E.; et al. vs. McManaman
Filing
62
ORDER DENYING DEFENDANTS MOTION TO DISMISS SECOND AMENDED COMPLAINT (ECF No. 46 ). Signed by JUDGE HELEN GILLMOR on 8/27/2015. (ecs, )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
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Plaintiffs,
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vs.
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RACHAEL WONG, in her official )
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capacity as Director of the
State of Hawai’i, Department of )
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Human Services,
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Defendant.
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J.E., through his parent
SUZANNE EGAN, for themselves
and on behalf of a class of
those similarly situated, and
the HAWAI’I DISABILITY RIGHTS
CENTER, in a representative
capacity on behalf of its
clients and all others
similarly situated,
CIV. NO. 14-00399 HG-BMK
ORDER DENYING DEFENDANT’S MOTION TO DISMISS SECOND AMENDED
COMPLAINT (ECF No. 46)
In this proposed class action lawsuit, Plaintiffs allege
that children and young adults with autism who qualify for
Medicaid are not receiving applied behavioral analysis treatment
("ABA treatment"), which Plaintiffs contend is a medically
necessary treatment under a provision of the Medicaid Act
requiring the provision of “early and periodic screening,
1
diagnostic, and treatment” services ("EPSDT services").
Plaintiffs allege that, for years, the Hawaii Department of Human
Services (“DHS”), has refused to cover the cost for ABA
treatment.
Plaintiffs allege that, while having made some
changes in its official policy, DHS has continued to fail to
provide medically necessary ABA treatment.
The sole issue raised by Defendant’s Motion to Dismiss is
whether Plaintiffs have a private right of action to enforce the
provisions of the Medicaid Act which require that the State
Medicaid agency provide medically necessary services to
“ameliorate defects and physical and mental illnesses and
conditions. . .” 42 U.S.C. § 1396d(r)(5).
The Court finds that Plaintiffs have a private right of
action to enforce their alleged rights to certain EPSDT services.
Defendant’s Motion to Dismiss (ECF No. 46) is DENIED.
PROCEDURAL HISTORY
On September 5, 2014, Plaintiff filed a Complaint for
Declaratory and Injunctive Relief. (ECF No. 1.)
On December 1, 2014, Plaintiff filed an Amended Complaint
for Declaratory and Injunctive Relief.
(ECF No. 8.)
On June 19, 2015, the parties stipulated to the filing of a
Second Amended Complaint. (ECF No. 42.)
On that same date, the Plaintiff filed a Second Amended
2
Complaint. (ECF No. 43, corrected by ECF No. 44.)
On July 6, 2015, the Defendant filed a Motion to Dismiss.
(ECF No. 46.)
On July 22, 2015, Plaintiff filed a Memorandum in Opposition
to Defendant’s Motion to Dismiss. (ECF No. 52.)
On August 5, 2015, Defendant filed a Reply. (ECF No. 57.)
BACKGROUND
Plaintiff J.E., through his parent Suzanne Egan, brings this
case as a proposed class action on behalf of himself and all
Hawaii children under the age of twenty-one with Autism Spectrum
Disorder (“autism”) who receive Medicaid services and have been
recommended for medically necessary applied behavior analysis
treatment (“ABA treatment”).
(SAC ¶ 1.)
Plaintiff J.E. is a
boy, age 6 at the time of the filing of the Second Amended
Complaint (“SAC”), who qualifies for Medicaid’s EPSDT services.
(SAC ¶ 66.)
Plaintiff J.E. has been diagnosed with autism and a
number of medical professionals have recommended ABA treatment
for J.E.’s condition.
(SAC ¶¶ 68, 69.)
Plaintiffs allege that
the ABA treatment is medically necessary and critical at J.E.’s
age to make a behavioral impact on his adult life.
70.)
(SAC ¶¶ 69,
According to the SAC, without ABA treatment J.E. faces
serious harm including regression of his skills and increases in
potentially dangerous behaviors as he approaches adolescence.
(SAC ¶ 70.)
Ms. Egan, Plaintiff J.E.’s mother, depends on
3
Medicaid to cover J.E.'s medical expenses and cannot otherwise
afford the cost of ABA treatment. (SAC ¶ 71.)
