Townsend v. Quasim, No. 01-35689.

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: Berzon
• Citation: 328 F.3d 511
• Parties: Levi TOWNSEND, Plaintiff-Appellant, v. Lyle QUASIM, Secretary of the State of Washington Department of Social and Health Services (DSHS), Defendant-Appellee.
• Docket Number: No. 01-35689.
• Decision Date: 01 May 2003

328 F.3d 511 Levi TOWNSEND, Plaintiff-Appellant,
v.
Lyle QUASIM, Secretary of the State of Washington Department of Social and Health Services (DSHS), Defendant-Appellee. No. 01-35689. United States Court of Appeals, Ninth Circuit. Argued and Submitted September 12, 2002. Filed May 1, 2003.

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Katrin E. Frank, Timothy K. Ford and Andrea Brenneke, MacDonald, Hoague & Bayless, Seattle, Washington, for the plaintiff-appellant.

Alan Smith and William L. Williams, Assistant Attorneys General, Department of the Attorney General, State of Washington, Olympia, Washington, for the defendant-appellee.

Appeal from the United States District Court for the Western District of Washington; Thomas S. Zilly, District Judge, Presiding, D.C. No. CV-00-00944-TSZ.

Before: BEEZER, GOULD and BERZON, Circuit Judges.

Opinion by Judge BERZON; Dissent by Judge BEEZER.

OPINION

BERZON, Circuit Judge.

Levi Townsend, as representative for a certified class of disabled Medicaid recipients residing in Washington state, appeals a district court's grant of summary judgment in favor of the Secretary ("the Secretary") of the State of Washington's Department of Social and Health Services ("DSHS"). Mr. Townsend contends that the state's use of community-based services to provide essential long term care to some disabled Medicaid recipients but not others violates Title II of the Americans with Disabilities Act ("ADA") and a Department of Justice regulation implementing the ADA and mandating that public entities administer and deliver government services to qualified disabled persons in "the most integrated setting" possible. See 42 U.S.C. § 12132; 28 C.F.R. § 35.130(d).

Because we find that the Secretary's refusal to offer community-based in-home nursing services to some disabled persons may violate the ADA, we reverse the district court's grant of summary judgment for the Secretary. In consideration of the Secretary's arguments that extending eligibility for in-home nursing services to all the state's disabled Medicaid recipients may fundamentally alter the state's Medicaid program, not addressed by the district court, we remand this case for further factual findings and development of the record.

BACKGROUND

A. Medicaid in Washington State

The federal Medicaid program "provid[es] federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons." Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct. 2671, 65 L.Ed.2d 784 (1980).

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Participation by states in the Medicaid program is optional, but a state receiving Medicaid funds must comply with the requirements of the Medicaid Act. Id.; see 42 U.S.C. § 1396a. An exception to this rule is the Medicaid waiver program, under which the Secretary of Health and Human Services is authorized to waive certain Medicaid requirements for innovative or experimental state health care programs. See 42 U.S.C. § 1396n; 42 C.F.R. § 430.25(b). The programs encouraged by the waiver program include increased provision of home and community based health care to Medicaid recipients who would otherwise qualify for nursing home care. See 42 U.S.C. § 1396n(c)(1).

The Medicaid Act groups needy persons into two categories, usually distinguished by income level: the "categorically needy" and the "medically needy." 42 U.S.C. § 1396a(a)(10)(A); 42 C.F.R. § 435.4; Schweiker v. Hogan, 457 U.S. 569, 572-73, 102 S.Ct. 2597, 73 L.Ed.2d 227 (1982). A participating state must provide certain types of services to categorically needy persons. See 42 U.S.C. §§ 1396a(a)(10)(A), 1396d(a)(1)-(5), (17), (21). For medically needy persons, the state is only obligated to establish "reasonable standards" consistent with the purposes of the Medicaid Act for determining the extent of assistance it will offer. Beal v. Doe, 432 U.S. 438, 441, 97 S.Ct. 2366, 53 L.Ed.2d 464 (1977); 42 U.S.C. § 1396a(a)(17).

Washington receives Medicaid funding and funds the provision of long-term medical care and living assistance in nursing home settings to both the categorically and the medically needy. Categorically needy Washington state residents, however, have the additional option of receiving long-term living assistance and medical care in their own homes or adult family homes in the community through a Medicaid waiver program: Community Options Program Entry Services ("COPES"). Medically needy persons must receive Medicaid-funded long term living and medical assistance in a nursing home setting or not at all.

