D.U. v. Rhoades

• Decision Date: 03 June 2016
• Docket Number: No. 15–1243,15–1243
• Citation: 825 F.3d 331
• Parties: D.U., a minor, Plaintiff–Appellant, v. Kitty Rhoades and Kelly Townsend, Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

825 F.3d 331

D.U., a minor, Plaintiff–Appellant

v.Kitty Rhoades and Kelly Townsend, Defendants–Appellees.

No. 15–1243

United States Court of Appeals, Seventh Circuit.

Argued March 30, 2016

Decided June 3, 2016

Norman Eugene Underwood, Jr., Attorney, Suite 3, 2550 Crawford Avenue, Evanston, IL 60201–0000, for Plaintiff–Appellant.

Sean Michael Murphy, Attorney, Office of the Attorney General, Wisconsin Department of Justice, 17 W. Main Street, P.O. Box 7857, Madison, WI 53707–7857, for Defendants–Appellees.

Before Wood, Chief Judge, and Posner and Rovner, Circuit Judges.

Rovner, Circuit Judge.

D.U. is a minor who was receiving the assistance of a Medicaid-funded private duty nurse for seventy hours each week after a catastrophic accident rendered her severely disabled. After many years of care, the State of Wisconsin determined that full-time skilled nursing assistance was no longer medically necessary for D.U.'s care, and the State denied further authorization of that level of care. D.U. then sued Kitty Rhoades, Secretary for the Wisconsin Department of Health Services (“DHS”), and Kelly Townsend, a nurse consultant in the Quality Assurance and Appropriateness Review Section (“QAARS”) in the DHS Office of the Inspector General, asserting that the reduction in hours of her private duty nurse is a violation of the Medicaid Act. See 42 U.S.C. § 1396 et seq . D.U. moved for a preliminary injunction, asking the court to compel the State to provide seventy hours of private duty nursing care each week pending the outcome of the lawsuit. The district court denied the motion for a preliminary injunction. Although we conclude that the district court erred in assessing D.U.'s likelihood of success on the merits of her claim, we affirm because D.U. has failed to demonstrate that she will suffer irreparable harm if the injunction is denied.

I.

In 2005, when she was three years old, D.U. was severely injured in a car accident. She initially qualified for Wisconsin Medicaid services on financial grounds, and was provided extensive medical care through that program until August 2013. After a change in family circumstances in 2013, D.U. no longer qualified on financial grounds for State-provided services. Wisconsin nevertheless continued to provide the same services under the State's “Katie Beckett Program,” which funds Medicaid benefits for children who are otherwise ineligible because of the assets or income of their parents. See 42 U.S.C. § 1396a(e)(3) (allowing states to provide Medicaid benefits at home to severely disabled children who would otherwise require institutional care). Other than the financial qualifications, benefits under the Katie Beckett Program are subject to the same rules as ordinary Medicaid benefits.

Certain services must be reviewed and authorized by DHS before Wisconsin Medicaid will pay for them. Medical services are approved if an application and supporting documentation demonstrate that the services are medically necessary. The care that D.U. requested and received for many years was private duty nursing care. A patient qualifies for private duty nursing if she requires skilled nursing care for eight or more hours each day. In D.U.'s case, private duty nursing was provided by the State for seventy hours per week. “Skilled nursing” includes the provision of medically complicated care “furnished pursuant to a physician's orders which require the skills of a registered nurse or licensed practical nurse and which are provided either directly by or under the supervision of the registered nurse or licensed practical nurse.” Wis. Admin Code § DHS 101.03(163). The regulation lists examples of services that would qualify as skilled nursing:

(a) Intravenous, intramuscular, or subcutaneous injections and hypodermoclysis or intravenous feeding ;

(b) Levin tube and gastrostomy feedings ;

(c) Nasopharyngeal and tracheotomy aspiration;

(d) Insertion and sterile irrigation and replacement of catheters;

(e) Application of dressings involving prescription medications and aseptic techniques;

(f) Treatment of extensive decubitus ulcers or other widespread skin disorder;

(g) Heat treatments which have been specifically ordered by a physician as part of active treatment and which require observation by nurses to adequately evaluate the patient's progress;

(h) Initial phases of a regimen involving administration of medical gases; and

(i) Rehabilitation nursing procedures, including the related teachings and adaptive aspects of nursing that are part of active treatment, e.g., the institution and supervision of bowel and bladder training programs.

