Strouchler v. Shah

• Citation: 891 F.Supp.2d 504
• Decision Date: 04 September 2012
• Docket Number: No. 12 Civ. 3216(SAS).,12 Civ. 3216(SAS).
• Parties: Charles STROUCHLER, Sara Campos, by her next friend Ana Simard, and Audrey Rokaw, by her next friend Nina Pinsky, individually Opinion and Order and on behalf of all persons similarly situated, Plaintiffs, v. Nirav SHAH, M.D., as Commissioner of the New York State Department of Health, and Elizabeth Berlin, as Executive Deputy Commissioner of the New York State Office of Temporary and Disability Assistance, and Robert Doar, as Administrator of the New York City Human Resources Administration/Department of Social Services, Defendants.
• Court: U.S. District Court — Southern District of New York

891 F.Supp.2d 504

Charles STROUCHLER, Sara Campos, by her next friend Ana Simard, and Audrey Rokaw, by her next friend Nina Pinsky, individually Opinion and Order and on behalf of all persons similarly situated, Plaintiffs,

v.Nirav SHAH, M.D., as Commissioner of the New York State Department of Health, and Elizabeth Berlin, as Executive Deputy Commissioner of the New York State Office of Temporary and Disability Assistance, and Robert Doar, as Administrator of the New York City Human Resources Administration/Department of Social Services, Defendants.

No. 12 Civ. 3216(SAS).

United States District Court,

S.D. New York.

Sept. 4, 2012.

Toby Golick, Esq., Leslie Salzman, Esq., Cardozo Bet Tzedek Legal Services, New York, NY, Donna Dougherty, Esq., Jasa / Legal Services for the Elderly in Queens, Yisroel Schulman, Esq., Ben Taylor, Esq., Randal Jeffrey, Esq., N.Y. Legal Assistance Group, New York, NY, for Plaintiffs.

David Rosinus, Jr., Gloria Yi, Assistant Corporation Counsel, New York City Law Department, New York, NY, for City Defendant.

Robert Kraft, Assistant Attorney General, Office of the Attorney General for the

State of New York, New York, NY, for State Defendant.

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge.

I. INTRODUCTION

On behalf of themselves and a putative class, Charles Strouchler, Sara Campos, and Audrey Rokaw have brought this lawsuit against the Commissioner of the New York State Department of Health, in his official capacity (“DOH” or “the State”) and the Administrator of the New York City Human Resources Administration, in his official capacity (“HRA” or “the City”). Plaintiffs are elderly and disabled recipients of 24–hour continuous home care services, administered by the State through its agent the City using Medicaid dollars. They now seek a preliminary injunction (and eventually a permanent injunction) preventing defendants from reducing or terminating these services without adequate notice and legitimate reasons that comply with federal and state law and the federal Constitution.¹ They also seek the restoration of services that have been wrongly reduced or terminated since October 4, 2011. On July 17, 26, and 27 I held a hearing to evaluate the parties' evidence. They have submitted both pre-and post-hearing briefs.²

New York State, like many states whose tax revenues were severely reduced by recent economic circumstances, has faced a significant budget crunch in recent years. Simultaneously, medical care is consuming an ever-larger portion of the state's budget and it is understandable that state and local governments are exploring ways to reduce costs. Indeed, reforming our health care system has been a dominant topic of the nation's political discourse in recent years.

While these goals may be laudable, the evidence here establishes a substantial likelihood that defendants' actions have violated federal law and the Constitution's guarantee of due process. Any change in the provision of health care must result from the legislative and regulatory process. But administrators—even when faced with major budget crises-may not deprive citizens of the care to which they are legally entitled. Because plaintiffs have established a substantial likelihood of success on the merits and of imminent irreparable harm, their motion for a preliminary injunction is granted, although its scope is narrower than what they seek.

II. FINDINGS OF FACTA. The Medicaid Program in New York City

As the Second Circuit recently explained, Medicaid is a cooperative federal-state program through which the Federal Government provides financial assistance to States so that they may furnish medical care to needy individuals. The federal and state governments share the cost of Medicaid, but each state government administers its own Medicaid plan. State Medicaid plans must, however, comply with applicable federal law and regulations.

