.com/data2/circs/8th/013971p.pdf 43 Home and Community Services Litigation Status Report: December 27, 2004 caid funding for the services. But, the court declined to with disabilities that is provided to others.” Addition- directly supervise the state’s administration of these ally, the plaintiffs point out that ADA regulations services, again enjoined the state to continue to prohibit public entities from “utilizing criteria or provide and pay for early intervention and related ser- methods of administration ... that have the effect of vices and barred the state from implementing changes subjecting qualified individuals with disabilities to in the provision of these services. In part, the court discrimination on the basis of disability.” As a result, based its injunction on the provisions of §1902(a)(30) they allege that California has discriminated against (A) of the Social Security Act, reasoning that the the plaintiffs by “utilizing criteria and methods of ad- changes that the state had in mind would affect access ministration that discriminate against people with dis- to services and that the implementation of any changes abilities by [offering] low wages for direct care and had to be preceded by a study to determine their professional staff.” impact. Claims based on Medicaid law include the allegation ADHS appealed the revised order to the 8th Circuit; that state payments for community services are CMS filed its own appeal concerning the order. In its insufficient to assure efficiency, economy, and quality appeal, ADHS protested that its removal of the distinct of care and enlist sufficient qualified providers to state plan coverage of early intervention services did ensure access to services as required by §1902(a)(30) not in any way mean that children could not obtain (A). The plaintiffs petitioned the court to order the them. CMS concurred and also argued that the district state to improve its community services payment and court’s order was improper on a number of grounds. benefit structure and correct other problems that are The plaintiffs have countered that ADHS is engaged in alleged to lead to unnecessary institutionalization. an ongoing effort to “deconstruct” the services that In August 2001, the Court certified the lawsuit as a they furnish. The Circuit Court heard oral arguments class action.72 In September 2001, the Court rejected in January 2004. the state’s motion for partial summary judgment to In April 2004, the 8th Circuit ruled on the appeal.70 It dismiss the plaintiffs’ claims with respect to §1902(a) dismissed CMS as a party to the litigation. It upheld (30)(A). The state argued that neither people with the district court’s injunction on procedural due disabilities nor providers may bring a lawsuit in process grounds, concluding that the injunction against federal court to enforce these provisions. In March the state’s making changes in its program was proper 2002, the plaintiffs filed a motion for summary “until a full impact study on the effect of terminating judgment.73 The motion for summary judgment asked the [CMHS] program is completed.” the court to issue “an order enjoining defendants at least to double current community direct care wages 3. California: Sanchez et al. v. Johnson et al. and benefits, making them substantially equal to Filed in May 2000 in the U.S. District Court for institutional direct care wages and benefits and index Northern California on behalf of individuals with them to meet defendants’ future, continuing duties developmental disabilities, this compliant (00cv01593) under federal statutes.” alleges that California has “established and maintained In August 2002, District Court Judge Claudia Wilken highly differential payment and wage and benefit turned down the plaintiffs’ motion for summary structures between the institutional and community- judgment but ruled that the issues raised by the plain- based components of California’s developmental dis- tiffs did not constitute violations of the ADA or §504 ability services program, which has the effect of sub- of the Rehabilitation Act.74 Judge Wilken also denied jecting people with developmental disabilities to the state’s motion to dismiss the case on sovereign unnecessary institutionalization and segregation.”71 immunity grounds. She then ordered that the case The plaintiffs – persons with disabilities, provider and proceed to trial. The remaining trial issues concerned advocacy organizations – claim the state, in creating whether California’s payments are sufficient to enable payment differentials, violates Title II of the ADA, providers to furnish quality services and individuals to both with respect to the integration mandate and other regulations “prohibiting a public entity from providing 72 The Court’s class certification order is at different or separate aids, benefits or services to indi- sanchezvsjohnson.org/order1593.html. viduals with disabilities of to any class of individuals 73 This motion is located at sanchezvsjohnson.org/summary.html. 70 This ruling is located at: 74 Marty Omoto, Legislative Director, California UCP (August caselaw.lp.findlaw.com/data2/circs/8th/031015p.pdf. 9, 2002). “CA UCP Legal Update: Sanchez v. Johnson Case: 71 This complaint may be found at Federal District Court Orders Case to Trial; Judge Denies sanchezvsjohnson.org/lawsuit.html. Other materials are found at Plaintiffs’ Summary Judgment Motion, Ruling Partially in sanchezvsjohnson.org/updates.html. Favor of State.”. 