Derek Waskul v. Washtenaw Cnty. Community Mental HealthDerek Waskul v. Washtenaw Cnty. Community Mental Health
Case Information
*1 Before: CLAY, WHITE, and READLER, Circuit Judges.
_________________
COUNSEL ARGUED: Edward P. Krugman, NATIONAL CENTER FOR LAW AND ECONOMIC JUSTICE, New York, New York, for Appellants. Stefani A. Carter, STEFANI A. CARTER, PLLC, Ypsilanti, Michigan, for Appellees Washtenaw County Community Mental Health and Trish Cortes. Marcelyn A. Stepanski, ROSATI SCHULTZ JOPPICH & AMTSBUECHLER PC, Farmington Hills, Michigan, for Appellees Community Mental Health Partnership of Southeast Michigan and Jane Terwilliger. Tracy E. Van den Bergh, MICHIGAN DEPARTMENT OF ATTORNEY GENERAL, Lansing, Michigan for Appellees Michigan Department of Health and Human Services and Robert Gordon. ON BRIEF: Edward P. Krugman, NATIONAL CENTER FOR LAW AND ECONOMIC JUSTICE, New York, New York, Nicholas A. Gable, LEGAL SERVICES OF SOUTH CENTRAL MICHIGAN, Ypsilanti, Michigan, Lisa Ruby, MICHIGAN POVERTY LAW PROGRAM, Ypsilanti, Michigan, for Appellants. Stefani A. Carter, STEFANI A. CARTER, PLLC, Ypsilanti, Michigan, for Appellees Washtenaw County Community Mental Health and Trish Cortes. Marcelyn A. Stepanski, ROSATI SCHULTZ JOPPICH & AMTSBUECHLER PC, Farmington Hills, Michigan, for Appellees Community Mental Health Partnership of Southeast Michigan and Jane Terwilliger. Kristin M. Heyse, William Morris, MICHIGAN DEPARTMENT OF ATTORNEY GENERAL, Lansing, Michigan for Appellees Michigan Department of Health and Human Services and Robert Gordon.
CLAY, J., delivered the opinion of the court in which WHITE, J., joined. READLER, J. (pp. 46–54), delivered a separate opinion concurring in part and dissenting in part.
_________________
OPINION
_________________
CLAY, Circuit Judge. In 2015, a predecessor to Defendant Washtenaw County
Community Mental Health modified the methodology through which it allocated funding to
individuals with disabilities receiving community living support services pursuant to a Medicaid
waiver received by the State of Michigan. Plaintiffs, five individuals receiving those services,
together with the Washtenaw Association for Community Advocacy, challenge that
methodology in this case against Defendants the Michigan Department of Health and Human
Services, Community Mental Health Partnership of Southeast Michigan, Washtenaw County
Community Mental Health, and the directors of these organizations. In particular, Plaintiffs
assert that by implementing or allowing implementation of this new methodology, Defendants
violated provisions of the Medicaid Act,
For the reasons set forth in this opinion, we REVERSE the district court’s decision and REMAND for further proceedings consistent with this opinion.
BACKGROUND
Factual Background The State of Michigan offers funding and support to qualifying individuals with disabilities to aid them in living independently in their own home communities, rather than in institutionalized care facilities, pursuant to a Medicaid waiver (the “Habilitation Supports Waiver” or the “Waiver”) obtained from the federal government. This Community Living Support (“CLS”) program furthers those individuals’ self-determination by allowing them to structure their own support services based on their medical needs.
Plaintiffs in this case are five individuals who participate in Michigan’s CLS program and the Washtenaw Association for Community Advocacy (“WACA”), a non-profit organization of which the individual Plaintiffs are members that advocates for support services for individuals with developmental disabilities. Plaintiff Derek Waskul has severe cognitive impairment and autism and requires 24/7 supervision. Plaintiff Cory Schneider has autism, a developmental disability, and an undiagnosed behavior disorder that also require 24/7 care. Plaintiff Kevin Wiesner has severe developmental disabilities and suffers from seizures. Plaintiff Lindsay Trabue has Down syndrome and is non-verbal. She has only very basic functional skills and also requires 24/7 care. Finally, Plaintiff Hannah Ernst has been diagnosed with Angelman syndrome, a seizure disorder, and cognitive impairment.
At bottom, Plaintiffs allege that a change in the method through which their CLS budgets are calculated has prevented them from receiving required services and support, in violation of federal and state law and Defendants’ contracts with one another. Plaintiffs’ claims hinge on Medicaid requirements and funding mechanisms, and so we must begin by surveying Michigan’s Medicaid framework.
A. Michigan’s Medicaid Framework
The joint federal-state Medicaid program provides medical assistance to qualifying
individuals who are unable to pay or do not have private insurance, pursuant to Title XIX of the
Social Security Act,
Michigan’s Medicaid program is administered by Defendant Michigan Department of
Health and Human Services (“the Department”), which is led by Defendant Robert Gordon, its
director (collectively, “State Defendants”).
B. The Community Living Support Program Framework Under this framework, Defendants work together to ensure CLS services are provided to qualifying recipients, including the individual Plaintiffs, pursuant to the terms of Michigan’s Habilitation Supports Waiver. That waiver is financed through so-called “capitation procedures.” This means that the federal government provides the relevant entity—here the PIHP, Defendant CMHPSM—with a fixed amount of funding for each person participating in the CLS program, regardless of how many services the entity ultimately provides to the recipient. The PIHP then determines how to allocate these funds to recipients. (Am. Compl., R. 146 at PageID #3718; Application for Habilitation Supports Waiver, MI.0167.R04.00, at 5–6 (Oct. 1, 2010) (hereinafter, “Waiver”), available at https://www.michigan.gov/documents/mdch/Habilation_Supports_Waiver_340749_ 7.pdf.) PIHPs can make or lose money depending on how the amount they receive in capitation funds compares to the amount of funding they provide recipients, but they must ensure that the services they provide comply with the terms of their contract with the State, which itself must ensure that it complies with the terms of the Medicaid Act, federal regulations, and the Waiver.
Once an individual has elected to receive CLS services, they go through what is known as
a person-centered planning (“PCP”) process, during which an
individual plan of
service (“IPOS”) and corresponding budget for CLS services is developed. Mich. Dep’t
of Health
& Human
Servs.,
Medicaid
Provider
Manual
at
328 (hereinafter “Mich. Medicaid Provider Manual”),
available at
http://www.mdch.state.mi.us/
dch-medicaid/manuals/MedicaidProviderManual.pdf),
see
An individual budget includes the expected or estimated costs of . . . obtaining the mental health services and supports included in the IPOS. . . . Once the IPOS is developed, the amount of funding needed to obtain the identified services and supports is determined collectively by the participant, the mental health agency (PIHP or designee), and others participating in the PCP process. This process involves costing out the services and supports using the rates for providers chosen by the participant and the number of hours authorized in the IPOS. . . . The individual budget is authorized in the amount of that total cost of all services and supports in the IPOS.
