E.; et al. vs. McManaman
Filing
123
ORDER GRANTING, IN PART, AND DENYING, IN PART, PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT (ECF No. 100 ) and GRANTING, IN PART, AND DENYING, IN PART, DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (ECF No. 98 ) - Signed by JUDGE HELEN G ILLMOR on 8/12/2016. " The Court finds that Plaintiffs are the prevailing party in this action, as they achieved a judicially-sanctioned material alteration of the legal relationship of the parties through this Court 's entry of summary judgment compelling the Department to publicize the Medicaid program's coverage of ABA treatment. CRST Van Expedited, Inc. v. E.E.O.C., 136 S. Ct. 1642, 1646 (2016); Buckhannon Bd. & Care Home, Inc. v. W. V a. Dept of Health & Human Res., 532 U.S. 598, 60406 (2001); Richard S. v. Dep't of Developmental Servs. of State of Cal., 317 F.3d 1080, 1087 (9th Cir. 2003). The Court, in the exercise of its broad discretion, grants Plain tiffs' request for an award of reasonable costs and attorneys' fees. Plaintiffs are entitled to attorneys' fees in presenting their entire case, even though there are issues that are either unresolved or on which Plaintiffs di d not prevail. K.W. v. Armstrong, __ F.Supp.3d __, 2016 WL 1254225, *4-*5 (D.Idaho Mar. 28, 2016)." (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
Civil No. 14-00399 HG-KJM
)
J.E., through his parent
SUZANNE EGAN, for themselves )
and on behalf of a class of )
those similarly situated; and )
the HAWAII DISABILITY RIGHTS )
CENTER, in a representative )
)
capacity on behalf of its
)
clients and all others
)
similarly situated,
)
)
Plaintiffs,
)
)
vs.
)
RACHAEL WONG, in her official )
capacity as Director of the )
State of Hawaii, Department )
)
of Human Services,
)
)
Defendant.
)
_____________________________ )
ORDER GRANTING, IN PART, AND DENYING, IN PART, PLAINTIFFS’ MOTION
FOR SUMMARY JUDGMENT (ECF No. 100)
and
GRANTING, IN PART, AND DENYING, IN PART, DEFENDANT’S MOTION FOR
SUMMARY JUDGMENT
(ECF No. 98)
Plaintiffs J.E., through his parent, Suzanne Egan, and the
Hawaii Disability Rights Center filed a Complaint alleging that
the State of Hawaii, Department of Human Services, violated
provisions of the Medicaid Act, 42 U.S.C. § 1396 et seq.
Plaintiffs claim that the Department of Human Services has
been precluding the state Medicaid program from covering Applied
Behavior Analysis (“ABA”) as a treatment for autistic children
1
and young adults, in violation of the Medicaid Act’s early and
periodic screening, diagnostic, and treatment (“EPSDT”) services
mandate.
Plaintiffs also allege that the Department has failed
to inform eligible persons that ABA is an available early and
periodic screening, diagnostic, and treatment service.
THE PARTIES FILED CROSS MOTIONS FOR SUMMARY JUDGMENT.
Plaintiffs seek a declaratory ruling stating that:
(1) the State of Hawaii, through the Department of Human
Services, violated the Medicaid Act by failing to cover ABA
treatment pursuant to the EPSDT services mandate;
Plaintiffs also seek an injunction:
(2) ordering the Department to include ABA as a covered treatment
under the state Medicaid program for persons eligible for
EPSDT services;
(3) compelling the Department to publicize the Medicaid program’s
coverage of ABA treatment; and
(4) instructing the Department to submit a State Plan Amendment
memorializing a policy that adds ABA treatment as a covered
EPSDT benefit.
Defendant seeks dismissal of Plaintiffs’ action as moot and
declaratory judgment in its favor as to the following:
(1) the Department has always covered medically necessary autism
treatment under Medicaid law;
(2) the Department does not have an obligation pursuant to the
2
Medicaid Act to inform persons eligible for EPSDT services
about ABA treatment; and
(3) the Defendant is not required to submit a State Plan
Amendment to the Centers for Medicare and Medicaid Services
that specifically memorializes coverage for ABA treatment.
Plaintiffs’ Motion for Summary Judgment (ECF No. 100) and
Defendant’s Motion for Summary Judgment (ECF No. 98) are each
GRANTED, IN PART, AND DENIED, IN PART.
PROCEDURAL HISTORY
On September 5, 2014, Plaintiffs J.E. and the Hawaii
Disability Rights Center (collectively, “Plaintiffs”) filed a
Complaint.
(ECF No. 1).
On December 1, 2014, Plaintiffs filed their First Amended
Complaint.
(ECF No. 8).
On June 19, 2015, the Magistrate Judge approved a
stipulation by the parties for Plaintiffs to file a Second
Amended Complaint.
(ECF No. 42).
On June 22, 2015, Plaintiffs filed a Second Amended
Complaint.
(ECF No. 44).
On July 6, 2015, Defendant Rachael Wong, Director of the
State of Hawaii, Department of Human Services (“Defendant”) filed
a Motion to Dismiss Plaintiffs’ Second Amended Complaint.
No. 46).
3
(ECF
On August 27, 2015, the Court denied Defendant’s Motion to
Dismiss.
(ECF No. 62).
On December 10, 2015, Plaintiffs filed a Motion for Class
Certification.
(ECF No. 78).
On February 10, 2016, Plaintiffs filed PLAINTIFFS’ MOTION
FOR SUMMARY JUDGMENT and PLAINTIFF’S CONCISE STATEMENT OF FACTS
IN SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT.
(ECF Nos.
100; 101).
On February 10, 2016, Defendant filed DEFENDANT RACHAEL
WONG, IN HER OFFICIAL CAPACITY AS DIRECTOR OF THE STATE OF
HAWAII, DEPARTMENT OF HUMAN SERVICE’S MOTION FOR SUMMARY JUDGMENT
and SEPARATE AND CONCISE STATEMENT OF FACTS IN SUPPORT OF
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT.
(ECF Nos. 98; 99).
On
the same date, Defendant also filed a Motion to Seal Exhibits 4,
7, 8, and 9.
(ECF No. 97).
On February 19, 2016, Plaintiffs filed PLAINTIFFS’ AMENDED
CONCISE STATEMENT OF FACTS.
(ECF No. 104).
On the same date,
Defendant filed DEFENDANT RACHAEL WONG, IN HER OFFICIAL CAPACITY
AS DIRECTOR OF THE STATE OF HAWAII, DEPARTMENT OF HUMAN SERVICE’S
FIRST AMENDED SEPARATE AND CONCISE STATEMENT OF FACTS IN SUPPORT
OF DEFENDANT’S MOTION FOR SUMMARY JUDGMENT.
(ECF No. 103).
On February 19, 2016, the Court granted Defendant’s Motion
to Seal Exhibits 4, 7, 8, and 9.
(ECF No. 105).
On February 23, 2016, the Magistrate Judge filed a Findings
and Recommendation to deny Plaintiffs’ Motion for Class
Certification.
(ECF No. 108).
4
On March 10, 2016, Defendant filed DEFENDANT RACHAEL WONG’S,
IN HER OFFICIAL CAPACITY AS DIRECTOR OF THE STATE OF HAWAII,
DEPARTMENT OF HUMAN SERVICES, MEMORANDUM IN OPPOSITION TO
PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT.
(ECF No. 109).
On the
same date, Defendant also filed DEFENDANT RACHAEL WONG’S, IN HER
OFFICIAL CAPACITY AS DIRECTOR OF THE STATE OF HAWAII, DEPARTMENT
OF HUMAN SERVICES, STATEMENT IN OPPOSITION TO PLAINTIFFS’ AMENDED
CONCISE STATEMENT OF FACTS IN SUPPORT OF PLAINTIFFS’ MOTION FOR
SUMMARY JUDGMENT.
(ECF No. 110).
On March 10, 2016, Plaintiffs filed PLAINTIFFS’ MEMORANDUM
IN OPPOSITION TO [ECF NO. 98] DEFENDANT RACHAEL WONG, IN HER
OFFICIAL CAPACITY AS DIRECTOR OF THE STATE OF HAWAII, DEPARTMENT
OF HUMAN SERVICES’ MOTION FOR SUMMARY JUDGMENT, FILED FEBRUARY
10, 2016.
(ECF No. 111).
On the same date, Plaintiffs also
filed PLAINTIFFS’ CONCISE STATEMENT OF FACTS IN OPPOSITION TO
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT.
(ECF No. 112).
On March 17, 2016, the Court adopted the Magistrate Judge’s
Findings and Recommendation to deny Plaintiffs’ Motion for Class
Certification.
(ECF No. 113).
On April 25, 2016, the Plaintiffs filed PLAINTIFFS’ REPLY IN
SUPPORT OF [ECF NO. 100] MOTION FOR SUMMARY JUDGMENT.
118).
(ECF No.
On the same date, Defendant filed DEFENDANT RACHAEL WONG,
IN HER OFFICIAL CAPACITY AS DIRECTOR OF THE STATE OF HAWAII,
DEPARTMENT OF HUMAN SERVICE’S REPLY IN SUPPORT OF HER MOTION FOR
SUMMARY JUDGMENT.
