Rosen v. Tennessee Com'R of Finance and Admin.

• Decision Date: 18 December 2002
• Docket Number: No. 3:98-0627.,3:98-0627.
• Citation: 280 F.Supp.2d 743
• Court: U.S. District Court — Middle District of Tennessee
• Parties: Michael ROSEN; Barbara Huskey; Emanuel Martin by his next friend, Cheryl Martin; Wanda Campbell; Connie Hoilman; Mark Hughes; Jacob B. by his next friend, Martin B.; Jackie Baggett; Brenda Clabo; Pradie Tibbs, Original Plaintiffs, and Gayle Cummings; Bach Thuy Nguyen; Di Nguyen; Sherry Justice; Sean Addison by his next friend, Lisa Addison; Lorri Griffin; Melanie Jackson; and Wilson Dale Jackson on their own behalf and on behalf of all others similarly situated; Mid-South Arc, a nonprofit Tennessee corporation; and the Tennessee Disability Coalition, a nonprofit Tennessee corporation, Additional Plaintiffs, v. TENNESSEE COMMISSIONER OF FINANCE AND ADMINISTRATION, Defendant.

Page 743

280 F.Supp.2d 743

Michael ROSEN; Barbara Huskey; Emanuel Martin by his next friend, Cheryl Martin; Wanda Campbell; Connie Hoilman; Mark Hughes; Jacob B. by his next friend, Martin B.; Jackie Baggett; Brenda Clabo; Pradie Tibbs, Original Plaintiffs, and Gayle Cummings; Bach Thuy Nguyen; Di Nguyen; Sherry Justice; Sean Addison by his next friend, Lisa Addison; Lorri Griffin; Melanie Jackson; and Wilson Dale Jackson on their own behalf and on behalf of all others similarly situated; Mid-South Arc, a nonprofit Tennessee corporation; and the Tennessee Disability Coalition, a nonprofit Tennessee corporation, Additional Plaintiffs, v. TENNESSEE COMMISSIONER OF FINANCE AND ADMINISTRATION, Defendant.

No. 3:98-0627.

United States District Court, M.D. Tennessee. Nashville Division.

December 18, 2002.

As Amended December 19, 2002.

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George Gordon Bonnyman, Jr., Lisa J. D'Souza, Shawn L. Caster, Michele M. Johnson, Tennessee Justice Center, Inc., Nashville, TN, for Plaintiffs.

Linda A. Ross, Jennifer Helton Hann, Sue A. Sheldon, Office of the Attorney General and Reporter, Katherine Anne Brown, Willis & Knight, Ronald W. McNutt, Mitch Grissim & Associates, Nashville, TN, Charles A. Miller, Julie L.B. Johnson, Robert D. Wick, Covington & Burling, Washington, DC, for Defendant.

Michael James Passino, Nashville, TN, for Special Master.

MEMORANDUM

HAYNES, District Judge.

                TABLE OF CONTENTS
                I. PROCEDURAL HISTORY ....................................................... 751
                 II. SUPPLEMENTAL CLAIMS ...................................................... 755
                III. PLAINTIFFS' FIFTH MOTION FOR PRELIMINARY INJUNCTION ...................... 755
                 IV. ISSUES TO BE DECIDED ..................................................... 756
                  V. SUMMARY OF RULING ........................................................ 757
                 VI. FINDINGS OF FACT ......................................................... 758
                      A. Origin of the TennCare Program ....................................... 758
                      B. The New TennCare Waiver .............................................. 759
                      C. Policies and Procedures for the New TennCare Program ................. 761
                         1. The July 1, 2002 to December 31, 2002 Reverification Rules and
                              Policies ........................................................ 762
                         2. TennCare's Policies and Rules for Reverification and Enrollment
                              after January 1, 2003 ........................................... 765
                      D. Defendant's Administration of the New TennCare Program ............... 767
                         1. TDHS's Management Capacity as Administrator ....................... 768
                         2. Notice and Appeal Practices from July 1, 2002 to December, 2002 ... 771
                         3. Pacific Health's Monitoring of TDHS's Administration .............. 776
                

