Rosen v. Tennessee Com'R of Finance and Admin.
| Decision Date | 24 October 2001 |
| Docket Number | No. 3:98-0627.,3:98-0627. |
| Citation | 204 F.Supp.2d 1061 |
| Parties | Michael ROSEN, et al., Plaintiffs, v. TENNESSEE COMMISSIONER OF FINANCE AND ADMINISTRATION, Defendant. |
| Court | U.S. District Court — Middle District of Tennessee |
George Gordon Bonnyman, Jr., Tennessee Justice Center, Inc., Nashville, TN, for plaintiffs.
Jennifer Helton Hann, Katherine Anne Brown, Linda A. Ross, Sue A. Sheldon, Office of Atty. Gen., Nashville, TN, Ronald W. McNutt, Mitch Grissim & Associates, Nashville, TN, Charles A. Miller, Julie L.B. Johnson, Robert D. Wick, Covington & Burling, Washington, DC, for defendant.
Michael James Passino, Lassiter, Tidwell & Hildebrand, Nashville, TN, for special master.
Plaintiffs, Michael Rosen, Barbara Huskey, Emanuel Martin, by his next friend, Cheryl Martin; Wanda Campbell, Connie Hoilman, Mark Hughes, Jacob B., by his next friend, Martin B.; Jackie Baggett, Brenda Clabo and Pradie Tibbs, filed this action under 42 U.S.C. § 1983 against the Defendant, the Tennessee Commissioner of Finance Administration, asserting claims that the Commissioner's administration of Tennessee's TennCare plan, a managed health care program established under Title XIX of the Social Security Act, 42 U.S.C. 1396 et seq., violates Plaintiffs' procedural rights under the Due Process Clause of the Fourteenth Amendment and applicable federal regulations. This class action is on behalf of all past, present and future applicants, including Medicaid recipients, insured and uninsurable applicants who seek medical coverage under TennCare's program. Extensive discovery was taken in this action. Other significant aspects of this litigation are discussed infra.
Before the Court is the Plaintiffs' motion for a preliminary injunction to bar the Defendant's implementation of his October, 1, 2001 amendment to the TennCare plan to exclude uninsurables from its medical coverage. (Docket entry No. 204). Plaintiffs contend, in essence: (1) that the Defendant's October 1st amendment to the TennCare plan was not reviewed by a Medical Care Advisory Committee, as required by federal Medicaid regulations; (2) that the Defendant's amendment to TennCare also breaches the parties' Settlement Agreement and Agreed Order in this action to maintain TennCare's current program design; (3) that the Defendant's amendment deprives the Plaintiffs of the benefits bargained for and contemplated in the parties' Settlement Agreement; and (4) that the Defendant failed to give the requisite prior notice of this Plan amendment, as required by the parties' Settlement Agreement.
In response, the Defendant argues, in sum: (1) that Plaintiffs lack standing to challenge its new amendment to the TennCare program; (2) that the Agreed Order provides only procedural protections and does not bar unilateral substantive changes to TennCare's plan; (3) that the notice requirements in the Agreed Order and Settlement Agreement apply only to procedural changes; (4) that the TennCare Plan for uninsurables is not subject to federal regulations requiring review by a Medical Care Advisory Committee; (5) that if applicable, Plaintiffs cannot enforce this regulation; (6) that the TennCare program has serious financial difficulties and the State cannot be limited in its policy decisions absent a clear agreement to do so; (7) that acute care remains available for uninsurables through other public and private health programs; and (8) that the Eleventh Amendment bars this action.
The Court earlier granted Plaintiffs' application for temporary restraining order on this Plan amendment (Docket Entry No. 217) and after a hearing on the motion for preliminary injunction, the Court awarded a provisional preliminary injunction to extend the temporary restraining order until a decision on the preliminary injunction issues. (Docket Entry No. 237). For that injunction, the Court adopted its findings in the Temporary Restraining Order and also found that the Defendant violated the notice requirements of the parties' Settlement Agreement. Id. The Defendant requested expedited consideration of the preliminary injunction issues. The Defendant has since filed a motion to stay any injunction in this action pending an appeal. (Docket Entry No. 247).