(ECF No. 117).
On May 5, 2016, the Court held a hearing on the parties’
5
cross-motions for summary judgment.
(ECF No. 119).
At the
hearing, the Court instructed the parties to file supplemental
memoranda addressing the Hawaii Disability Rights Center’s
standing.
On May 13, 2016, Defendant filed DEFENDANT RACHAEL WONG, IN
HER OFFICIAL CAPACITY AS DIRECTOR OF THE STATE OF HAWAII,
DEPARTMENT OF HUMAN SERVICE’S SUPPLEMENTAL BRIEF ON HAWAII
DISABILITY RIGHTS CENTER’S STANDING.
(ECF No. 120).
On May 20, 2016, Plaintiffs filed PLAINTIFFS' RESPONSE TO
DEFENDANT'S SUPPLEMENTAL MEMORANDUM ON STANDING OF THE HAWAII
DISABILITY RIGHTS CENTER.
(ECF No. 122).
BACKGROUND
J.E.
Plaintiff J.E. (“J.E.”) is a seven-year-old boy who was
first diagnosed with autism spectrum disorder (“autism”) at age
four.1
(Egan Decl. at ¶¶ 3-6; 18-19, ECF No. 104-2).
in the State of Hawaii and receives Medicaid benefits.
J.E. lives
(Id. at ¶
4).
The Hawaii Disability Rights Center
The Hawaii Disability Rights Center (“the HDRC”) is a non-
1
The United States Department of Education regulations
describe autism as a “developmental disability significantly
affecting verbal and nonverbal communication and social
interaction, generally evident before age three, that adversely
affects a child's educational performance. Other characteristics
often associated with autism are engagement in repetitive
activities and stereotyped movements, resistance to environmental
change or change in daily routines, and unusual responses to
sensory experience.” 34 C.F.R. § 300.8(c)(1)(i).
6
profit “Protection and Advocacy” organization that serves
Hawaii’s disabled residents.
No. 122-1).
(Erteschik Supp. Decl. at ¶ 3, ECF
A Protection and Advocacy organization defends and
supports the legal and human rights of individuals with
disabilities.
See 29 U.S.C. § 794e; Haw. Rev. Stat. § 333F-8.5.
The HDRC is the designated Protection and Advocacy organization
for the State of Hawaii.
(Erteschik Supp. Decl. at ¶ 3).
The HDRC has constituents instead of members. (Id. at ¶ 4).
During the calendar years 2014 and 2015, the HDRC had a least 181
Medicaid-eligible constituents with an autism diagnosis.
¶ 8).
J.E. is a constituent of the HDRC.
(Id. at
(Id. at ¶¶ 9-13).
The Medicaid Program in Hawaii
The State of Hawaii, Department of Human Services (“the
Department”) is the agency responsible for administering the
Medicaid program in Hawaii.
See 42 U.S.C. § 1396a(a)(5); 42
C.F.R. § 431.10; Haw. Rev. Stat. §§ 346-7; 346-14.
The
Department provides Medicaid services through a managed care
system.
(Fink Depo. at 40:3-9, Ex. 3 of Plas. Amended CSF, ECF
No. 104-5).
Under the managed care system, the Department contracts with
third-party health plans to provide Medicaid coverage to eligible
beneficiaries.
(Id. at 40:3-42:6).
It also relies on the health
plans to communicate directly with Medicaid beneficiaries.
(Id.
at 53:24-55:16; Dep’t of Human Servs. Request for Proposal at pp.
124-128; Ex. 3 of Def. Amended CSF, ECF No. 103-6).
7
If a
beneficiary is unsatisfied with a medical coverage decision, he
may engage in a grievance or appeals process with the health
plan.
(Dep’t of Human Serv. Request for Proposal at pp. 151-153;
330-333, Ex. 3 of Def. Amended CSF).
of grievances and appeals.
The Department is informed
Unless a grievance or appeal is
submitted, the Department does not generally know whether the
health plan has denied a particular medical treatment.
(Fink
Depo. at 22:17-24; 167:3-10, Ex. 3 of Plas. Amended CSF).
The Department’s Initial Position on ABA Treatment
Prior to August 2014, the Department did not view Applied
Behavior Analysis (“ABA”) as an effective form of treatment for
autism.
In January 2013, the State’s Legislative Reference Bureau
published a report regarding ABA coverage.
Citing to an
interview with the Department’s Medicaid administrator, Dr.
Kenneth Fink (“Dr. Fink”), the report stated that ABA treatment
was not covered by Medicaid, as it was not considered
“evidence[]-based and, therefore, not medically necessary.”
(Ex.
6 of Plas Amended CSF, ECF No. 104-9).
In April 2013, the then-director of the Department, Patricia
McManaman (“Director McManaman”), testified before the state
legislature in opposition to a bill that would require health
insurers to provide coverage for ABA.
Director McManaman stated
that ABA treatment was “not currently covered by the Hawaii
Medicaid program.”
(Ex. 7 of Plas. Amended CSF at p. 1, ECF No.
104-10).
8
J.E. is Prescribed ABA Treatment
In October 2013, a physician at Shriners Hospital for
Children evaluated J.E.’s autism and prescribed J.E. be treated
for his autism by receiving 20 hours of ABA treatment per week.
(Ex. 1 of Plas. Amended CSF at Bates Nos. E00544-47, ECF No. 1044).
On November 10, 2013, a psychologist from a separate
healthcare provider recommended that J.E. receive ABA to
“increase manding2 and verbal communication.”
(Id. at Bates Nos.
E000516; E000531).
At the end of 2013, J.E.’s mother conducted her own research
as to whether Hawaii’s Medicaid program covered ABA treatment.
(Egan Decl. at ¶¶ 14; 20-21, ECF No. 104-2).
As part of her
investigation, she spoke with Leolinda Parlin, a “Medicaid
Ombudsman,” (“Medicaid Ombudsman Parlin”) about ABA.
15).
(Id. at ¶
The Department asserts that a Medicaid Ombudsman is a
third-party entity that the Department utilizes to “provide an
alternative resource for [Medicaid] beneficiaries . . . to assist
them in resolving issues or concerns between themselves and the
medical, dental, or behavioral plans of the [Medicaid] Programs
informally and up through a [Medicaid] Health plan’s
2
“Manding” is a term of art that refers to a child’s
request for a desired object. See R.E. v. N.Y.C. Dep't of Educ.,
694 F.3d 167, 179 (2d Cir. 2012).
9
grievance/appeals process.”
(Dep’t of Human Servs. Ombudsman
Request for Proposal at p. 26, Ex. 21 of Def. Supp. Memo., ECF
No. 120-2; Def. Ans. to Plas. Interrogatories at p. 4, Ex. 3a of
Plas. Amended CSF, ECF No. 104-6).
According to J.E.’s mother,
Medicaid Ombudsman Parlin confirmed that ABA treatment would not
be covered under Medicaid.
(Egan Decl. at ¶¶ 14; 15).
In December 2013, J.E. was enrolled in an ABA treatment
program with a private ABA provider.
(Id. at ¶ 21).
From
December 2013 through February 2014, J.E. received approximately
6-10 hours of ABA per week at the private provider.
(Plas. Ans.
to Def. Interrogatories at p. 3, Ex. 10 of Def. Amended CSF, ECF
No. 103-13).
The ABA treatment with the private provider was
paid directly by J.E.’s family for those months; J.E.’s mother
did not submit coverage claims to J.E.’s Medicaid health plan.
(Egan Decl. at ¶ 21).
The Department Maintains its Public Position on ABA Treatment
On March 19, 2014, Director McManaman again presented
testimony before the state legislature.
She expressed support
“for the intent of the coverage” of ABA treatment, but questioned
whether sufficient evidence to support the effectiveness of ABA
existed at that time.
(Mar. 19, 2014 Testimony of Director
McManaman at pp. 2-3, Ex. 12 of Plas. Amended CSF, ECF No. 10415).
Payment for J.E.’s ABA Treatment is Submitted by the Private
Provider
In late March 2014, J.E.’s mother spoke with the private ABA
10
provider about Medicaid coverage of J.E.’s ABA treatment.
Based
on her discussions with the provider, J.E.’s mother continued to
believe that such a claim would be denied.
(Egan Decl. at ¶ 26).
The private ABA provider nonetheless submitted claims for J.E.’s
ABA treatment to his Medicaid health plan.
J.E.’s Medicaid
health plan paid for his ABA treatment at the private ABA
provider from March through August 2014.3
(Id. at ¶ 29; Behavior
Analysts Inc. Mar. 31, 2014 Invoice, Ex. 4 of Plas. Amended CSF,
ECF No. 104-7).
The private provider e-mailed J.E.’s mother in
May 2014 to inform her that the health plan had begun paying for
the private provider’s ABA services. (Def. Sealed Exs. 8; 9).
J.E.’s mother, however, asserts that she did not know about the
health plan’s payments until after she filed this lawsuit in
September 2014.