Any state that participates in Medicaid must designate “a single State agency” ... to administer—or to supervise the administration of—the state's Medicaid plan. See42 U.S.C. § 1396a(a)(5). Although the State agency may delegate to local entities the performance of certain responsibilities, see42 C.F.R. § 431.10(e), the State agency must (1) “[h]ave methods to keep itself currently informed of the adherence of local [entities] to the State plan provisions and the agency's procedures for determining eligibility,” and (2) “[t]ake corrective action to ensure their adherence,” 42 C.F.R. § 435.903 (some quotations and citations omitted).³

In New York State, DOH is the state agency responsible for the implementation of the State's Medicaid plan.⁴ The City HRA administers the Medicaid program in New York City as the local agent of the State. As part of that program, plaintiffs and others receive help with personal hygiene, dressing, feeding, walking, and other activities of daily life, and are therefore able to continue living in their homes rather than in hospitals or other institutions. This assistance, known as “personal care services,” is governed by federal and state regulations.⁵

The State offers various types of personal care services, depending on a patient's need. The most expansive (and expensive) type is known as “split-shift care,” because it involves multiple care givers each working a separate shift so that a patient can have up to 24 hours per day of care. The next type is known as “live-in” or “sleep-in” care, whereby one attendant lives with the patient full time and is able to sleep during the night without waking up to provide care except on rare occasions.⁶

In order to obtain personal care services, Medicaid recipients apply to the City, which conducts an assessment and determines the level of care that it believes is medically necessary.⁷ Before split-shift care is authorized, the initial determination must be reviewed and approved by an independent physician called a “local medical director” or “LMD.” ⁸ Authorizations of personal care services are reviewed either once or twice per year. Before reducing or terminating care, defendants must provide notice to the recipient detailing their reasons for doing so, must provide the recipient the opportunity for an administrative hearing to challenge the change in services, and must refrain from making the changes pending the outcome of that hearing.⁹

B. Recent Developments

In 2011, the United States intervened on behalf of a City employee who had brought a false claims action alleging that “the City has maintained a policy ... of reauthorizing split-shift services without any LMD determination,” in violation of State regulations.¹⁰ As part of the settlement terminating the lawsuit, the City committed “to obtain independent medical reviews in connection with reauthorizing 24–hour split-shift care.” ¹¹ Also in 2011, the State made certain amendments to its regulations governing personal care services although, according to subsequent clarifications by the State, the relevant changes to the regulations were only semantic, not substantive.

Beginning around April or May of 2011, the City began an initiative “to review all split-shift cases ... that were being reauthorized.” ¹² This initiative was part of an effort by the City to “reduce or transfer split-shift cases” and to revisit all previous decisions in light of the Feldman settlement.¹³ Plaintiffs argue that these actions were taken in order to reduce the cost of the program.¹⁴ The City has responded by arguing that, because of the structure of the Medicaid program under New York law, it would not benefit financially from a reduction in the number of split-shift recipients.¹⁵

Between January 1, 2010 and May 1, 2011, the number of patients on split-shift care fell from 1,356 to 1,274. From August 2011 through April 2012, the number of recipients fell from 1, 135 to 945. As plaintiffs point out, “during this more recent period, [the City] reduced its split-shift census twice the amount in half the time.” ¹⁶ Between August 1, 2011 and June 15, 2012, 270 recipients of split-shift care appealed the decision by the City to reduce or terminate their care. After conducting fair hearings, the State's Administrative Law Judges (“ALJs”) reversed 262 of these decisions.¹⁷ That is, the City's decisions were reversed by the State over ninety-seven percent of the time.

C. Regulations and Interpretations of Regulations Challenged by Plaintiffs

Many of the City's termination or reduction notices rely on one or more of the following reasons, which plaintiffs challenge as improper under state regulations and/or federal law:

1. “Some” Versus “Total” Assistance

Since 1987, New York State's Medicaid regulations have distinguished between a patient's need for “some assistance” with the activities of daily living and a patient's need for “total assistance” with those activities. The distinction is crucial because only those patients who require “total assistance” are entitled to split-shift care. The regulations define the terms as follows:

(i) Some assistance shall mean that a specific function or task is performed and completed by the patient with help from another individual.

(ii) Total assistance shall mean that a specific function or task is performed and completed for the patient.¹⁸

The distinction is between those tasks that are completed by the patient with help and those that are completed for the patient. “[I]n the wake of the Feldman case,” the administrative leadership at the HRA placed a new “focus” on these definitions to ensure that all split-shift recipients fit within the regulations.¹⁹ Instead of ensuring proper implementation of the regulation, however, the City's renewed focus led it to adopt a strained interpretation of “total” and “some” assistance that conflicts with the plain language of the regulation.

According to Anita Aisner, its chief medical director, the City's new understanding of the regulation was this: “some assistance is when the task is completed with...