For the reasons set forth below, the Court concludes first that Plaintiffs possess standing to challenge the Defendant's October 1st policy, as class representatives and as parties to the Settlement Agreement and Agreed Order. Further, Plaintiff Clabo who remains a potential future applicant for coverage under TennCare, also has standing to challenge this policy. Second, the Court concludes that Medicaid statutes and regulations can be enforced by enrollees and applicants for enrollment in a Medicaid Waiver Plan. Third, the Defendant did not honor Medicaid's regulations' requirement to consult a Medical Advisory Committee in adopting its October 1st policy, despite a prior ruling of this Court that such consultation was a "clear" and "mandatory" requirement. Fourth, the Agreed Order and Settlement Agreement when construed together, required the Defendant to provide Plaintiffs thirty (30) days prior notice of any change in TennCare's "program design" and "policies." The Defendant did not provide such notice for its October 1st amendment. Fifth, under the Supremacy Clause of the federal constitution, the Court's prior Orders that awarded relief for violations of Plaintiffs' procedural rights and substantive entitlements to TennCare coverage and those Orders cannot be superceded by the October 1st rule changes. Sixth, the Eleventh Amendment does not bar this action seeking injunctive relief against a state official alleged to be violating a federal law. Class members who are uninsurable will be irreparably injured by this October 1st policy that would result in loss of medical care and medications necessary for their serious medical problems. Thus, a preliminary injunction should issue as well as the appointment of a Special Master. Finally, the facts of this case do not warrant a stay of this injunction pending an appeal.
On November 18, 1993, the Tennessee Commissioner of Public Health received approval of the State's application for its "TennCare" plan from the Administrator of the Health Care Financing Administration ("HCFA") in the United States Department of Health and Human Services. (Docket Entry No. 230, Defendant's Memorandum, Attachment No. 2 thereto). The TennCare plan was a "waiver-only demonstration" that was subject to "special terms and conditions". The purpose of the TennCare plan was to provide medical benefits not only to Medicaid recipients, but also to persons who were not covered under Title XIX.
Under the authority of section 1115(a)(2) of the SSA, expenditures made by the state for fee terms identified below (which are not otherwise included as expenditures under section 1903) shall, for the period of this project, be regarded as expenditures under the states title 19 plan
vi. Expenditures which would otherwise be precluded by section 1903(F.) For eligibility groups:
+ those who are uninsurable because of pre-existing conditions; and
+ those who are uninsured.
Id. at Administrator's November 18, 1993 letter at p. 3. Among the "special terms and conditions", as pertinent here, was a paragraph 22 that reads as follows: Id., Attachment thereto at 7.
Initially, the TennCare plan had an enrollment cap of 1,300,000 enrollees that was later extended to 1,500,000. Id. at Attachment No. 3. Under the original plan, as the number of enrollees reached the enrollment cap, the Plan would limit the further enrollment of uninsureds. Id. As the HCFA announcement on TennCare explained:
The State is planning to cap enrollment at 1.3 million in the first year of the waiver, and 1.5 million in the following years. While enrollment will not be restricted for those currently eligible for Medicaid or the uninsurables, the cap on total enrollment may limit the number of uninsured served.
(Plaintiff's Exhibit No. 10, Attachment thereto) (emphasis added).
In a December 28, 1993 letter, HCFA declined to approve the State's proposed charge of $25.00 to "a TennCare enrollee" that used a hospital emergency room for non emergency care, citing a statutory prohibition for such a change in a waiver program. (Docket Entry No. 230, Defendant's Memorandum at Attachment No. 7).
In a letter to Mr. H. Russell White dated April 21, 1994, the Department of Health and Human Services stated that there would not be any waiver of applicable Medicaid regulations without express HCFA approval.
It has come to our attention that attorneys for the State of Tennessee, acting on behalf of David L. Manning, Manny Martins, and you, in your official capacities, have taken the position in the context of litigation relating to the TennCare demonstration that certain portions of the Medicaid statute have been waived by implication as a result of our approval of the TennCare demonstration project. The purpose of this letter is to make clear that we do not believe there is any merit to the concept of waiver by implication in connection with a section 1115 demonstration project, and moreover, that we have explicitly refused to waive the particular statutory provision in question.
(Plaintiff's Exhibit No. 10 (emphasis added)).
After implementation of the TennCare plan, litigation arose over the disparate treatment of uninsured and uninsurables, as compared to Medicaid recipients. In response to a state inquiry, HCFA's Director of Office of Beneficiary Services issued a memorandum on June 17,...
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