(Egan Decl. at ¶ 29).
J.E.’s ABA Treatment at the Private Provider Increases
From March through May 2014, J.E. continued to receive 6-10
hours of ABA treatment at the private provider.
(Plas. Ans. to
Def. Interrogatories at p. 4, Ex. 10 of Def. Amended CSF).
Beginning in June 2014, J.E. began to receive 20 hours of
ABA treatment at the private provider.
(Id.)
J.E.’s ABA Treatment Prescription Increases
On July 14, 2014, a second psychologist recommended that
J.E. undergo 35-40 hours of ABA treatment per week.
3
(Ex. 1 of
The provider received payment for ABA services rendered
in March 2014 on May 2, 2014. (Ex. 4 of Plas. Amended CSF, ECF
No. 104-7).
11
Plas. Amended CSF at Bates Nos. E00034-35).
J.E. Stops Treatment at the Private Provider
In August 2014, J.E. stopped attending the private
provider’s ABA treatment program.
(Plas. Ans. to Def.
Interrogatories at p. 4, Ex. 10 of Def. Amended CSF).
According
to J.E.’s mother, the private provider “had staffing issues that
could not accommodate the frequency and intensity of services . .
. and upon inquiry to Medicaid I could not get any confirmation
that I could rely on future payment for J.E.'s continued minimal
ABA services.”
(Egan Decl. at ¶ 30).
The Agency for Healthcare Research and Quality Report
In August 2014, the federal Agency for Healthcare Research
and Quality published a report on autism.
The report discussed
various autism treatment studies, concluding that ABA is
evidence-based and “can positively affect a subset of children
with [autism].” (Ex. 15 of Plas. Amended CSF at p. 9, ECF No.
104-18).
Dr. Fink reviewed the August 2014 report and surmised that
based on its analysis, sufficient research existed to conclude
that ABA treatment is evidence-based, and therefore may qualify
as medically necessary for Medicaid coverage purposes.
Depo. at 159:14-161:8, Ex. 2 of Plas. Amended CSF).
(Fink
Dr. Fink
began plans to articulate a formal policy that included guidance
as to ABA provider certification requirements, Medicaid coverage
limits, and who may qualify for coverage of ABA treatment.
12
(Aug.
26, 2014 E-Mail from Dr. Fink, Ex. 17 of Plas. Amended CSF, ECF
No. 104-20).
The National Centers for Medicare & Medicaid Services Issues
Guidance with Respect to ABA Coverage
In September 2014, the national Centers for Medicare &
Medicaid Services issued an informational bulletin that clarified
the federal agency’s position on ABA treatment.
The bulletin
stated that the agency was not mandating ABA treatment,
emphasizing that ABA “is one treatment modality for ASD [autism
spectrum disorder].
CMS is not endorsing or requiring any
particular treatment modality for ASD.
State Medicaid agencies
are responsible for determining what services are medically
necessary for eligible individuals.”
(Ex. 19 of Plas. Amended
CSF at p. 1, ECF No. 104-20).
J.E. Begins ABA Treatment at Easter Seals
On November 14, 2014, J.E. restarted his ABA treatment.
(Egan Decl. at ¶ 35).
He received 15 hours of ABA a week at
Easter Seals Hawaii (Pacific Autism Center) (“Easter Seals”).
(Id. at ¶ 33).
At that time, Easter Seals was not a Medicaid-
authorized provider.
treatment.
(Id.)
J.E.’s mother paid for his ABA
(Id. at ¶ 34).
The Department Prepares to Finalize a Memorandum Adopting a
Favorable Position Towards the Coverage of ABA Treatment
In early December 2014, officials from the Department of
Human Services drafted a one-page memorandum that directed health
plans to consider covering ABA treatment.
13
The memorandum was
sent to Dr. Fink for his review.
(Ex. 21 of Plas. Amended CSF at
Bates No. DHS 2467, ECF No. 104-24).
On December 8, Dr. Fink
sent an e-mail rejecting the draft memorandum.
DHS 2463).
(Id. at Bates No.
Dr. Fink explained that the memorandum was “too late
for its original intended purpose,” and wrote that the Department
needed to focus on “finaliz[ing] our guideline[,] which is being
issued for consistency and clarity.”
(Id.)
On December 18, 2014, the Department of Human Service’s
Medicaid Medical Director, Dr. Curtis Toma, informed the Medicaid
health plans’ medical directors that “[p]atients with Autistic
Spectrum Disorder can benefit from Applied Behavior Analysis
(ABA) therapy.
We are currently working on draft guidance
regarding ABA and would appreciate any feedback on your part.”
(Dec. 18, 2014 E-Mail from Dr. Curtis Toma, Ex. 22 of Plas.
Amended CSF, ECF No. 104-25; Fink Depo. at 90:15-91:15, Ex. 2 of
Plas. Amended CSF).
The Department’s Medicaid Medical Director
also indicated that the Department had sought feedback from other
state agencies as well.
(Dec. 18, 2014 E-Mail from Dr. Curtis
Toma, Ex. 22 of Plas. Amended CSF).
The Governor of Hawaii’s Budget Provides for an Increase of the
Department’s Funding for Autism-Related Services
In January 2015, the Governor of Hawaii proposed an increase
in the Department’s budget for fiscal years 2016 and 2017 by $5.6
million and $5.5 million, respectively.
(Amendments to 2015-2017
Exec. Biennium Budget, Ex. 24 of Plas. Amended CSF, ECF No. 10427).
The budget increase was meant to account for the expected
14
increase in services for Medicaid recipients with autism,
including ABA treatment.
(Id.; Fink Depo. at 153:14-154:4;
163:12-15, Ex. 2 of Plas. Amended CSF).
The Department’s January 2015 Memorandum
On January 13, 2015, the Department issued a memorandum to
Medicaid health plans and service providers suggesting that the
Department viewed ABA treatment favorably.
Citing to the August
2014 report by the federal Agency for Healthcare Research and
Quality, the memorandum concluded that ABA treatment is
effective.
(Ex. 12 of Def. Amended CSF at Bates No. DHS 5852,
ECF No. 103-15).
The memorandum provided general instructions as
to how autism treatment claims may be processed.
The memorandum
contained information regarding appropriate billing codes for
autism treatments.
The memorandum did not request any action by
the health plans for notification of patients of the change in
the Department’s position.
It stated, “[w]e will be working with
the community to make revisions to this clarification guidance.”
(Id. at Bates No. DHS 5854).
J.E.’s Hiatus with Easter Seals
In February 2015, J.E.’s mother could not afford to continue
paying for J.E.’s ABA treatment, and removed him from the Easter
Seals program.
(Egan Decl. at ¶ 38).
On approximately July 1, 2015, Easter Seals became a
Medicaid-approved provider.
(Tawata Decl. at ¶ 6, ECF No. 103-
3).
15
In August 2015, J.E.’s mother re-enrolled him with Easter
Seals.
(Plas. Ans. to Def. Interrogatories at p. 5, Ex. 10 of
Def. Amended CSF; Egan Decl. at ¶ 43).
Since August 2015, J.E.
has been receiving 35-40 hours of ABA treatment per week.
Decl. at ¶ 44).
(Egan
J.E.’s Medicaid health plan has been paying for
the entirety of his ABA treatment.
The Department’s August 28, 2015 Memorandum
On August 28, 2015, the Department sent a new memorandum to
its Medicaid health plans and service providers, replacing the
January 13, 2015 memorandum.
The memorandum stated that
“Hawaii’s [Medicaid] health plans must comply with the full range
of EPSDT duties and requirements, . . . including ABA
[treatment], for children under 21 years of age with [autism],
when based on individualized determinations of medical
necessity.”
16).
(Ex. 13 of Def. Amended CSF at p. 1, ECF No. 103-
The superseding memorandum included four attachments: A, B,
C, and D:
Attachment A was a ten-page document that provided detailed
information regarding how ABA treatment coverage should be
assessed by the Medicaid health plans.
Attachment B was a flow chart that outlined the state’s
approved process for assessing ABA treatment.
Attachment C was a twelve-page document that delineated the
billing codes and rates for autism services, including ABA.
Attachment D was a four-page document that included a sample
16
claim form and accompanying instructions.
(Id. at attachments A, B, C, D).
The Second Modification of the Department’s Budget
On December 22, 2015, the state Department of Budget and
Finance added $4.9 million to the Department of Human Services’s
budget for fiscal year 2017.
(2017 Exec. Supp. Budget, Ex. 31 of
Plas. Amended CSF, ECF No. 104-34).
The added amount was
designated towards autism-related treatments for Medicaid
beneficiaries. (Id.)
There is no evidence that the Department of Human Services
has notified or instructed its health plans to inform eligible
persons of the Department’s reversal on its position as to
Applied Behavior Analysis.
STANDARD OF REVIEW
Summary judgment is appropriate when there is no genuine
issue as to any material fact and the moving party is entitled to
judgment as a matter of law.
Fed. R. Civ. P. 56(c).
To defeat
summary judgment there must be sufficient evidence that a
reasonable jury could return a verdict for the nonmoving party.
