Pashby v. Delia

• Decision Date: 05 March 2013
• Docket Number: No. 11–2363.,11–2363.
• Parties: Henry PASHBY; Annie Baxley; Margaret Drew; Deborah Ford; Melissa Gabijan; Michael Hutter; James Moore; Lucretia Moore; Ayleah Phillips; Alice Shropshire; Sandy Splawn; Robert Jones; Rebecca Pettigrew, Plaintiffs–Appellees, and Betty Moore, Plaintiff, v. Albert DELIA, In his official capacity as Secretary of the N.C. Department of Health and Human Services, Defendant–Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

709 F.3d 307

Henry PASHBY; Annie Baxley; Margaret Drew; Deborah Ford; Melissa Gabijan; Michael Hutter; James Moore; Lucretia Moore; Ayleah Phillips; Alice Shropshire; Sandy Splawn; Robert Jones; Rebecca Pettigrew, Plaintiffs–Appellees,

and

Betty Moore, Plaintiff,

v.Albert DELIA, In his official capacity as Secretary of the N.C. Department of Health and Human Services, Defendant–Appellant.

No. 11–2363.

United States Court of Appeals,Fourth Circuit.

Argued: Sept. 18, 2012.

Decided: March 5, 2013.

ARGUED:Tracy J. Hayes, North Carolina Department of Justice, Raleigh, North Carolina, for Appellant. Sarah Somers, National Health Law Program, Carrboro, North Carolina, for Appellees. ON BRIEF:Roy Cooper, North Carolina Attorney General, Lisa Granberry Corbett, Special Deputy Attorney General, North Carolina Department of Justice, Raleigh, North Carolina, for Appellant. Douglas Stuart Sea, Legal Services of Southern Piedmont, Inc., Charlotte, North Carolina; Jane Perkins, National Health Law Program, Carrboro, North Carolina; John R. Rittelmeyer, Jennifer L. Bills, Elizabeth D. Edwards, Disability Rights NC, Raleigh, North Carolina, for Appellees.

Before AGEE, WYNN, and FLOYD, Circuit Judges.

Remanded by published opinion. Judge FLOYD wrote the majority opinion, in which Judge WYNN joined. Judge AGEE wrote a separate opinion concurring in part and dissenting in part.

OPINION

FLOYD, Circuit Judge:

In 2010, the North Carolina General Assembly voted to impose stricter eligibility requirements for in-home personal care services (PCS), an optional Medicaid program that assists disabled adults with daily tasks such as eating and bathing. Appellees—thirteen North Carolina residents who lost access to in-home PCS due to the statutory change (collectively “the PCS Recipients”)—brought suit, contending that the new PCS program violated the Social Security Act, the Americans with Disabilities Act (ADA), and the Rehabilitation Act. The PCS Recipients further alleged that the boiler-plate termination letters they received did not fulfill the Fourteenth Amendment's due process requirements.

The district court granted the PCS Recipients' motions for a preliminary injunction and class certification, and Appellant—Acting Secretary of the North Carolina Department of Health and Human Services (DHHS) Albert Delia—filed this timely appeal. On appeal, the DHHS argues that (1) the district court lacked subject matter jurisdiction; (2) the district court erred in granting the PCS Recipients' motion for class certification; (3) the injunction qualifies as a mandatory preliminary injunction, necessitating a heightened standard of review; (4) the PCS Recipients failed to make the case for a preliminary injunction; and (5) the district court's order does not satisfy Rule 65 of the Federal Rules of Civil Procedure. We agree with the district court's conclusion that a preliminary injunction was appropriate in this case. However, because the district court's order failed to comply with Rule 65, we remand.

I.

A.

Medicaid is a cooperative program through which the federal government offersfinancial assistance to states, allowing them to provide medical services to individuals with limited incomes. 42 U.S.C. § 1396–1. If a state participates in Medicaid, it must comply with federally mandated standards. Id.§ 1396a. States may also choose to provide additional, optional benefits. North Carolina has elected to participate in Medicaid, and the DHHS administers its program.

One of the optional Medicaid benefits that North Carolina offers is PCS. Individuals who qualify for PCS are assigned an aide who assists them with everyday tasks. Prior to June 2011, Medicaid-eligible adults could receive PCS in their homes if a physician determined that they required medically necessary assistance with two or more of the following five activities of daily living (ADLs): eating, bathing, dressing, mobility, and toileting. The North Carolina General Assembly began the process of altering these requirements when it passed Session Law 2010–31, which replaced the old in-home PCS program with the new In–Home Care for Adults (IHCA) program. The DHHS developed a plan for providing PCS under IHCA and sought approval from the Centers for Medicare and Medicaid Services (CMS), the federal agency that administers Medicaid. The CMS approved the DHHS's plan through a “state plan amendment” (SPA) on April 15, 2011, and IHCA went into effect on June 1, 2011.

