Bontrager v. Indiana Family & Soc. Servs. Admin., 3:11–cv–216.

• Decision Date: 04 November 2011
• Docket Number: No. 3:11–cv–216.,3:11–cv–216.
• Citation: 829 F.Supp.2d 688
• Parties: Sandra M. BONTRAGER, on her own behalf and on behalf of a class of those similarly situated, Plaintiff, v. INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION, Michael A. Gargano, and Patricia Cassanova, Defendants.
• Court: U.S. District Court — Northern District of Indiana

829 F.Supp.2d 688

Sandra M. BONTRAGER, on her own behalf and on behalf of a class of those similarly situated, Plaintiff,

v.INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION, Michael A. Gargano, and Patricia Cassanova, Defendants.

No. 3:11–cv–216.

United States District Court, N.D. Indiana,South Bend Division.

Nov. 4, 2011.

Gavin M. Rose, ACLU of Indiana, Jacquelyn E. Bowie–Suess, Indianapolis, IN, John W. Davis, Jr., Davis & Roose, Goshen, IN, for Plaintiff.

Wade J. Hornbacher, Indiana Attorney General's Office, Indianapolis, IN, for Defendants.

OPINION and ORDER

PHILIP P. SIMON, Chief Judge.

Sandra Bontrager is a Medicaid recipient living in Indiana and in need of serious dental procedures including implants and abutments for her mandibular jaw. Everyone admits that these procedures are “medically necessary” as defined by Indiana law. Nevertheless, the Indiana Family and Social Services Administration (the agency that handles the state's Medicaid program) has refused to pay for these procedures because they exceed the new $1,000 annual limit that the Administration has put on dental reimbursements. Bontrager has thus filed this class action suit against the Administration and its individually named administrators (collectively, the “State”), arguing that the State's refusal to reimburse her (and others) for medically necessary procedures in excess of $1,000 violates both Indiana and federal law. Before the Court is Bontrager's Motion for a Preliminary Injunction [DE 6], about which I held an evidentiary hearing earlier this year [DE 26].

This disputes casts us into the byzantine world of state and federal Medicaid laws, regulations, and cases. At bottom, however, the parties essentially agree that these laws, regulations, and cases require the State to cover all medically necessary dental procedures. So why are we here? Neither party frames their dispute quite this way, but their disagreement is really over what it means to “cover” a procedure: Plaintiffs argue that the State can only really “cover” medically necessary dental procedures by fully paying for them; the State argues that it can “cover” medically necessary expenses by partially paying for them.

I think this is a close question, but as explained in detail below, I have decided that the State is required to fully cover medically necessary dental expenses. Plaintiffs' Motion for a Preliminary Injunction will therefore be GRANTED.

FACTUAL BACKGROUND

I'll start with the facts, which are essentially undisputed. The Medicaid program is jointly funded by the states and the federal government. It pays for medical services to low-income individuals pursuant to state plans approved by the Secretary of the Department of Health and Human Services. See 42 U.S.C. § 1396a(a)-(b). Indiana's Medicaid program is administered by the Office of Medicaid Policy and Planning, a subdivision of the Family and Social Services Administration. States are not required to include dental services in their Medicaid coverage, but Indiana has chosen to do so. See 405 IAC 5–14–1, et seq.

Before Indiana will pay for certain dental services, the State must determine whether those services constitute a “medically reasonable and necessary service” as defined by 405 IAC 5–2–17. The State has thus put in place preauthorization procedures to ensure that any given service is covered by Medicaid and will be paid. Indiana has contracted with a private company, Advantage Health Solutions (“Advantage”), to handle the preauthorization process and to make a determination as to whether a requested service is a “medically reasonable and necessary service” as defined by 405 IAC 5–2–17. For each preauthorization request, Advantage reviews the specific medical facts and opinions of the provider and makes an independent determination, based upon Advantage's independent medical expertise, that the requested services are required for the care and well being of the patient and are provided in accordance with accepted standards of medical or professional practice.

Plaintiff Sandra Bontrager is enrolled in the Medicaid program. In 2009, Bontrager's dentist determined that Bontrager needed two endosteal implants and two implant abutments for her mandibular jaw. The dentist thus submitted an “Indiana Prior Review and Authorization Dental Request” for these procedures to Advantage. Advantage denied the prior review request on the grounds that the procedures were not “covered dental services.”

Some 15 months worth of appeal procedures unfolded from that point. In the end it was determined that Bontrager's requested dental services were in fact “covered services” as defined under 405 IAC 5–2–6 and were “medically reasonable and necessary services” as defined by 405 IAC 5–2–17. With these determinations, Bontrager resubmitted her preauthorization request fully expecting that she could finally get her dental work done.