                         4. Appeals Process ................................................... 778
                         5. Accommodations for Enrollees with Severe and Persistent Mental
                             Illness ("SPMI") and Seriously Emotionally Disturbed Children
                             ("SEDC") ......................................................... 780
                         6. Accommodations for Enrollees with Limited English Proficiency
                             ("LEP") .......................................................... 789
                         7. The Effects of Multiple Eligibility Reverification ................ 790
                            a. Waiver Eligible Redetermination Process ........................ 791
                         8. The Medical Care Advisory Committee ("MCAC") ...................... 792
                      E. Individual Plaintiffs ................................................ 792
                      F. Other Individuals and Class Members .................................. 798
                      G. Organization Plaintiffs .............................................. 805
                      H. TennCare Advocacy Groups ............................................. 805
                 VII. CONCLUSIONS OF LAW ...................................................... 811
                      A. The Purposes of the Medicaid Act ..................................... 811
                      B. Plaintiffs' Standing ................................................. 813
                         1. Individual Plaintiffs ............................................. 814
                         2. Organizational Plaintiffs ......................................... 816
                      C. Plaintiffs' Implied Right of Action to Enforce Medicaid Regulations .. 819
                      D. Plaintiffs' MCAC Claims .............................................. 822
                      E. Plaintiffs' Procedural Due Process Claims ............................ 827
                         1. Plaintiffs' Claims of Notice Violations ........................... 830
                            a. Adequacy of Notices to SPMI and SED Enrollees .................. 830
                            b. Lack of Notice of Good Cause ................................... 830
                            c. Inadequate Notices of Appeals at the Termination Stage ......... 831
                            d. Inadequate Notice of Reasons of Denial ......................... 832
                      F. Plaintiffs' Rights to Accommodations ................................. 832
                      G. Lack of LEP Accommodations ........................................... 835
                      H. Arbitrary Policies and Administration ................................ 836
                         1. The 45 Day Rule ................................................... 837
                         2. TennCare's Failure to Consider All Eligibility Statements ......... 839
                         3. A Current CRG/TPG Assessment for SPMI and SED Enrollees ........... 840
                         4. SPMI and SED Enrollee's Personal Signature Requirement ............ 841
                      I. Limiting Scope of Appeals and Coverage ............................... 841
                VIII. RELIEF AWARDED ........................................................... 842
                

INTRODUCTION:

Plaintiffs, Michael Rosen, Barbara Huskey, Emanuel Martin, by his next friend, Cheryl Martin; Wanda Campbell, Connie Hoilman, Mark Hughes, Jacob B., by his next friend, Martin B.; Jackie Baggett, Brenda Clabo, and Pradie Tibbs, on behalf of all others similarly situated; filed this action under 42 U.S.C. § 1983 against the Defendant, the Tennessee Commissioner of Finance Administration. Plaintiffs assert claims that the Commissioner's administration of Tennessee's TennCare plan, a managed health care program established under Title XIX of the Social Security Act, 42 U.S.C. 1396 et seq., violates Plaintiffs' procedural rights under the Due Process Clause of the Fourteenth Amendment and applicable federal regulations. This action has been an extensive and complex proceeding.¹

I. PROCEDURAL HISTORY

In earlier proceedings, the Court granted the original Plaintiffs' second motion for a preliminary injunction to reinstate their coverage under TennCare, citing the lack of any response by the Defendant to the merits of the motion. (Docket Entry No. 27). Plaintiffs' first motion for preliminary injunction (Docket Entry No. 2) was denied as moot. (Docket Entry No. 27). The Court ordered reinstatement of TennCare coverage to all class members who were denied coverage without the benefit of due process. Id. In response, the Defendant temporarily suspended termination of insured and uninsured enrollees. The Defendant then filed a motion for relief (Docket Entry No. 29), citing the parties' ongoing settlement discussions that delayed Defendant's response to Plaintiffs' preliminary injunction motions. (Docket Entry No. 29). On May 5, 2000, the Court granted that motion (Docket Entry No. 106) that had actually become moot. In the interim, on September 13, 1999, the Court granted a joint motion to modify the January 20, 1999 Order. (Docket Entry No. 53).

Under the September 13, 1999 Order, the Defendant used its TennCare eligibility base of insured and uninsureds to notify and allow Rosen class members to re-enroll in TennCare without an eligibility review or payment of past premiums. Id. at 2. In a word, this Order allowed the State to substitute the prior notice procedure for immediate reinstatement of those persons affected by the Court's earlier Order. Id. at 3-4. Under this Order, 14,994 class members re-enrolled. Id. Class members who did not respond, would receive a second notice and notices of re-enrollment would be posted at public places. Id. at 5. Re-enrollment was reopened for sixty (60) days. Id. at 6. Further, by April, 2000, the Defendant agreed that enrollees who had lost Medicaid coverage and were not enrolled as uninsured or uninsurable, would be given notice of their rights to reapply as an uninsured or uninsurable or to have an administrative appeal of their earlier losses of coverage.

On April 28, 2000, Plaintiffs renewed their motion for preliminary injunction (Docket Entry No. 87) citing continuing violations of the Court's September 13, 1999 Order because none of the notices required by that Order had been mailed and the Defendant failed to provide due process requirements in the TennCare administrative appeal process. (Docket Entry No. 88). A state audit had documented these appellate deficiencies. Plaintiffs also cited other instances of terminations of coverage without notice or receipt of notice after termination. Reverification notices were sent during one quarter in 2000 for 100,000 enrollees on their continued eligibility for TennCare coverage. (Docket Entry No. 144, Transcript of Proceedings, October 3, 2000, at 12-17).

On May 5, 2000, Plaintiffs filed an application for a Temporary Restraining Order (Docket Entry No. 92), citing the Defendant's continuing violations of the Court's injunction and Plaintiffs' procedural due process rights. The Court granted the Plaintiffs' application for a temporary restraining order (Docket Entry No. 96), requiring compliance with 42 C.F.R. § 431, Subpart E before any termination or disruption of a class member's TennCare coverage.

On September 7, 2000, Plaintiffs filed a motion to...