44 Home and Community Services Litigation Status Report: December 27, 2004 be able to access to necessary services, as required by implementing Medicaid rate cuts that were slated to go §1902(a)(30)(A). into effect January 1, 2004.76 The Sanchez plaintiffs In August 2003, the state filed a motion asking the filed their appellant brief in May 2004. The Court court to reconsider its decision that the plaintiffs could heard oral arguments in the Sanchez, Clayworth and seek relief in federal court for the alleged violations of CMA appeals on December 8, 2004. Medicaid law. In its motion, the state argued that, in 4. California: Rodde et al. v. Bonta et al. light of the Gonzaga decision, the court should This lawsuit (03-01580) was filed in the U.S. District conclude that neither individuals nor providers have Court for the District of Central California expressly to enforceable rights under the Medicaid Act. Also, the halt Los Angeles County’s plan to close Rancho Los state filed proposed findings of law and fact. In its Amigos National Rehabilitation Center, a county- proposed findings of law, the state implicitly urged the operated facility that furnishes specialized inpatient court to find that its policies and practices in fact had and outpatient services to individuals with disabilities. not violated §1902(a)(30)(A). The plaintiffs sought and obtained from the court a In January 2004, Judge Wilken dismissed the lawsuit. preliminary injunction to halt the closure, contending She agreed with the state’s argument that the federal that, if the facility were closed, they would be left Medicaid Act does not confer individually enforceable without access to medically necessary services. The rights but instead has an aggregate focus. She based plaintiffs based their claims on federal Medicaid law her decision on her application of the U.S. Supreme (arguing that they would be unable to obtain services Court’s Gonzaga decision to the provisions of covered by California’s Medicaid program) and the §1902(a)(30)(A) and decisions in other cases ADA (arguing that the county’s action was (including the Pennsylvania Sabree decision and discriminatory because it treated people with another Northern District lawsuit concerning the disabilities differently than other Medicaid recipients application of §1902(a)(30)(A) (California Association who did not face a similar loss of access to services). of Health Facilities v. State Department of Health The county appealed the injunction to the 9th Circuit Services (03-736)). Court of Appeals (03-55765). Characterizing Judge Wilken’s decision as “fatally In February 2004, the Circuit upheld the preliminary flawed,” the plaintiffs appealed the dismissal to the 9th injunction, concluding that the plaintiffs were likely to Circuit in early February 2004 (04-15228). The succeed on the merits of their ADA claim.77 The court plaintiffs expect to rely on a December 2003 U.S. agreed that, absent the injunction, the plaintiffs faced District Court for Eastern California decision in potential harm. The Circuit also noted that the district lawsuits75 that also concerned Medicaid payments. In court decision did not mean that the county could not that litigation, the district court also wrestled the ultimately close the facility but, instead, if it were to implications of the Gonzaga decision concerning close the facility, it had to ensure that comparable whether §1902(a)(30)(A) conferred individually services would be available to the plaintiffs. enforceable rights for which Medicaid recipients and providers could seek federal court intervention under 5. Connecticut: Pragano et al. v. Wilson-Coker §1983. Based on its reading of legislative history, the In November 2002, three Medicaid beneficiaries with court decided that Congress intended to confer disabilities filed a lawsuit (02-CV-1968) against the individually enforceable rights under §1902(a)(30)(A) Connecticut Department of Social Services (DSS, the for beneficiaries but not Medicaid providers. Based on state’s Medicaid agency) alleging that the state was this conclusion and other 9th Circuit decisions, the refusing to pay for durable medical equipment they court then granted the plaintiffs a preliminary need to improve their health and live independently. injunction that prevented California from 76 This decision is located at: 75 The lawsuits are: Clayworth et al. v. Bonta et al. (03-2110) 207.41.18.73/caed/DOCUMENTS/Opinions/Levi/03-2110.pdf. and California Medical Association et al. v. Bonta et al. (03- In the decision, the court noted that interpreting the legislative 2336). Both of these lawsuits were filed to prevent California history surrounding §1902(a)(30)(A) posed some difficulties. from instituting a 5% across the board rate reduction in Once the court decided that Medicaid beneficiaries could bring Medicaid (Medi-Cal) payments as part of the state’s efforts to a federal action to block rate cuts that might harm them, it relied cut its budget deficit. The state has appealed both decisions to on the standards set down by the 9th Circuit in its 1997 the 9th Circuit (04-15498 and 04-15532), which has Orthopaedic Hospital v. Belshe decision (located at: consolidated the appeals and instructed the state to submit its laws.findlaw.com/9th/9555607.html) in deciding that the state’s opening brief by May 5, 2004. Since both cases concern rate cut was improper. preliminary injunctions against the state, it is likely that they 77 Decision located at: will receive expedited consideration. caselaw.lp.findlaw.com/data2/circs/9th/0355765p.pdf 45 Home and Community Services Litigation Status Report: December 27, 2004

The plaintiffs argue that the state has adopted “an un- Medicaid law, the ADA and §504 of the Rehabilitation written and unpublished policy of denying Medicaid Act. The plaintiffs have been denied motorized payment for any equipment not covered by the federal wheelchairs even though rehabilitation hospitals have Medicare program,” thereby impermissibly restricting determined that the plaintiffs would benefit from them. access to necessary equipment. The plaintiffs sought a As a consequence, the plaintiffs contend that they are preliminary injunction and class certification. The unnecessarily confined to the nursing homes in which plaintiffs are represented by New Haven Legal Assis- they reside. In contrast, the plaintiffs point out that tance Association and Connecticut Legal Services. individuals who are not in nursing facilities are In 1997, the New Haven Legal Assistance Association authorized to receive Medicaid-funded motorized filed a similar lawsuit (DeSario v. Thomas) chal- wheelchairs. The lawsuit was filed on the plaintiffs’ lenging Connecticut’s practice of limiting payment for behalf by Access Living of Metropolitan Chicago, an medical equipment to items included on a list estab- Independent Living Center. lished by DSS. Ultimately, this