Makin ex rel. Russell v. Hawaii, CV 98-00997 DAE.

• Decision Date: 26 November 1999
• Docket Number: No. CV 98-00997 DAE.,CV 98-00997 DAE.
• Citation: 114 F.Supp.2d 1017
• Court: Hawaii Supreme Court
• Parties: Janet MAKIN and Robert Mullan, By and Through their mother and next friend Elizabeth RUSSELL; Brandon Delacruz, by and through his mother and next friend Charlotte Idao; Barbara Thai, by and through her sister and next friend Thoa Thai; Jeffrey Stubbs, by and through his mother and next friend Marilyn Stubbs, on behalf of themselves and all other similarly situated persons, and Kahua Ho`Omalu Kina, Inc., d.b.a. The Protection & Advocacy Agency of Hawaii, Plaintiffs, v. State of HAWAII; Benjamin Cayetano, in his capacity as Governor of the State of Hawaii; Susan M. Chandler, in her capacity as Director of the Department of Human Services of the State of Hawaii; Bruce Anderson, in his capacity as Director of the Department of Health of the State of Hawaii; Stan Yee, in his capacity as Chief of Developmental Disabilities Division of the State of Hawaii; Virginia Pressler, in her capacity as Deputy Director of Health Care Resources of the Department of Health of the State of Hawaii; Charles Duarte, in his capacity as Med-Quest Division Administrator, Department of Human Services of the State of Hawaii; Pat Snyder, in her capacity as Administrator of the Social Service Division of the Department of Human Services of the State of Hawaii; John and Jane Does 1-10; Doe Partnerships 1-10; Doe Corporations 1-10; and Other Doe Entities 1-10, Defendants.

Page 1017

114 F.Supp.2d 1017

Janet MAKIN and Robert Mullan, By and Through their mother and next friend Elizabeth RUSSELL; Brandon Delacruz, by and through his mother and next friend Charlotte Idao; Barbara Thai, by and through her sister and next friend Thoa Thai; Jeffrey Stubbs, by and through his mother and next friend Marilyn Stubbs, on behalf of themselves and all other similarly situated persons, and Kahua Ho`Omalu Kina, Inc., d.b.a. The Protection & Advocacy Agency of Hawaii, Plaintiffs, v. State of HAWAII; Benjamin Cayetano, in his capacity as Governor of the State of Hawaii; Susan M. Chandler, in her capacity as Director of the Department of Human Services of the State of Hawaii; Bruce Anderson, in his capacity as Director of the Department of Health of the State of Hawaii; Stan Yee, in his capacity as Chief of Developmental Disabilities Division of the State of Hawaii; Virginia Pressler, in her capacity as Deputy Director of Health Care Resources of the Department of Health of the State of Hawaii; Charles Duarte, in his capacity as Med-Quest Division Administrator, Department of Human Services of the State of Hawaii; Pat Snyder, in her capacity as Administrator of the Social Service Division of the Department of Human Services of the State of Hawaii; John and Jane Does 1-10; Doe Partnerships 1-10; Doe Corporations 1-10; and Other Doe Entities 1-10, Defendants.

No. CV 98-00997 DAE.

United States District Court, D. Hawai`i.

November 26, 1999.

COPYRIGHT MATERIAL OMITTED

Matthew C. Bassett, The Protection and Advocacy Agency of Hawaii, Honolulu, HI, Rory S. Toomey, Law Office of Rory Soares Toomey, Honolulu, HI, Michael G.M. Ostendorp, Honolulu, HI, for plaintiffs.

Laurence K. Lau, Marlene Q.F. Young, Office of the Attorney General — State of Hawaii, Honolulu, HI, for defendants.

ORDER DENYING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT, GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT, AND DENYING PLAINTIFFS' CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT

EZRA, District Judge.

The court took both Plaintiffs' and Defendants' Motions for Summary Judgment under advisement on November 22, 1999. Matthew C. Bassett, Esq., and Shawn A. Luiz, Esq., appeared at the hearing on behalf of Plaintiffs; Laurence K. Lau, State Deputy Attorney General, appeared at the hearing on behalf of Defendants. After reviewing the Motions and the supporting and opposing memoranda, the court DENIES Plaintiffs' Motion for Summary Judgment, and GRANTS in part and DENIES in part Defendants' Motion for Summary Judgment.

BACKGROUND

In this civil class action case, Plaintiffs challenge the State of Hawaii's administration of its Medicaid Home and Community Based Services for the Developmentally Disabled or Mentally Retarded program ("HCBS-MR"). The certified class consists of mentally retarded people living at home who are on a wait list for services from Hawaii's HCBS-MR program and seek but cannot obtain the services because of a lack of state funding for the services.¹

In their complaint, Plaintiffs raise seven causes of action: (1) Defendants violated the Americans with Disabilities Act ("ADA") because they discriminated against Plaintiffs by denying HCBS-MR services and violating the "Integration Mandate" of 28 C.F.R. § 35.130(d); (2) Defendants violated Section 504 of the Rehabilitation Act of 1973 by discriminating against Plaintiffs because of their disabilities; (3) Defendants violated Procedural Due Process and 42 U.S.C. § 1983; (4) Defendants violated the "reasonable promptness" provision of the Medicaid statute, 42 U.S.C. § 1396a(a)(8), by denying HCBS-MR services to Plaintiffs; (5) Defendants allegedly violated 42 U.S.C. § 1396n by allegedly funding institutional placement using HCBS-MR funds; (6) Defendants allegedly violated 42 U.S.C. § 1396n(2)(a) by allegedly providing inadequate services to individuals eligible for HCBS-MR services; and (7) Defendants violated 42 U.S.C. § 1396n(c)(2) by allegedly denying Plaintiffs "freedom of choice" of an appropriate HCBS-MR.

