John B. v. Menke
| Decision Date | 19 December 2001 |
| Docket Number | No. 3:98-0168.,3:98-0168. |
| Citation | 176 F.Supp.2d 786 |
| Parties | JOHN B., Carrie G., Joshua M., Meagan A. and Erica A. by their next friend, L.A.; Dustin P. by his next friend, Linda C.; Bayli S. by her next friend, C.W.; James D. by his next friend, Susan H.; Elsie H. by her next friend, Stacy Miller; Julian C. by his next friend, Shawn C.; Troy D. by his next friend, T.W.; RAY M. by his next friend, P.D.; Roscoe W. by his next friend, B.W.; William B by his next friend, K.B.; Jacob R. by his next friend, Kim R.; Justin S. by his next friend, Diane P.; Estel W. by his next friend, E.D.; individually and on behalf of all others similarly situated, Plaintiffs, v. Nancy MENKE, Commissioner, Tennessee Department of Health; Theresa Clarke, Assistant Commissioner Bureau of TennCare; George Hattaway, Commissioner Tennessee Department of Children's Services, Defendants. |
| Court | U.S. District Court — Middle District of Tennessee |
Gordon Bonnyman, Michele M. Johnson, Patricia George, Gary D. Housepian, David Kozlowski, Hugh Mundy, Russel J. Overby, Tennessee Justice Center, Nashville, TN, for plaintiffs.
Paul G. Summers, Atty Gen. and Reports, Linda A. Ross, Deputy Atty. Gen., Katherine Brown, Assist. Atty. Gen., Nashville, TN, Kathryn Stephenson, Leesa A. Hinson, Paul W. Ambrosius, Doramus, Trauger & Ney, Nashville, TN, for defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This civil action involves the State of Tennessee's provision of health benefits pursuant to the federal Early Periodic Screening, Diagnosis and Treatment (EPSDT) requirement. After the Plaintiffs filed their complaint on February 25, 1998 (Doc. No. 1), the parties immediately filed a Consent Decree, governing Tennessee's duties under EPSDT. (Doc. No. 12).
In 1994, the State converted its Medicaid-based fee-for-service health plan to a managed care system called TennCare.1 Until 1994, the State participated in the traditional Medicaid program. However, in 1993 Tennessee sought and obtained from the United States Secretary of Health and Human Services a five-year waiver, effective January 1, 1994, under Section 1115 of the Social Security Act, 42 U.S.C. § 13152 (waiver). The original waiver, by suspending certain federal statutory and regulatory provisions, allowed the State to replace its Medicaid program with TennCare.3
TennCare differs from traditional Medicaid in two pertinent ways. First, TennCare converted Tennessee's Medicaid program from a fee-for-service system to a managed care system, whereby recipients obtain services from a limited number of network providers known as Managed Care Organizations (MCOs). The MCO is paid a monthly capitated rate for each beneficiary, based on eligibility characteristics of the enrollee. In return, the MCO is required to provide the beneficiary all medically necessary health care services covered by the TennCare scope of benefits, as provided in the TennCare waiver. The MCOs then assign their enrollees to primary care providers (PCPs). The PCPs manage the individual beneficiaries' access to specialists or other medical care. The MCOs are required to spend eighty-five percent of their capitation revenue for medical services. Any shortfall must be absorbed by the MCO as a loss, subject to risk sharing agreements4 with the State, while any excess after administrative costs is considered profit. The scope of the benefits covered by the risk agreement is limited by various "carve outs" that are solely the responsibility of the MCO.5
Approximately 9½ percent of children in the plaintiffs' class are enrolled in TennCare Select, the State's self-insured TennCare MCO. TennCare Select provides services to populations that, for varying geographic and health care reasons, are more difficult to serve.
In addition, in 1996 the State established a behavioral health and substance abuse managed care program, known as TennCare Partners, to be managed by Behavioral Health Organizations (BHOs). The Tennessee Department of Children's Services (DCS) administers certain TennCare behavioral health services6, and serves as a BHO in that context. TennCare Partners provides benefits to a population of individuals classified by the Department of Mental Health and Developmental Disabilities (DMHDD) as severely and persistently mentally ill (SPMI) adults or severely emotionally disturbed (SED) children. The benefits are to be provided by TennCare Partners to any TennCare child whenever medically necessary.
