Skubel v. Fuoroli

• Citation: 113 F.3d 330
• Decision Date: 13 May 1997
• Docket Number: No. 1323,D,1323
• Parties: , 53 Soc.Sec.Rep.Ser. 368, Medicare & Medicaid Guide P 44,236 Jacinta SKUBEL, by parents & next friends Michael & Eva, Plaintiff-Appellee, Travis Hardy, By and Through his parents and next friend, Flora Hardy Brown, in/and on behalf of himself and all others similarly situated, Intervenor-Plaintiff-Appellee, v. Alfred J. FUOROLI, Assoc. Regional Adm. Health Care, HH, o/, Defendant, Joyce Thomas, in her official capacity as Commissioner of the Department of Social Services; Julie Pollard, in her official capacity as Director of Medical Administrative Operations of the Connecticut Department of Social Services; Defendants-Appellants. ocket 96-6201.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 330

113 F.3d 330

65 USLW 2751, 53 Soc.Sec.Rep.Ser. 368,

Medicare & Medicaid Guide P 44,236

Jacinta SKUBEL, by parents & next friends Michael & Eva,

Plaintiff-Appellee,

Travis Hardy, By and Through his parents and next friend, Flora Hardy Brown, in/and on behalf of himself and all others similarly situated, Intervenor-Plaintiff-Appellee, v. Alfred J. FUOROLI, Assoc. Regional Adm. Health Care, HH, o/, Defendant, Joyce Thomas, in her official capacity as Commissioner of

the Department of Social Services; Julie Pollard, in her

official capacity as Director of Medical Administrative

Operations of the Connecticut Department of Social Services;

Defendants-Appellants.

No. 1323, Docket 96-6201.

United States Court of Appeals, Second Circuit.

Argued March 24, 1997.

Decided May 13, 1997.

Carl Levine, law student intern, New Haven, CT (Caroll L. Lucht, The Jerome N. Frank Legal Services Organization, J. Steven Farr, Daniel C. Lewis, Andrea C. Luby, Tamarra D. Matthews, Eve L. Runyon, law student interns, of counsel), for Plaintiffs Appellees.

Judith A. Merrill, Assistant Attorney General, Hartford, CT (Richard Blumenthal, Attorney General, Richard J. Lynch, Hugh Barber, Assistant Attorneys General, of counsel), for Defendants-Appellants Joyce Thomas and Julie Pollard.

Before NEWMAN, Chief Judge, MINER and GODBOLD, ^* Circuit Judges.

MINER, Circuit Judge:

Defendants-appellants Joyce Thomas and Julie Pollard, in their respective official capacities as Commissioner and Director of Medical Administrative Operations of the Connecticut Department of Social Services ("DSS"), appeal from a judgment entered in the United States District Court for the District of Connecticut (Burns, J.) granting summary judgment in favor of plaintiffs-appellees Jacinta Skubel and Travis Hardy. ¹ The district court determined that the United States Department of Health and Human Services ("HHS") regulation limiting Medicaid coverage to home health care services provided at the recipient's place of residence was an unreasonable interpretation of the home health care services provision of the Medicaid statute, 42 U.S.C. § 1396 et seq., and therefore arbitrary and capricious. Accordingly, the district court permanently enjoined DSS and officials of HHS from denying Medicaid funding to members of plaintiffs' class for medically necessary home health nursing services outside their residences.

For the reasons that follow, we affirm the judgment of the district court as modified.

BACKGROUND

Plaintiffs are children suffering from severe medical conditions who require nearly constant supervision during their waking hours. Skubel, who lives at home with her parents, was eight years old at the time the action giving rise to this appeal was initiated. She suffers from several serious medical disorders, including lissencephaly (a severe congenital brain malformation), a mixed seizure disorder, and global developmental delay. Due to Skubel's medical condition, she experiences daily seizures, which result in oral secretions that interfere with her breathing.

Skubel requires constant supervision and care for the maintenance of her breathing and administration of her medications. As part of Skubel's supervision, her doctor has prescribed a minimum of 76 hours per week of nursing as medically necessary. Of the 76 hours of nursing prescribed, 56 hours are funded by Medicaid under Connecticut's home health services program ² and the remaining hours are funded under a private employee insurance plan.

Hardy is 12 years old and also suffers from a number of medical disorders, including spastic quadriplegia resulting from bronchopulmonary dysplasia, seizure disorder and mental retardation. As a result of breathing difficulties, Hardy requires a tracheostomy tube in his throat. The attention of a nurse is required for a substantial part of the day to suction his airway through the tracheostomy tube. Hardy's doctor has prescribed 40 Because both children require nearly constant nursing care, they can participate safely in educational and social activities available in the community only if accompanied by a nurse. However, an HHS regulation limits Medicaid funding for home health services to services "provided to a recipient ... [a]t his place of residence." ³ 42 C.F.R. § 440.70(a)(1). Both Skubel and Hardy requested Medicaid funding for nursing care outside of their homes, but these requests were denied as barred by the HHS regulation.

hours per week of medically necessary home nursing care, all of which is funded by Medicaid through Connecticut's home health services program.