The Medicaid program, funded jointly by the federal and state governments, is designed to enable the states to provide medical assistance to individuals whose resources are insufficient to meet the costs of their medical needs. 42 U.S.C. § 1396 et seq. Under the Medicaid statute, a state is not required to participate in the Medicaid Program. However, if a state does participate, it must comply with federal statutory and regulatory requirements in its administration and execution of the program. 42 U.S.C. § 1396a. See also, Schweiker v. Gray Panthers, 453 U.S. 34, 37, 101 S.Ct. 2633, 69 L.Ed.2d 460 (1981). The State of Hawaii has elected to and does participate in the Medicaid program. Therefore, it must comply with the statute in its administration of the benefits under the program.

While certain services of Medicaid are mandatory, some other services under the statute are optional. See 42 U.S.C. § 1396d(a)(6)-(16), (18), (20), (22)-(25). Both the HCBS-MR and the Intermediate Care Facilities for the DD/MR ("ICF-MR") are optional services that the State of Hawaii has chosen to include in its program. See Hawaii Revised Statutes ("HRS") §§ 346-14, 346D, and 333F; Hawaii Administrative Rules ("HAR") § 17-1439-18. As with the mandatory provisions, if a state elects to provide optional services, it must comply with the Medicaid provisions covering those services. See Weaver v. Reagen, 886 F.2d 194, 197 (8th Cir.1989) ("Once a state chooses to offer such optional services it is bound to act in compliance with the Act and the applicable regulations in the implementation of those services").

A. Hawaii's HCBS-MR Program

The HCBS-MR program in Hawaii is a Medicaid financial assistance program that is funded jointly by the state and federal government. Under the Medicaid statute, 42 U.S.C. § 1396n(c), the HCBS-MR program is optional. Section 1915(c) of the Act allows a state to offer, under a federal "waiver" of certain Medicaid statutory requirements an array of certain HCBS-MR services to qualified individuals. See 42 C.F.R. §§ 440.180, 441.300-441.310.

Congress created the Home and Community-Based Waiver Program to provide a way for individuals who would otherwise be cared for in a nursing home or ICF-MR to be cared for in their own homes or home-like settings. See S.Rep. No. 97-139 & H.R.Rep. No. 97-208, reprinted in 1981 U.S.C.C.A.N. 396; See also, Cramer v. Chiles, 33 F.Supp.2d 1342, 1347 (S.D.Fla. 1999). Under the waiver provisions, a state may

include as `medical assistance' ... the cost of home or community-based services ... approved by the Secretary which are provided pursuant to a written plan of care to individuals with respect to whom there has been a determination that but for the provision of such services the individuals would require the level of care provided in a hospital or a nursing facility or intermediate care facility for the mentally retarded the cost of which could be reimbursed under the State plan.

42 U.S.C. § 1396d(c)(1). Further, 42 U.S.C. § 1396a(a)(8) provides that assistance under the Act "shall be furnished with reasonable promptness to all eligible individuals." Also, 42 C.F.R. § 435.930(a)-(b) states that the state's administrative procedures cannot cause any delay in the state's furnishing of prompt services to Medicaid recipients, and the agency must "continue to furnish Medicaid regularly to all eligible individuals until they are found ineligible."

Under Section 1396a(a)(5), Medicaid must be administered or supervised by a single State agency. In Hawaii, the Hawaii Department of Human Services (DHS) administers the program under HRS § 346-17(7).² The state's HCBS-MR program offers a variety of services to its recipients that include, but are not limited to adult day health, habilitation, respite, nursing services, and transportation.

The objective of Hawaii's HCBS-MR program is to offer an alternative to institutionalization in ICF-MRs. Therefore, 42 U.S.C. § 1396n(c)(2)(C) provides that

such individuals who are determined to be likely to require the level of care provided in a hospital, nursing facility, or intermediate care facility for the mentally retarded are informed of the feasible alternatives, if available under the waiver, at the choice of such individual, to the provision of inpatient hospital services, nursing facility services, or services in the ICF/MR.

(emphasis added).

Importantly, the HCBS-MR program is part of a larger statutory scheme for the DD/MR that is administered by the Department of Health ("DOH") under HRS 333F and HAR 11-88.³ According to Defendants, the HCBS-MR program is jointly operated by the DHS and DOH, and there are five steps involved in the program's admission process. First, the "DOH acts as a single point of intake for all the DD/MR services under HRS ch. 333F and HAR ch. 11-88-4(a)(1) and determines if a person meets State criteria defining developmental disabilities or mental retardation." Second, the DHS determines whether the person meets the requirements set out under the Medicaid statute. HAR § 17-1439-3(a)(1). Third, DOH determines whether there are sufficient funds to cover the individual's services. Fourth, the DHS determines what the appropriate level of care for the individual is under the circumstances. Fifth, if they qualify for the HCBS-MR program the individuals are admitted based on priorities provided in a state admission policy written on November 9, 1998.⁴

However, since the demand for HCBS-MR exceeds the available state funding for the program, a wait list exists. The DOH administers this wait list, which is comprised of people who meet the HCBS-MR requirements and request the services, but for whom a space in the program is not available. HRS § 333F-6(c) states that the DOH must keep "wait lists of all individuals who are eligible for services and supports, but for whom services and supports have not been...