Price v. Medicaid Dir.

• Decision Date: 30 September 2016
• Docket Number: No. 15-4066,15-4066
• Citation: 838 F.3d 739
• Parties: Kathryn A. Price, et al., Plaintiffs–Appellees, v. Medicaid Director, Office of Medical Assistance, et al., Defendants–Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

838 F.3d 739

Kathryn A. Price, et al., Plaintiffs–Appellees,

v.Medicaid Director, Office of Medical Assistance, et al., Defendants–Appellants.

No. 15-4066

United States Court of Appeals, Sixth Circuit.

Argued: April 28, 2016

Decided and Filed: September 30, 2016

ARGUED: Jeffrey Clair, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., Amicus Curiae. Jeffrey P. Jarosch, OFFICE OF THE OHIO ATTORNEY GENERAL, Columbus, Ohio, for Appellants. Eric M. Carlson, JUSTICE IN AGING, Los Angeles, California, for Appellees. ON BRIEF: Jeffrey Clair, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., Amicus Curiae. Jeffrey P. Jarosch, Cheryl R. Hawkinson, Amy R. Goldstein, OFFICE OF THE OHIO ATTORNEY GENERAL, Columbus, Ohio, for Appellants. Eric M. Carlson, JUSTICE IN AGING, Los Angeles, California, Anna M. Rich, JUSTICE IN AGING, Oakland, California, Janet E. Pecquet, Peter L. Cassady, Ashley S. Burke, BECKMAN WEIL SHEPARDSON LLC, Cincinnati, Ohio, for Appellees. Carol Rolf, ROLF GOFFMAN MARTIN LANG LLP, Cleveland, Ohio, William J. Browning, BROWNING & MEYER CO., LPA, Worthington, Ohio, for Amici Curiae.

Before: BOGGS and KETHLEDGE, Circuit Judges; STAFFORD, District Judge.^*

KETHLEDGE

, Circuit Judge.

OPINION

Ohio offers assisted-living coverage to its Medicaid beneficiaries on a prospective basis. The plaintiffs here, a class of Ohio Medicaid beneficiaries, sued Ohio's Medicaid administrators on the claim that federal law requires Ohio to cover certain assisted-living services retrospectively. The district court granted summary judgment to the plaintiffs. We reverse.

I.

A.

In 1965, Congress used its Spending Clause power to establish Medicaid. See U.S. Const. art. I, § 8, cl. 1

. Through Medicaid, the federal government gives money to the States for the purpose of paying the medical costs of people “whose income and resources are insufficient to meet the costs of necessary medical services[.]” 42 U.S.C. § 1396–1. The money comes with strings attached. “Like other Spending Clause legislation, Medicaid offers the States a bargain: Congress provides federal funds in exchange for the States' agreement to spend them in accordance with congressionally imposed conditions.” Armstrong v. Exceptional Child Ctr., Inc. , ––– U.S. ––––, 135 S.Ct. 1378, 1382, 191 L.Ed.2d 471 (2015).

Per Congress's conditions, all State Medicaid plans must apply uniformly statewide, provide medical assistance equally “in amount, duration, [and] scope” among Medicaid beneficiaries, and establish a “single standard to be employed in determining” eligibility for medical assistance among different classes of beneficiaries. See 42 U.S.C. §§ 1396a(a)(1)

, (a)(10)(B), (a)(10)(C)(i)(III). In 1981, however, Congress recognized that these requirements needlessly diverted many Medicaid beneficiaries into impersonal and expensive long-term residence at hospitals, nursing homes, and intermediate-care facilities, without regard to whether less-intensive forms of care—such as assisted-living services—might meet an individual beneficiary's medical needs. See Mary Jean Duckett & Mary R. Guy, Home & Community-Based Services Waivers , 22 Health Care Fin. Rev. 123 (2000).

Since 1981, therefore, Congress has allowed the Secretary of Health and Human Services to waive the uniformity and equal-provision conditions for States that pay the cost of “home or community-based services (other than room and board) [.]” 42 U.S.C. § 1396n(c)(1)

. Under an approved waiver plan, a State may provide “community-based” health services (which include assisted-living services) to Medicaid beneficiaries “with respect to whom there has been a determination that but for the provision of such services the [beneficiaries] would require the level of care provided in a hospital or a nursing facility ... the cost of which could be reimbursed under the State [Medicaid] plan.” Id. Per such waiver plans, therefore, States may provide beneficiaries with assisted-living services rather than more-intrusive (and expensive) nursing-home services. In return for this flexibility, the State must individually evaluate Medicaid beneficiaries regarding their “eligib [ility] for such home or community-based care[.]” Id. § 1396n(c)(2)(B)(iii). In addition, the State may cover only community-based services—such as assisted-living services—that have been provided “pursuant to a written plan of care[.]” Id. § 1396n(c)(1).

