O. B. v. Felicia Norwood, 838 F.3d 837

Background

Plaintiffs are Medicaid-eligible Illinois children (class) approved for EPSDT private duty/home nursing but not receiving the approved in-home nursing hours.
O.B., a representative class member, was approved for up to 18 hours/day of home nursing with HFS agreeing to pay, but remained hospitalized nearly a year because his parents could not find nurses.
Plaintiffs sued HFS (Norwood in official capacity) alleging violation of Medicaid Act provisions requiring states to make medical assistance available, to arrange corrective treatment disclosed by EPSDT screening, and to furnish services with reasonable promptness.
The district court certified a class and granted a preliminary injunction requiring HFS to take immediate affirmative steps to arrange or refer for in-home shift nursing for class members.
HFS appealed, arguing the Medicaid Act requires only payment (not state-arranged provision) and that the injunction is vague and potentially unworkable given nurse shortages and limits on judicially ordering higher reimbursement.
The Seventh Circuit affirmed the preliminary injunction, concluding the statute requires states to provide or ensure provision of services (not merely pay), and that HFS had failed to show it was taking steps to secure in-home nursing for approved children.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Medicaid requires the State to arrange/provide EPSDT corrective treatment (home nursing) rather than merely pay for it	Medicaid (EPSDT) obligates the State to make medical assistance available and to arrange corrective treatment disclosed by child screening	Medicaid requires only to pay for services; the State may choose payment over providing services	The court held the statute requires the State to provide or ensure provision (arrange) of services, not merely payment
Whether HFS violated the Medicaid Act by not arranging home nursing with reasonable promptness	HFS approved home nursing but failed to arrange nurses, leaving parents to search and causing delays (violates promptness and arranging duties)	HFS has no obligation to arrange; alternatives (hospital care) are available and State cannot guarantee nurse availability	The court held the record supports a likelihood plaintiffs will prevail: HFS failed to take steps to arrange timely home nursing
Whether the preliminary injunction was sufficiently definite and enforceable	Plaintiffs: injunction properly directs HFS to take affirmative steps to arrange home nursing; details can be refined later	HFS: injunction is vague under Fed. R. Civ. P. 65(d) and Supreme Court precedent; lacks required specificity	The court found the injunction described required acts in reasonable detail and affirmed; concurrence urged monitoring and possible modification if necessary
Whether shortage of nurses or need to raise reimbursement forecloses judicial relief	Plaintiffs: State can recruit or arrange nurses and must try; hospitalization is costlier and not an adequate alternative	HFS: nurse shortage and Armstrong bar courts from ordering increased reimbursement; may be impossible to meet injunction without reallocating scarce nurses	Court acknowledged potential shortages and Armstrong limits on ordering rate changes, but held HFS still must take affirmative steps short of rate-setting; injunction stands subject to adjustment

Key Cases Cited

Bruggeman ex rel. Bruggeman v. Blagojevich, 324 F.3d 906 (7th Cir. 2003) (characterized Medicaid historically as a payment scheme but discussed in context of later statutory amendment)
Katie A. ex rel. Ludin v. Los Angeles County, 481 F.3d 1150 (9th Cir. 2007) (interpreting EPSDT arranging/ensuring duties of states)
Armstrong v. Exceptional Child Center, 135 S. Ct. 1378 (2015) (judicial relief cannot compel state to increase Medicaid reimbursement rates)
Schmidt v. Lessard, 414 U.S. 473 (1974) (Supreme Court reversal of vague injunctive orders; cited on injunction specificity)