Plaintiff Hawaii Disability Rights Center (“HDRC”) is a
Hawaii nonprofit corporation whose purpose is to protect and
advocate for the human, legal, and civil rights of people with
disabilities.
(SAC ¶ 21.)
The HDRC brings this action in its
representative capacity on behalf of all Hawaii children under
the age of twenty-one with Autism Spectrum Disorder (“autism”)
who receive Medicaid services and have been recommended for
medically necessary ABA treatment. (SAC ¶ 20.)
According to the Second Amended Complaint, the Defendant
Hawaii Department of Human Services (“DHS”), of which Defendant
Rachael Wong is the director, does not provide Medicaid coverage
for ABA treatment regardless of medical necessity and, thus,
fails to comply with the Medicaid Act. (SAC ¶ 1.)
Plaintiff alleges that he and the proposed Class are
entitled to a broad scope of “early and periodic screening,
diagnostic, and treatment” services (“EPSDT services”) under the
Medicaid Act, which includes ABA treatment. (SAC ¶ 2.)
Plaintiffs further allege that the cost of these services must be
covered by Medicaid when medically necessary. (Id.)
According to the SAC, ABA treatment is an effective medical
treatment for autism which can lead to the maximum reduction of
physical and mental disabilities for children with autism and
4
bring them to their best possible functional level. (SAC ¶¶
28-29.) Over 1,500 children and young adults under the age of
twenty-one in Hawaii suffer from autism, many of whom are
recipients under Medicaid’s EPSDT services program. (SAC ¶ 30.)
DHS is the State agency responsible for administering
Medicaid in Hawaii.
(SAC ¶ 3.)
The SAC alleges that DHS’s
refusal to provide coverage for ABA treatment for the treatment
of autism is a long-standing policy.
Plaintiffs allege that for
years DHS has refused to cover ABA treatment for recipients of
EPSDT services under Medicaid based on a conclusion that ABA
treatment is never medically necessary.
(SAC ¶¶ 4, 52.)
Plaintiffs allege that DHS planned to formalize its long-standing
policy to exclude ABA treatment from Medicaid coverage beginning
on January 1, 2015. (SAC ¶¶ 3, 4.)
On December 1, 2014, the State and DHS administration
changed and Rachael Wong succeeded Patricia McManaman as the
acting Director of DHS.
(SAC ¶ 5.)
On December 4, 2015,
Defendant informed Plaintiffs that the ABA exclusion would be
removed from Medicaid contracts and not implemented, as planned,
on January 1, 2015. (SAC ¶ 6.)
In light of this change in
circumstances, Plaintiffs withdrew their request for a
preliminary injunction. (ECF No. 23.)
On January 13, 2015, DHS issued a Memorandum to Medicaid
providers and health plans regarding coverage of "intensive
5
behavioral therapy for autism spectrum disorder." (SAC ¶ 8.)
According to the SAC, the Memo revealed DHS’s intent to develop a
program for the coverage of ABA treatment under Medicaid.
Plaintiffs, however, allege that the Memo did not include the
details necessary for DHS to develop and implement a
federally-compliant program. (Id. ¶¶ 8-11.)
Plaintiffs further
allege that DHS has not made any public statements to inform
beneficiaries of this change in policy, nor established any
operational improvements that secure access to, and coverage for,
ABA treatment. (SAC ¶ 52.)
Plaintiffs allege that DHS continues to violate Plaintiffs’
federal right to early and periodic screening, diagnostic and
treatment services (“EPSDT services”) under the Medicaid Act.
(SAC ¶ 72.)
Plaintiffs allege that, after this case was filed,
DHS claimed it changed its policy and has made repeated
representations in the litigation that ABA treatment is now
covered.
Yet, according to Plaintiffs, Plaintiff J.E. still
cannot find a Medicaid provider for his ABA treatment.
12.)
(SAC ¶
Plaintiffs further allege that DHS continues to refuse to
educate the public about the ABA treatment that is now allegedly
available.
(SAC ¶ 9.)
Plaintiffs allege that as Hawaii’s Medicaid agency, DHS is
required to inform recipients of EPSDT services of the "services
available under the EPSDT program and where and how to obtain
6
those services." (SAC ¶ 63 (citing 42 C.F.R. §
441.56(a)(2)(ii)).)