case was settled by the The plaintiffs contend that the state’s policy to not state’s agreeing to periodically update its list of cov- provide motorized wheelchairs to nursing home ered items and allow individuals to obtain unlisted residents violates the requirements of the federal 1987 items when necessary. This litigation also prompted Nursing Home Reform Act, §1902(a)(10)(B) by not the Health Care Financing Administration (now CMS) making Medicaid services available to all beneficiaries to clarify its policies concerning the coverage of medi- who require them, the ADA (by virtue of cal equipment, including requiring states to provide discriminatory treatment of individuals with individuals “a meaningful opportunity for seeking disabilities and encouraging unnecessary segregation modifications of or exceptions to a State’s pre- of nursing facility residents), and §504 because the approved list.” This policy was promulgated via a state’s policies discriminate on the basis of disability. 78 September 1998 State Medicaid Director letter. The state filed motions to dismiss and in opposition to In this lawsuit, the plaintiffs alleged that the Depart- class certification. Both motions adopted the position ment was once again employing an arbitrary list to that Medicaid law, the ADA, and the Rehabilitation deny individuals of equipment that is necessary for Act do not give the plaintiffs enforceable rights that them to function in the community and thereby in- may be pursued through a §1983 action. In August crease their risk of institutionalization. In particular, 2004, the court granted the motion for class the plaintiffs alleged that Connecticut’s policies vio- certification.79 lated: (a) §1902(a)(17)(A) of the Social Security Act 7. Illinois: Drzewicki v. Maram et al. which requires that the state apply reasonable stan- dards in determining eligibility for services; (b) the In November 2004, an individual filed suit (04-CV- goals of the Medicaid by denying payment for DME 7164) in the U.S. District Court for the Northern necessary for individuals to attain and maintain inde- District of Illinois against the Illinois Departments of pendence and self-care; and, (c) Medicaid require- Public Aid and Human Services challenging the state’s ments that bar limiting the scope of coverage based on policies limiting the availability of HCBS waiver- a person’s specific medical condition. In March 2003, funded residential services to persons who need the Court turned down the plaintiffs’ request for a pre- emergency services or are in other priority groups. liminary injunction. The parties arrived at a tentative This lawsuit was not filed as a class action. settlement in September 2003. In December 2003, the The plaintiff is a person who participates in and court approved the agreement. Under the agreement, receives some services in the family home through the Department of Social Services has issued a revised Illinois’ HCBS waiver for persons with developmental provider bulletin concerning DME and beneficiary disabilities. The individual seeks residential (Commu- rights to appeal adverse determinations. nity Integrated Living Arrangements (CILA) services 6. Illinois: Jackson et al. v. Maram that are also funded through the waiver program. The State denied those services based on its policy of lim- In January 2004, three individuals residents filed a iting residential services to persons who require emer- class action complaint (04-0174) against the Illinois gency placement or are in pre-established priority Department of Public Aid in the U.S. District Court for groups. In part, the State based its denial on the lack of the Northern Illinois contending that the agency funding for residential services to serve individuals impermissibly denies motorized wheelchairs to nursing facility residents in violation of federal 79 http://www.equipforequality.org/news/equalizer/06legalhighlig 78 Located at: cms.hhs.gov/states/letters/smd90498.asp hts.php 46 Home and Community Services Litigation Status Report: December 27, 2004 who do not meet priority criteria. community services. In particular, the plaintiffs point The plaintiff argues that the state’s policy violates the out that the DDRA made it Kansas policy that: reasonable promptness requirement at §1902(a)(8) of “ … this state …assist persons who have a develop- the Social Security Act and is at odds with the policies mental disability to have: (a) Services and supports set forth in CMS Olmstead Letter #4, which provides which allow persons opportunities of choice to in- that a state may not deny covered waiver services to crease their independence and productivity and inte- waiver participants who require them. gration and inclusion into the community; (b) access to a range of services and supports appropriate to such 8. Indiana: Collins et al. v. Hamilton et al. persons; and (c) the same dignity and respect as In 2001, the Indiana Civil Liberties Union filed a class persons who do not have a developmental disability.” action lawsuit against state officials for failing to pro- (K.S.A. 39-1802). vide child and youth long-term residential treatment in The DDRA also provides that SRS establish “a system psychiatric residential treatment facilities (PRTF). The of adequate and reasonable funding or reimbursement plaintiffs argued that Indiana’s refusal to provide such for the delivery of community services that: services violated federal Medicaid law because PRTF services are a recognized Medicaid benefit and, hence, “requires an independent, professional review of the rate structures on a biennial basis resulting in a rec- must be furnished to all eligible children and youth ommendation to the legislature regarding rate when “medically necessary” under the federal Early adjustments. Such recommendations shall be ade- and Periodic Screening, Diagnosis and Treatment quate to support: (A) a system of employee compen- (EPSDT) mandate. The district court ruled in plaintiffs sation competitive with local conditions; (B) training favor, deciding that the provision of PRTF services and technical support to attract and retain qualified was mandatory when medically necessary. The court