Fisher v. Oklahoma Health Care Authority, No. 02-5192.

• Decision Date: 15 July 2003
• Docket Number: No. 02-5192.
• Citation: 335 F.3d 1175
• Parties: Katherine FISHER; Earlee Heath; Karol Loy, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. OKLAHOMA HEALTH CARE AUTHORITY, Sued as: State of Oklahoma, Oklahoma Health Care Authority and Mike Fogarty, in his capacity as CEO of the Oklahoma Health Care Authority; Mike Fogarty, Defendants-Appellees, Oklahoma Disability Law Center, Inc., Amicus-Curiae.
• Court: U.S. Court of Appeals — Tenth Circuit

335 F.3d 1175

Katherine FISHER; Earlee Heath; Karol Loy, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. OKLAHOMA HEALTH CARE AUTHORITY, Sued as: State of Oklahoma, Oklahoma Health Care Authority and Mike Fogarty, in his capacity as CEO of the Oklahoma Health Care Authority; Mike Fogarty, Defendants-Appellees Oklahoma Disability Law Center, Inc., Amicus-Curiae.

No. 02-5192.

United States Court of Appeals, Tenth Circuit.

July 15, 2003.

COPYRIGHT MATERIAL OMITTED

Stephen F. Gold (Morris Bernstein, University of Tulsa Boesche Legal Clinic, Tulsa, Oklahoma, with him on the briefs), Philadelphia, PA, for the Plaintiffs-Appellants.

Andrew J. Tevington, Deputy General Counsel, Oklahoma Health Care Authority, Oklahoma City, OK, for the Defendants-Appellees.

Kayla A. Bower and Joy J. Turner, Oklahoma Disability Law Center, Inc., Oklahoma City, OK, filed a brief for the Amicus-Curiae.

Before LUCERO, BALDOCK, and O'BRIEN, Circuit Judges.

LUCERO, Circuit Judge.

Plaintiffs, three disabled individuals receiving state-funded medical care as part of Oklahoma's Home and Community-Based Services ("HCBS") Waiver Program, the "Advantage Program," ask us to decide whether the defendants, the Oklahoma Health Care Authority ("OHCA")— the state agency that administers the Medicaid program for Oklahoma—and Mike Fogarty, in his official capacity as CEO of the OHCA, are violating federal law by the manner in which they operate their HCBS program. Specifically, plaintiffs object to the defendants' recent decision to limit prescription medications for participants in the waiver program to five per month, irrespective of medical necessity, and seek declaratory and injunctive relief against the imposition of the five-prescription cap. Plaintiffs assert that due to their precarious medical and financial circumstances, imposition of the five-prescription cap will force them out of their communities and into nursing homes in order to obtain the care that is medically necessary. The district court granted summary judgment to the defendants, holding that the plaintiffs could not maintain a claim under the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq., because they are not presently institutionalized and face no risk of institutionalization. Because we conclude that the plaintiffs may have a meritorious ADA claim, we exercise jurisdiction under 28 U.S.C. § 1291, and reverse and remand for further consideration.

I

Medicaid is a joint federal-state program designed to provide medical assistance to low-income families and individuals "to help such families and individuals attain or retain capability for independence or self-care." 42 U.S.C. § 1396. Once a state enters into a partnership with the federal government, Congress requires the state to provide a minimum level of benefits known as the mandatory program. § 1396a(10)(A)(i); 42 C.F.R. §§ 440.210,.220. Mandatory services include nursing home care. 42 U.S.C. § 1396a(10)(A) (incorporating § 1396d(a)(4)(A)). Pharmacy benefits, the focus of the instant case, are not part of the mandatory program, and are considered an optional program under Title XIX. §§ 1396a(a)(10), 1396d(a)(12). Along with every other state, Oklahoma has elected to provide prescription drugs as part of its Medicaid program. Persons institutionalized in nursing homes receive all the prescriptions that are medically necessary. Okla. Admin. Code. § 317:35-3-2(15)(B).

As an alternative to institutionalization, Congress provides for home and community-based services as part of an optional waiver program.¹ 42 U.S.C. § 1396n(c)(1). Once a state obtains a waiver, this program allows individuals who meet the level of care required for institutionalization in a nursing facility to live at home and receive state-funded medical care. Id. "[T]he department of Heath and Human Services (HHS) has a policy of encouraging States to take advantage of the waiver program, and often approves more waiver slots than a State ultimately uses." Olmstead v. Zimring, 527 U.S. 581, 601, 119 S.Ct. 2176, 144 L.Ed.2d 540 (1999) (quotation omitted). To obtain a waiver, a state must certify that placement of an individual in a waiver program will be cost-neutral, meaning that costs for persons in the waiver program will be less than if those persons were in an institution.² § 1396n(c)(2)(D). Oklahoma obtained such a waiver from the federal government for its Advantage Program. Okla. Admin. Code. § 317:30-5-760.