Nidds v. Schindler Elevator Corp., 113 F.3d 912, 916 (9th Cir.
1997).
The moving party has the initial burden of "identifying for
the court the portions of the materials on file that it believes
demonstrate the absence of any genuine issue of material fact."
17
T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d
626, 630 (9th Cir. 1987) (citing Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986)).
The moving party, however, has no burden
to negate or disprove matters on which the opponent will have the
burden of proof at trial.
The moving party need not produce any
evidence at all on matters for which it does not have the burden
of proof.
Celotex, 477 U.S. at 325.
The moving party must show,
however, that there is no genuine issue of material fact and that
he or she is entitled to judgment as a matter of law.
That
burden is met by pointing out to the district court that there is
an absence of evidence to support the non-moving party's case.
Id.
If the moving party meets its burden, then the opposing
party may not defeat a motion for summary judgment in the absence
of probative evidence tending to support its legal theory.
Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 282
(9th Cir. 1979).
The opposing party must present admissible
evidence showing that there is a genuine issue for trial. Fed. R.
Civ. P. 56(e); Brinson v. Linda Rose Joint Venture, 53 F.3d 1044,
1049 (9th Cir. 1995).
"If the evidence is merely colorable, or
is not significantly probative, summary judgment may be granted."
Nidds, 113 F.3d at 916 (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249-50 (1986)).
The court views the facts in the light most favorable to the
non-moving party.
State Farm Fire & Casualty Co. v. Martin, 872
F.2d 319, 320 (9th Cir. 1989).
Opposition evidence may consist
18
of declarations, admissions, evidence obtained through discovery,
and matters judicially noticed.
477 U.S. at 324.
Fed. R. Civ. P. 56(c); Celotex,
The opposing party cannot, however, stand on
its pleadings or simply assert that it will be able to discredit
the movant's evidence at trial. Fed. R. Civ. P. 56(e); T.W. Elec.
Serv., 809 F.2d at 630.
The opposing party cannot rest on mere
allegations or denials.
Fed. R. Civ. P. 56(e); Gasaway v. Nw.
Mut. Life Ins. Co., 26 F.3d 957, 959-60 (9th Cir. 1994).
When
the non-moving party relies only on its own affidavits to oppose
summary judgment, it cannot rely on conclusory allegations
unsupported by factual data to create an issue of material fact.
Hansen v. United States, 7 F.3d 137, 138 (9th Cir. 1993); see
also Nat’l Steel Corp. v. Golden Eagle Ins. Co., 121 F.3d 496,
502 (9th Cir. 1997).
ANALYSIS
I.
PLAINTIFFS’ REQUESTED RELIEF
42 U.S.C. § 1983 (“Section 1983") provides a private cause
of action to enforce a Medicaid beneficiary’s right to early and
periodic screening, diagnostic and treatment (“EPSDT”) services.
J.E. v. Wong, 125 F.Supp.3d 1099, 1106 (D. Haw. 2015).
Pursuant
to Section 1983, a plaintiff may sue a state official in her
official capacity where the plaintiff seeks prospective relief.
Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 281 (1997).
The doctrine of sovereign immunity pursuant to the Eleventh
19
Amendment of the United States Constitution precludes a plaintiff
from obtaining retrospective relief or damages against the State.
Green v. Mansour, 474 U.S. 64, 73 (1985); Lojas v. Washington,
347 F. App'x 288, 290 (9th Cir. 2009).
Here, Plaintiffs J.E. and the Hawaii Disability Rights
Center (“the HDRC”) seek the following relief:
(1) A declaratory ruling that the State of Hawaii, through the
Department of Human Services (“the Department”), violated the
Medicaid Act by failing to cover Applied Behavior Analysis
(“ABA”) treatment pursuant to the EPSDT services mandate;
(2) An injunction:
(a) ordering the Department to include ABA as a covered
treatment under the state Medicaid program for persons
eligible for early and periodic screening, diagnostic and
treatment (“EPSDT”) services;
(b) compelling the Department to publicize the Medicaid
program’s coverage of ABA treatment; and
(c) instructing the Department to submit a State Plan
Amendment memorializing a policy that adds ABA treatment as
a covered EPSDT benefit.
(Plas. Motion for Summary Jdgmt. at p. 38, ECF No. 100-1).
Plaintiffs’ request for declaratory relief is retrospective
in nature; it concerns the Department’s past conduct regarding a
failure to cover ABA under the state’s Medicaid program.
Absent
a waiver from the State, the Court may not impose retrospective
20
relief pursuant to the Eleventh Amendment.
See Green, 474 U.S.
at 73; Mueller v. Auker, No. CIV 04-399-S-BLW, 2010 WL 2265867,
at *5 (D. Idaho June 4, 2010).
The State of Hawaii, through the
Department, has not waived sovereign immunity rights granted
under the Eleventh Amendment.
Plaintiffs may not obtain their
requested declaratory relief.
II.
THE HAWAII DISABILITY RIGHTS CENTER HAS STANDING
Article III of the United States Constitution requires
plaintiffs to have standing for courts to adjudicate their
claims.
Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992).
An organization has associational standing when “[1] its
[constituents] 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.”
WildEarth Guardians v. U.S. Dep't of
Agric., 795 F.3d 1148, 1154 (9th Cir. 2015) (internal quotations
omitted) (quoting Friends of the Earth, Inc. v. Laidlaw Envtl.
Servs. (TOC), Inc., 528 U.S. 167, 181 (2000)).
The first two
prongs of associational standing are constitutional requirements,
while the third prong is prudential.
See United Food &
Commercial Workers Union Local 751 v. Brown Grp., Inc., 517 U.S.
544, 555-56 (1996).
21
The HDRC has associational standing in this case.
Plaintiffs have produced evidence establishing that (1) at least
one of the HDRC’s constituents, J.E., would have standing to sue
on his own; (2) Medicaid coverage of autism treatments are
germane to the HDRC’s mission as a Protection and Advocacy
organization; and (3) neither the claim asserted nor the relief
requested requires the HDRC’s constituents to participate in the
lawsuit.
See Associated Gen. Contractors of Am., San Diego
Chapter, Inc. v. Cal. Dep't of Transp., 713 F.3d 1187, 1194 (9th
Cir. 2013); (Erteschik Supp. Decl. at ¶¶ 3-18, ECF No. 122-1).
III. FROM AUGUST 2014 TO AUGUST 2015, THE DEPARTMENT RECOGNIZED
THE VALIDITY OF APPLIED BEHAVIOR ANALYSIS TREATMENT, BUT DID
NOT IMMEDIATELY IMPLEMENT IT
A. The Medicaid Program
Congress established Medicaid as a cooperative federal-state
program, through which the federal government provides financial
aid to states that furnish medical assistance to eligible
low-income individuals.
See 42 U.S.C. § 1396 et seq.; see also
Atkins v. Rivera, 477 U.S. 154, 156-57 (1986).
States are not required to participate in the Medicaid
program.
Participating states, however, must comply with the
requirements of the Medicaid Act, 42 U.S.C. § 1396 et seq., and
regulations interpreting the statute.
1272, 1273 (9th Cir. 2007).
the Medicaid program.
Spry v. Thompson, 487 F.3d
Hawaii is a participating state in
See Haw. Rev. Stat. §§ 346-7; 346-14.
To qualify for federal funding, a participating state must
22
submit and have approved a “[s]tate plan” for “medical
assistance,” 42 U.S.C. § 1396a(a), that contains a comprehensive
statement describing the nature and scope of the state's Medicaid
program.
42 C.F.R. § 430.10.
The Medicaid Act defines “medical assistance” as “payment of
part or all of the cost of . . . care and services” included in a
list of 29 mandatory and optional categories.
42 U.S.C. §
1396d(a); 42 U.S.C. § 1396a(a)(10)(A).
B.
The Medicaid Act Requires Participating States to Cover
Early and Periodic Screening, Diagnostic, and Treatment
Services
One mandatory category of “medical assistance” concerns
“early and periodic screening, diagnostic, and treatment
[‘EPSDT’] services . . . for individuals who are eligible under
the plan and are under the age of 21.”
42 U.S.C. §
1396d(a)(4)(B).
If a condition or illness is discovered through EPSDT
screening, the EPSDT mandate requires a state’s Medicaid program
to provide coverage of treatments that “correct or ameliorate
defects and physical and mental illnesses and conditions[,] . . .
whether or not such services are covered under the State plan.”
42 U.S.C. § 1396d(r)(5); Garrido v. Dudek, 731 F.3d 1152, 1154
(11th Cir. 2013).
The level of treatment coverage afforded “must
be sufficient in amount, duration, and scope to reasonably
achieve its purpose.”
42 C.F.R. § 440.230(b).
Congress deliberately crafted an “extremely broad” EPSDT
23
mandate to ensure that the poorest children and young adults have
access to modern medical services.
See Katie A., ex rel. Ludin
v. L.A. Cnty., 481 F.3d 1150, 1154 (9th Cir. 2007).