(Waiver at 134.) The individual then enters a “self-determination arrangement” with their local community mental health service program. ( Id. at 135.) Under that arrangement, the individual determines how to use the funds in their budget to execute their IPOS. This includes hiring, scheduling, and paying staff, as well as selecting, arranging, and paying for services, supports, and treatments listed in the IPOS. A fiscal intermediary actually holds the funds and pays bills directed to them.
C. WCCMH’s Budget Methodology
This brings us to the change in budget methodology that prompted this case. Budgets for CLS services are calculated by multiplying how many hours of services a participant’s IPOS calls for by a specific rate. Starting in at least April 2012, the CLS budget for recipients in Washtenaw County was developed by providing a rate for staff or providers and then allowing billing of other services and supports ( e.g. , workers’ compensation, staff training, and transportation) as separate line items. In 2015, the predecessor to WCCMH, Washtenaw Community Health Organization (“WCHO”), shifted to a budget methodology under which it provided a single, all-inclusive rate to cover both staff and services. [2] WCCMH now operates under this methodology.
As this Court explained in a previous opinion in this case,
The budgeting change did not reduce the total number of service hours recipients were authorized to receive. The effect of utilizing an all-inclusive rate, however, was to reduce the total budget amount for each recipient. As a practical matter, service recipients had to reduce the hourly rate they paid service providers to maintain the level of hours authorized prior to the budget change. The notice to recipients acknowledged this reality, stating that “[w]hile this is not a reduction in your current level of services, it may reduce the amount you can pay your staff.” Waskul v. Washtenaw Cty. Cmty. Mental Health , 900 F.3d 250, 254 (6th Cir. 2018). CLS recipients like the individual Plaintiffs now had to begin budgeting from the fixed all-inclusive rate (then $13.88 per hour) and subtract out the costs of non-staff services and supports in order to determine the amount they could pay staff. Plaintiffs Waskul, Schneider, and Wiesner challenged the resulting reductions in their budgets in Medicaid Fair Hearings through the Michigan Administrative Hearing System. An administrative law judge ruled in their favor, and their budgets were increased, but the budget methodology was not changed.
Plaintiffs allege that, due to this change in the budget methodology, the funding they receive no longer suffices to cover the services required by their IPOSs. In particular, they say that they cannot find sufficient CLS providers willing to work at the low rates they must pay under the new budgeting method and that, in order to pay providers more, they are now compelled to pay for supports and services themselves and hire family members at below-market rates. As a result of the reduction in support, they allege that they have not been able to receive all of the services identified in their IPOSs and their conditions have deteriorated.
Procedural Background
In 2016, Plaintiffs Waskul, Wiesner, Schneider and WACA filed the original complaint in this case (“ Waskul I ”), asserting five claims, including violations of constitutional and statutory due process, the Medicaid Act, and the Michigan Mental Health Code. Plaintiffs then violated any contract or law in deciding Defendants’ motions to dismiss. Defendants do not argue that the current methodology is the only permissible methodology, and whether the prior methodology is permissible goes to what relief Plaintiffs can be provided. Since Plaintiffs request a variety of forms of relief and the district court has broad discretion to fashion appropriate injunctive relief if or when it becomes necessary, see, e.g. , United States v. Oakland Cannabis Buyers’ Co-op , 532 U.S. 483, 496 (2001), at this juncture, we need not consider whether the prior methodology complied with Medicaid law and regulations and with the Defendants’ agreements. moved for a preliminary injunction, which the district court denied, finding that WACA lacked standing, that the individual Plaintiffs could not show the required irreparable harm on their due process claims because they had received hearings following the change in budget methodology, and that they could not show a likelihood of success on their remaining claims because the prior budgeting method to which Plaintiffs sought to return violated Medicaid requirements. Plaintiffs only appealed the district court’s decision as to WACA’s standing, and on appeal sought only preliminary injunctive relief of “fresh notices and hearing rights” for the unnamed members of the organization. ( Waskul v. Washtenaw Cnty. Cmty. Mental Health , No. 16-2742, Pls.’ Br., Doc. No. 18 at 48.)
While that appeal was pending, Plaintiffs filed a new case in the district court ( Waskul II , E.D. Mich. No. 17-cv-12355), adding Plaintiffs Trabue and Ernst and asserting five new claims. The new complaint also responded to the preliminary injunction ruling by attempting to show that the prior budgeting method did not violate Medicaid requirements. Plaintiffs moved to consolidate the two cases and for leave to file an amended complaint conforming the original complaint in Waskul I to that in Waskul II . The district court granted the motion to consolidate, but held the motion for leave to amend in abeyance pending the resolution of Plaintiffs’ appeal to this Court. Defendants moved to dismiss the Waskul II complaint or for judgment on the pleadings. The district court stayed proceedings in full until resolution of the appeal. Following that stay, Plaintiff Schneider filed a motion for leave to file a second motion for a preliminary injunction.
On August 14, 2018, this Court issued its decision regarding Plaintiffs’ appeal.
Waskul
,
After this Court’s decision, the district court lifted the stay and requested supplemental briefing on the pending motions in Waskul II . The parties agreed to withdraw pending motions and refile them with modified arguments as desired. Plaintiffs responded to those motions, and Defendants replied. Plaintiff Schneider then renewed his motion for a preliminary injunction. At the motion hearing, the district court granted Plaintiffs’ longstanding request for leave to file the amended complaint and agreed to treat the pending motions as directed at the amended complaint.
On March 20, 2019, the district court issued an order construing Defendants’ motions as motions to dismiss and dismissing Plaintiffs’ claims in their entirety. This timely appeal followed.
DISCUSSION
Standard of Review
We review the grant of a motion to dismiss
de novo
.
Mezibov v. Allen
,
On appeal, the parties dispute what evidence the district court considered and what evidence we may consider. Plaintiffs contend that, given the district court’s extended delay in granting their motion to amend their complaint, we should consider other materials before the district court that they relied on in opposing Defendants’ dispositive motions, including the evidentiary records associated with Defendants’ initial motions to dismiss and for summary judgment, Plaintiff Schneider’s motion for a preliminary injunction, and supplemental briefing and arguments submitted to the district court following various status conferences and hearings. Defendants seek to rely on similar evidence, including testimony from the preliminary injunction hearing.
We decline to consider this evidence. As a general rule, a court considering a motion to
dismiss “must focus only on the allegations in the pleadings.”
Bates v. Green Farm Condo.
Ass’n
,
Standing
Before turning to the merits of Plaintiffs’ claims, we must address several threshold
matters. First, PIHP Defendants assert on appeal that Plaintiff WACA “lack[s] standing to bring
claims on behalf of unnamed individuals.” (PIHP Defs.’ Br. at 39–42.) As discussed, we
previously found that Plaintiff WACA lacked standing to assert its due process claims because
all named members of the association had received the relief then sought—fresh notices and
hearing rights—prior to filing their complaint and Plaintiffs did not show that any unnamed
member of the association had not received this relief.
