Silvey v. Roberts

• Decision Date: 08 August 1973
• Docket Number: No. 72-915-Civ-J.,72-915-Civ-J.
• Parties: Alice Eileen SILVEY, Individually, and on behalf of all others similarly situated, Plaintiffs, v. Emmett S. ROBERTS, Secretary, Department of Health and Rehabilitative Services, State of Florida, et al., Defendants.
• Court: U.S. District Court — Middle District of Florida

363 F. Supp. 1006

Alice Eileen SILVEY, Individually, and on behalf of all others similarly situated, Plaintiffs, v. Emmett S. ROBERTS, Secretary, Department of Health and Rehabilitative Services, State of Florida, et al., Defendants.

No. 72-915-Civ-J.

United States District Court, M. D. Florida, Jacksonville Division.

August 8, 1973.

Alan A. Alop, Steven M. Goldstein, Duval County Legal Aid Assn., Jacksonville, Fla., for plaintiffs.

Chester G. Senf, Jacksonville, Fla., for defendants.

ORDER AND OPINION

CHARLES R. SCOTT, District Judge.

This case presents three basic issues: (1) whether a state welfare agency's termination or reduction of Medicaid assistance for prescribed medicine prior to notice and an opportunity to be heard violates the Social Security Act of 1935, as amended, and the federal regulations promulgated thereunder; (2) whether the said reduction prior to notice and an opportunity to be heard violates the Due Process Clause of the Fourteenth Amendment; and (3) assuming said reduction prior to notice and an opportunity to be heard is held to be aberrant, whether the class of plaintiffs in this case is entitled to retroactive benefits. Since this Court holds that the defendants' policy of reducing excess prescribed medicine grants under Medicaid without the benefit of prior notice and an opportunity to be heard is clearly inconsistent with the Social Security Act and the federal regulations promulgated pursuant thereto under 42 U.S.C. § 1302, the issue is as to whether said practice violates the Due Process Clause is pretermitted. As to the third issue, this Court holds that retroactive benefits should be made available to the class of plaintiffs herein.

I. FACTUAL BACKGROUND

In the State of Florida, all public assistance recipients are entitled to receive a monthly grant for prescribed medicine under the Medicaid program up to a general maximum of twenty dollars ($20.00) per month.¹ In a "serious and complicated situation such as when additional medicine is necessary for the prolongation of life itself", grants in excess of the general $20.00 maximum are provided for.²

The uncontroverted facts surrounding the unilateral reduction of the Medicaid excess medicine grant of the named plaintiff is set forth below. The named plaintiff, Alice Eileen Silvey, is a 55 year old unmarried woman. She has had no income or resources other than the welfare benefits received under the Aid to the Disabled Program since January 1972. Plaintiff is afflicted with rheumatoid arthritis, rheumatoid vasculitis, peripheral neuropathy, and a heart condition. She is presently confined to bed at St. Jude Manor Nursing Home, Jacksonville, Florida. On January 27, 1972, the Bureau of Medical Service, Division of Family Services, Department of Health and Rehabilitative Services, pursuant to operations letter 1775³ of the Medicaid State Plan and Chapter 504.1⁴ of the Medical Services Bureau Medicaid Manual, granted the named plaintiff a monthly allotment of $70.00 for prescribed medicine. This grant was effective January 1, 1972, and was based on information provided to the Bureau of Medical Services by Louis M. Sales, M. D., plaintiff's physician.

On or about April 1972, Doctor Sales requested the Bureau of Medical Services to increase plaintiff's monthly prescribed medicine grant because the amount plaintiff was then receiving was insufficient to purchase all her necessary prescribed medication. On April 18, 1972, the Bureau of Medical Services denied this request and, in addition, for some unknown reason, reduced the monthly medicine allotment from $70.00 to $35.00, effective April 1, 1972. This reduction was effected upon the unilateral decision of Edward Morrow, M. D., the medical consultant employed by the Bureau of Medical Services, on the basis of Sections 504.2⁵ and 504.3⁶ of the Medical Services Bureau Medicaid Manual (hereinafter referred to as "Regs. 504.2 and 504.3"). The named plaintiff was concededly given no opportunity, prior to the reduction, to be heard on the question of whether her benefits should be reduced and was given no notice whatsoever that the Bureau of Medical Services was contemplating such an action. In addition, at the time Miss Silvey's physician submitted the request for an increase in benefits, plaintiff had no knowledge that this request would paradoxically result in a reduction of benefits.