employees; (C) a quality assurance process which is permanently enjoined Indiana from denying these responsive to consumers’ needs and which maintains services. the standards of quality service (D) risk management In 2002, the state appealed this decision to the 7th and insurance costs; and (E) program management Circuit Court of Appeals (02-3935), arguing that it had and coordination responsibilities.” (K.S.A. 39-1806) decided to exclude such services for various reasons. The plaintiffs charge that the required rate review was In November 2003, the Circuit Court rejected the not conducted and the wage rates upon which SRS state’s appeal and upheld the district court decision.80 bases payments are inadequate. As a result, provider The court found that the EPSDT mandate requires that agencies are unable to recruit and retain qualified staff a state must furnish any Medicaid coverable service to meet the needs of individuals. In addition to violat- that is medically necessary. ing the DDRA, the plaintiffs also charge that SRS has 9. Kansas: Interhab, Inc. et al. v. Schalansky et violated §1902(a)(30)(A) of the Social Security Act by al. not making payments sufficient to ensure that “con- sumers of community programs and services have ac- In October 2002, Interhab and five other community cess to high quality care.” The plaintiffs also are service providers filed a class action lawsuit in advancing an equal protection claim under both the Shawnee County District Court (02C001335) against U.S. and Kansas Constitutions by contending that the the Kansas Department of Social and Rehabilitation state discriminates between community providers and Services (SRS) claiming that the state’s payments are its own institutions by funding similar services differ- insufficient to meet the needs of people with develop- ently. The plaintiffs also allege breach of contract. mental disabilities and thereby violate Kansas and fed- eral law. Interhab is an association of Kansas commu- The plaintiffs are asking the court to: (a) review all nity service providers. The plaintiffs assert that com- payment rates for the period 1996 – 2003; (b) order the munity services were underfunded by $88 million. The state to pay for all “underfunding” during that period; lawsuit also seeks damages for alleged underfunding (c) enjoin the state to pay “adequate and reasonable in previous years; such damages might total $300 reimbursement rates”; (d) enjoin the state to establish a million, according to the plaintiffs. rate setting methodology that complies with federal and state law; and (e) enter a judgment directing SRS The lawsuit claims that the state has violated the to reimburse all costs incurred by the plaintiffs in de- state’s 1996 Developmental Disabilities Reform Act livering services, including hourly wages and benefits (DDRA), which the plaintiffs argue mandates that the that reflect the amounts paid to other workers in each state provide “adequate and reasonable” funding for locality. In December 2002, the state filed motions to 80 The decision is at: dismiss the federal and state law claims. http://caselaw.findlaw.com/data2/circs/7th/023935P.pdf 47 Home and Community Services Litigation Status Report: December 27, 2004

In January 2003, the plaintiffs amended the complaint to agree to give up the child’s place on that waiting list and asked the court to issue a temporary restraining if they accepted enrollment in the new waiver order to block payment and other funding cuts ordered program. Families objected to this proviso because it in August and November 2002 by outgoing Governor meant that their children would be disadvantaged if Bill Graves to address the state’s mounting budget they needed more intensive services. Plaintiffs deficit. Included in these cuts were developmental contended that this requirement was impermissible disabilities HCBS waiver rate reductions. under federal law. In February 2003, the court turned down the plaintiff’s When the lawsuit was filed, federal officials had not request for a temporary restraining order. The Court yet decided whether to approve the new program. ruled that there was no evidence that the state acted Subsequently, CMS determined that the state’s “arbitrarily, capriciously or unreasonably in [its] proposal concerning the waiting-list proviso could not choices of program reductions.” While acknowledging be approved. The state then removed the proviso and that the budget cuts “appear potentially harmful,” the CMS approved the waiver request. The Children’s “court could not conclude that its interference would Choices program has since been implemented and the not do more harm than good to the public interest if it lawsuit has been settled. issued a temporary restraining order.” With the 11.Maine: Risinger et al. v. Concannon et al. rejection of the request for a temporary restraining order, activity in this litigation has returned to the Filed in June 2000, this complaint (00-116-B-C) issues raised in the original complaint. The court has alleged that Maine violated federal Medicaid law by heard oral arguments concerning various motions over failing to furnish medically necessary EPSDT services the past few months. to children with mental disabilities. The lawsuit was filed by private attorneys in collaboration with Maine At a September 2003 hearing, the court observed that Equal Justice Partners, Inc. Maine’s Disability Rights it was struggling to understand the issues in the case, Center joined the lawsuit as a named plaintiff. The including the complexities of the funding of lawsuit argued that federal law requires the state to community services in Kansas and whether the plain- arrange for medically necessary EPSDT services – tiffs had the right to make the claims they had. The including in-home mental health services – in a court allowed two individuals with developmental dis- reasonably prompt manner. Consequently, at issue was abilities who receive services to be added as plaintiffs. Maine’s assuring access to non-waiver Medicaid The court decided to allow the lawsuit to go forward, services for children. Under federal law, a state may rejecting the state’s motion to dismiss except for the