B. Plaintiffs and Procedural History of this Case

Levi Townsend, the lead plaintiff in this case, is in his eighties, has diabetic peripheral vascular disease, and is a bilateral amputee. In addition to medical treatment, he requires assistance preparing meals, performing housework, bathing, dressing, and attending to other personal hygiene needs. Mr. Townsend is eligible for Medicaid services administered by DSHS because he is a person with a limited income.

Before July 1999, Mr. Townsend's income placed him among the "categorically needy" who qualified for COPES assistance. Rather than move to a nursing home, Mr. Townsend chose to receive COPES services in a community-based adult family home setting. This arrangement enabled Mr. Townsend to remain in his own community, near friends and family.

In Washington, persons whose income is at or below three-hundred percent of the Social Security Income Federal Benefit Rate ("SSI FBR") are deemed categorically needy. See Wash. Admin. Code § 388-513-1301. In July 1999, Mr. Townsend's income increased to approximately forty-six dollars above three hundred percent of the SSI FBR. This increase meant that Mr. Townsend was no longer "categorically needy," but, instead, only "medically needy." DSHS informed Mr. Townsend that he would have to move to a nursing home within 30 days or lose his Medicaid benefits.

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In May 2000, Mr. Townsend filed suit on behalf of himself and a class of similarly situated Medicaid recipients certified by the district court, seeking to enjoin the requirement that he move to a nursing home as a condition of receiving needed, available Medicaid services. Mr. Townsend alleged that DSHS's denial of community-based long term care to medically needy disabled persons violated the ADA by (1) discriminating on the basis of disability; and (2) contravening the principles expressed in Olmstead v. L.C., 527 U.S. 581, 119 S.Ct. 2176, 144 L.Ed.2d 540 (1999), and the ADA's "integration regulation," which require that public entities administer services "in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 C.F.R. § 35.130(d).

The district court granted summary judgment for the DSHS Secretary. The court held that the exclusion of medically needy persons from COPES did not discriminate on the basis of Medicaid recipients' disability, but instead permissibly allocated services according to recipients' income levels. Characterizing COPES as a distinct program through which "Washington state has sought to provide additional services for the most needy individuals," the court further held that modifying the income-based restrictions on COPES eligibility for disabled medically needy persons would "fundamentally alter" the program by "merging the two distinct classes of categorically needy and medically needy individuals." Because the ADA ordinarily does not require fundamental alterations to state programs, the court found that exclusion of medically needy disabled persons from COPES did not violate the ADA.

With regard to plaintiffs' separate argument that the Secretary was violating the ADA's integration mandate by not providing services to medically needy disabled persons in the most integrated setting possible, the court relied on Rodriguez v. City of New York, 197 F.3d 611 (2d Cir.1999), in which the Second Circuit stated that the ADA does not require the state to provide services that it does not already provide to the disabled. In the court's view, requiring the state to provide long term care in community-based settings as well as nursing homes would mean developing and funding a new program of services for the disabled. The court concluded that "because Washington state does not provide community-based programs to the medically needy, the integration mandate does not require their creation."

Mr. Townsend appeals the court's grant of summary judgment on his claim that the state's failure to provide long-term care to the medically needy disabled in a community-based setting violates the ADA principles expressed in Olmstead and the integration regulation implementing those principles. He does not appeal the grant of summary judgment on his claim that exclusion from COPES discriminated against class members on the basis of disability.

ANALYSIS

A. The ADA's Integration Mandate

In adopting the ADA, Congress recognized that "historically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvements, such forms of discrimination against individuals with disabilities continue to be a serious and pervasive social problem," and that "individuals with disabilities continually encounter various forms of discrimination, including outright intentional exclusion, ... failure to make modifications to existing facilities and practices, ... [and] segregation." 42 U.S.C. § 12101(a)(2), (5). Congress aimed

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to eliminate this unjustified segregation and isolation of disabled persons through, among other provisions of the ADA, Title II, which provides that "no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, activities of a public entity, or be subjected to discrimination by any such entity." 42 U.S.C. § 12132.

The Department of Justice's integration regulation implements the...