Davis v. Shah
821 F.3d 231
| 2d Cir. | 2016Background
- New York amended its Medicaid plan in 2011 to restrict coverage of orthopedic footwear and compression stockings to beneficiaries with certain enumerated conditions (e.g., diabetes-related foot problems, pregnancy, venous stasis ulcers), claiming cost savings.
- Plaintiffs (a class of disabled Medicaid beneficiaries, both categorically and medically needy) had medically necessary prescriptions for these items but lost coverage because their diagnoses were not among the enumerated conditions.
- Plaintiffs sued the NY Commissioner alleging violations of the Medicaid Act (reasonable standards, home health services, due process, comparability) and disability discrimination under Title II of the ADA and § 504 of the Rehabilitation Act; the district court largely ruled for plaintiffs and enjoined enforcement of the restrictions.
- On appeal, the Second Circuit: affirmed liability on comparability, due‑process (notice) and ADA/Rehabilitation Act (integration mandate) claims; reversed as to the reasonable‑standards claim (no private action under Supremacy Clause/Armstrong); affirmed that orthopedic footwear and compression stockings are optional prosthetics (not mandatory home‑health services).
- The court vacated the district court’s broad injunction as overbroad given the narrowed liability holdings and remanded for tailored relief (including reconsideration of class scope and injunction breadth).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1396a(a)(17) "reasonable standards" is privately enforceable | Plaintiffs: Supremacy Clause implies private right to enforce reasonable‑standards against state plan changes | Shah: No private cause of action; claim barred by Armstrong and §1983 limits | Held: Vacated district win for plaintiffs — no private enforcement via Supremacy Clause or §1983 (Armstrong controls) |
| Whether orthopedic footwear/compression stockings are mandatory "home health services" | Plaintiffs: Items are medical supplies/equipment; thus mandatory under §1396a(a)(10)(D) | Shah: Items are optional "prosthetic devices" under §1396d(a)(12) and NY law/regulations | Held: Affirmed for defendant — items are optional prosthetics, not mandatory home‑health services |
| Whether NY failed to provide required due process (notice and hearings) | Plaintiffs: NY implemented coverage change without written notice or hearings, violating §1396a(a)(3) | Shah: No evidentiary hearing required when change is automatic by law; legislative/public process suffices; any notice failure harmless | Held: Split — no right to evidentiary hearings (excused), but NY violated notice requirements; plaintiffs entitled to summary judgment on notice; defendant on hearing element |
| Whether NY’s restriction violates comparability (§1396a(a)(10)(B)) | Plaintiffs: Denying identical medically necessary services to some categorically needy on basis of diagnosis violates comparability | Shah: State may define scope/purpose of a service and limit coverage accordingly | Held: Affirmed for plaintiffs — restriction denies some categorically needy equal scope of medically necessary services; violates comparability |
| Whether restrictions violate ADA Title II / §504 (integration mandate) | Plaintiffs: Denial of necessary items to certain disabled beneficiaries increases risk of institutionalization; constitutes discrimination under Olmstead/integration mandate | Shah: Distinctions among disabled groups are resource allocation, not ADA discrimination; providing service to some but not others among disabled is permissible | Held: Affirmed for plaintiffs — restrictions risk unjustified institutionalization and violate the ADA/Rehab Act integration mandate; plaintiffs entitled to relief on these claims |
| Scope of remedy (injunction) | Plaintiffs: Broad injunction barring enforcement for all beneficiaries | Shah: Injunction should be narrowed to match proven statutory violations | Held: District court injunction vacated as overbroad; remanded to craft tailored relief consistent with affirmances and reversals |
Key Cases Cited
- Armstrong v. Exceptional Child Ctr., 135 S. Ct. 1378 (2015) (Supreme Court limits private enforcement of certain Medicaid plan provisions and rejects Supremacy Clause as source of private right)
- Olmstead v. L.C., 527 U.S. 581 (1999) (integration mandate: unjustified institutionalization/segregation of disabled persons is discrimination under ADA)
- Gonzaga Univ. v. Doe, 536 U.S. 273 (2002) (§1983 remedy exists only where statute manifests unambiguous intent to create individual rights)
- Auer v. Robbins, 519 U.S. 452 (1997) (deference to agency interpretations of its own regulations)
- Rodriguez v. City of New York, 197 F.3d 611 (2d Cir. 1999) (comparability requirement prohibits unequal provision of Medicaid benefits to categorically needy)