Waskul
,
“An association has standing to bring suit on behalf of its members when [1] its members
would otherwise have standing to sue in their own right, [2] the interests at stake are germane to
the organization’s purpose, and [3] neither the claim asserted nor the relief requested requires the
participation of individual members in the lawsuit.”
Friends of the Earth, Inc. v. Laidlaw Envtl.
Servs., Inc.
,
Regarding the first prong of the associational standing test, PIHP Defendants contend that
the individual Plaintiffs lack standing because their “complaints were redressed through the state
administrative process or are otherwise moot.” (PIHP Defs.’ Br. at 40–41.) They point out that
Plaintiffs Waskul, Wiesner, and Schneider “are currently receiving the same or higher rates than
they received prior to May 2015” and that the CLS rate has been raised multiple times since May
2015. (
Id.
at 12.) But even if this is true, as the district court concluded, “[t]his argument
mistakenly assumes that the only form of relief sought is an adjustment to the hourly rate,” when
in fact Plaintiffs “have repeatedly made clear that they are challenging the budgeting method, not
simply the amount budgeted for.” (Dist. Ct. Op., R. 164 at PageID #4368.) The allegation
underlying each of Plaintiffs’ claims on appeal is that they are actually being harmed by
Defendants’ failure to use or ensure a budget method that allows their IPOSs to be fully
implemented. This alleged harm is current and ongoing. And unlike Plaintiffs’ previous due
process claims, none of the relief Plaintiffs seek to remedy this harm has already been afforded
to any of the individual named Plaintiffs.
[3]
Defendants do not contest any of the remaining
standing elements as to any individual Plaintiff, and there are no apparent deficiencies in the
individual Plaintiffs’ standing as to each claim and form of relief sought. Thus, Plaintiffs have
shown that WACA’s “members would otherwise have standing to sue in their own right.”
Laidlaw
,
Turning to the second prong of the associational standing test, Defendants do not contest that WACA’s “interests at stake are germane to the organization’s purpose.” Id. And indeed, ensuring CLS recipients’ IPOS budgets are correctly calculated and otherwise sufficient is clearly germane to WACA’s “mission and purpose [of] advocating for persons with developmental disabilities and their families in order to help them obtain and maintain services.” (Am. Compl., R. 146 at PageID #3774.)
PIHP Defendants do contest the remaining element of associational standing—that is,
whether the claims asserted or relief requested require WACA’s members’ participation in this
suit.
See Laidlaw
,
Eleventh Amendment Immunity
We must next address a second threshold matter. In their briefing, State and PIHP Defendants contend that they are entitled to Eleventh Amendment immunity against Plaintiffs’ claims. Some of these arguments are specific to certain of Plaintiffs’ claims and so we will address them in our analysis of those claims. But two of their arguments address Plaintiffs’ claims more generally.
First, State Defendants argue that “[t]o the extent that [Plaintiffs] seek either some form
of monetary compensation or retrospective injunctive relief,” they are immune under the
Eleventh Amendment. (State Defs.’ Br. at 4.) But Plaintiffs request purely prospective
declaratory and injunctive relief, and Plaintiffs’ only claim against the Department directly is
brought under § 504 of the Rehabilitation Act. Michigan waived its Eleventh Amendment
immunity against § 504 claims by accepting federal Medicaid funding after enactment of
Because Plaintiffs seek prospective injunctive relief, Plaintiffs’ claims against Defendant
Gordon in his official capacity are permitted under
Ex parte Young
, 209 U.S. 123 (1908).
[4]
Westside Mothers v. Haveman
(“
Westside Mothers I
”), 289 F.3d 852, 860–62 (6th Cir. 2002).
This is true “notwithstanding” the fact that this relief will have “a direct and substantial impact
on the state treasury.”
Milliken v. Bradley
,
PIHP Defendants, too, claim that they are entitled to Eleventh Amendment immunity.
This argument also fails. “[T]he Eleventh Amendment does not extend its immunity to units of
local government” or other political subdivisions, like CMHPSM.
Bd. of Trustees of Univ. of
Ala. v. Garrett
,
(1) the State’s potential liability for a judgment against the entity; (2) the language by which state statutes and state courts refer to the entity and the degree of state control and veto power over the entity’s actions; (3) whether state or local officials appoint the board members of the entity; and (4) whether the entity’s functions fall within the traditional purview of state or local government.
Ernst v. Rising
, 427 F.3d 351, 359 (6th Cir. 2005) (citations omitted). Of these, “[t]he state’s
potential legal liability for a judgment against the defendant ‘is the foremost factor’ to consider
in our sovereign immunity analysis.”
Lowe
,
PIHP Defendants contend that CMHPSM “functions fiscally as an arm of the state (and,
by virtue of the necessity of state approval of various operational aspects of each entity,
administratively, as well).” (PIHP Defs.’ Br. at 37.) Considering the first factor, it is true that
Michigan financially supports CMHPSM pursuant to state law.
See
Turning to the other factors, Michigan law recognizes that PIHPs are regional entities
governed by bylaws adopted by county officials.
PIHP Defendants also assert that Defendant Terwilliger is entitled to Eleventh Amendment immunity because Plaintiffs sue her in her official capacity. However, “[t]he only immunities that can be claimed in an official-capacity action are forms of sovereign immunity that the entity, qua entity, may possess, such as the Eleventh Amendment.” Kentucky v. Graham , 473 U.S. 159, 167 (1985). Because CMHPSM itself is not entitled to immunity, Terwilliger is also not entitled to immunity.
Exhaustion
Having now ascertained that Plaintiffs have standing to bring this case and that
Defendants are not entitled to Eleventh Amendment immunity, we must contend with one final
threshold matter. PIHP Defendants assert that Plaintiffs were required to exhaust their
administrative remedies provided by the State under the Medicaid Act,
We now turn to the content of Plaintiffs’ claims. I. The Medicaid Act’s Reasonable-Promptness and Availability- and Comparability-
of-Services Provisions,
The district court correctly concluded that
A. Private Right of Action Under
In
Westside Mothers v. Olszewski
(“
Westside Mothers II
”), 454 F.3d 532, 540–41 (6th
Cir. 2006), this Court found that the plaintiffs had forfeited their claims that payments provided
to them by the defendants “were insufficient to enlist an adequate number of providers, which
effectively frustrates
Despite this, Defendants argue that
This is not the proper analysis. In
Blessing v. Freestone
, 520 U.S. 329 (1997), the
Supreme Court laid out three factors relevant to whether a statute confers rights enforceable
under
Considering the first
Blessing
factor in
Westside Mothers II
, this Court reasoned that “the
text of § 1396a(a)(30)[(A)] does not focus on individual entitlements.”