DHS is required to "make available a variety
of individual and group providers qualified and willing to
provide EPSDT services." 42 C.F.R. § 441.61(b).
Despite these
obligations, Plaintiffs allege that no list of DHS-approved ABA
treatment providers exists for recipients of EPSDT services to
seek out ABA treatment. (SAC ¶ 64.)
Plaintiffs also allege that
DHS has failed to amend the State Plan for the Medicaid program
to reflect the availability of ABA treatment as required by 42
C.F.R. § 430.12(c)(1).
(SAC ¶ 65.)
Plaintiffs seek declaratory and injunctive relief against
DHS for its violations of Plaintiffs’ federal rights to EPSDT
services as provided for by the federal Medicaid Act.
Plaintiffs’ Complaint contains one Count - Violation of Civil
Rights (Medicaid Act) pursuant to 42 U.S.C. § 1983.
Plaintiffs
claim that DHS has violated their rights established by certain
provisions of the Medicaid Act by excluding ABA treatment from
available services and failing to establish a program to supply
access to covered services.
(SAC ¶ 88.)
According to the SAC,
DHS’s alleged violations have resulted in inadequate treatment
options for children with autism and insufficient healthcare
coverage in violation of Medicaid. (Id.)
In particular, Plaintiffs cite various provisions of the
Medicaid Act - 42 U.S.C. § 1396a(a)(10)(A); 42 U.S.C. §
7
1396a(a)(43); 42 U.S.C. § 1396d(a)(4)(B); and 42 U.S.C. §
1396d(r)(5).
They allege in the Complaint that under the
Medicaid Act, the full range of EPSDT services are mandatory for
all Medicaid recipients under the age of twenty-one if they are
medically necessary to "ameliorate defects and physical and
mental illnesses and conditions."
(SAC ¶ 85.)
Finally, the SAC includes allegations as to why the DHS’s
Memo issued on January 13, 2015, which generally recognized
coverage for ADA treatment, does not satisfy DHS’s obligations
under the Medicaid Act.
Plaintiffs allege that the Memo is
deficient because it: (a) did not notify Medicaid recipients of
the availability of coverage for ABA treatment for autism under
Medicaid; and (b) does not bring DHS into compliance with the
Medicaid Act.
(SAC ¶ 89.)
STANDARD OF REVIEW
The Court must dismiss a complaint as a matter of law
pursuant to Federal Rule of Civil Procedure 12(b)(6) where it
fails “to state a claim upon which relief can be granted.”
Rule
(8)(a)(2) of the Federal Rules of Civil Procedure requires “a
short and plain statement of the claim showing that the pleader
is entitled to relief.”
When considering a Rule 12(b)(6) motion
to dismiss, the Court must presume all allegations of material
fact to be true and draw all reasonable inferences in favor of
8
the non-moving party.
Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th
Cir. 1998).
Conclusory allegations of law and unwarranted inferences are
insufficient to defeat a motion to dismiss.
Id. at 699.
The
Court need not accept as true allegations that contradict matters
properly subject to judicial notice or allegations contradicting
the exhibits attached to the complaint.
Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001).
In Bell Atl. Corp. v. Twombly, the United States Supreme
Court addressed the pleading standards under the Federal Rules of
Civil Procedure in the anti-trust context.
550 U.S. 544 (2007).
The Supreme Court stated that Rule 8 of the Federal Rules of
Civil Procedure “requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action,” and
that “[f]actual allegations must be enough to raise a right to
relief above the speculative level.”
Id. at 555.
Most recently, in Ashcroft v. Iqbal, the Supreme Court
clarified that the principles announced in Twombly are applicable
in all civil cases.
129 S.Ct. 1937 (2009).
The Court stated
that “the pleading standard Rule 8 announces does not require
‘detailed factual allegations,’ but it demands more than an
unadorned, the-defendant-unlawfully-harmed-me-accusation.”
at 1949 (citing Twombly, 550 U.S. at 555).
Id.
To survive a motion
to dismiss, a complaint must contain sufficient factual matter,
9
accepted as true, to state a claim to relief that is plausible on
its face.
Id. (quoting Twombly, 550 U.S. at 570).
A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.
Twombly, 550 U.S. at 556).
