Vaughn v. Walthall

• Decision Date: 05 August 2020
• Docket Number: No. 19-1244,19-1244
• Citation: 968 F.3d 814
• Parties: Karen VAUGHN, Plaintiff-Appellee, v. Jennifer WALTHALL, in her official capacity as Secretary of the Indiana Family and Social Services Administration, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

968 F.3d 814

Karen VAUGHN, Plaintiff-Appellee,

v.Jennifer WALTHALL, in her official capacity as Secretary of the Indiana Family and Social Services Administration, et al., Defendants-Appellants.

No. 19-1244

United States Court of Appeals, Seventh Circuit.

Argued May 22, 2020

Decided August 5, 2020

Martha Jane Perkins, Sarah Grusin, Elizabeth Edwards, Attorneys, NATIONAL HEALTH LAW PROGRAM, Carrboro, NC, Mark Sniderman, Attorney, FINDLING, PARK, CONYERS, WOODY & SNIDERMAN, PC, Indianapolis, IN, for Plaintiff - Appellee.

Aaron T. Craft, Thomas M. Fisher, Kian James Hudson, Julia Catherine Payne, Esq., Attorneys, OFFICE OF THE ATTORNEY GENERAL, Indianapolis, IN, for Defendants - Appellants.

Before Bauer, Easterbrook, and Wood, Circuit Judges.

Wood, Circuit Judge.

Federal law prohibits discrimination against persons with disabilities, and in furtherance of that goal, it requires states to administer public programs "in the most integrated setting appropriate to the needs of qualified individuals with disabilities." That duty is bounded by the standard of reasonableness; states are not obligated fundamentally to alter their programs to comply.

At issue here is whether the anti-discrimination mandate compels a state to structure and fund its Medicaid programs in a manner that ensures that all Medicaid recipients who desire to receive health care in a home setting may do so regardless of cost to the state. In addition, we must decide how, if at all, the state's adoption after oral argument of a pilot program that provides greater flexibility to those who want home health care affects this case. We conclude that we still face a live controversy but that further proceedings are necessary. We also conclude that the permanent injunction issued by the district court swept too broadly. If any injunction is still warranted—a question on which we take no position—it must be narrowly tailored to any violations that are proven.

I

Karen Vaughn has lived with quadriplegia

for approximately 40 years and has received home-based care for over 30 years. She relies on others to help her with all basic daily tasks and her medical care. She strongly prefers to live at home rather than in a nursing facility or other institution. In 2012 she had a tracheostomy, which is still in place; she uses a ventilator at night to help her breathe. She must have help with personal care (hygiene, dressing, eating, etc.), household maintenance, mobility exercises, transportation, medications, suctioning secretions from her tracheostomy, and use of the ventilator. This amounts to 20+ hours per day of in-home nursing care. On occasions when nursing shifts cannot be staffed, Vaughn has relied on friends to fill the gaps.

Until January 2016, the Indiana Family and Social Services Administration (FSSA) approved and coordinated Vaughn's plan of care, and a state-approved home-health agency managed it day-to-day. The state funded her care through two Medicaid programs for which it receives federal reimbursement: the core Medicaid program ("prior-authorization services"), which covered up to 16 hours per day of at-home nursing services for Vaughn; and the "Aged and Disabled" waiver program ("A&D waiver"), which covered additional hours of non-medical attendant-care services, including assistance with personal hygiene, meal preparation, and household tasks. The A&D waiver program is intended to facilitate care in both home- and community-based settings for those who otherwise would need to be institutionalized. Under regulations in effect at the time, Vaughn had the option to select her own caregivers and arrange for them to receive A&D waiver funds. In contrast, she could not personally direct nursing care funded through the core Medicaid program. Both nursing staff and attendant-care providers were paid at the state's federally approved Medicaid rates for the particular services they performed.

In January 2016, Vaughn was hospitalized with pneumonia

. That's when the trouble began. She was cleared by her doctors to be discharged within a week, but the state could not find any nurses available to provide the round-the-clock care she needs when she is at home. Matters had changed dramatically while she was in the hospital: the home-health agency that had been managing her care could not resume its services, because it had reassigned its nurses to other clients. It did so, it said, because it could no longer afford to provide Vaughn's care at the low Medicaid reimbursement rates. Over the next few months, FSSA staff members contacted over 50 other home-health agencies, but none would accept Vaughn as a client. As a result, she remained in the hospital against her will.