not limit the availability of medically necessary claims for retrospective recovery of funds under EPSDT services. The lawsuit also contended that federal law. In January 2004, the plaintiffs once again Maine’s payments for services were insufficient to asked the court for a temporary restraining order, ensure their availability when and as needed and temporary and permanent injunctions and the thereby the state is violating §1902(a)(30)(A). As a appointment of a special master. The court turned consequence, the plaintiffs argued that 600 Maine down these requests. Over the past several months, the children with mental disabilities had been wait listed plaintiffs and the state have filed numerous motions, for services or could not obtain entitled services.81 including motions by the state to dismiss plaintiff claims. In July 2001, the District Court granted the plaintiff’s motion for class action certification.82. In May 2002, 10.Louisiana: Malen v. Hood the parties reached a settlement. Reportedly, the This class action compliant was filed in December settlement provides that children who need services 2000 against the Louisiana Department of Health and will be evaluated more quickly and no child will wait Hospitals in the U.S. District Court for the Eastern more than six months to receive approved treatment District of Louisiana. At issue in this case was the and services. state’s proposed method of implementing a new “Children’s Choices” HCBS waiver program for 12. children with severe disabilities. The new waiver program offers a dollar-capped set of benefits that is less broad than that offered under Louisiana’s pre- existing HCBS waiver program. The state had proposed that, if a child were on the waiting list for 81 See also www.healthlaw.org/pubs/200006release.html. 82 Louisiana’s existing HCB waiver program for people At www.med.uscourts.gov/opinions/carter/2001/GC_07022001_1- with developmental disabilities, the family would have 00cv116_Risinger_v_Concannon.pdf 48 Home and Community Services Litigation Status Report: December 27, 2004

13.Minnesota: Association for Residential because it attempts to expand the ADA’s integration Resources in Minnesota et al. v. Goodno et mandate beyond its basic parameters by arguing that al. and Masterman et al. v. Goodno the lack of identical funding between institutional and Both of these lawsuits seek to halt Minnesota’s community services is discriminatory. “rebasing” the amount of funds it allocates to counties In October 2003, the Court heard arguments for HCBS waiver services for persons with mental concerning the plaintiffs’ request that the court issue a retardation and related conditions. In each case, the preliminary injunction to halt the rebasing. The state concern is that rebasing will result in a reduction of opposed this motion, contending that sufficient funds funds to individuals. The Association for Residential were now available in the waiver program to ensure Resources in Minnesota (ARRM) filed its lawsuit (03- that no deep cuts would be made and that the cv-2438) in the U.S. District Court for the District of administrative appeals process afforded individuals Minnesota in March 2003. ARRM asked the court to sufficient protection should their services be reduced. issue a temporary restraining order (TRO) to halt the In January 2004, the court turned down the plaintiffs’ rebasing until the court could decide the issues in the motion for a preliminary injunction and dissolved the lawsuit. In March 2003, the court issued the TRO. In temporary restraining order against implementation April 2003, the court held a hearing concerning the except in the case of the individual plaintiffs.83 The ARRM motion for a preliminary injunction to halt the court decided that it could not continue to block the rebasing and issued the requested TRO. In August, the rebasing, especially because the lawsuit was not a Court dissolved the TRO and denied an ARRM motion class action. At the same time, however, the court for a new TRO. However, in September 2003, the denied the state’s motion to dismiss, except for one court agreed to the Masterman plaintiffs’ petition to claim. The court rejected the state’s contention that the issue a new TRO. This TRO did not halt the method of Gonzaga decision undermined the plaintiffs’ standing rebasing but simply provided that no reduction to the to bring suit. The Court also rejected the state’s request budgets of individual waiver participants could take to dismiss the ADA and §504 claims. The Court also place because of rebasing until the Court could hear expressed the view that the rebasing decision might be the merits of the ARRM motion for a temporary at odds with Medicaid statutory provisions concerning injunction. With respect to this lawsuit, the parties are the operation of HCBS waiver programs, noting “That in preliminary settlement discussions before the Congress has allowed states to limit the number of discovery phase begins. The ARRM lawsuit was people served by waivers does not mean that Congress dismissed in November 2004 after the parties arrived meant to allow states to underserve those actually on at a settlement agreement. the waiver, or treat waiver recipients differently, or In April 2003, four individuals and Arc Minnesota excuse states from assuring the health and safety of filed a similar lawsuit (03cv2939) asking for a pre- waiver recipients. Most importantly, it does not liminary injunction to halt the rebasing. The Minnesota evidence that Congress did not intend Medicaid Disability Law Center (the state’s P&A agency) filed recipients to benefit from the Medicaid program.” this lawsuit on behalf of the plaintiffs. The plaintiffs In June 2004, the state and the Masterman plaintiffs contend that the payment rebasing will result in filed a joint motion asking the court to dismiss this “irreparable harm.” It appears that the plaintiffs also litigation, based on a settlement agreement that they argue that rebasing will adversely affect their choice had reached.84 Under the settlement agreement, the between HCBS waiver and institutional services as state agreed to increase county allocations over the well as undermine