Oklahoma has elected to provide prescription benefits to Advantage participants as well as residents in nursing homes. Until recently, Advantage participants were entitled to an unlimited number of medically necessary prescriptions paid for by the state. However, in September 2002, the state notified participants that it would impose a cap of five prescriptions per month on Advantage participants, effective October 1, 2002, while continuing to provide unlimited prescriptions to patients in nursing facilities. This decision was based on a budgetary shortfall; defendants anticipated that capping the number of prescriptions available would save the state $3.2 million.

On the same day that the five-prescription cap came into effect, plaintiffs Katherine Fisher, Earlee Heath, and Karol Loy, participants in Oklahoma's Advantage program, filed suit in federal court against the OHCA and its CEO, Mike Fogarty. In their complaint, plaintiffs allege that defendants' five-prescription cap violates the integration requirements of the ADA, 42 U.S.C. § 12101 et seq., and section 504 of the Rehabilitation Act ("RA"), 29 U.S.C. § 794, because it will force them out of their communities and into nursing homes in order to obtain the care that is medically necessary.³ Plaintiffs further assert that the cap violates Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. All three plaintiffs meet the medical and financial requirements for nursing facility care and would be eligible for admission to a nursing home.

Earlee Heath is 73 years old, uses a wheelchair, and suffers from insulin-dependant diabetes, hypertension, asthma, congestive heart failure, residual bilateral paresis and deep-vein thrombosis. She uses a portable oxygen machine to assist her in breathing. She takes approximately sixteen prescription medications that cost a total of $839 per month, all of which are prescribed by her doctors, who monthly review and monitor them. Assuming that defendants pay for the five most expensive medications, plaintiffs contend that Heath will have to pay $256 per month for the remainder out of her monthly income of $313.

Katherine Fisher is 48 years old, uses a wheelchair, has suffered from cerebral palsy since birth, and has had two strokes that required hospitalization. Fisher takes approximately twenty-one medications that cost a total of $858 per month. Her treating physicians re-evaluate her medications on a monthly basis. Assuming that defendants pay for the five most expensive medications, plaintiffs assert that Fisher, whose monthly income is $725, will have to pay $274 per month for the remainder.

Karol Loy is 46 years old, has difficulty walking and standing, and has acute mixed connective tissue disease with seizure disorder, residual from a stroke and cardiac malfunction. She has been hospitalized for two strokes and a heart attack. Loy takes twenty-four prescriptions daily that cost a total of $2,808 per month. Assuming that defendants pay for the five most expensive medications, plaintiffs claim that Loy will have to pay $644 per month, out of a monthly income of $547, for the remainder.

Defendants contest these figures. According to defendants, adjusting the schedule under which medication is purchased and eliminating drug interactions could reduce the amount plaintiffs would have to pay under the cap.⁴ By rescheduling and eliminating drugs that have adverse interactions with other drugs defendants argue that Fisher's monthly cost could be reduced to $45 — 60 per month; Heath's monthly cost could be reduced to $25 per month; and Loy's monthly cost could be reduced to "an admittedly still high two hundred dollars." (Appellees' Br. at 6.) Because the plaintiffs do not contest these projected cost savings, we assume that defendants' projections are correct.

Plaintiffs filed a motion for a preliminary injunction, which the district court converted into a motion for a permanent injunction. After receiving briefing and conducting a hearing on the matter, the district court granted summary judgment to the defendants, concluding that the plaintiffs could not maintain a claim under the ADA because they are not presently institutionalized and face no risk of institutionalization. This appeal followed.

II

"We review the district court's grant of summary judgment de novo, applying the same legal standard used by the district court." Simms v. Okla. ex rel. Dep't of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir.1999). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). "When applying this standard, we view the evidence and draw reasonable inferences therefrom in the light most favorable to the nonmoving party." Simms, 165 F.3d at 1326.

A party requesting a permanent injunction bears the burden of showing: (1) actual success on the merits; (2) irreparable harm unless the injunction is issued; (3) the threatened injury outweighs the harm that the injunction may cause the opposing party; and (4) the injunction, if issued, will not adversely affect the public interest. Fed. Lands Legal Consortium ex rel. Robart Estate v. United States, 195 F.3d 1190, 1194 (10th Cir.1999); Amoco Prod. Co. v. Gambell, 480 U.S. 531, 546...