Turning to the second
Blessing
factor, this Court found in
Westside Mothers II
that the
“‘broad and nonspecific’ language” of
But unlike
Regarding the third factor, as this Court explained in
Westside Mothers I
, these
provisions “are couched in mandatory rather than precatory language, stating that Medicaid
services, ‘
shall
be furnished’ to eligible [individuals]” with reasonable promptness, 289 F.3d at
863 (quoting
B. Merits
Turning then to the merits, Plaintiffs assert two separate claims based on these
provisions. First, Count IV of Plaintiffs’ amended complaint asserts that Defendants failed to
ensure that the individual Plaintiffs were able to obtain medically necessary services with
reasonable promptness, in violation of
Second, in Count III of their amended complaint, Plaintiffs assert that Defendants have
failed “to pay for services in the amount, scope, and duration needed to reasonably achieve their
purpose,” in violation of
Instead, Plaintiffs assert that Defendants violated
Turning then to the district court’s stated reasons for dismissal and the parties’ arguments
on appeal, Plaintiffs dispute the district court’s conclusion that they did not sufficiently state
their
The district court also concluded that Plaintiffs undisputedly had the option to use
providers who contract with the County if they could not find their own providers to work at the
pay they can offer under the current methodology. Thus, even if Plaintiffs couldn’t
hire
CLS
providers, it said, they were not necessarily deprived of community-based services. It is true
that, were such services actually available, Plaintiffs could not show a violation of
The court also determined that Plaintiffs’ claim failed because if they faced a shortfall in funding, they could simply request additional funding through the PCP process. Again, if this option were actually available, it might undermine Plaintiffs’ claims. However, the complaint explains that Plaintiffs’ budget is now developed by multiplying “a specific rate times the number of [service] hours in the IPOS.” (Am. Compl., R. 146 at PageID #3732.) Thus, without increasing the number of service hours called for by the IPOS, Plaintiffs cannot increase their budgets. Plaintiffs at no point allege that the hours identified in their IPOS are insufficient to meet their needs—instead, they allege that the budget they receive per hour is insufficient because it is improperly calculated. Nor do Plaintiffs apparently have any new medical needs that their IPOS can be updated to accommodate. As Plaintiffs explained at the hearing on Defendants’ motions to dismiss, “[b]ecause the services that [they] are asking for are already in the IPOS, there is nothing to supplement” the IPOS with in order to receive more funds. (Mot. Hr’g Tr., R. 149 at PageID ##4021–22.) Moreover, the complaint suggests that at least some of the individual Plaintiffs have already requested and been denied additional funds to cover specific services already identified under their IPOSs. ( See, e.g. , Am. Compl., R. 146 at PageID #3759 (stating that Plaintiff Schneider “requested $400 monthly for transportation and $200 monthly for community activities” and was told that “these costs are above what the current self- determination budget covers”); id. at #3769 (explaining that former Plaintiff Erlandson requested additional funds for a CLS staff supervisor and was rejected).)
Finally, throughout the course of their general argument, Defendants contend that CLS
recipients are obligated to rely on natural or community supports, including family care, before
they may use Medicaid funds. Accordingly, in their view, there is no problem with compelling
individual Plaintiffs to pay out of pocket for certain supports or to enlist family members to
provide care. However, the extent to which Plaintiffs can be required to do so is again a question
of fact. Medicaid regulations call for individuals’ IPOSs to include “natural supports,” or
“unpaid supports that are provided voluntarily to the individual in lieu of [Waiver] services and
supports.”
[The Department] encourages the use of natural supports to assist in meeting an individual’s needs to the extent that the family or friends who provide the natural supports are willing and able to provide this assistance. PIHPs may not require a beneficiary’s natural support network to provide such assistance as a condition for receiving specialty mental health supports and services. The use of natural supports must be documented in the beneficiary’s individual plan of service.
(Mich. Medicaid Provider Manual at 325.) Plaintiffs’ complaint suggests that the individual Plaintiffs’ family members do not voluntarily provide care to them so much as they are compelled to do so by the current budget methodology, often at significant detriment to their health and finances. ( See, e.g. , Am. Compl., R. 146 at PageID #3753 (Plaintiff Waskul was “forced to hire” his father for care, although he is only available on weekends and in the evening); id. at #3760 (Plaintiff Schneider was “forced to hire” his 77-year-old ailing grandfather, and his grandparents are providing nearly 50% of his care because he is “short- staffed and cannot find CLS providers”); id. at #3765 (Plaintiff Wiesner’s mother was compelled to pay for and provide his IPOS-required community activity and transportation, causing her to fall behind on her taxes and putting her at risk of foreclosure); id. at #3771 (Plaintiff Trabue’s family is “forced to pay” for exercise activities called for by her IPOS).) Thus, to the extent that Plaintiffs must depend on non-voluntary natural supports or supports not documented in their IPOS, this too does not defeat their claim.
To be sure, while the Supreme Court has explained that “serious statutory questions might be presented if a state Medicaid plan excluded necessary medical treatment from its coverage,” the district court is correct that it is not “inconsistent with the objectives of the [Medicaid] Act for a State to refuse to fund unnecessary though perhaps desirable medical services.” Beal v. Doe , 432 U.S. 438, 444–45 (1977). The potential availability of county providers, the potential that Plaintiffs could modify their budgets to ensure necessary medical coverage is available, and the potential that Plaintiffs’ reliance on natural supports is within the scope of their IPOSs all suggest that Plaintiffs may not be able to succeed on this claim at later stages of their litigation. This said, at this juncture, Plaintiffs’ allegations suffice to state a plausible claim that they are being denied sufficient necessary medical services. We therefore reverse the district court’s dismissal of Counts III and IV of Plaintiff’s amended complaint. II. The Medicaid Act’s Necessary-Safeguards and Free-Choice Provisions,
Plaintiffs next claim that Defendant Gordon, Director of the Michigan Department of
Health and Human Services, violated
A. Private Right of Action Under § 1983
As with
[A habilitation supports] waiver shall not be granted under this subsection unless the State provides assurances satisfactory to the Secretary that— (A) necessary safeguards . . . have been taken to protect the health and welfare of individuals provided services under the waiver and to assure financial accountability for funds expended with respect to such services; [and] . . .
(C) such individuals who are determined likely to require the level of care provided in a hospital, nursing facility, or intermediate care facility for [individuals with intellectual disabilities] are informed of the feasible alternatives, if available under the waiver, at the choice of such individuals, to the provision of inpatient hospital services, nursing facilities, or services in an intermediate care facility for [individuals with intellectual disabilities] . . . .
Our own application of the
Blessing
-
Gonzaga
analysis confirms that
Considering the first prong of
Blessing
, it is clear that Congress intended both
Turning to
Blessing
’s second prong, the rights “assertedly protected by the statute [are]
not so ‘vague and amorphous’ that [their] enforcement would strain judicial competence.” 520
U.S. at 340–41. We have already concluded in
Wood
that “[t]he duties set forth [in
Under
Blessing
’s third prong, both provisions “impose a binding obligation on the States”
by using “mandatory, rather than precatory” language. 520 U.S. at 341.