Wis. Admin Code § DHS 101.03(163).

In February 2013, the State authorized a continuation of private duty nursing for D.U. through the end of July 2013. However, the authorization noted that D.U., whose condition had substantially improved over the years, was now “borderline” for meeting the criteria to qualify for private duty nursing care. D.U. was instructed to submit additional information with her next request. In August 2013, the State informed D.U. and her father that D.U. no longer qualified for private duty nursing services. In order to transition D.U. to an alternate level of care, the State authorized three additional months of private duty nursing. In November, as the clock ran out on authorized services, D.U. filed a new request for seventy hours per week of private duty nursing. At the State's request, D.U. submitted additional information, but the request was ultimately denied on the ground that the documentation submitted by D.U. did not support a need for at least eight hours of skilled nursing care per day. Although an administrative appeal was available, D.U. did not appeal the denial of skilled nursing services. Instead, she filed this suit and moved for a preliminary injunction requiring the State to continue providing skilled nursing services. The district court concluded that the evidence that D.U. submitted in support of her request for injunctive relief failed to demonstrate a likelihood of success on the merits. The court therefore denied D.U.'s request for an injunction, and D.U. filed this interlocutory appeal.

II.

On appeal, D.U. contends that the court misapplied the medical necessity standard and also erred in assessing whether D.U. met the standard for a preliminary injunction. “A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v. Natural Resources Defense Council, Inc. , 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). A preliminary injunction is an extraordinary remedy and is never awarded as of right. Id. at 24, 129 S.Ct. 365. We review the district court's findings of fact for clear error, its legal conclusions de novo , and its balancing of the factors for a preliminary injunction for abuse of discretion. Stuller, Inc. v. Steak N Shake Enterprises, Inc. , 695 F.3d 676, 678 (7th Cir. 2012) ; United Air Lines, Inc. v. Air Line Pilots Ass'n, Int'l , 563 F.3d 257, 269 (7th Cir. 2009) ; Hodgkins ex rel. Hodgkins v. Peterson , 355 F.3d 1048, 1054–55 (7th Cir. 2004).

The district court began and ended its analysis on the first factor, finding that D.U. was unlikely to succeed on the merits and therefore was not entitled to a preliminary injunction. The district court framed the issue as “whether D.U. has established that she has a more than negligible chance of persuading the trier of fact by a preponderance of the evidence that at least 70 hours of private duty nursing services is medically necessary.” Applying this standard, the court found that the records submitted did not demonstrate that D.U.'s private duty nurse was medically necessary for her care.

D.U. contends that, in reaching this conclusion, the district court misapplied the standards under the Early and Periodic Screening, Diagnostic and Treatment Services (“EPSDT”) provision of the Medicaid Act. See 42 U.S.C. § 1396d(r). The EPSDT provision mandates that the states provide certain categories of care to all Medicaid-eligible patients under the age of twenty-one. In addition to screening services, a catch-all provision of EPSDT requires participating states to provide to these children “[s]uch other necessary health care, diagnostic services, treatment, and other measures described in subsection (a) of this section 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.” Private duty nursing is one of the categories of services mandated under EPSDT, but states are free to limit the provision of services based on medical necessity. 42 C.F.R. § 4.230(d). Although EPSDT broadened the categories of care that participating states are required to provide to Medicaid-eligible children, it did not change the medical necessity limitation.

Medical necessity is not expressly defined in the Medicaid Act, but Wisconsin law provides that:

“Medically necessary” means a medical assistance service under ch. DHS 107 that is:

(a) Required to prevent, identify or treat a recipient's illness, injury or disability; and

(b) Meets [certain] standards[.]¹

Wis. Admin. Code § DHS 101.03(96m). The medical necessity determination is made in Wisconsin by QAARS consultants such as defendant Kelly Townsend, who review information submitted by the applicant's health care providers.

In support of the motion for preliminary relief and in an attempt to demonstrate the medical necessity of eight hours per day of skilled nursing care, D.U. submitted the statement of Karen Roberts, who had served as D.U.'s case manager and registered nurse for seven years; letters from two physicians who treated D.U.; and some of D.U.'s medical records. One doctor stated that the skilled nursing...