meeting the essential needs through next two years and issue new guidelines to counties in the waiver program. This lawsuit was transferred to establishing individual budgets. The state also agreed the judge hearing the ARRM lawsuit. to contract with an independent consultant to establish The state filed a motion to dismiss the lawsuit. In its a new funding methodology for the waiver program. motion to dismiss, the state argued that: (a) the plaintiffs have no right of private action under §1983 14.Montana: Sandy L. et al. v. Martz et al. to pursue their Medicaid claims under §1902(a)(10)(B) In September 2002, eight individuals and the Montana (comparability), §1915(c)(2)(A) (assurance of the Association of Independent Living Services, Inc. health and welfare of HCBS waiver participants), and (M.A.I.D.S.) filed a class action lawsuit in state court §1902(a)(1) statewideness of the Social Security Act; 83 The decision is at: (b) plaintiffs lack standing because they cannot show www.nysd.uscourts.gov/courtweb/pdf/D08MNXC/04- that concrete or imminent injury has resulted from 00195.PDF rebasing; and, (c) the plaintiffs’ ADA claim fails 84 The settlement is described in more detail at: http://www.arcminnesota.com/Rebasing_Settlement.htm. 49 Home and Community Services Litigation Status Report: December 27, 2004 against Governor Judy Martz and the Department of The plaintiffs are seeking preliminary and permanent Public Health and Human Services alleging that the injunctions to bar the state from maintaining the cur- state’s payments for community services are inade- rent disparity in wages and benefits between institu- quate and thereby violate the Montana Constitution tional and community workers. It is estimated that and other laws concerning the provision of services to eliminating the disparity in wages and benefits would individuals with developmental disabilities. The pro- cost about $20 million. posed class includes: (a) all persons who receive 15.Ohio: Nickolaus Thompson and Ohio community services but are at risk of being institution- Provider Resource Association et al. v. Hayes alized because of the closure, reduction or termination et al. of their services and (b) institutionalized persons who should be served in the community but cannot due to Filed in June 2003 in the Franklin County Court of inadequate payments. M.A.I.D.S. is an association of Common Pleas, this lawsuit charges that Ohio is 34 community developmental disabilities provider violating federal Medicaid law by interfering with the agencies that furnish HCBS waiver services. The right of individuals to choose their service provider plaintiffs are persons who receive community services. and is not administering Medicaid services for people with developmental disabilities uniformly in all parts Some persons are served in community residences; 85 others live on their own or with their families. of the state. The lawsuit was filed by Ohio’s private provider association and individual provider agencies In the complaint, the plaintiffs argue that state institu- against the Departments of Job and Family Services tional staff is paid between 23 and 38% more than (Ohio’s Medicaid agency) and Mental Retardation and their community counterparts, even though community Developmental Disabilities (ODMRDD, which ad- workers perform much the same work. This wage dis- ministers the state’s HCBS waiver programs for parity is alleged to cause high turnover among com- people with developmental disabilities) as well as the munity workers and providers have a difficult time superintendents of several county boards of mental recruiting workers. As a result of these problems, it is retardation and developmental disabilities that admin- alleged that providers are increasingly unable to meet ister services locally as well as the Ohio Association of the needs of many of the individuals they serve, County Boards of Mental Retardation and Develop- thereby placing individuals at high risk of institution- mental Disabilities. At issue in this litigation is the alization. In addition, the complaint alleges that low legitimacy of Ohio counties operating Medicaid- payments prevent the placement of institutionalized funded community services in a fashion that varies persons who could be supported in the community. county-to-county and, hence, results in disparate The plaintiffs argue that the wage disparity between treatment of individuals. In 2001, the Ohio legislature institutional and community workers results in viola- directed ODMRDD to promulgate rules to ensure uni- tions of: (a) provisions of Montana law that require the form administration of Medicaid services in all administration of state and federal funds in a fashion counties. To date, such rules have not been adopted that ensures the proper fulfillment of their purpose, and the lawsuit was triggered when private providers including assisting people with developmental faced the prospect of having to sign new contracts with disabilities to live as independently as possible and each county by June 30, 2003, even though, in their securing “for each developmentally disabled person view such contracts are not legal. such treatment and habilitation as will be suited to the In a press release concerning this lawsuit, the execu- needs of the person and assure that such treatment and tive director of the provider’s association said: habilitation are skillfully and humanely administered with full respect for the person’s dignity and personal “ Federal law is very clear on this point. Medicaid integrity in a community-based setting whenever pos- must be administered uniformly across the state. The sible;” (b) provisions of Montana law that set forth the fact that the State of Ohio has abdicated its responsi- state’s policy aims with to people with developmental bility to write uniform administrative rules does not disabilities, including supporting individuals to live as mean that county boards, which also are substantial independently as possible in the least restrictive set- service providers in addition to their Medicaid ad- ting; (c) state statutory provisions that require uniform ministration roles, can assume powers that are not payment for Medicaid-covered services “where the properly theirs. What we have here is an attempt by actual cost of, quality of, knowledge and skills for the county boards and their associations to hijack state delivery of, and availability of, Medicaid-covered ser- 85 vices is equivalent or similar;” and, (d) provisions of For additional information, go to www.opra.org/ and then look under “What’s New” to access documents concerning the the Montana Constitution, including equal protection. lawsuit, including the complaint which is at: www.opra.org/pdf/Lawsuit-MemoranduminSupport.PDF 50 Home and Community Services Litigation Status Report: December 27, 2004