“There is no
requirement that an illness or condition must be specifically
enumerated in the EPSDT statutes in order to be covered by a
state's plan.”
Dajour B. v. City of N.Y., No. 00 CIV. 2044
(JGK), 2001 WL 830674, at *8 (S.D.N.Y. July 23, 2001).
The
standard for whether an ameliorative or corrective treatment
qualifies as an EPSDT service is whether it is medically
necessary.
42 U.S.C. § 1396d(r)(5); S.D. v. Hood, No. CIV.A. 02-
2164, 2002 WL 31741240, at *4 (E.D. La. Dec. 5, 2002), aff'd sub
nom., 391 F.3d 581 (5th Cir. 2004).
If a prescribed treatment is
medically necessary to correct or ameliorate an illness or
condition, the state Medicaid program must cover it.
Katie A.,
481 F.3d at 1154.
Each participating state has the authority to determine
which treatments are medically necessary, so long as those
restrictions are reasonable and are consistent with the Medicaid
Act and its goal “of providing a broad range of health-sustaining
services.”
Hope Med. Grp. for Women v. Edwards, 63 F.3d 418,
427-28 (5th Cir. 1995); 42 U.S.C. § 1396a(a)(17); 42 C.F.R. §
440.230(d).
The Department of Human Services of the State of Hawaii
considers a treatment medically necessary if it (1) is used for a
medical condition, (2) is supported by “sufficient evidence” to
demonstrate that the treatment can be expected to produce its
24
intended effects on health outcomes, (3) has beneficial effects
on heath outcomes that outweigh expected harmful effects, and (4)
is the most cost-effective method available to address the
medical condition.
Haw. Admin. R. 1700.1-2.
Evidence is
considered sufficient “if it is peer-reviewed, is
well-controlled, directly or indirectly relates the intervention
to health outcomes, and is reproducible both within and outside
of research settings.”
C.
Id.
The Department May Not Exclude a Medically Necessary
EPSDT Service
A participating state fails to comply with the EPSDT mandate
when it refuses to cover a qualifying EPSDT service.
A state
would unlawfully fail to provide coverage of a treatment if:
(1) a prescribed treatment is designed to correct or ameliorate
defects, physical or mental illnesses, or conditions
discovered through EPSDT screening;
(2) the state, or its Medicaid program, excludes coverage or
denied payment of that treatment; and
(3) the state, or its Medicaid program, acted unreasonably when
it determined that the prescribed treatment is experimental
or otherwise disqualifying.
See K.G. v. Dudek, 839 F.Supp.2d 1254, 1262-63 (S.D. Fla. 2011),
affirmed as to grant of permanent injunction, Garrido 731 F.3d at
1158-60; S.D., 2002 WL 31741240, at *8 (granting summary judgment
in favor of a child who applied for, but was denied, coverage for
25
incontinence supplies).
A prospective plaintiff does not need to
exhaust his state administrative remedies before bringing a
federal lawsuit alleging a violation of the Medicaid Act.
Okla.
Chapter of Am. Acad. of Pediatrics (OKAAP) v. Fogarty, 366
F.Supp.2d 1050, 1102 (N.D. Okla. 2005) (citing cases from the
Fourth and Eleventh Circuit Courts of Appeals).
Plaintiffs allege that Applied Behavior Analysis (“ABA”) is
an effective form of treatment for children and young adults who
have autism.
D.
The Department Delayed Creating and Implementing a
Policy for Coverage of ABA Treatment from August 2014
to August 2015
In August 2014, the Department’s Medicaid administrator, Dr.
Kenneth Fink (“Dr. Fink”), reviewed a report from the federal
Agency for Healthcare Research and Quality regarding ABA.
(Fink
Depo. at 159:14-161:8, Ex. 2 of Plas. Amended CSF, ECF No. 104-5;
Aug. 2014 Agency for Healthcare Research and Quality Report, Ex.
15 of Plas. Amended CSF, ECF No. 104-18).
The report concluded
that ABA was evidence-based and an effective form of treatment
for autism.
(Ex. 15 of Plas. Amended CSF at p. 9).
The
uncontroverted evidence presented before the Court establishes
that the report’s analysis convinced Dr. Fink that there was
sufficient research to support Medicaid coverage of ABA.
(Fink
Depo. at 159:14-161:8, Ex. 2 of Plas. Amended CSF).
Despite the fact that the Department recognized ABA as a
26
valid form of treatment, Department officials failed to inform
the Medicaid health plans that it considered ABA to be effective
until January 2015.
(Jan. 13, 2015 Department Memo., Ex. 12 of
Def. Amended CSF, ECF No. 103-15).
The Department did not issue
specific instructions concerning processing of ABA claims until
August 2015, six months after issuing a formal policy position
and twelve months after the Department accepted ABA as a valid
form of treatment for autism.
(Aug. 28, 2015 Department Memo.,
Ex. 13 of Def. Amended CSF, ECF No. 103-16).
There was a twelve-month delay between the Department’s
acceptance of ABA treatment and the promulgation of specific
instructions to the Medicaid health plans.
The Medicaid Act
requires participating states to provide medical assistance “with
reasonable promptness to all eligible individuals.”
1396a(a)(8).
42 U.S.C. §
Federal regulations interpreting the Medicaid Act
require participating states to “[f]urnish Medicaid promptly to
recipients without any delay caused by the agency's
administrative procedures.”
42 C.F.R. § 435.930(a).
A period of
twelve months is significant for children whose development
depends on effective treatment for the serious condition of
autism.
Defendant has provided no reasonable explanation as to
why the twelve-month delay was necessary.
The Court finds that the Department excluded ABA treatment
from Medicaid Coverage from August 2014 to August 2015.
IV.
PLAINTIFFS’ CLAIM THAT THE DEPARTMENT CURRENTLY EXCLUDES
27
MEDICAID COVERAGE FOR ABA IS MOOT
A federal court does not have authority to render opinions
as to questions that have become moot.
Ctr. For Biological
Diversity v. Lohn, 511 F.3d 960, 963 (9th Cir. 2007).
A claim
becomes moot “when the issues presented are no longer live or the
parties lack a legally cognizable interest in the outcome.”
City
of Erie v. Pap's A.M., 529 U.S. 277, 287 (2000)(internal
citations and quotations omitted).
The key inquiry with respect to a mootness issue is whether
there can be any effective relief.
W. v. Sec'y of Dep't of
Transp., 206 F.3d 920, 925 (9th Cir. 2000).
Without the
availability of effective relief, a court’s opinion regarding the
challenged action would be advisory.
287.
City of Erie, 529 U.S. at
Article III of the United States Constitution forbids
federal courts from rendering advisory opinions.
Coal. for a
Healthy Cal. v. F.C.C., 87 F.3d 383, 386 (9th Cir. 1996).
Plaintiffs’ claim that the Department currently excludes ABA
from Medicaid coverage is moot.
Plaintiffs concede that since
August 2015, J.E. has been receiving his full dosage of
prescribed ABA treatment, and that the treatment is covered by
Medicaid.
(Egan Decl. at ¶ 44, ECF No. 104-2).
The evidence
presented establishes that the Department presently endorses
Medicaid coverage of ABA.
There is no indication that the state
Medicaid program excludes or will exclude ABA from coverage.
28
A.
The Voluntary Cessation Exception Does Not Preclude a
Finding of Mootness
Plaintiffs argue that their claim is still live, as the
Department has voluntarily ceased its practice of excluding ABA
treatment.
(Plas. Opp. at pp. 13-16, ECF No. 111).
Plaintiffs’
chief objection to a mootness finding is that “there are no
assurances that this coverage is permanent.”
(Plas. Motion for
Summary Jdgmt. at p. 37, ECF No. 100).
The appellate courts have recognized that a defendant’s
voluntary cessation of a challenged practice may preclude a court
from finding the case moot, as doing so may set the defendant
“free to return to his old ways.”
Friends of the Earth, Inc. v.
Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 189 (2000)
(internal quotations and citations omitted); Rosebrock v. Mathis,
745 F.3d 963, 971 (9th Cir. 2014), cert. denied sub nom., 135 S.
Ct. 1893 (2015).
Voluntary cessation may, however, permit a
conclusion that a claim is moot when “subsequent events made it
absolutely clear that the allegedly wrongful behavior could not
reasonably be expected to recur.”
Rosebrock, 745 F.3d at 971
(quoting Friends of the Earth, 528 U.S. at 189).
1.
The Department has Changed its Position on
Medicaid Coverage of ABA
The evidence presented shows that in August 2014, the
Department began a reexamination of ABA treatment as a medically
necessary treatment for autism.
29
a.
The Department Began to Take Steps Toward
Finding ABA Treatment as Evidence-Based in
August 2014
In August 2014, the federal Agency for Healthcare Research
and Quality published a report that described ABA as evidencebased and effective.
No. 104-18).
(Ex. 15 of Plas. Amended CSF at p. 9, ECF
The report’s analysis convinced Dr. Fink that there
was sufficient research to support coverage of ABA.
at 159:14-161:8, Ex. 2 of Plas. Amended CSF).
(Fink Depo.