Id. (citing
The plausibility standard is not akin
to a “probability requirement,” but it asks for more than a sheer
possibility that a defendant has acted unlawfully.
Twombly, 550 U.S. at 556).
Id. (quoting
Where a complaint pleads facts that
are “merely consistent with” a defendant’s liability, it “stops
short of the line between possibility and plausibility of
‘entitlement to relief.’”
Id. (quoting Twombly, 550 U.S.
at 557).
The complaint “must contain sufficient allegations of
underlying facts to give fair notice and to enable the opposing
party to defend itself effectively” and “must plausibly suggest
an entitlement to relief, such that it is not unfair to require
the opposing party to be subjected to the expense of discovery
and continued litigation.”
AE ex. rel Hernandez v. Cnty. of
Tulare, 666 F.3d 631, 637 (9th Cir. 2012) (internal quotations
omitted).
ANALYSIS
Defendant has moved to dismiss Plaintiffs’ Second Amended
10
Complaint (“SAC”) on the grounds that Plaintiffs do not have a
private cause of action to enforce their alleged right to applied
behavioral analysis treatment ("ABA treatment") for autism
spectrum disorder (“autism”) as a medically necessary treatment
under Medicaid’s program for “early and periodic screening,
diagnosis and treatment” services (“EPSDT services”).
The Medicaid Program
Medicaid is 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 (1986).
The federal government grants
funds to the states for the provision of health care services,
and the states act as administrators of those funds. (Id.)
States are not required to participate in the Medicaid program,
but if they do they must comply with the requirements of the
Medicaid Act and its regulations.
To qualify for federal
assistance, a state must submit to the Secretary and have
approved a “state 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 CFR §
430.10. “The state plan is required to establish, among other
things, a scheme for reimbursing health care providers for the
medical assistance provided to eligible individuals.” Wilder v.
11
Virginia Hosp. Ass'n, 496 U.S. 498, 502 (1990).
Section 1396a(a)(10)(A) states that the provision of EPSDT
services is mandated to be included in the state plan.1
Section
1396a(a)(43) also mandates that a state plan include the
provision of EPSDT services.2
Thus, the requirement that EPSDT
services be provided has resulted in states adopting
comprehensive child health programs designed to assure the
availability and accessibility of health care resources for the
treatment, correction and amelioration of the unhealthful
conditions of individual Medicaid recipients under the age of
twenty-one.
Relevant Provisions of Medicaid Law
By taking federal funds for its Medicaid program, the State
of Hawaii is required to provide “early and periodic screening,
diagnostic, and treatment” services (“EPSDT services”) to all
1
Section 1396a(a)(10)(A) mandates that a state plan provide
medical assistance, “including at least the care and services
listed in paragraphs (1) through (5), (17), (21) and (28) of
section 1396d(a). . . ” 42 U.S.C. § 1396a(a)(10)(A). Section
1396d(a) defines the term “medical assistance,” and subpart 4(B)
of that subsection includes “early and periodic screening,
diagnostic, and treatment services (as defined in subsection (r)
of this section).” 42 U.S.C. § 1396d(a)(4)(B). Because §
1396a(a)(10)(A) states that a state plan must provide at least
the medical assistance provided in § 1396d(a) (1)-(5), (17),
(21), and (28), EPSDT services must be included in a state plan.
2
Section 1396a(a)(43) mandates that a state plan provide
for screening services, arrange corrective treatment for
disorders uncovered by the screening services, and inform all
eligible recipients of the availability of EPSDT services.
12
Medicaid eligible children under the age of twenty-one.
42 U.S.C. § 1396a(a)(10) & (43)
Section 1396a of Title 42 of the United States Code sets
forth the requirements for state plans for medical assistance
under federal Medicaid law.
Section 1396a(a)(10)(A) provides
that a state plan for medical assistance must make certain care
and services available to Medicaid recipients.
Section
1396a(a)(10)(A) references 42 U.S.C. § 1396d(a)(4)(B).
Under
Section 1396d(a)(4)(B) “early and periodic screening, diagnostic,
and treatment services (as defined in subsection (r) of this
section) for individuals who are eligible under the plan and are
under the age of 21” are required services.
42 U.S.C. § 1396d(r)
sets forth a lengthy definition of the services that qualify as
EPSDT services.