law for their own purposes, even though the result residents an unlimited number of medications. The will be that individuals with mental retardation and plaintiffs argued that the state’s policy was developmental disabilities will not get the same discriminatory. The district court, however, granted quality of services from county to county.” summary judgment to the state, deciding that the The plaintiffs asked the court to grant injunctive relief plaintiffs could not maintain a claim under the ADA to prevent the county boards from forcing them to sign because they were not institutionalized or at risk of contracts that they do not regard as legal or withhold institutionalization. The plaintiffs appealed this payments. decision to the 10th Circuit Court of Appeals. In July 2003, the Circuit reversed the summary judgment and With respect to the injunctive relief, in a June 2003 remanded the complaint to the district court.87 order86, the court directed that county boards and providers should reach mutual agreements to either The Circuit ruled that the district court had erred in extend or revise the terms of existing service contracts interpreting the ADA and the Olmstead decision as or otherwise resolve their differences under the state's only apply to institutionalized persons or individuals at dispute resolution statute. In the event that the board risk of institutionalization. The Circuit pointed out that and providers do not agree, or choose not to enter into Title II applied to all publicly-operated programs that a new contract or amend an existing contract, the court serve people with disabilities. The Circuit also ques- instructed both sides to continue to operate under tioned the district court’s reasoning that requiring the existing contracts, day-to-day until ODMRDD, as the state to reinstate unlimited prescribed medications ODJFS designee, promulgates the overdue rules would constitute a fundamental alternation. The Cir- governing service contracts. However, the order also cuit noted that, if the effect of the limit were to force made it clear that a provider’s agreeing to continue an individuals to seek care in nursing facilities, the state existing contract or enter into a new contract with a would incur higher costs because such services are county board would in no way limit the plaintiffs’ more expensive than waiver services. Since the plain- pursuing their claims regarding the underlying tiffs had not based their original claims on Medicaid lawfulness of the contracts. law, the Circuit refused to rule on alleged violations of Medicaid requirements that they raised on appeal. So far, rules that would address the underlying issues These claims revolved around the effect of the waiver in this litigation have not been adopted by the state. of comparability that states receive when they operate 16.Oklahoma: Fisher et al. v. Oklahoma Health an HCBS waiver program and their argument that such Care Authority et al. a waiver does not extend to other non-waiver Medicaid In 2002, Oklahoma decided that it would limit to five services. The Circuit noted that these issues would the number of prescribed medications that participants have to be addressed by the district court. in the state’s “Advantage” HCBS waiver program for In November 2003, this lawsuit was settled by the people with disabilities and older persons could re- parties and dismissed. The Oklahoma Health Care ceive in order to reduce spending to address the state Authority revised its policies concerning prescribed state’s budget deficit. Previously, there was no limit on drugs, increasing the prescription limit to six per the number of medications that Advantage participants month for all adult Medicaid beneficiaries. In the case could receive, a policy that also was in effect for of HCBS waiver participants, in addition to the six nursing facility residents. Medicaid beneficiaries not prescriptions, they also may have up to seven served in nursing facilities or participating in the additional generic prescriptions. Persons who require waiver program are subject to a three-prescription additional medications may request them through a limit. Oklahoma’s Advantage program covered pre- prior authorization process that will include a clinical scribed drugs over and above this limit as an additional review of all the individual’s prescribed drugs. “extended pharmacy” benefit. In limiting prescribed 17.Pennsylvania: Network for Quality M.R. drugs to five per month, the state amended its waiver Services in Pennsylvania v. Department of program to curtail the number of medications provided Public Welfare under the extended pharmacy benefit. This lawsuit was filed in March 2002 in the The Oklahoma Disability Law Center immediately Commonwealth Court of Pennsylvania by a coalition filed suit (02-cv-762) in the U.S. District Court for the of agencies that furnish services to individuals in Northern District of Oklahoma, arguing that limiting ICFs/MR and/or Pennsylvania’s HCBS waiver pro- the number of medications violated the ADA and §504 gram for people with mental retardation. The plaintiffs because the state continued to allow nursing facility 87 Decision located at: 86 The order is at: www.opra.org/pdf/Judge McGrath Order.PDF http://laws.findlaw.com/10th/025192.html. 51 Home and Community Services Litigation Status Report: December 27, 2004 contended that Pennsylvania has depressed payments deciding that the decree could not be enforced unless for ICF/MR services and held down waiver funding