B. Merits
Considering Plaintiffs’ claim under
The district court dismissed Plaintiffs’
Turning to
The district court dismissed Plaintiffs’
Defendant Gordon contends that this provision does not require the State to ensure that
Plaintiffs have “meaningful” alternatives to institutionalized care. (State Defs.’ Br. at 39.) We
disagree. An alternative in name only is no alternative, and if this provision has any purpose at
all, it is to ensure that Plaintiffs have access to meaningful alternatives. Accordingly, courts
regularly interpret this provision to require “meaningful choice.”
See, e.g.
,
Ball v. Kasich
, 244 F.
Supp. 3d 662, 685 (S.D. Ohio 2017);
Boulet v. Celluci
,
As a last point,
III. Third-Party Beneficiary Claim
Plaintiffs next argue that Defendants Gordon, Terwilliger, and CMHPSM breached the terms of the Waiver and the Department-CMHPSM contract implementing the Waiver by failing to ensure that participants’ budgets are “sufficient to implement the IPOS” and are developed “by costing out the services and supports using the rates for providers chosen by the participant and the number of hours authorized by the IPOS.” (Am. Compl., R. 146 at PageID ##3801, 3803 (quoting Waiver at 125, 134).) Defendants argue that Plaintiffs cannot assert this claim as third-party beneficiaries because they do not have a private right of action under the statute underlying the Waiver and contract, because “the relevant waiver language does not support Plaintiffs’ claim,” and because Plaintiffs did not show that Defendants’ conduct led to them being denied any required services. The district court dismissed this claim, concluding that “Plaintiffs concede . . . that this claim is inseparable from their statutory claims” and that, because those claims failed, this one must also fail. (Dist. Ct. Op., R. 164 at PageID #4378 (citing Pls.’ Oral Arg. Ps., R. 153-1 at PageID #4220).) That conclusion is unjustified; accordingly, we reverse the district court’s decision.
The district court reasoned that Plaintiffs had conceded that their third-party beneficiary
claim was inseparable from their statutory claims based on Plaintiffs’ argument that the court
should exercise supplemental jurisdiction over their third-party beneficiary claim because the
Waiver and Department-CMHPSM contract “are central to every claim in this action” and would
be impossible to separate into different suits in state and federal court. (Pls.’ Oral Arg. Ps.,
R. 153-1 at PageID #4220.) But this argument does not concede that Plaintiffs’ statutory and
third-party beneficiary claims must necessarily rise and fall together. Instead, Plaintiffs simply
assert that the third-party beneficiary claim is “so related to claims” over which the district court
had original jurisdiction “that they form part of the same case or controversy under Article III.”
We could alternatively read the district court’s decision as declining to exercise
supplemental jurisdiction over these claims based on its dismissal of Plaintiffs’ federal law
claims.
See United Mine Workers of Am. v. Gibbs
,
Notably, the district court did not reach the merits of this claim. “Absent ‘exceptional
circumstances,’ we normally decline to rule on an issue not decided below.”
Stoudemire v.
Mich. Dep’t of Corr.
, 705 F.3d 560, 576 (6th Cir. 2013) (quoting
St. Marys Foundry, Inc. v.
Emp’rs Ins. of Wausau
,
IV. ADA and Rehabilitation Act Claims
In Counts V and VI, Plaintiffs argue that Defendants Gordon, Terwilliger, Cortes, CMHPSM, and WCCMH have violated the “integration mandate” established under the ADA and that all Defendants have violated a mirroring provision of § 504 of the Rehabilitation Act. Defendants generally assert that they did not violate either provision because neither requires them to provide integration to the extent Plaintiffs desire. [12] The district court dismissed these claims because Plaintiffs had not sufficiently shown that they were at risk of institutionalization or effectively institutionalized at home and because Plaintiffs’ requested relief would require a “fundamental alteration” of Defendants’ programs not available under either the ADA or § 504. (Dist. Ct. Op, R. 164 at PageID ##4376–78.) Because Plaintiffs have plausibly stated a claim that they were at serious risk of institutionalization and were unduly isolated in their homes as a result of the change in budget methodology, we reverse the district court’s decision.
Plaintiffs assert that Defendants Gordon, Terwilliger, Cortes, CMHPSM, and WCCMH
have violated Title II of the ADA,
Alongside this, Plaintiffs also claim that all Defendants have violated § 504 of the
Rehabilitation Act,
Plaintiffs argue that Defendants have violated the ADA and § 504 in two distinct manners. [14] First, they contend that implementation of the current budget methodology places all of the individual Plaintiffs at serious risk of institutionalization. Second, they assert that this methodology has caused Plaintiffs Waskul and Wiesner to be effectively institutionalized in their own homes. We address each theory in turn.
Considering Plaintiffs’ first theory, courts have widely accepted that plaintiffs can state a
claim for violation of the integration mandate by showing that they have been placed at serious
risk of institutionalization or segregation.
See, e.g.
,
Radaszewski ex rel. Radaszewski v. Maram
,
In order to receive needed medical services, persons with mental disabilities must, because of those disabilities, relinquish participation in community life they could enjoy given reasonable accommodations, while persons without mental disabilities can receive the medical services they need without similar sacrifice.
527 U.S. at 601. Under this reasoning, individuals with disabilities are subjected to discrimination when they are forced to choose between forgoing necessary medical services while remaining in the community or receiving necessary medical services while institutionalized—not just when they are actually institutionalized.
In accordance with this precedent, the Department of Justice put forward guidance in
2011 clarifying that “[i]ndividuals need not wait until the harm of institutionalization or
segregation occurs or is imminent” in order to bring a claim for violation of the integration
mandate. U.S. Dep’t of Justice, Statement of the Department of Justice on Enforcement of the
Integration Mandate of Title II of the Americans with Disabilities Act and
Olmstead v. L.C.
(last
updated Feb. 25, 2020) (hereinafter, “U.S. Dep’t of Justice, Statement on
Olmstead
”),
https://www.ada.gov/olmstead/q&a_olmstead.htm. Instead, Plaintiffs may show a sufficient risk
of institutionalization “if a public entity’s failure to provide community services or its cut to such
services will likely cause a decline in health, safety, or welfare that would lead to the individual’s
eventual placement in an institution.”
Id.
Courts have also looked to this guidance in reviewing
claims like Plaintiffs’.
See, e.g.
,
Steimel v. Wernert
,
The district court properly recognized and accepted this possibility, but found that Plaintiffs had not sufficiently alleged that they were at serious risk of institutionalization because “this action was filed three years ago, but all of the individually named Plaintiffs still live at home.” (Dist. Ct. Op., R. 164 at PageID #4376.) But while perhaps true, this fact says nothing about whether Plaintiffs have been compelled to forgo necessary medical services in order to remain in the community during that time. Nor does it reflect on the actual imminence of Plaintiffs’ institutionalization—indeed, that could happen at any moment that Plaintiffs are unable to sustain their own care. See U.S. Dep’t of Justice, Statement on Olmstead .