In accordance with the mandate for the provision of EPSDT
services, the State must provide any listed service under the
Medicaid Act even if the service is not in the State's Medicaid
Plan for adults. 42 U.S.C. § 1396d(r)(5)("Such other necessary
healthcare, diagnostic services, treatment, and other measures .
. . to correct or ameliorate defects and physical and mental
illnesses and conditions discovered by the screening services,
whether or not such services are covered under the State plan.").
These services include any of those listed in 42 U.S.C. §
1396d(a)(1)-(29).
13
42 U.S.C. § 1396d(a)(13) pertains to coverage for medically
necessary behavioral health services.
In particular,
1396d(a)(13) requires the State to provide preventative services
such as "other diagnostic, screening, and rehabilitative
services, including . . . (C) any medical or remedial services
(provided in a facility, a home, or other setting) recommended by
a physician or other licensed practitioner of the healing arts
within the scope of their practice under State law, for the
maximum reduction of physical or mental disability and
restoration of an individual to the best possible functional
level." 42 U.S.C. § 1396d(a)(13).
Section 1396a(a)(43) requires that state plans for medical
assistance provide for informing eligible recipients of the
availability of EPSTD services.
That Section also requires a
state to arrange and provide for such screening services when
requested.
Section 1396a(a)(43) provides, in relevant part, that
a state plan for medical assistance must provide for:
(A) informing all persons in the State who are
under the age of 21 and who have been determined to
be eligible for medical assistance including
services described in section 1396d(a)(4)(B) of
this title, of the availability of early and
periodic screening, diagnostic, and treatment
services as described in section 1396d(r) of this
title
and
the
need
for
age-appropriate
immunizations against vaccine-preventable diseases,
(B) providing or arranging for the provision of
such screening services in all cases where they are
requested,
14
(C) arranging for (directly or through referral to
appropriate
agencies,
organizations,
or
individuals) corrective treatment the need for
which is disclosed by such child health screening
services, and
*
*
*
42 U.S.C. § 1396a(a)(43).
Private Cause of Action Pursuant to Section 1983 for State
Medicaid Agency’s Failure to Provide EPSDT Services
The only question before the Court, at this stage, is
whether Medicaid recipients have a private cause of action to
enforce their rights to EPSDT services under 42 U.S.C. § 1983.
42 U.S.C. § 1983 imposes liability on anyone who under color of
state law deprives a person of “rights, privileges, or
immunities” secured by the laws or the Constitution of the United
States. 42 U.S.C. § 1983.
As Plaintiffs point out, a number of courts have recognized
a private cause of action, under Section 1983, to enforce a
Medicaid recipient’s right to EPSDT services and to challenge the
adequacy of a state plan that does not cover a particular
treatment.
In Westside Mothers v. Haveman, 289 F.3d 852 (6th
Cir. 2002), for instance, a welfare rights organization sued
state officials under Section 1983 for systemically depriving
Medicaid recipients of EPSDT services under its Medicaid program.
The Sixth Circuit Court of Appeals held that Medicaid’s EPSDT
15
provisions – the same provisions as at issue here – created a
right privately enforceable against state officials through
Section 1983.
Id. at 863; see Pediatric Specialty Care, Inc. v.
Arkansas Dept. of Human Services, 293 F.3d 472 (8th Cir. 2002)
(recognizing private cause of action under Section 1983 to
enforce right to EPSDT services under Medicaid law); Miller by
Miller v. Whitburn, 10 F.3d 1315, 1319-20 (7th Cir. 1993) (same).
In S.D. ex rel. Dickson v. Hood, 391 F.3d 581 (5th Cir.
2004) the Fifth Circuit Court of Appeals similarly recognized a
private right of action by Medicaid recipients against the state.
The Dickson Court held that the state Medicaid agency violated
the Medicaid Act by denying payment for a prescription for
disposable incontinence underwear that was necessary to
ameliorate a recipient of EPSDT services’ birth defect and
condition of incontinence. Id. at 597, 603 (“the Medicaid Act
confers the right to the health care, treatment, services and
other measures described in § 1396d(a) when necessary for EPSDT
ameliorative purposes upon an identified class.”).