by the state had voluntarily waived its 11th Amendment predicating funding levels on inadequate compensation immunity. of direct care workers. As a result, the plaintiffs argued The plaintiffs then petitioned the U.S. Supreme Court that they are cannot furnish an appropriate level of to reverse the 5th Circuit’s decision. The plaintiffs services due to high staff turnover and workforce contend that the state’s agreeing to the consent decree instability. They also cited a federal review of amounted to a waiver of sovereign immunity and, Pennsylvania’s HCBS waiver program that questioned therefore, the state could not back out of the decree. the adequacy of the state’s payments for services. The This litigation raised significant concerns about the en- plaintiffs asked the Court to order the state to “fairly, forceability of consent decrees and settlement agree- reasonably and lawfully reimburse providers … to ments and thereby their role in resolving litigation.88 ensure the quality, and continuity, of care provided by The Supreme Court granted the petition (02-628) and these providers.” heard oral arguments on October 7, 2003. During the In particular, the lawsuit contended that the state is in oral arguments, several Justices expressed serious res- violation of: (a) the State’s Public Welfare Code and ervations concerning the 5th Circuit’s decision. implementing regulations that require providers to be On January 14, 2004, the Court handed a unanimous paid for “reasonable costs”; (b) §1902(a)(30)(A) decision reversing the 5th Circuit decision.89 Writing because payments are insufficient to ensure the quality for the Court, Justice Kennedy wrote: “Federal courts of care; (c) federal Medicaid requirements by not are not reduce to approving consent decrees and hop- providing an effective and timely process for the ing for compliance. Once entered, a consent decree reconsideration of payment rates; and, (d) equal must be enforced. protection under the Pennsylvania Constitution by providing for higher payments to publicly-operated Note Concerning Sources programs than for services furnished by non-state We scan news articles and other sources for agencies. The plaintiffs asked the Court to order that developments concerning the filing of lawsuits in the the state ensure that fair and reasonable direct care disabilities arena. We access court websites for updates staff costs are reimbursed and updated. The plaintiffs concerning the status of lawsuits and to obtain primary also asked for the appointment of a Master to oversee source documents when they are available on the court’s this process. The federal law claims were subsequently website. In most cases, federal court documents are only dropped by the plaintiffs. directly available to individuals that have set up a fee- based U.S. PACER system account. To the extent that In July 2003, the Commonwealth Court dismissed the lawsuits and/or court decisions are posted on websites lawsuit. The Court found that the plaintiffs had not that are accessible to the general public without charge, exhausted their available administrative remedies we include links in the report. Usually, we do not report under Pennsylvania law and, until they had, the issues on a lawsuit until we have the actual complaint in hand. raised in the lawsuit were not ripe for judicial review. We also appreciate it when readers of this report alert us that a lawsuit has been filed or when there are new 18.Texas: Frew et al. v. Hawkins et al. developments in a case. Filed in 1993, this lawsuit alleged that Texas was not References meeting its obligations in furnishing EPDST services to children. In 1996, the state entered into a voluntary Office of the Assistant Secretary for Planning and consent decree that would be enforceable by the court. Evaluation (ASPE), U.S. Department of Health and Hu- The decree required the state to institute detailed man Services (2000). Understanding Medicaid Home and procedures to comply with the decree. In 1998, the Community Services: A Primer. Washington DC. Also plaintiffs returned to court, arguing that the state was available at: aspe.hhs.gov/daltcp/reports/primer.htm. not living up to the decree. The court agreed and then Elizabeth Priaulx (December 2003). “Docket of moved to enforce the decree, prescribing detailed Significant Protection and Advocacy Cases Related to requirements that the state would have to meet. This Community Integration” Washington DC: National Asso- prompted the state to appeal the district court’s th enforcement of the decree to the 5 Circuit Court of 88 For more information, go to: Appeals. In particular, Texas claimed that it should not journalism.medill.northwestern.edu/docket/action.lasso?- be held to the decree because its requirements went database=docket&-layout=lasso&-response=%2fdocket well beyond those contained in federal Medicaid law %2fdetail.srch&-recordID=33149&-search. This site describes and the decree was not enforceable under the 11th the issues at play and contains links to the plaintiff petition and th amici briefs in support of the plaintiffs. Amendment. The 5 Circuit ruled in the state’s favor, 89 The decision is at: laws.findlaw.com/us/000/02-628.html 52 Home and Community Services Litigation Status Report: December 27, 2004 ciation of Protection & Advocacy Systems, Inc., Training and Advocacy Support Center. Robert Prouty, Gary Smith and K. Charlie Lakin (eds.) (2004). Residential Services for Persons with Intellectual and Developmental Disabilities: Status and Trends Through 2003. Minneapolis: University of Minnesota, Research and Training Center on Community Living. Available at: rtc.umn.edu/risp/index.html. Gary Smith (1999). Closing the Gap: Addressing the Needs of People with Developmental Disabilities Wait ing for Supports. Alexandria VA: National Association of State Directors of Developmental Disabilities Services. Resources National Health Law Project (NHeLP) – Health Activist Court Watch Project is an excellent source of information about litigation that bears on access to health and other long-term services. Its web-site is www.healthlaw.org/courtwatch.shtml.

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