In fact, Plaintiffs did plausibly allege a serious risk of institutionalization. They explained in particular that the current budget methodology caused them to have to substantially rely on family members incapable of providing sustained, long-term care, thus placing them at risk of institutionalization. For instance, according to the complaint, Plaintiff Schneider must rely on his grandparents for “around 75 hours of CLS services per week, nearly 50% of the CLS support required by [his] IPOS, because [he] . . . cannot find CLS providers to work at the current rate.” (Am. Compl., R. 146 at PageID #3760.) Plaintiff Schneider’s grandparents are aging and unwell. While not explicitly stated, the implication of this pleading is clear—should Plaintiff Schneider’s grandparents no longer be able to care for him, he would be compelled to submit to institutionalization. Similarly, Plaintiffs allege that Plaintiff Wiesner has been forced to rely upon his guardian “to pay for the majority of [his] community activity and transportation needs out of pocket,” causing her to “fall behind on her property taxes” and “putting her at risk of foreclosure.” ( Id. at #3765.) Plaintiff Wiesner’s guardian is “unable to work during the time she has to stay home with [him],” purportedly at least forty hours a week, thus increasing her financial strain. ( Id. at #3766.) This prompts the reasonable inference that he, too, is at serious risk of institutionalization if his guardian is unable to continue caring for him due to her dire financial situation. Plaintiff Waskul, for his part, has allegedly suffered “decline[s] in health, safety, or welfare” because he is unable to pay for his IPOS-required staff under the current methodology, including depression, worsening scoliosis, and anger management issues. See U.S. Dep’t of Justice, Statement on Olmstead . For the purposes of a motion to dismiss, these facts suffice to show that Plaintiffs are at serious risk of institutionalization.
Turning to Plaintiffs’ second theory, we have not yet addressed whether individuals’
isolation at home may also violate the integration mandate. In considering Plaintiffs’ claim, we
find the Seventh Circuit’s decision in
Steimel v. Wernert
persuasive. The
Steimel
court
confronted a claim substantially similar to Plaintiffs’ and concluded that the Supreme Court’s
rationale in
Olmstead
also applied when individuals were isolated at home.
The first is that “institutional placement of persons who can handle and benefit
from community settings perpetuates unwarranted assumptions that persons so
isolated are incapable or unworthy of participating in community life.” The
second is that “confinement in an institution severely diminishes the everyday life
activities of individuals, including family relations, social contacts, work options,
economic independence, educational advancement, and cultural enrichment.”
Id.
(citations omitted) (quoting
Olmstead
,
Nevertheless, even accepting that home isolation might violate the integration mandate, the district court found that Plaintiffs’ did not state a claim because they “have not alleged how the current budgeting method has rendered them effectively institutionalized at home.” (Dist. Ct. Op., R. 164 at PageID #4377.) Again, this elides the well-pleaded allegations of Plaintiffs’ complaint. According to Plaintiffs, Plaintiff Wiesner is only receiving eighty of the 120 CLS hours his IPOS requires per week because he cannot afford to hire providers for the remaining time. Because he must be accompanied by at least two CLS staff members in public, he must use at least two service hours for every hour that he wishes to leave his home. This means that Plaintiff Wiesner can be outside his home a maximum of forty hours a week, rather than the sixty hours a week his IPOS would potentially allow. As a practical matter, it stands to reason that Plaintiff Wiesner cannot use all forty hours outside the home if he needs to maximize the proportion of his time that he has care. Moreover, Plaintiff Wiesner has allegedly been able to hire only two CLS providers, rather than his IPOS-required three, leading to increased difficulty scheduling out-of-home time. As a result of being “stuck at home more,” the complaint states, Plaintiff Wiesner’s behavioral issues have worsened. (Am. Compl., R. 146 at PageID #3766 . ) This suggests that Plaintiff Wiesner is confined at home in a manner that does not enable him to engage with non-disabled persons “to the fullest extent possible,” Olmstead , 527 U.S. at 592 (quoting 28 C.F.R. pt. 35, App. A, p. 450 (1998)), which in turn causes “decline[s] in health, safety, or welfare” that could lead to institutionalization, U.S. Dep’t of Justice, Statement on Olmstead .
Similarly, Plaintiffs allege that Plaintiff Waskul cannot hire sufficient staff under the current budget methodology, and as a result, he must “go[] three weekdays (Monday through Wednesday) without his normal community routine,” during which time he “is confined to his home.” (Am. Compl., R. 146 at PageID #3753.) As previously discussed, Plaintiff Waskul has allegedly suffered from depression, worsened scoliosis, and anger management issues due to his reduced time in the community and with CLS providers.
In
Steimel
, the Seventh Circuit reversed the district court’s grant of summary judgment to
the state defendants based on the plaintiffs’ evidence that the state defendants’ policies resulted
in them only being able to leave their home for twelve hours a week.
However, our inquiry again does not end here. Under the integration mandate, public
entities must “make reasonable modifications . . . necessary to avoid discrimination on the basis
of disability,” unless they “can demonstrate that making the modifications would fundamentally
alter the nature of the service, program, or activity.”
A plurality of the
Olmstead
Court opined that a state might show that a modification
requires fundamental alteration of its programs if “in the allocation of available resources,
immediate relief for the plaintiffs would be inequitable, given the responsibility the State has
undertaken for the care and treatment of a large and diverse population of persons with mental
disabilities.”
Altogether, the facts alleged in Plaintiffs’ complaint suggest that they are at serious risk of institutionalization and that they are unreasonably confined at home. Defendants have not carried their burden to show that modifying their budget methodology would result in a fundamental alteration of their programs. Thus, Plaintiffs have stated a plausible claim for violation of the integration mandate under Title II of the ADA and § 504 of the Rehabilitation Act. Accordingly, we also reverse the district court’s dismissal of these claims.
V. Michigan Mental Health Code,
In their final claim, Plaintiffs assert that Defendants WCCMH and CMHPSM violated
Michigan Compiled Laws
A. Immunity
First, we contend with the district court’s conclusion that Defendants were entitled to
immunity under Michigan Compiled Laws § 691.1407. It is true that Michigan Compiled Laws
B. Merits
Turning to the merits, the relevant provisions of the Michigan Mental Health Code
provide that “[a] recipient of mental health services shall not be subjected to abuse or neglect,”
and that those who are abused or neglected have “a right to pursue injunctive and other
appropriate civil relief.”
an act or failure to act committed by an employee or volunteer of the department, a community mental health services program, or a licensed hospital; a service provider under contract with the department, a community mental health services program, or a licensed hospital; or an employee or volunteer of a service provider under contract with the department, a community mental health services program, or a licensed hospital, that denies a recipient the standard of care or treatment to which he or she is entitled under this act.