In 2006, the State of Ohio applied for and received a Medicaid waiver to provide assisted-living services to low-income seniors. Ohio Ctrs. for Assisted Living Br. at 6. Under Ohio's Medicaid regulations, a senior wishing to benefit from the waiver program must satisfy several criteria, including a determination by a county-level “passport” agency that the senior's “health related needs ... can be safely met” in a state-approved assisted-living facility (as opposed, for example, to a nursing home). Ohio Admin. Code 5160–33–03(B)(9)

. Per Congress's conditions on Medicaid funding through the assisted-living waiver, Ohio's county-level passport agencies will enroll a senior into the waiver program only after the senior meets several eligibility requirements, including approval of the senior's “service plan” by the county passport agency. Ohio Admin. Code 173–38–03(C)(1)(b) ; see also Ohio Admin. Code 173–38–01(B). Ohio does not permit the disbursement of any Medicaid funding for waiver-program services rendered before the passport agency approves the service plan. See Ohio Admin. Code 173–38–03(C)(1)(c).

B.

1.

In 2008, Betty Hilleger—then suffering from dementia, heart problems, and arthritis—moved into The Lodge Care Center, an assisted-living facility in Cincinnati. During her first four years at The Lodge, Hilleger paid the center's $4,300 monthly fee out of her own pocket. Then she ran out of money, and her daughters began paying the center's fee. In October 2012, Hilleger applied for Medicaid assistance through Ohio's assisted-living waiver program. Soon thereafter, her local passport agency approved a service plan for her. Later, in January 2013, the agency determined that Hilleger was financially eligible for the waiver program. Medicaid then began paying for the costs of Hilleger's care at The Lodge.

In April 2012, Geraldine Saunders checked into a hospital and then a rehabilitation facility after suffering a fall. Her stress fractures

and worsening dementia prevented her from returning home. In June 2012, she moved into the Close to Home assisted-living center in Ironton, Ohio. The same day, she applied for Medicaid assistance through Ohio's assisted-living waiver program. Eighteen days later, the local passport agency approved her service plan, determined that she was otherwise eligible for benefits under the program, and authorized the payment of Medicaid benefits. Saunders's daughter paid the 18 days' worth of assisted-living costs between the time Saunders entered Close to Home and the time her service plan was finalized.

2.

In February 2013, Hilleger and Saunders—acting through their daughters, Marilyn Wenman and Kathryn Price, respectively—sued the director of Ohio's Medicaid program and the director of the Ohio Department of Aging in a putative class action in federal district court. The plaintiffs alleged that Ohio's omissions of Medicaid coverage for the first 18 days of Saunders's assisted-living costs, and for the first three months of Hilleger's assisted-living costs, were in violation of federal law. The plaintiffs sought declaratory and injunctive relief under 42 U.S.C. § 1983

on behalf of themselves and others similarly situated. They specifically alleged that, per 42 U.S.C. § 1396a(a)(34), Ohio must retroactively cover the assisted-living services for a waiver-program beneficiary for up to three months before the beneficiary applies for coverage under the program. Section 1396a(a)(34) requires States to offer Medicaid coverage to any beneficiary

for care and services included under the [Medicaid] plan and furnished in or after the third month before the month in which [the beneficiary] made application ... for such assistance if such [beneficiary] was (or upon application would have been) eligible for such assistance at the time such care and services were furnished.

The plaintiffs asserted that they were eligible for Medicaid assistance under Ohio's waiver program from the moment each of them took up residence at their assisted-living centers, and that they were therefore entitled to retroactive benefits (i.e. , payments for services provided before a passport agency's approval of their service plans) under § 1396a(a)(34)

. The plaintiffs asked the district court to enter a declaratory judgment that Ohio's waiver program violated § 1396a(a)(34). They also asked the district court to enjoin the defendants from “artificially delaying” payment of the plaintiffs' assisted-living benefits, and to provide class members with written notice of their right to a state hearing as to their eligibility for retroactive benefits.

In November 2014, the plaintiffs amended their complaint and added two more claims under § 1983

: that the defendants failed to comply with the notice requirements of 42 U.S.C. § 1396a(a)(3) ; and that the defendants failed to provide Medicaid assistance with reasonable promptness, in violation of 42 U.S.C. § 1396a(a)(8).

In September 2015, the district court certified the plaintiffs' proposed class of Medicaid beneficiaries and granted summary judgment to the plaintiffs. The court held that federal law required Ohio to “assess whether, at any time up to three months prior to [an] application for assisted living waiver benefits, the [applicant] met the financial eligibility benefits; whether the [applicant] had a need for intermediate or skilled level of care; and whether the [applicant] received supportive services consistent with the plan of care. If so, the State must grant retroactive assisted living waiver benefits in accordance with § 1396a(a)(34)

.” The court also...