By August 26,
2014, Dr. Fink started plans to articulate a formal Department
policy recognizing ABA treatment. (Aug. 26, 2014 E-Mail from Dr.
Fink, Ex. 17 of Plas. Amended CSF, ECF No. 104-20).
In early December 2014, officials from the Department
drafted a one-page memorandum indicating that health plans should
cover ABA treatment under the EPSDT mandate.
(Ex. 21 of Plas.
Amended CSF at Bates No. DHS 2467, ECF No. 104-24).
Dr. Fink
rejected the draft memorandum, citing the need “to finalize our
guideline[,] which is being issued for consistency and clarity.”
(Id. at Bates No. DHS 2463).
On December 18, 2014, the Department’s Medicaid Medical
Director informed the health plans’ medical directors that
“[p]atients with Autistic Spectrum Disorder can benefit from
Applied Behavior Analysis (ABA) therapy.
We are currently
working on draft guidance regarding ABA and would appreciate any
feedback on your part.”
(Dec. 18, 2014 E-Mail from Dr. Curtis
Toma, Ex. 22 of Plas. Amended CSF, ECF No. 104-25; Fink Depo. at
30
90:15-91:15, Ex. 2 of Plas. Amended CSF).
b.
In January 2015, the Governor of Hawaii’s
Budget Provided for an Increase of the
Department’s Funding for Autism-Related
Services
In January 2015, the Governor of Hawaii proposed an increase
in the Department’s budget for fiscal years 2016 and 2017 by $5.6
million and $5.5 million, respectively.
(Amendments to 2015-2017
Exec. Biennium Budget, Ex. 24 of Plas. Amended CSF, ECF No. 10427).
The budget increase was meant to account for the expected
increase in services for Medicaid recipients with autism,
including ABA treatment.
(Id.; Fink Depo. at 153:14-154:4;
163:12-15, Ex. 2 of Plas. Amended CSF).
c.
On January 13, 2015, the Department Issued a
Formal Memorandum to Medicaid Health Plans
Indicating Support for ABA
On January 13, 2015, the Department issued a memorandum to
Medicaid health plans and service providers suggesting that the
Department viewed ABA treatment favorably.
Citing to the August
2014 report by the Agency for Healthcare Research and Quality,
the memorandum concluded that ABA treatment is effective.
(Ex.
12 of Def. Amended CSF at Bates No. DHS 5852, ECF No. 103-15).
The Department provided general instructions as to how autism
treatment claims may be processed.
The memorandum contained
information regarding appropriate billing codes for autism
treatments.
The memorandum did not request any action to notify
31
patients of the change in the Department’s position.
It stated,
“[w]e will be working with the community to make revisions to
this clarification guidance.”
d.
(Id. at Bates No. DHS 5854).
The Department Published a Subsequent
Superseding Memorandum that Provided Detailed
Information as to how the Health Plans may
Process ABA Treatment Claims
On August 28, 2015, the Department sent a detailed
superseding memorandum to its Medicaid health plans and service
providers.
The memorandum stated that “Hawaii’s [Medicaid]
health plans must comply with the full range of EPSDT duties and
requirements, . . . including ABA [treatment], for children under
21 years of age with [autsim], when based on individualized
determinations of medical necessity.”
CSF at p. 1, ECF No. 103-16).
(Ex. 13 of Def. Amended
The superseding memorandum
included four attachments, which provided extensive detail
regarding how health plans should approach ABA claims.
(Id. at
Attachments A, B, C, D).
e.
The Second Modification of the Department's
Budget
On December 22, 2015, the state Department of Budget and
Finance designated an additional $4.9 million to help the
Department cover autism-related treatments for Medicaid for
fiscal year 2017.
(2017 Exec. Supp. Budget, Ex. 31 of Plas.
Amended CSF, ECF No. 104-34).
32
Defendant has demonstrated that the Department’s internal
discussions, external communications with the Medicaid health
plans, and formal memoranda outlining the Department’s acceptance
of ABA treatment “[make] it absolutely clear that the allegedly
wrongful behavior [cannot] reasonably be expected to recur.”
Rosebrock, 745 F.3d at 971.
The August 2015 memorandum represents a permanent change in
the way the Department views ABA treatment.
White v. Lee, 227
F.3d 1214, 1243 (9th Cir. 2000) (Department of Housing and Urban
Development policy memorandum was sufficient to show that the
agency would not repeat its challenged conduct).
The policy
announced in the memorandum is “broad in scope and unequivocal in
tone,” and addresses Plaintiffs’ claim that the Department
excludes or will exclude ABA treatment from Medicaid coverage.
Rosebrock, 745 F.3d at 971 (internal quotations and citation
omitted).
It has been in place for a significant period of time,
and there is no indication that the Department has considered
reversing its position on ABA treatment.
Id.
Defendant posits
that the Department “has no intention of terminating its coverage
of ABA [treatment] after this lawsuit concludes.” (Def. Reply at
p. 7, ECF No. 117).
The state government currently shows a favorable disposition
towards ABA.
In addition to its allocation of approximately $15
million to pay for Medicaid coverage of autism-related services,
the state government has also mandated private health insurance
plans to cover autism treatments, including ABA.
33
See Haw. Rev.
Stat. § 432:1-614 (effective July 1, 2015).
The Ninth Circuit Court of Appeals has recognized that
“unlike in the case of a private party, we presume the government
is acting in good faith.”
Am. Cargo Transp., Inc. v. United
States, 625 F.3d 1176, 1180 (9th Cir. 2010).
“The mere possibility that a party may suffer future harm is
insufficient to preserve a case or controversy; the threat of
injury must be ‘real and immediate,’ not ‘conjectural’ or
‘hypothetical.’”
Valdivia v. Brown, 956 F.Supp.2d 1125, 1134-35
(E.D. Cal. 2013) (citing City of L.A. v. Lyons, 461 U.S. 95, 102
(1983)).
Plaintiffs seek relief on the basis of present and
continuing harm.
J.E., however, has been receiving full and
uninterrupted treatment by ABA providers since August 2015.
There is no evidence that the Department now excludes Medicaid
coverage of ABA.
The evidence presented establishes that the
Department now has policies and procedures that specifically
address payment for ABA services.
There is no reasonable
likelihood that the Department will exclude ABA from Medicaid
coverage in the future.
B.
No State Plan Amendment is Necessary
Plaintiffs argue that the Department must amend its Medicaid
State Plan, so that the State Plan specifically mentions ABA as a
covered treatment. (Plas. Opp. at pp. 11; 15, ECF No. 111).
Plaintiffs do not point to a provision of the Medicaid Act, or
its accompanying regulations, that require a State Plan to
34
include specific treatments covered by the EPSDT services
mandate.
Defendant, in contrast, has presented a communication
from the Centers for Medicaid and Medicare Services, which stated
that “CMS encourages states not to call out a particular model of
ASD treatment modalities, such as ‘ABA-based therapies’.
We ask
states to use more general terms, such as ‘Intensive Behavioral
Therapies.’” (Ex. 18 of Def. Reply, ECF No. 117-3) (emphasis
added).
On June 29, 2015, the Department submitted a State Plan
Amendment that references Intensive Behavioral Therapy as a
permitted form of treatment for autism.
CSF in Opp., ECF No. 112-12).
(Ex. 10 of Plas. Amended
Plaintiffs have not produced
evidence indicating that a State Plan Amendment referencing ABA
is necessary in this case.
Defendant’s Motion for Summary Judgment seeking a
declaratory judgment that it has always covered medically
necessary autism treatment is DENIED.
Defendant did not create
and implement a policy of covering ABA treatment until August
2015.
Plaintiffs’ claims seeking prospective relief on the basis
that the Department may exclude ABA treatment in the future is
DENIED AS MOOT.
See Get Outdoors II, LLC v. City of Chula Vista,
407 F.Supp.2d 1172, 1180 (S.D. Cal. 2005), aff'd, 254 F. App'x
571 (9th Cir. 2007).
V.
THE DEPARTMENT FAILED TO FULFILL ITS OBLIGATION TO
35
EFFECTIVELY INFORM ELIGIBLE PERSONS OF EPSDT SERVICES
A.
The Participating State Must Inform Persons Eligible
for Early and Periodic Screening, Diagnostic, and
Treatment Services About the EPSDT Program
In addition to providing early and periodic screening,
diagnostic, and treatment (“EPSDT”) services, a participating
state must also ensure that persons eligible to receive EPSDT
services are informed of the EPSDT program.
The Medicaid Act
provides that the state is responsible for “informing all persons
in the State who are under the age of 21 and who have been
determined to be eligible for medical assistance . . . of the
availability of early and periodic screening, diagnostic, and
treatment services . . . and the need for age-appropriate
immunizations against vaccine-preventable diseases[.]”
42 U.S.C.
§ 1396a(a)(43)(A).
The Court previously ruled that 42 U.S.C. § 1983 provides a
private cause of action to enforce a Medicaid recipient’s rights
pursuant to 42 U.S.C. § 1396(a)(43)(A).