Although the Ninth Circuit Court of Appeals has not
addressed the question of whether there is a private right of
action with regard to the provision of EPSDT services under
Medicaid, it has found a private right of action under 42 U.S.C.
§ 1396a(a)(10)(A) for similarly mandated services.
In Watson v.
Weeks, 436 F.3d 1152, 1155 (9th Cir. 2006), the Ninth Circuit
16
Court of Appeals found that Medicaid-eligible Oregon residents
and an advocacy organization had a private right of action to
enforce the requirement that a state plan, pursuant to 42 U.S.C.
§ 1396a(a)(10)(A), include the provision of home and community
based services as an alternative to Medicaid institutional
nursing facility services.
Plaintiffs’ case is similarly based on Section
1396a(a)(10)(A), requiring that state plans provide certain care
and services to Medicaid recipients.
The Watson Court applied to
found a private cause of action is created by Section
1396a(a)(10)(A).3
The same reasoning applies in the case before
the Court here.
United States Supreme Court’s Decision in Armstrong v.
Exceptional Child Center, Inc.
3
In the Watson case, the Ninth Circuit Court of Appeals
also considered whether another provision of the Medicaid law,
Section 1396a(a)(17), created a private cause of action. Watson,
436 F.3d at 1162. Section 1396a(a)(17) provides that a state
plan for medical assistance “must ... include reasonable
standards (which shall be comparable for all groups ...) for
determining eligibility for and the extent of medical assistance
under this plan.” The Court applied the same analysis as it did
in finding a private cause of action under Section 1396a(a)(10)
and held that Section 1396a(a)(17) did not provide a private
right of action. Id. at 1162-63. The Court found that first
prong of the private right of action test set forth in Blessing
v. Freestone, 520 U.S. 329 (1997) was not satisfied because the
provision did not provide an “unambiguously conferred right.” Id.
at 1162. The Watson decision illustrates, as discussed below,
that whether a private right of action exists under a certain
provision of the Medicaid law is highly dependent upon the
language and nature of the particular provision at issue.
17
Defendant’s Motion to Dismiss hinges on the United States
Supreme Court’s March 2015 decision in Armstrong v. Exceptional
Child Center, Inc., ___ U.S. ___ , 135 S.Ct. 1378 (2015).
In
Armstrong, providers of residential habilitation services to
Medicaid-eligible individuals brought an action against the state
agency running Idaho’s Medicaid program challenging the agency’s
failure to amend existing Medicaid reimbursement rates.
The
providers were seeking to enforce 42 U.S.C. § 1396a(a)(30)(A),
regarding rate reimbursement for Medicaid services providers, and
brought their action under the Supremacy Clause of the United
States Constitution.
Id. at 1383.
The district court found that
the providers had an implied cause of action under the Supremacy
Clause to seek injunctive relief, and the Ninth Circuit Court of
Appeals affirmed.
Id.
The United States Supreme Court reversed,
recognizing that the Supremacy Clause is not the source of any
federal rights and holding that it “certainly does not create a
cause of action.” Id.
The Court similarly found that the
providers could not proceed against the state in equity. Id. at
1385.
Finally, in Part IV of its decision, the Court considered
whether the providers had a cause of action under the Medicaid
Act itself.
Part IV was not joined by a majority of the Court
and is a plurality opinion.
It is also dicta.
The providers had
not argued before the lower courts that they had a private right
18
of action under the Medicaid Act itself.
Id. at 1397 (noting
that the providers had not argued that they had a private right
of action under the Medicaid Act and “rightly so.”)
Id. at 1397.
In a few paragraphs, the Court rejected the notion that the
providers could have a private right of action under Section
1396a(a)(30)(A).
The Court explained that Section
1396a(a)(30)(A), which pertains to the reimbursement rates set by
the state for providers, lacked “the sort of rights-creating
language needed to imply a private right of action.” Id. at 1387.
The Court then discussed whether the providers were intended
beneficiaries under the federal-state Medicaid agreement. Id.
Because of the nature of the providers’ cause of action, the
Court did not apply the framework for evaluating whether a
statute creates a privately enforceable right under Section 1983
as set forth in Blessing v. Freestone, 520 U.S. 329 (1997).