On August 24, 1972, Doctor Morrow, the medical consultant of the Bureau of Medical Services, once again considered the monthly medicine grant of the plaintiff in the course of deciding a second request for an increase in monthly benefits submitted by the plaintiff's physician, Doctor Sales. As a result, Doctor Morrow further reduced the plaintiff's prescribed medicine grant from $35.00 per month to the general maximum of $20.00 per month without affording the plaintiff prior notice or an opportunity to be heard by an impartial tribunal. This reduction was effective October 1, 1972. The plaintiff was and is without funds to personally purchase the medicines which her physician prescribed as necessary for her health and even her existence.⁷

Without conceding the improvidence of their actions, the defendants, pursuant to a stipulation,⁸ filed herein April 4, 1973, have agreed to provide notice and an opportunity to be heard prior to any reduction of Medicaid medicine grants in the future and that this lawsuit may be maintained as a class action.⁹

The jurisdictional basis for this action is 28 U.S.C. § 1343(3) and 42 U.S.C. § 1983.¹⁰ Relief is sought pursuant to 28 U.S.C. §§ 2201 and 2202 and 42 U.S.C. § 1983. The specific relief requested is: (1) a declaratory judgment that the actions of the defendants in reducing the Medicaid medicine payments without prior notice and a hearing were inconsistent with the Social Security Act of 1935, as amended, and violative of the Due Process Clause of the Fourteenth Amendment; (2) a permanent injunction enjoining the defendants and their agents, employees, successors, and all those acting in concert with them from reducing or terminating the monthly level of Medicaid payments for prescribed medicine to Florida public assistance recipients without prior notice and a hearing pursuant to Regs. 504.2 and 504.3; and (3) an award of retroactive benefits to the plaintiffs.

As pointed out above, this Court pre-termits any decision as to the merits of plaintiffs' claim that the defendants' actions herein were violative of due process. This Court does hold that the defendants' practice of reduction or termination of Medicaid grants for prescribed medicine as embodied in Regs. 504.2 and 504.3 of the Medical Services Bureau Medicaid Manual is inconsistent with 42 U.S.C. § 1382(a)(4) and 45 C.F.R. § 205.10 (1972) and that the defendants must be permanently enjoined therefrom. This Court also holds that benefits must be accorded to all members of the class retroactive to the effective date of 45 C.F.R. § 205.10, April 14, 1971.

II. THREE-JUDGE COURT UNNECESSARY

Before this Court can reach the merits of plaintiffs' claim, the threshhold issue of whether a three-judge court should be convoked to decide the case must perforce be disposed of.

At the hearing on the plaintiffs' application for preliminary injunction on April 4, 1973, the parties orally stipulated that a three-judge court, pursuant to 28 U.S.C. § 2281, was unnecessary to the disposition of this case. As the plaintiffs point out, there are two main reasons why a three-judge court is not called for here. First of all, a three-judge court is not required to declare a state statute (or other legislation of statewide application as is involved in this case) inconsistent with a federal statute and, therefore, violative of the Supremacy Clause. Swift & Co. v. Wickham, 382 U.S. 111, 86 S.Ct. 258, 15 L.Ed.2d 194 (1965). See also Rosado v. Wyman, 397 U.S. 397, 402, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970). Since this Court feels that the instant case is easily disposed of on the basis of federal-state statutory inconsistency without reaching the constitutional question, Swift & Co. v. Wickham, supra, clearly precludes the necessity of a three-judge court. The second reason for not convening a three-judge court is that the plaintiffs are not attacking the constitutionality of the regulations themselves but rather their application within the context of procedural due process.¹¹See Phillips v. United States, 312 U.S. 246, 61 S.Ct. 480, 85 L.Ed. 800 (1941); Spencer v. Kugler, 454 F.2d 839 (3d Cir. 1972); Almenares v. Wyman, 453 F.2d 1075 (2d Cir. 1971), cert. denied 405 U.S. 944, 92 S.Ct. 962, 30 L. Ed.2d 815 (1972); Bussie v. Long, 383 F.2d 766 (5th Cir. 1967); Benoit v. Gardner, 351 F.2d 846 (1st Cir. 1965); Serritella v. Engelman, 339 F.Supp. 738 (D.N.J.1972); Hunt v. Edmunds, 328 F.Supp. 468 (D.Minn.1971).

III. CONFLICT WITH THE SOCIAL SECURITY ACT AND THE REGULATIONS PROMULGATED THEREUNDER

The "fair hearings" requirement of the Social Security Act of 1935, as amended, 42 U.S.C. §§ 301 et seq., is expressed in at least three distinct locations. For example, 42 U.S.C. § 1382 (1968) provides in pertinent part as follows:

(a) A State plan for aid to the aged, blind, or disabled, or for aid to the aged, blind, or disabled and medical assistance to the aged, must—

(4) provide for granting an opportunity for a fair hearing before the State agency to any individual whose claim for aid or assistance under the plan is denied or is not acted upon with reasonable promptness.¹²

To the same effect for A.F.D.C. programs is 42 U.S.C. § 602(a)(4) and for aid to the blind programs is 42 U.S.C. § 1202(a)(4).

The rule-making provision of the Act, 42 U.S.C. § 1302¹³, provides the authority for the "fair hearings" requirement of 45 C.F.R. § 205.10, 36 Fed.Reg. 3034 (1971), which was announced on February 13, 1971, to go into effect April 14, 1971. The pertinent portion of this provisions is as follows:

. . . . . .

(2) Every claim

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