TennCare also differs from traditional Medicaid in that TennCare provides coverage to an expanded population. Under the terms of the waiver, benefits are made available to those who are "uninsured," defined as individuals who lack insurance coverage and do not have access to group coverage under an employer. In addition, the plan expands coverage to individuals deemed "uninsurable" by commercial insurers because of poor health or previous medical history.7 This newly covered population is termed "waiver eligible." Waiver eligibles with incomes below the poverty line, receive coverage at no cost to them. Waiver eligibles above the poverty level pay premiums and cost sharing obligations on a sliding scale, based on income and family size.8
This case was initially brought in March 1998 on behalf of all individuals under age twenty-one involved in Tennessee's TennCare program. Almost immediately after the case was filed, the parties submitted to the Court a Consent Decree, granting broad declaratory and injunctive relief enforcing the EPSDT provisions of Title XIX of the Social Security Act. 42 U.S.C. § 1396, et seq.9 The Court approved the Consent Decree on March 12, 1998. (Doc. No. 12).
EPSDT covers a broad range of services. As the name suggests, the purpose of EPSDT is to ensure that all medicaid-eligible children receive regular screening, vision, hearing, dental and treatment services consistent with established pediatric standards.10 The Federal Code requires that the children receive "such other necessary health care, diagnostic services, treatment and other measures ... to correct or ameliorate defects and physical and mental illnesses under the State plan." 42 U.S.C. § 1396d(r)(5). The purpose of EPSDT is to ensure that underserved children receive preventive health care and follow-up treatment. EPSDT is premised on the idea that early detection of problems will lead to treatment of minor problems before they become major healthcare issues. By preemptively screening, diagnosing and treating current problems, EPSDT staves off larger healthcare problems in the future, and ultimately results in a more efficient and effective healthcare system with a proactive, comprehensive, and long-term focus.
The Consent Decree recognizes and attempts to address deficiencies in State EPSDT services. The Consent Decree directed the State to retain an expert to evaluate EPSDT services for children in or at risk of entering State custody. After the expert, Paul DeMuro, submitted the report in late 1998, the parties submitted two proposed agreed orders relating to EPSDT for children in this subclass. The parties entered into a remedial plan that required the State to take additional steps to improve EPSDT services for children in or at risk of entering State custody, and provided a timetable for implementation. The Court approved the proposed orders in May of 2000. (Doc. Nos.57, 59).
The State, after encountering difficulties implementing the Agreed Orders, filed a motion requesting that enforcement be stayed and requesting modification of the Agreed Orders. (Doc. Nos.63). On January 29, 2001, Plaintiffs filed a motions to show cause (Doc. No. 79), in which they alleged that the State Defendants were in contempt of court for violating both the original 1998 Consent Decree and the May 2000 Agreed Orders. The Plaintiffs requested a finding of contempt, imposition of sanctions and the appointment of a special master. This Court heard arguments from both Plaintiffs and Defendants on the above motions for a total of three weeks in June, July and early August 2001.
The Court finds that Plaintiffs' Motion to Show Cause does have some merit, and appropriate relief is therefore granted to the Plaintiffs, as discussed in detail below. In Part Two, the Court will discuss Defendants' Motion to Stay Enforcement and Motion to Modify the May 2000 Agreed Orders.
1. The Defendant State officials have attempted to comply with and implement the 1998 Consent Decree. The record demonstrates that the Defendants have been, for the most part, well-intentioned and diligent in attempting to comply with both the Consent Decree and federal EPSDT requirements. In fact, Defendant officials sometimes attempted to implement the very strategies that Plaintiffs' counsel advocated, but were constrained by the realities of State Government.11 TennCare employees are committed to the mission of TennCare-the provision of health and mental care to eligible individuals in Tennessee. For example, with the hiring of Ken Okolo and Kasi Tiller,12 the State Defendants committed to expending resources to achieve compliance with federal law and the Consent Decree.
2. The record also indicates that TennCare and the other State Defendants have tried to work within the TennCare managed care system to achieve compliance. From the beginning, TennCare has attempted to comply with some of the concrete provisions of the Consent Decree. For example, TennCare published a Standard Operating Procedure regarding EPSDT early in 1999, and continue to operate within these parameters.13 Additionally, the State has revised BHO and MCO contracts on a number of occasions to reflect commitments under EPSDT.14
3. However, from the beginning, the State's efforts have been hampered by...
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