(Order Denying
Defendant’s Motion to Dismiss Second Amended Complaint, ECF No.
62); J.E. v. Wong, 125 F.Supp.3d 1099, 1104-08 (D. Haw. 2015).
The statutory mandate demands a proactive approach.
A
participating state “is supposed to seek out eligible individuals
and inform them of the benefits of prevention and the health
services and assistance available.”
Emily Q. v. Bonta, 208
F.Supp.2d 1078, 1095-96, (C.D. Cal. 2001) (internal citation
omitted).
The objective is to provide beneficiaries with enough
36
information to allow them to determine whether they should obtain
EPSDT services.
Tenn. 2001).
John B. v. Menke, 176 F.Supp.2d 786, 802 (M.D.
Compliance with the mandate is measured in terms of
the state’s efforts, not whether a certain number of eligible
beneficiaries actually participate in the EPSDT program.
Fogarty, 366 F.Supp.2d at 1112-13.
The Medicaid Act’s outreach obligation is comprised of three
aspects: form, content, and frequency.
1.
Form
Federal regulations require participating states to use “a
combination of written and oral methods designed to inform
effectively all EPSDT eligible individuals (or their families)
about the EPSDT program.”
42 C.F.R. § 441.56(a)(1).
Examples of
methods that may provide effective outreach include mailed
notices, public service announcements, public presentations, and
community advocacy that addresses the target population.
See
Memisovski ex rel. Memisovski v. Maram, No. 92 C-1982, 2004 WL
1878332, at *49-50 (N.D. Ill. Aug. 23, 2004); CMS, State Medicaid
Manual § 5121, pp. 5-7 (Apr. 1990).
The participating state is
afforded “the flexibility to determine how information may be
given most appropriately while assuring that every EPSDT eligible
receives the basic information necessary to gain access to EPSDT
services.”
CMS, State Medicaid Manual at § 5121; Early and
Periodic Screening, Diagnosis, and Treatment (EPSDT) Program, 49
Fed. Reg. 43654-01, *43655 (Oct. 31, 1984).
37
Communications regarding ESPDT services must be presented in
plain terms.
42 C.F.R. § 441.56(a)(2).
To comply with this
obligation, the participating state should routinely assess its
outreach methods, and may have to change its approach to ensure
that the beneficiaries are effectively informed of the EPSDT
program.
Maram, 2004 WL 1878332 at *49-50.
2.
Content
Communications should apprise eligible persons of the nature
of the early and periodic screening, diagnosis, and treatment
(“EPSDT”) program (including the fact that it is cost-free in
most cases), services available under the program, and where and
how they may obtain EPSDT services.
42 C.F.R. §441.56(a)(2)(ii);
Maher v. White, No. CIV. A. 90-4674, 1992 WL 122912, at *6 (E.D.
Pa. June 2, 1992).
Federal law affords some flexibility to state Medicaid
programs with respect to the amount and specificity of
information they must provide to the beneficiaries.
208 F.Supp.2d at 1095.
Emily Q.,
There is no requirement that a state
furnish information regarding every treatment a beneficiary could
receive as a result of an EPSDT screening.
See Id.; Hawkins v.
Comm'r, N.H. Dep't of Health & Human Servs., No. 99-CV-143 JD,
2010 WL 2039821, at *4 (D.N.H. May 19, 2010), aff'd sub nom., 665
F.3d 25 (1st Cir. 2012) (rejecting plaintiffs’ argument that the
state was required to obtain and disseminate information
concerning the number of Medicaid openings in each dental
38
provider’s office).
The state must, however, provide enough
information so that eligible beneficiaries can determine whether
they should obtain EPSDT services.
John B., 176 F.Supp.2d at
802; Early and Periodic Screening, Diagnosis, and Treatment
(EPSDT) Program, 49 Fed. Reg. 43654-01, *43656 (Oct. 31, 1984).
The Medicaid Act requires the participating state to provide
accurate and up-to-date information to EPSDT-eligible persons.
Rosie D. v. Romney, 410 F.Supp.2d 18, 27 (D. Mass. 2006).
In
accordance with the obligation to proactively inform eligible
individuals of EPSDT services, a state Medicaid program has an
affirmative duty to correct out-of-date or incorrect information.
Id.; Health Care For All, Inc. v. Romney, No. CIV.A. 00-10833RWZ,
2005 WL 1660677, at *13 (D. Mass. July 14, 2005) (finding
Massachusetts’ Medicaid program in violation of the Medicaid Act
for providing incorrect and outdated written literature and
customer service information about dental providers).
Where, as here, a Medicaid beneficiary files suit and shows
that there is significant and widespread confusion about the
Medicaid program’s coverage of an EPSDT service, the state is on
notice that its outreach efforts are inadequate.
The lawsuit
demonstrates that there is a clear need for an update to the
contents of the state’s communications.
3.
Frequency
Federal regulations provide clear instructions regarding
when, and how often, a state Medicaid program must disseminate
39
its EPSDT notices.
The state must provide the relevant
information "within 60 days of the individual's initial Medicaid
eligibility determination and in the case of families which have
not utilized EPSDT services, annually thereafter."
42 C.F.R. §
441.56(a)(4).
B.
The Department has Failed to Correct Out-of-Date or
Inaccurate Information it Provided to Medicaid
Beneficiaries
Plaintiffs claim that the Department has failed to fulfill
its obligation to ensure that eligible recipients are informed of
“services available under the EPSDT program and where and how to
obtain those services,” by failing to announce that Applied
Behavior Analysis (“ABA”) treatment is covered by Medicaid.
42
C.F.R. § 441.56(a)(2)(ii).
Defendant demurs by asserting that the Medicaid Act requires
the Department “to simply pass on general information about the
availability of EPSDT as a program to the eligible
beneficiaries.”
(Def. Motion for Summary Jdgmt. at pp. 14-15,
ECF No. 98-1).
The Department cites the logistical complexity
associated with notifying its 300,000 Medicaid beneficiaries, and
asserts that in any case, it has contracted the obligation to
provide information about EPSDT services to various third-party
Medicaid health plans, as permitted under the managed care
system.
(Id. at p. 15).
Defendant presented evidence that in January 2015, J.E.
40
(through his mother) received a “Welcome Kit” from
UnitedHealthcare, a Medicaid health plan.
The Welcome Kit
included general information about EPSDT services, but did not
reference autism-related treatments or provide updates concerning
Medicaid coverage.
(Sealed Ex. 4 of Def. Amended CSF at Bates
Nos. E000582; E000605; E000684-85).
1.
The Department Previously Held an Adverse Position
Towards the Coverage of ABA Treatment
Plaintiffs have submitted evidence establishing that in the
past, the Department publically announced its opposition to the
coverage of ABA.
In January 2013, the State Legislative Reference Bureau
reported that Hawaii’s Medicaid program did not cover ABA, as the
treatment was not considered evidence-based or medically
necessary.
That report’s conclusion was based on an interview
with the Department’s Medicaid administrator, Dr. Fink.
(Ex. 6
of Plas. Amended CSF, ECF No. 104-9; Fink Depo. at 148:16-149:8,
Ex. 2 of Plas. Amended CSF).
In April 2013, the then-director of the Department, Patricia
McManaman (“Director McManaman”), testified before the state
legislature in opposition to a state bill that would require
health insurers to provide coverage for ABA treatment.
Director
McManaman stated that ABA treatment was “not currently covered by
the Hawaii Medicaid program.”
(Ex. 7 of Plas. Amended CSF at p.
1, ECF No. 104-10).
41
In March 2014, Director McManaman again presented testimony
before the state legislature.
She expressed support “for the
intent of the coverage” of ABA, but questioned whether sufficient
evidence to support the effectiveness ABA treatment existed at
that time.
(Ex. 12 of Plas. Amended CSF at pp. 2-3, ECF No. 104-
15).
2.
The Department Did Not Inform Eligible Persons of
its Reversal Concerning the Coverage of ABA
Treatment
The evidence presented establishes that since August 2014,
the Department has stated it has embarked on adopting a policy
that allows for Medicaid coverage of ABA treatment.
(See, e.g.,
Fink Depo. at 159:14-161:8, Ex. 2 of Plas. Amended CSF; Aug. 26,
2014 E-Mail from Dr. Fink, Ex. 17 of Plas. Amended CSF, ECF No.
104-20; Jan. 13, 2015 Department Memo., Ex. 12 of Def. Amended
CSF).
The Department’s policy shift culminated in the August
2015 publication of a detailed memorandum concerning Medicaid
coverage of ABA.
(Ex. 13 of Def. Amended CSF).
The August 2015
memorandum was forwarded to Medicaid health plans.
There is no indication, however, that the Department has
informed persons eligible for EPSDT services about its changed
policy as to ABA.
Plaintiffs have produced evidence indicating
that eligible Medicaid beneficiaries such as J.E. have “not
received pamphlets, information, or heard any public
announcements that the [ABA] treatment is officially covered.”
42
(Egan Decl. at ¶ 46; Erteschik Supp. Decl. at ¶ 18).