The “[s]tandard for mental health services” provision of the Michigan Mental Health Code provides that “[a] recipient shall receive mental health services suited to his or her condition,” and that they “shall be offered in the least restrictive setting that is appropriate and available.” Id. §§ 330.1708(1), (3). Thus, if Defendants’ acts or failures to act denied Plaintiffs mental health services suitable to their condition in the least restrictive setting, they are liable. Michigan courts have interpreted § 330.1708 to cover an individual’s “mental health treatment involv[ing] the implementation of [a] Behavior Treatment Plan . . . including [a] provision regarding [the individual’s] movement in the community.” Estate Wrenn v. Spectrum Cmty. Servs. , Nos. 339594, 342320, 2019 WL 845711, at *3 (Mich. Ct. App. Feb. 21, 2019) (per curiam). Plaintiffs alleged that Defendants WCCMH and CMHPSM fail to “provide CLS participants with actual budgets tied to the services and supports listed in the IPOS,” and that because of this the individual Plaintiffs are denied transportation, staff, and recreation activities medically necessary to address their conditions. (Am. Compl., R. 146 at PageID ##3753, 3758–59, 3766, 3771–72, 3805.) This plausibly states a claim under the Michigan Mental Health Code.
County Defendants respond that Plaintiffs have not identified any employee, volunteer, or service provider associated with WCCMH who subjected the individual Plaintiffs to neglect, and so they have not stated a claim because the definition of neglect requires one of these parties to be the actor. PIHP Defendants rightly do not contest that CMHPSM is covered by this definition. Of course, Plaintiffs allege that Defendants Cortes and Terwilliger—current or former employees of WCCMH and CMHPSM, respectively—are responsible for the implementation of the flawed budget methodology. Indeed, this allegation underlies all of their claims against Defendants Terwilliger and Cortes. Accordingly, County Defendants’ argument is unpersuasive.
Plaintiffs have sufficiently alleged that the action or inaction of Defendants WCCMH and CMHPSM have denied them mental health services meeting the standard of care established in Michigan’s mental health code. The district court’s dismissal of this claim was thus in error, and this Court must reverse.
CONCLUSION
For these reasons, we REVERSE the district court’s decision and REMAND for further proceedings consistent with this opinion.
_______________________________________________________ CONCURRING IN PART AND DISSENTING IN PART _______________________________________________________ CHAD A. READLER, Circuit Judge, concurring in part, and dissenting in part. Save for
three instances where the majority opinion extends acts of Congress in an extra-legislative, atextual manner, I agree that the complaint may proceed beyond the pleading stage.
That one can identify beneficiaries from a statute’s terms is not tantamount to a finding
that the statute creates individual rights in those beneficiaries. More than simply establishing
benefits, the statute must also include unambiguous, rights-creating language generating an
enforceable individual right.
Harris v. Olszewski
, 442 F.3d 456, 460 (6th Cir. 2006)
(“[A] claimant must demonstrate that the underlying statute creates enforceable rights because it
is
rights
after all, not the broader or vaguer benefits or interests, that may be enforced under the
statute.” (quotations omitted)). And where a statute’s focus is on a regulated entity, no
individual rights exist.
Alexander v. Sandoval
,
Confirming this reading of
In these ways, today’s case tracks
Gonzaga
. There, the Supreme Court determined that
the Family Educational Rights and Privacy Act (FERPA), which protects students from
educational institutions mishandling their personal information, did not create individual rights
enforceable via
If all of this is not enough to show why
The ADA instructs 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,
or activities of a public entity, or be subjected to discrimination by any such entity.”
Together with the text of the ADA, the Supreme Court has interpreted the integration
mandate to prohibit the unwarranted institutionalization of disabled individuals.
Olmstead v.
L.C. ex rel. Zimring
, 527 U.S. 581, 600 (1999). In the two decades that followed
Olmstead
,
however, some lower courts (as does the majority opinion today) have extended that holding to
find an ADA violation when a state’s Medicaid plan places disabled individuals “at risk” of
institutionalization.
See, e.g.
,
M.R. v. Dreyfus
,
Doing so violates numerous aspects of current-day administrative law. One, the DOJ guidance is explicitly non-binding. See DOJ Guidance (explaining that the “guidance document is not intended to be a final agency action [and] has no legally binding effect,” and thus does “not establish legally enforceable responsibilities beyond what is required by the terms of the applicable statutes, regulations, or binding judicial precedent”). That fact alone dramatically undercuts its use as an interpretive North Star. See Cement Kiln Recycling Coal. v. EPA , 493 F.3d 207, 228 (D.C. Cir. 2007) (noting that non-binding disclaimers are “relevant to the conclusion that a guidance document is non-binding”). Two, the DOJ has independently disavowed using guidance documents to create binding standards. See Prohibition on the Issuance of Improper Guidance Documents Within the Justice Department, 85 Fed. Reg. 50951 (Aug. 19, 2020) (to be codified at 28 C.F.R § 50) (instructing that guidance documents do not “create binding standards by which the [DOJ] will determine compliance with existing regulatory or statutory requirements”). That admission is understandable, as an agency’s guidance document, unlike its formal rules and regulations, does not traverse the lengthy notice- and-comment period that tests an agency’s proposal against the views of others. See Christensen v. Harris County , 529 U.S. 576, 587 (2000) (“[W]e confront an interpretation contained in an opinion letter, not one arrived at after, for example, a formal adjudication or notice-and-comment rulemaking. Interpretations such as those in opinion letters—like interpretations contained in policy statements, agency manuals, and enforcement guidelines, . . . lack the force of law . . . .”); see also Dismas Charities, Inc. v. U.S. Dep’t of Justice , 401 F.3d 666, 680 (6th Cir. 2005) (noting that “the primary purpose of Congress in imposing notice and comment requirements for rulemaking [is] to get public input so as to get the wisest rules”).
The DOJ Guidance, in other words, has little practical effect here, by the DOJ’s own
admission. Reference to agency guidance might be appropriate where, as the majority opinion
notes in separately concluding that the ADA reaches claims brought by those purportedly
institutionalized at home, the guidance squarely supports what the agency rule already
establishes.
Compare
Nor, at all events, is there reason to defer to agency guidance when the text of the ADA
and the integration mandate are unambiguous on the point.
See Kisor v. Wilkie
,
Embracing DOJ guidance to cover those “at risk” of institutionalization also creates a practical interpretive problem. What, after all, does it mean to say an individual is “at risk” of institutionalization? There is no articulable definition in the ADA, the mandate, or Olmstead . Nor does the majority opinion provide one. One could theoretically define “at risk” with some temporal connection to actual institutionalization—for example, one is “at risk” of institutionalization if she is expected to be institutionalized in the next few months, perhaps even a year. But setting aside the fact that such a standard has no textual mooring, even that generous articulation would not help Appellants. After all, as revealed at oral argument, Appellants have been claiming a risk of institutionalization for over four years. Yet none have been institutionalized.