In April 2016, Vaughn sent a letter to the FSSA requesting renewed authorization for a plan of care that included 22 hours per day of nursing services and two hours per day of attendant care. Given the difficulty the state had experienced in finding a home-health agency to manage staffing for her, Vaughn sought permission to self-direct all her care, not just the attendant portion. She proposed that she would directly hire a case manager, nurses, and other providers, and that the state would bankroll everything using funds from the Medicaid prior-authorization program, the Medicaid waiver program, or other public health care programs. The only problem was that this arrangement was not authorized under Indiana's existing regulations. Vaughn also asked to hire "qualified staff for the level of service I believe most appropriate to my needs." In other words, she wanted the ability to hire and train people who would be paid by the state but who lack the credentials the state considers necessary to furnish her medical care. Vaughn's doctor and social worker at the hospital supported her request. They believe that home-based care delivered by non-nurses who have been trained to perform skilled tasks such as those involving her tracheostomy

and ventilator will meet her needs. In the hospital, various medical specialists performed these tasks; in Vaughn's home, nurses handled them before her hospitalization.

The FSSA denied Vaughn's request and instead continued to search in vain for a home-health agency that would accept her as a client. In November 2016 Vaughn was transferred to a nursing home. She filed a complaint in the district court on November 30, 2016, bringing claims under the Americans with Disabilities Act (ADA), 42 U.S.C. § 12132 ; section 504 of the Rehabilitation Act, 29 U.S.C. § 794 ; and the reasonable-promptness provision of the Medicaid Act, 42 U.S.C. § 1396a(a)(8). Meanwhile, time dragged on through 2017 and the first half of 2018 with no progress. The FSSA continued to insist that Vaughn's nursing care be coordinated through a home-health agency rather than through self-direction, but it was unable to find an agency or combination of agencies willing to provide her care at Medicaid rates.

Both parties moved for summary judgment. On June 1, 2018, the district court granted summary judgment in favor of Vaughn. It followed up on January 9, 2019, with a permanent injunction requiring the state to "do whatever is necessary to achieve the result" that Vaughn wanted: round-the-clock home-based care, fully paid for by the state. On February 8, 2019, in response to a court order requiring it to certify its compliance with the injunction, the state notified the court that Vaughn had returned home and that it had allocated state funds in the amount needed to cover her home-health and attendant-care services. It did so through a unique contract with Tendercare, a home-health agency, which agreed to provide Vaughn's skilled nursing care at a market rate of $65 per hour. (This is roughly half again as much as the Medicaid rate of $43.34.) The state is not authorized to use any federal Medicaid funds to pay Tendercare, because the contract exceeds the Medicaid cap.

Indiana now appeals both the summary judgment in Vaughn's favor and the permanent injunction.

II

We examine the district court's decision to grant summary judgment de novo , taking the record in the light most favorable to the party against whom summary judgment was granted and drawing all reasonable inferences from the evidence in that party's favor. Skyrise Constr. Grp., LLC v. Annex Constr., LLC , 956 F.3d 950, 955 (7th Cir. 2020). We "consider only what was before the judge at the summary judgment stage." Indiana Funeral Dirs. Ins. Trust v. Benefit Actuaries, Inc. , 533 F.3d 513, 518 (7th Cir. 2008). "Summary judgment is appropriate when there are no genuine disputes of material fact and the movant is entitled to judgment as a matter of law." Skyrise Constr. , 956 F.3d at 955–56.

A. ADA and Rehabilitation Act

1. Standard for Liability

The ADA and the Rehabilitation Act prohibit discrimination against qualified persons with disabilities. 42 U.S.C. § 12132 ; 29 U.S.C. § 794(a). For present purposes, there is no material difference between these two laws, Radaszewski ex rel. Radaszewski v. Maram , 383 F.3d 599, 607 (7th Cir. 2004), and so in this opinion we generally refer only to the ADA. The law "explicitly identifie[s] unjustified segregation of persons with disabilities as a form of discrimination." Olmstead v. L.C. ex rel. Zimring , 527 U.S. 581, 600, 119 S.Ct. 2176, 144 L.Ed.2d 540 (1999) (internal quotation marks omitted). Under regulations promulgated by the Attorney General, when a state chooses to provide services, programs, or activities for its residents, it must administer the "services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 C.F.R. § 35.130(d) ; see also id. § 41.51(d). A state "might violate the integration mandate if ... through its planning, service system design, funding choices, or service implementation practices, [it] promotes or relies upon the segregation of individuals with disabilities in private facilities or programs." Steimel v....