During the two-year period preceding the filing of the action giving rise to this appeal, a number of letters were sent to members of the regional staff of the Health Care Financing Administration ("HCFA") of HHS, both by plaintiffs and officials of the Connecticut Department of Income Maintenance ("DIM"), requesting an interpretation of § 440.70(a)(1). On each occasion, the regional administrators responded that the regulation as currently written would not allow Medicaid funding for home health services provided outside of the plaintiffs' residences.

Following our decision in Detsel v. Sullivan, 895 F.2d 58 (2d Cir.1990), in which we held invalid a regulation limiting the provision of private duty nursing to a recipient's residence, a series of letters were sent to HCFA to obtain a reinterpretation of the home health care services regulation in light of Detsel. On March 14, 1990, DIM Director of Medical Care Administration Linda Schofield wrote to then-HCFA Regional Administrator defendant Alfred G. Fuoroli seeking clarification of the home health services regulation. On May 4, 1990, Fuoroli wrote: "[S]ince the Detsel case dealt only with the place of service restrictions on private duty nursing services, it did not apply to the long-standing regulation at 42 CFR 440.70." He further explained that HCFA's regional general counsel had informed him "that absent a court order to the contrary," Medicaid-funded home health care services would extend only to services provided in the home. Finally, on May 10, 1990, acting Medicaid Bureau Director Rozann Abato wrote to Andrew S. Golub, a law student intern assisting plaintiffs, that HHS had "no plans to extend the boundaries of the place of service limitations beyond that which is specified in the regulations."

After these efforts to seek an interpretation and reevaluation of the HHS regulation, plaintiffs did not pursue any administrative remedies. Instead, on June 4, 1990, Skubel filed a complaint in district court seeking declaratory and injunctive relief against named officials of HHS and DIM. ⁴ She claimed that HHS's interpretation of § 440.70 violated the Administrative Procedure Act ("APA"), 5 U.S.C. § 500 et seq., the Civil Rights Act of 1877, 42 U.S.C. § 1983, and the Rehabilitation Act of 1973, 29 U.S.C. § 794, and denied equal protection under the Fifth and Fourteenth Amendments. The primary relief Skubel sought was that she receive Medicaid funding for nursing care provided outside her residence.

On July 6, 1990, after an evidentiary hearing, the district court entered a preliminary injunction requiring that defendants fund Skubel's nursing services outside her home. On November 5, 1990, Skubel moved to amend her complaint to add class claims and also moved for class certification. On December 21, 1990, while those motions were pending, Hardy moved to intervene. On March 31, 1992, the district court granted the pending motions and certified a class consisting of all Connecticut residents

who have been or in the future will be determined to be eligible for home health nursing services as defined at 42 C.F.R. § 440.70(a) and (b)(1) provided pursuant to the federal Medicaid Act, 42 U.S.C. § 1396 et seq., who, pursuant to interpretations of The parties filed motions for summary judgment and, on May 14, 1996, the district court granted summary judgment in favor of plaintiffs on their APA and § 1983 claims. The district court found that (1) plaintiffs were excused from exhausting their administrative remedies because it would have been futile and a waste of judicial resources to require them to pursue rulemaking, and (2) the regulation was an unreasonable interpretation of the Medicaid statute because, inter alia, it did not represent a reasoned decision in light of the medical advances permitting disabled individuals to leave their homes. Judgment was entered on May 17, 1996, and an amended judgment was entered on June 6, 1996. This appeal followed.

the text of the Medicaid Act or its implementing regulations, have been or will be limited in the receipt of those services to the physical confines of their homes and for whom home health nursing services are medically necessary when they leave their homes to engage in normal life activities.

DISCUSSION

DSS argues that the district court erred in granting summary judgment in favor of plaintiffs. Specifically, DSS contends: (1) the district court should have dismissed the action for failure to exhaust administrative remedies; and (2) the regulation was a reasonable interpretation of the Medicaid statute.

In reviewing a grant of summary judgment, we apply the same standard as the district court and determine de novo whether summary judgment is appropriate. See Taggart v. Time Inc., 924 F.2d 43, 45-46 (2d Cir.1991). Summary judgment may be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986). In determining whether summary judgment is appropriate, we resolve all ambiguities and draw all reasonable inferences against the moving party. See Cifarelli v....