The Hawaii
Disability Rights Center reports that its constituents are unsure
as to whether the Medicaid program covers ABA treatment.
(Bassett Decl. at ¶ 11, ECF No. 122-4).
Parents who sought ABA
treatment for their autistic children before the Department
reversed its policy were never informed of the Department’s
changed position.
(Tachera Decl. at ¶¶ 49-52, ECF No. 122-3).
The Department has failed to uphold its duty to correct outof-date or inaccurate information previously disseminated to the
beneficiaries.
Rosie D., 410 F.Supp.2d at 26-27; Health Care For
All, Inc., 2005 WL 1660677 at *13.
Eligible beneficiaries who
reasonably relied on the Department’s prior public statements
that ABA was not covered are still unaware that the Department
has since reversed its position on Medicaid coverage of ABA.
The
Department’s January and August 2015 memoranda, which are
technical and directed towards sophisticated healthcare insurers
and providers, are inadequate forms of notice.
See Pediatric
Specialty Care, Inc. v. Ark. Dep't of Human Servs., 293 F.3d 472,
481 (8th Cir. 2002) (holding that the state may not “shirk its
responsibilities to Medicaid recipients by burying information
about available services in a complex bureaucratic scheme”).
3.
The Department Must Update Eligible Beneficiaries
of its Policy Covering ABA Treatment Pursuant to
the EPSDT Mandate
43
The Department must notify persons eligible for EPSDT
services of the fact that ABA is now recognized as a covered
treatment for autism under the state Medicaid program.
See Emily
Q., 208 F.Supp.2d at 1097 (instructing the state to provide
notice of therapeutic behavioral services to children on
California’s Medicaid program).
The notifications must be
presented in plain terms, 42 C.F.R. § 441.56(a)(1), and provide
sufficient information to allow eligible persons to decide if
they should discuss the applicability of ABA treatment with their
medical care providers.
See John B., 176 F.Supp.2d at 802.
If the Department elects to delegate the task to the thirdparty Medicaid health plans, it still has the responsibility to
ensure that the health plans’ outreach efforts are effective and
comply with federal law.
Id. (“The State must assure that the
contractors provide adequate outreach efforts”).4
The oversight
responsibility demands an aggressive and proactive approach by
the Department.
Katie A., 481 F.3d at 1159; Fogarty, 366
F.Supp.2d at 1112.
Plaintiffs’ Motion for Summary Judgment as to the claim that
the Department did not fulfill its statutory obligation to
4
The Medicaid Act permits participating states to delegate
the provision of medical assistance to third-party entities under
a managed care system. 42 U.S.C. § 1396u–2(a).
44
effectively inform Medicaid beneficiaries of EPSDT services is
GRANTED.
CONCLUSION
Between August 2014 and August 2015, the State of Hawaii,
Department of Human Services (“the Department”) delayed in
instructing Medicaid health plans to cover claims for Applied
Behavior Analysis (“ABA”), despite the Medicaid Act’s early and
periodic screening, diagnostic and treatment (“EPSDT”) mandate,
42 U.S.C. § 1396 et seq., and despite recognizing ABA treatment’s
effectiveness and qualification for Medicaid coverage.
Since August 2015, the Department has had a policy and
practice of covering ABA as a medically necessary treatment under
the state’s Medicaid program.
The Department’s current policy
concerning Medicaid coverage of ABA is permanent.
There is no
reasonable likelihood that the Department will reverse its
position in the future.
An amendment to the Medicaid State Plan to reflect the
Department’s position as to ABA is not required.
The Department of Human Services did not fulfill the
Medicaid Act’s requirement that eligible persons be informed
effectively of EPSDT services.
The Department has a duty to
correct out-of-date or inaccurate information that it previously
disseminated.
The Department must notify persons eligible for
EPSDT services of the fact that ABA is now recognized as a
45
covered treatment for autism under the state Medicaid program.
Plaintiffs J.E., through his parent, Suzanne Egan, and the
Hawaii Disability Rights Center’s Motion for Summary Judgment
(ECF No. 100) is GRANTED, IN PART, AND DENIED, IN PART, as
follows:
(1)
The Court finds that the Department of Human Services
created and implemented a policy to provide coverage
for ABA treatment beginning from August 2015.
Plaintiff’s request for a declaratory ruling stating
that the State of Hawaii, through the Department of
Human Services, violated the Medicaid Act by failing to
cover ABA treatment earlier as retrospective relief is
DENIED pursuant to the State’s sovereign immunity under
Eleventh Amendment of the United States Constitution.
(2)
Plaintiffs’ request for an injunction ordering the
Department to include ABA as a covered treatment under
the state Medicaid program for persons eligible for
EPSDT services is DENIED as moot.
(3)
Plaintiffs’ request for an injunction compelling the
Department to publicize the Medicaid program’s coverage
of ABA treatment is GRANTED.
(4)
Plaintiffs’ request for an injunction instructing the
Department to submit a State Plan Amendment
memorializing a policy that adds ABA treatment as a
46
covered EPSDT benefit is DENIED.
Defendant Rachael Wong, in her official capacity as Director
of the Department of Human Services’ Motion for Summary Judgment
(ECF No. 98) is GRANTED, IN PART, AND DENIED, IN PART, as
follows:
(1)
Defendant’s request for a declaratory judgment that it
has always covered medically necessary autism treatment
under Medicaid law is DENIED.
The Department delayed
creating and implementing a plan to cover ABA treatment
until August 2015.
Plaintiffs’ claims based on alleged present and
continuing harm relating to coverage for ABA treatment
are moot.
J.E. has been receiving full and
uninterrupted treatment by ABA providers since August
2015.
There is no evidence that the Department now
excludes Medicaid coverage of ABA treatment.
There is
no reasonable likelihood that the Department will
exclude ABA from Medicaid coverage in the future.
(2)
Defendant's request for summary judgment as to
Plaintiffs’ claim that the Department failed to inform
persons eligible for EPSDT services about ABA treatment
is DENIED.
(3)
Defendant’s request for a declaratory judgment that it
is not required to submit a State Plan Amendment to the
47
Centers for Medicare and Medicaid Services that
specifically memorializes coverage for ABA treatment is
GRANTED.
Plaintiffs’ Request for Attorneys’ Fees and Costs
Plaintiffs have requested an award of reasonable costs and
attorneys’ fees.
42 U.S.C. § 1988 permits the Court to award
reasonable attorneys' fees to the prevailing party of an action
pursuant to 42 U.S.C. § 1983.
42 U.S.C. § 1988(b); Cal. Ass'n of
Rural Health Clinics v. Douglas, No. 2:10 CV-00759 TLN, 2014 WL
5797154, at *2 (E.D. Cal. Nov. 6, 2014) (determining reasonable
attorneys' fees in Medicaid Act action).
The Court finds that Plaintiffs are the prevailing party in
this action, as they achieved a judicially-sanctioned material
alteration of the legal relationship of the parties through this
Court’s entry of summary judgment compelling the Department to
publicize the Medicaid program's coverage of ABA treatment.
CRST
Van Expedited, Inc. v. E.E.O.C., 136 S. Ct. 1642, 1646 (2016);
Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health &
Human Res., 532 U.S. 598, 604–06 (2001); Richard S. v. Dep't of
Developmental Servs. of State of Cal., 317 F.3d 1080, 1087 (9th
Cir. 2003).
The Court, in the exercise of its broad discretion, grants
Plaintiffs’ request for an award of reasonable costs and
attorneys’ fees.
Plaintiffs are entitled to attorneys’ fees in
48
presenting their entire case, even though there are issues that
are either unresolved or on which Plaintiffs did not prevail.
K.W. v. Armstrong, __ F.Supp.3d __, 2016 WL 1254225, *4-*5 (D.
Idaho Mar. 28, 2016).
In a case of this complexity, the
Plaintiffs’ attorneys’ fees were necessarily incurred in
developing a complete record, presenting the issues as a whole,
seeking various forms of relief, and ultimately succeeding on a
significant issue in the litigation which achieves a benefit for
the Plaintiffs.
Id.; Dowdell v. Imhof, 2016 WL 737908, *2 (E.D.
N.Y. Feb. 23, 2016).
The amount of reasonable attorneys’ fees
//
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49
shall be determined in accordance with District of Hawaii Local
Rule 54.3.
IT IS SO ORDERED.
DATED:
August 12, 2016, Honolulu, Hawaii.
___________________________________
Helen Gillmor
United States District Judge
J.E., through his parent Suzanne Egan, for themselves and on
behalf of a class of those similarly situated; and the Hawaii
Disability Rights Center, in a representative capacity on behalf
of its clients and all others similarly situated v. Rachael Wong,
in her official capacity as Director of the State of Hawaii,
Department of Human Services; Civil No. 14-00399 HG-KJM; ORDER
GRANTING, IN PART, AND DENYING, IN PART, PLAINTIFFS’ MOTION FOR
SUMMARY JUDGMENT (ECF No. 100) and GRANTING, IN PART, AND
DENYING, IN PART, DEFENDANT’S MOTION FOR SUMMARY JUDGMENT (ECF
No. 98).
50
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