Garrido v. Interim Sec'y

• Decision Date: 20 September 2013
• Docket Number: No. 12–13785.,12–13785.
• Citation: 731 F.3d 1152
• Parties: Iliana GARRIDO, K.G. by and through his next friend, et al., Plaintiffs–Appellees, v. Interim Secretary, Florida Agency for Health Care Administration, Elizabeth DUDEK, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

731 F.3d 1152

Iliana GARRIDO, K.G. by and through his next friend, et al., Plaintiffs–Appellees,

v.Interim Secretary, Florida Agency for Health Care Administration, Elizabeth DUDEK, Defendant–Appellant.

No. 12–13785.

United States Court of Appeals, Eleventh Circuit.

Sept. 20, 2013.

Miriam Harmatz, Betsy Ellen Havens, Florida Legal Services, Inc., Monica Vigues–Pitan, Legal Services of Greater Miami, Inc., Miami, FL, Neil David Kodsi, The Law Offices of Neil D. Kodsi Plantation Corporate Ctr., Plantation, FL, Miles A. McGrane, IV, McGrane Nosich & Ganz, PA, Coral Gables, FL, Martha Jane Perkins, National Health Law Program, Carrboro, NC, for Plaintiffs–Appellees.

Stuart F. Williams, Debora E. Fridie, Cynthia L. Hain, Andrew T. Sheeran, Florida Agency for Health Care Administration, Andy V. Bardos, GrayRobinson, PA, George Nicholas Meros, Jr., GrayRobinson, PA, Allen C. Winsor, Attorney General's Office, Tallahassee, FL, Pam Bondi, Charles M. Fahlbusch, Attorney General's Office, FT Lauderdale, FL, for Defendant–Appellant.

Appeal from the United States District Court for the Southern District of Florida.

Before HULL, MARTIN, Circuit Judges, and BOWEN,^* District Judge.

HULL, Circuit Judge:

Plaintiffs–Appellees K.G., I.D., and C.C., through their next friends, sued Defendant–Appellant Elizabeth Dudek, in her official capacity as Interim Secretary for the Florida Agency for Health Care Administration. Plaintiffs alleged that Dudek violated the Medicaid Act by denying Medicaid coverage of applied behavioral analysis to treat Plaintiffs' autism spectrum disorders. After a four-day bench trial, the district court granted Plaintiffs a permanent injunction, concluding that Medicaid covered this treatment for the Plaintiffs. K.G. ex rel. Garrido v. Dudek, 864 F.Supp.2d 1314 (S.D.Fla.2012). The district court subsequently granted Plaintiffs a declaratory judgment. K.G. ex rel. Garrido v. Dudek, 1:11–cv–20684–JAL (D.E.144) (S.D.Fla. June 14, 2012). This appeal concerns the scope of the permanent injunction and declaratory judgment. After review and with the benefit of oral argument, we affirm in part, but reverse and remand to the district court for modification of the permanent injunction and declaratory judgment.

I. BACKGROUND

To understand the issues in this appeal, we briefly outline the Medicaid program and its coverage of certain medically necessary services.

A. Regulatory Framework

Medicaid is a cooperatively funded federal-state program designed to help states provide medical treatment to their needy citizens. States devise and fund their own medical assistance programs, subject to the requirements of the federal Medicaid Act, and the federal government provides partial reimbursement. See42 U.S.C. §§ 1396b(a), 1396d(b). A state's participation in the Medicaid program is voluntary, but once a state chooses to participate it must comply with federal statutory and regulatory requirements. See Alexander v. Choate, 469 U.S. 287, 289 n. 1, 105 S.Ct. 712, 714 n. 1, 83 L.Ed.2d 661 (1985). All states, including Florida, participate in the Medicaid program. Florida administers its Medicaid program through the Agency for Health Care Administration (“AHCA”). SeeFla. Stat. §§ 409.901(2), 409.902.

Under the Medicaid Act, participating states must provide “early and periodic screening, diagnostic, and treatment services” (“EPSDT”) for Medicaid-eligible minors under the age of 21. 42 U.S.C. § 1396d(a)(4)(B). The EPSDT program mandates four specific categories of services: screening, vision, dental, and hearing services. 42 U.S.C. § 1396d(r)(1)-(4). Additionally, the catch-all EPSDT provision in § 1396d(r)(5)—the most relevant to this appeal—mandates that participating states provide to Medicaid-eligible minors “[s]uch other necessary health care, diagnostic services, treatment, and other measures described in [§ 1396d(a) ] to correct or ameliorate defects and physical and mental illnesses and conditions discovered by the screening services, whether or not such services are covered under the State plan.” Id. § 1396d(r)(5).

In turn, § 1396d(a) lists 29 covered categories of care and services, including preventive and rehabilitative services. Id. § 1396d(a)(13). Thus, under § 1396d(r)(5), a state must provide a service listed in § 1396d(a) to a Medicaid-eligible minor—even if the state does not provide that service to Medicaid-eligible adults—if the service is necessary to “correct or ameliorate” a condition or defect discovered during an EPSDT screen.