The State's response must have puzzled Ms. Bontrager. She was told that, although it recognized that the services had been determined to be covered and medically necessary, the approved dollar amount for these services was $0.00. In a subsequent letter, Patricia Casanova, Director of Medicaid in the Office of Medicaid Policy and Planning, stated that “state regulations limit reimbursement of dental services to one thousand dollars ($1000) per recipient per twelve (12) month period.” This $1,000 annual limit on Medicaid payment for dental service—newly implemented as of January 1, 2011—applies regardless of whether a given service has been determined to be medically reasonable and necessary.

The State implemented the cap as a way to save money (potentially millions of dollars annually) while still covering the vast majority of Medicaid recipients. It seems like a sensible thing to do since more than 99% of Indiana Medicaid participants have annual dental costs of less than $1,000. So the new plan still enables 99 out 100 Medicaid recipients to obtain the dental care that they need. According to the State, invalidating the $1,000 cap could well lead to the discontinuation of the dental program altogether, meaning that no participant would receive the dental care that they need. (Recall that the State isn't mandated to provide any dental services.)

Bontrager brings this suit on her own behalf and on the behalf of a similarly situated class on the grounds that the State's refusal to pay for services that have been deemed medically necessary violates both Indiana and federal law. Plaintiffs' Complaint seeks a declaratory judgment that the $1,000 annual cap is a violation of Indiana and federal law. The parties have stipulated to the following class:

All past, current and future Indiana Medicaid enrollees age twenty-one and older, who from January 1, 2011 (when the $1,000 cap took effect) forward, need, have needed, or will need coverable dental services that are administratively or judicially determined to be medically necessary, that are routinely provided in a dental office, and that cost more than $1,000 per twelve month period.

[DE 22 at 2.]

DISCUSSION

The sole substantive question at issue in this case is whether the State can place a $1,000 annual limit on dental services, including procedures deemed medically necessary. But before we get there, there is a question whether Bontrager has a private right of action to bring this suit. As explained below, I ultimately conclude (with reservations) that a private right of action exists and that the $1,000 annual cap runs afoul of Indiana and federal Medicaid laws.

I. Private Right of Action under 42 U.S.C. § 1396a(a)(10)

The first issue is whether Plaintiffs have a private right of action to bring this suit under 42 U.S.C. § 1983. A person bringing a viable § 1983 claim must first allege a violation of a federal statutory or constitutional right—not merely a violation of a federal law. See Blessing v. Freestone, 520 U.S. 329, 340, 117 S.Ct. 1353, 137 L.Ed.2d 569 (1997). To do this, a plaintiff bears the burden of showing that the statute at issue was intended to create an enforceable right. Gonzaga Univ. v. Doe, 536 U.S. 273, 283–84, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002). The Supreme Court has emphasized that “it is rights, not the broader or vaguer ‘benefits' or ‘interests' that may be enforced under the authority of [§ 1983].” Id. at 283, 122 S.Ct. 2268 (emphasis in original).

Blessing explains how courts should determine whether a statute creates an enforceable right. Specifically, it directs courts to consider whether:

(1) “Congress intended that the provision in question benefit the plaintiff”; (2) the plaintiff has “demonstrated that the right assertedly protected by the statute is not so ‘vague and amorphous' that its enforcement would strain judicial competence”; and (3) “the statute unambiguously imposes a binding obligation on the States,” such that “the provision giving rise to the asserted right is couched in mandatory, rather than precatory terms.”

Ball v. Rodgers, 492 F.3d 1094, 1104 (9th Cir.2007) (quoting Blessing, 520 U.S. at 340–341, 117 S.Ct. 1353). If all three elements are satisfied, a federal right is “presumptively enforceable by § 1983, subject only to a showing by the state that Congress specifically foreclosed a remedy under § 1983.” Id. at 1116 (citation and internal quotations omitted).

Plaintiffs bring this case pursuant to 42 U.S.C. § 1396a(a)(10). This section of the Medicaid Act, with more than 50 different subparts, is something of a labyrinth. But at its core § 1396a(a)(10) is focused on providing all Medicaid recipients with equal access to care. It requires that state Medicaid plans “provide for making medical assistance available ... to ... all individuals” who are qualified enrollees of the program. 42 U.S.C. § 1396a(a)(10)(A)(i). This subsection has been referred to as the “minimum services” provision. K & A Radiologic Techn. Servs., Inc. v. Comm'r of Dept., 189 F.3d 273, 280 (2d Cir.1999)....