Under Blessing, a statute will be found to create an
enforceable right if, after a particularized inquiry, the court
concludes: (1) the statutory section was intended to benefit the
putative plaintiff, (2) it sets a binding obligation on a
government unit, rather than merely expressing a congressional
preference, and (3) the interests the plaintiff asserts are not
so “‘vague and amorphous' that [their] enforcement would strain
judicial competence.”
Id. at 341 (quotation omitted).
It was
under this framework that the Fifth, Sixth, Seventh, Eighth and
19
Ninth Circuit Courts of Appeals found a private cause of action,
pursuant to Section 1983, for Medicaid recipients to enforce the
rights conferred by Medicaid law for EPSTD services.
Along these lines, Plaintiffs argue that their claim is
distinguishable from those analyzed by Armstrong in three
important ways.
First, Plaintiffs are Medicaid beneficiaries
entitled to EPSDT services, not Medicaid providers.
Plaintiffs’ suit relies on 42 U.S.C. § 1983.
Second,
Plaintiff does not
rely on the Supremacy Clause or an equity theory.
Third,
Plaintiffs sue for EPSDT services pursuant to individual rights
conferred by 42 U.S.C. §§ 1396a(a)(10) and (43), not for higher
provider reimbursement rates based on the federal agency
directive in 42 U.S.C. § 1396a(a)(30). (Opposition, ECF No. 52,
at p. 11.)
The Court agrees and finds that the Armstrong decision is
distinguishable from the present case and does not dictate that
Plaintiffs are deprived of a private right of action to enforce
their rights to EPSDT services.
The Armstrong Court’s discussion
regarding the lack of a private cause of action to enforce
Section 1396a(a)(30) was not a departure from existing precedent.
The Ninth Circuit Court of Appeals in Sanchez v. Johnson, 416
F.3d 1051 (9th Cir. 2005) reached the same conclusion ten years
earlier.
In finding that there was no private cause of action
under Section 1396a(a)(30) of the Medicaid Act, the Sanchez Court
20
reasoned that "[t]he text and structure of § 30(A) do not
persuade us that Congress has, with a clear voice, intended to
create an individual right that either Medicaid recipients or
providers would be able to enforce under § 1983." Sanchez, 416
F.3d at 1062.
The Sanchez Court pointed out the difference
between Section 1396a(a)(30) of the Medicaid Act and Section
1396a(a)(10).
The opinion states that a finding that Section
1396a(a)(30) does not give rise to a private cause of action did
not mean that there was no private cause of action under Section
1396a(a)(10):
Although 42 U.S.C. § 1396a(a) sets out a
comprehensive list of requirements that a state
plan must meet, it does not describe every
requirement
in
the
same
language.
Some
requirements, such as . . . § 10, focus on
individual recipients, while others are concerned
with the procedural administration of the Medicaid
Act by the States and only refer to recipients, if
at all, in the aggregate. Section 30(A) is one of
the latter provisions . . . .
Sanchez, 416 F.3d at 1062.
The following year, the Watson Court decision is consistent
with the holding in Sanchez.
In Watson, 436 F.3d at 1159-60, the
Ninth Circuit Court of Appeals recognized that a Medicaid
recipient has a private cause of action to enforce his or her
right to certain treatments or services under Section
1396a(a)(10) pursuant to Section 1983.
In its reply, the Department of Human Services (“DHS”)
21
argues that applied behavioral analysis (“ABA”) treatment is not
specifically provided as an enumerated service under the
definition of “early and periodic screening, diagnostic, and
treatment” (“EPSTD”) services, but that if ABA is actually
prescribed as medically necessary it will be covered.
The
question of whether ABA treatment is, in fact, a medically
necessary treatment for children and young adults with autism,
for which DHS is failing to provide coverage, is not before the
Court on DHS’s Motion to Dismiss.
The Court holds that
Plaintiffs have a private cause of action under the Medicaid Act
pursuant to which they may make these allegations.
CONCLUSION
Defendant’s Motion to Dismiss (ECF No. 46) is DENIED.
IT IS SO ORDERED.
Dated: August 27, 2015, Honolulu, Hawaii.
/s/ Helen Gillmor
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 et al. v. Rachael Wong;
14cv00399 HG-BMK; ORDER DENYING DEFENDANT’S MOTION TO DISMISS
SECOND AMENDED COMPLAINT (ECF No. 46)
22
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