Another relevant component of the federal Medicaid Act is its comparability requirement provision, which ensures equitable treatment of beneficiaries. Under this provision, “the medical assistance made available to any [eligible] individual ... shall not be less in amount, duration, or scope than the medical assistance made available to any other such individual.” 42 U.S.C. § 1396a(a)(10)(B)(i); see also id. § 1396a(a)(10)(B)(ii).

However, federal regulations provide that each service covered by Medicaid “must be sufficient in amount, duration, and scope to reasonably achieve its purpose” and the state Medicaid agency “may place appropriate limits on a service based on ... medical necessity.” 42 C.F.R. § 440.230. Although neither the Medicaid Act nor its implementing regulations explicitly define the standard of “medical necessity,” “it has become a judicially accepted component of the federal legislative scheme.” Moore ex rel. Moore v. Reese, 637 F.3d 1220, 1232 (11th Cir.2011). The Medicaid Act and its implementing regulations grant the authority to the states to set reasonable standards for the terms “necessary” and “medical necessity.” See42 U.S.C. § 1396a(a)(17); 42 C.F.R. § 440.230(d); see also Moore, 637 F.3d at 1255. Thus, as permitted by the federal Medicaid Act, Florida statute authorizes Medicaid coverage for only those services that are “medically necessary.” Fla. Stat. §§ 409.905, 409.906. Under Florida's regulatory scheme, “medically necessary” or “medical necessity” means that

the medical or allied care, goods, or services furnished or ordered must ... [m]eet the following conditions:

1. Be necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain;

2. Be individualized, specific, and consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the patient's needs;

3. Be consistent with generally accepted professional medical standards as determined by the Medicaid program, and not experimental or investigational;

4. Be reflective of the level of service that can be safely furnished, and for which no equally effective and more conservative or less costly treatment is available statewide; and

5. Be furnished in a manner not primarily intended for the convenience of the recipient, the recipient's caretaker, or the provider.

Fla. Admin. Code r. 59G–1.010(166)(a).

Accordingly, for a treatment to be “medically necessary” and covered by Florida Medicaid, the treatment must be, inter alia, “individualized [and] specific,” “not in excess of the patient's needs,” and “not experimental.” Id. A treatment is “experimental” when, for example, “[r]eliable evidence shows that the consensus among experts regarding the drug, device, or medical treatment or procedure is that further studies or clinical trials are necessary to determine its maximum tolerated dose, toxicity, safety, or efficacy as compared with the standard means of treatment or diagnosis.” Fla. Admin. Code r. 59G–1.010(84)(a)3.

Florida's Medicaid coverage of behavioral health services is found at Florida Administrate Code rule 59G–4.050, which incorporates by reference the Florida Medicaid Community Behavioral Health Services Coverage and Limitations Handbook (the “Handbook”). SeeFla. Admin. Code r. 59G–4.050(2)(3). The Handbook delineates the specific behavioral health services that are covered by Florida's Medicaid program. As relevant here, a portion of the Handbook, entitled “Service Exclusions,” stated that “Medicaid does not pay for community behavioral health services for treatment of autism [or] pervasive developmental delay.” Handbook Rule 2–1–4.

B. Factual Background

Plaintiffs K.G., I.D., and C.C. are minors under the age of 21 who receive Florida Medicaid due to their disabling conditions and their parents' income status. All three Plaintiffs were diagnosed with autism or autism spectrum disorders (“ASD”) ¹ during EPSDT screens and were all prescribed applied behavioral analysis (“ABA”) treatment by their treating physicians. ABA is a type of early intensive behavioral interaction health service that uses a structured, one-on-one program to treat the behavioral problems associated with ASD.

Because Plaintiffs' conditions were discovered during EPSDT screens, Florida Medicaid must provide any treatment “necessary” “to correct or ameliorate” those conditions, whether or not the treatment is covered by the state's plan. See42 U.S.C. § 1396d(r)(5). As noted above, such services were excluded from Florida Medicaid coverage as memorialized in Handbook Rule 2–1–4. Furthermore, after the lawsuit was filed, AHCA determinedthat community behavioral health services like ABA were experimental and thus not medically “necessary” for the treatment of ASD. SeeFla. Admin. Code r. 59G–1.010(166)(a)3. In accordance with its policy at that time, AHCA denied Plaintiffs' requests for Medicaid coverage of ABA treatment.

C. Procedural History

Plaintiff K.G., through his next friend, Iliana Garrido, filed his complaint on February 28, 2011 against Elizabeth Dudek, the Secretary of AHCA and the State of Florida's Medicaid administrator. K.G. alleged that, under 42 U.S.C. § 1983, AHCA's denial of ABA treatment violated the Medicaid Act's EPSDT provision and comparability provision.

In his complaint, K.G. sought: (1) a declaration that the Handbook's exclusion of behavioral health services for treatment of ASD violates...