Whether one is in fact institutionalized is a bright-line determination that can be fairly and uniformly applied by those who sit on the federal bench. See Daunt v. Benson , 956 F.3d 396, 424–25 (6th Cir. 2020) (Readler, J., concurring) (discussing the advantages of bright-line rules). But absent any textually articulated standards, how are we to decide when a benefits formula places individuals “at risk” of being institutionalized? That hazy approach is a surefire recipe for unequal and unpredictable application of the law, an unattractive option for litigants and courts alike. Antonin Scalia, The Rule of Law as a Law of Rules , 56 U. Chi. L. Rev. 1175, 1179 (1989) (“Even in simpler times uncertainty has been regarded as incompatible with the Rule of Law.”). And it is likely why Congress never intended for judges to make this determination to begin with.
Extending the ADA in this manner has yet one more unwelcome feature: It permits
claims by individuals who are not seeking to remedy discriminatory conduct, but instead simply
seek more Medicaid funding.
Olmstead
, however, expressly “disavowed” reading the ADA to
“impose[] on the States” a duty to “provide a particular level of benefits to disabled persons.”
Radaszewski ex rel. Radaszewski v. Maram
,
The majority opinion nonetheless believes its understanding of the ADA is necessary lest
the landmark law risks losing its bite. But the more customary practice is that a definitive harm,
not just the “risk” of one, is needed before legal action is ripe.
See Spokeo, Inc. v. Robins
, 136 S.
Ct. 1540, 1547–49 (2016). At the very least, the risk of harm must be “certainly impending.”
See Huff v. TeleCheck Servs.
, 923 F.3d 458, 463 (6th Cir. 2019) (quoting
Clapper v. Amnesty
Int’l USA
,
One can understand why a fair-minded judge might want to extend the ADA’s reach to cover those at risk of institutionalization. But as has long been true, our job remains to “say what the law is,” no more, and no less. Marbury v. Madison , 5 U.S. (1 Cranch) 137, 177 (1803). Expanding the ADA in this manner must come from Congress’s drafting pen, in conjunction with supporting regulations enacted by the Attorney General.
Appellants make no such allegation. They describe their claim as a “Medicaid statutory
claim under
* * * * *
One final point deserves mention. In Count IV, Plaintiffs tie together
Notes
[1] According to Plaintiffs, Defendant Terwilliger left her position at CMHPSM in April 2019. The parties do not further acknowledge this fact in their briefing; their posture has not apparently changed as a result.
[2] Defendant WCCMH explains that WCHO also used this methodology prior to 2012, and argues that the methodology implemented between 2012 and 2015 duplicated costs by providing for them in calculating the staff rate and then also paying for them separately as additional line items. Defendants previously argued that this billing methodology violated Medicaid regulations and their inter-entity contracts, and the district court denied a preliminary injunction in part because Plaintiffs were not “entitled to the reinstatement of a calculation method that violates Medicaid regulations and existing contracts between WCCMH and the State and PIHP.” (Order Denying Pls. Mot. for Prelim. Inj., R. 55 at PageID #1168.) A court’s determination of substantive issues at the preliminary injunction stage is “not dispositive of those substantive issues on the merits,” Wilcox v. United States , 888 F.2d 1111, 1114 (6th Cir. 1989), and the district court did not rely on this issue or suggest that the prior methodology
[3] Specifically, Plaintiffs ask the court to declare unlawful the current budget methodology and corresponding rate reduction, as well as any denial of participants’ rights to self-determination. They further request that the court enjoin Defendants from continuing to use the current budget methodology and depriving CLS recipients of services provided in the most integrated setting. They request costs and attorneys’ fees and “such other relief as is just and proper.” (Am. Compl., R. 146 at PageID #3807.) In their amended complaint, Plaintiffs also asked the court, as a remedy for alleged due process violations, to enjoin Defendants “from denying participants their right to procedural due process” and from refusing to reinstate pre-May 2015 funding until recipients are afforded IPOS meetings and provided notice and an opportunity to be heard regarding any proposed cuts. ( Id. at #3806.) However, Plaintiffs no longer seek this relief after voluntarily dismissing their due process claims.
[4] Plaintiffs’ request for attorneys’ fees is also permitted under Ex parte Young . Hutto v. Finney , 437 U.S. 678, 691–92 (1978).
[5]
We note that we have previously held that a group of nursing homes suing the Secretary of the
Department of Health and Human Services was required to exhaust their available remedy of review by the
Secretary before bringing suit against her to challenge Medicare and Medicaid regulations.
Mich. Ass’n of Homes &
Servs. for the Aging, Inc. v. Shalala
,
[6]
Notably, the same panel, considering a prior appeal in that case, applied the Supreme Court’s analysis in
Blessing v. Freestone
, 520 U.S. 329 (1997), to determine whether provisions of
[7]
That provision requires state plans to:
provide such methods and procedures relating to the utilization of, and the payment for, care and
services available under the plan . . . as may be necessary to safeguard against unnecessary
utilization of such care and services and to assure that payments are consistent with efficiency,
economy, and quality of care and are sufficient to enlist enough providers so that care and services
are available under the plan at least to the extent that such care and services are available to the
general population in the geographic area.
[8]
See, e.g.
,
Romano
,
[9]
See, e.g.
,
Ball v. Rodgers
, 492 F.3d 1094, 1117 (9th Cir. 2007) (
[10]
The simple fact that
[11]
The dissent’s citation to
Nasello v. Eagleson
, --- F.3d ---,
[12] State Defendants also assert that they are entitled to immunity because Title II of the ADA only validly abrogates a state’s Eleventh Amendment sovereign immunity insofar as the alleged ADA violation also violates the Fourteenth Amendment. They therefore focus the majority of their ADA analysis on applying the test articulated in United States v. Georgia , 546 U.S. 151 (2006), to show that their conduct does not also violate the Fourteenth Amendment. This strategy is misguided. As addressed earlier, Plaintiffs do not state a claim against the Department under the ADA, and Plaintiffs’ claim against Defendant Gordon is permitted under Ex parte Young .
[13]
State Defendants contend that their conduct did not violate § 504 because discrimination was not the sole
motivation for their actions, because they had no discriminatory animus, and because Plaintiffs did not allege that
they were denied services based on a distinction between them and other similarly situated individuals. But such
showings are not required to state a claim for violation of the integration mandate, and so we are not persuaded by
this argument.
See Ability Ctr. of Greater Toledo v. City of Sandusky
,
[14] Olmstead clarified that states are only required to provide community-based treatment for individuals with disabilities when “the State’s treatment professionals determine that such treatment is appropriate.” 527 U.S. at 607. In this case, there is no dispute about whether such treatment is appropriate for the individual Plaintiffs.