As part of the implementation process for IHCA, the DHHS developed IHCA Policy 3E, which is the focal point of this case. IHCA Policy 3E imposes stricter eligibility requirements for receiving in-home PCS. Pursuant to IHCA Policy 3E, adults qualify for in-home PCS if they require limited assistance with three ADLs or extensive assistance with two ADLs. As under the prior in-home PCS program, the recipient's physician must attest that in-home PCS is medically necessary, and a representative of the DHHS's Division of Medical Assistance (DMA) must conduct a face-to-face assessment before an individual can receive in-home PCS. Under both programs, the DMA's representative can reassess whether an individual qualifies for in-home PCS at any time.

In addition to offering in-home PCS, North Carolina also provides Medicaid-funded PCS to individuals who reside in adult care homes (ACHs). The eligibility requirements for receiving PCS in an ACH are less stringent than the requirements for obtaining in-home PCS under IHCA Policy 3E. Whereas an individual must need assistance with two or three of five ADLs before the DMA will approve in-home PCS under IHCA Policy 3E, individuals residing in ACHs qualify for PCS if they require “assistance” or “limited supervision” with regard to one of seven ADLs: bathing, dressing, personal hygiene, ambulation or locomotion, transferring, toileting, and eating. An individual's personal care needs must be “medically related” to qualify for ACH PCS, but an ACH staff member rather than a DMA representative may conduct the assessment. Consequently, individuals who do not meet the requirements for in-home PCS may be able to receive PCS if they move to an ACH.

The CMS-approved SPA that authorized the DHHS to implement IHCA also required the DHHS to impose stricter eligibility requirements for ACH PCS. Specifically, pursuant to that SPA, ACH residents could qualify for PCS if they required assistance with two of seven ADLs. On May 1, 2012, the CMS approved a second SPA, reiterating that the DHHS must make its ACH PCS eligibility criteria comparable with its in-home PCS eligibility requirements and extendingits deadline to do so until December 31, 2012. The North Carolina General Assembly took preliminary steps to assuage the CMS's concerns when it passed Session Law 2012–142, which specifies that Medicaid recipients must satisfy the same requirements to receive PCS regardless of whether they reside at home or in an ACH. These new eligibility criteria were scheduled to go into effect on January 1, 2013. The DHHS ultimately aims to provide all PCS—both in homes and in ACHs—under § 1915(i) of the Social Security Act. Because § 1915(i) allows a waiver of Medicaid's comparability requirements, the DHHS claims that the transition to § 1915(i) will eliminate any comparability issues with respect to PCS.

B.

Before IHCA Policy 3E went into effect, the DHHS mailed letters informing approximately 2,405 individuals—including the named Appellees and certified class members—that they no longer met the eligibility requirements for in-home PCS and would cease to receive the service as of June 1, 2011. The letters did not give individualized reasons why each person's PCS had been terminated; instead, the letters cited North Carolina's shift to the new IHCA program as the reason for the change in benefits. However, the letters did explain the administrative appeal process and advised the recipients of their right to review Medicaid's files regarding their cases. Many of the individuals who received these notifications—including Appellees Ayleah Phillips and Rebecca Pettigrew—continue to receive in-home PCS pending the resolution of their administrative appeals, and the DHHS reversed its decision with respect to Appellees Henry Pashby, Annie Baxley, Margaret Drew, Deborah Ford, Melissa Gabijan, Michael Hutter, James Moore, Lucretia Moore, Alice Shropshire, and Sandy Splawn after they filed this lawsuit. Appellee Robert Jones voluntarily dismissed his administrative appeal when a mediator refused to reinstate his in-home PCS.

The PCS Recipients brought suit on May 31, 2011, challenging IHCA Policy 3E and seeking a preliminary injunction to prohibit the DHHS from implementing stricter eligibility requirements for in-home PCS. Specifically, the PCS Recipients contended that the differences between the new in-home PCS program and the PCS available to individuals who reside in ACHs cause IHCA Policy 3E to contravene the ADA, section 504 of the Rehabilitation Act, and the Social Security Act. The PCS Recipients further alleged that the DHHS did not provide sufficient notice before terminating their in-home PCS, violating the Due Process Clause of the Fourteenth Amendment.

The PCS Recipients filed a motion for class certification on June 6, 2011. On December 8, 2011, the district court entered an order granting the PCS Recipients' motion for a preliminary injunction, thereby halting the implementation of IHCA Policy 3E. Pashby v. Cansler, 279 F.R.D. 347, 356 (E.D.N.C.2011). The district court also granted the PCS Recipients' motion for class certification and defined the class as follows:

[A]ll current or future North Carolina Medicaid recipients age 21 or older who have, or will have, coverage of PCS denied, delayed, interrupted, terminated, or reduced by Defendant directly or through his agents or assigns as a result of the new eligibility requirements for in-home PCS and unlawful policies contained in IHCA Policy 3E.

Id....