Doctors Nursing and Rehabilitation Center, LLC et al v. Norwood
Filing
69
MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 9/1/2017. Mailed notice. (mgh, )
`
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
Doctors Nursing and
Rehabilitation Center, LLC, et
al.,
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Plaintiffs,
v.
Felicia F. Norwood, in her
official capacity as the
Director of Illinois Department
of Healthcare and Family
Services,
Defendant,
and related cases.
No.
No.
No.
No.
No.
No.
No.
No.
1:16-cv-9837
1:16-cv-9842
1:16-cv-9922
1:16-cv-10255
1:16-cv-10614
1:17-cv-104
1:17-cv-640
1:17-cv-1750
Memorandum Opinion and Order
In these related actions, several healthcare providers and
their patients sue Felicia Norwood, Director of the Illinois
Department of Healthcare and Family Services (“HFS”), in her
official capacity, seeking declaratory and injunctive relief for
violations
of
Title
XIX
of
the
Social
Security
Act
(the
“Medicaid Act”) and its implementing regulations, the Americans
with Disabilities Act (“ADA”), the Rehabilitation Act, and the
Fourteenth
Amendment.
Before
me
is
plaintiffs’
motion
for
a
preliminary injunction requiring defendant Norwood to process
Medicaid
applications
and
to
provide
Medicaid
benefits
with
reasonable promptness in accordance with the Medicaid Act and
timeliness standards set by federal regulations. [Case No. 1:16cv-9837, ECF. No. 14]. For the reasons that follow, I grant
plaintiffs’ motion to the extent described below.
I.
Medicaid
healthcare
program,
If
as
an
program
individuals.
(1990).
is
for
Wilder
a
optional,
v.
state
Illinois
providing
Va.
medical
Hosp.
elects
has,
cooperative
to
it
assistance
Ass’n.,
496
participate
must
federal-state
create
a
in
to
U.S.
498,
the
state
needy
502
Medicaid
plan
that
complies with the Medicaid Act and federal regulations. Id. In
Illinois, the Department of Healthcare and Family Services is
responsible
Medical
for
supervising
Assistance
program.
and
305
administering
ILCS
§§
the
5/2-12(3),
state’s
5/5-1
et
seq.; see 42 U.S.C. § 1396a(a)(5).
These
related
cases
concern
Illinois’s
provision
of
Medicaid benefits and the timeliness requirements for approving
and providing such benefits. Plaintiffs in these matters are
residents (“patient plaintiffs”) of twenty-four hour, long-term
nursing care facilities who seek long-term care benefits under
Illinois’s
state
Medicaid
plan
and
the
healthcare
providers
(“facilities” or “institutional plaintiffs”) that operate these
nursing facilities. The patient plaintiffs fall into two major
2
categories: (1) those who are awaiting Medicaid or long-term
care
eligibility
determinations,
and
(2)
those
who,
despite
receiving approval, are still awaiting long-term care benefits.
Plaintiffs bring suit against Felicia Norwood, the Director
of HFS, in her official capacity, because, they allege, she has
failed
to
provide
process
Medicaid
plaintiffs’
benefits
Medicaid
with
applications
to
promptness,
reasonable
and
as
required by the Medicaid Act and its implementing regulations.
According to plaintiffs, HFS violates the regulatory timeliness
requirements whenever it takes longer than ninety days to make a
benefit eligibility determination and whenever it takes longer
than twelve months to process and furnish payment for Medicaid
benefits.
Norwood’s
Plaintiffs
inaction
Rehabilitation
Act,
additionally
violates
the
and
Equal
the
assert
ADA,
that
Section
Protection
defendant
504
of
Clause
the
of
the
Fourteenth Amendment.
Plaintiffs
relief
to
ultimately
compel
seek
defendant’s
injunctive
future
and
compliance
declaratory
with
the
regulatory time limits for determining applicant eligibility and
processing
claims.
In
the
interim,
they
seek
preliminary
injunctive relief because, they assert, the patient plaintiffs
require the twenty-four hour nursing care they are currently
receiving, have no means of paying for it, and are now in danger
of losing it. See, e.g., Reis Decl. ¶¶ 3-5, 9 [Doc. No. 35-3];
3
Hart Decl. ¶¶ 3-5, 9 [Doc. No. 35-5]; Crowder Decl. ¶¶ 3-5, 9
[Doc.
No.
35-6].
They
seek
preliminary
relief
to
prevent
irreparable harm to these individuals.
On August 22 and 23, 2017, the parties presented evidence
in
a
hearing
Plaintiffs
president
on
called
of
plaintiffs’
five
Carlyle
preliminary
witnesses:
Health
injunction
Christopher
Center
and
St.
Ries,
motion.
the
vice
Vincent’s
Home
(“Carlyle”), who gave testimony concerning five of the patient
plaintiffs
office
in
Case
manager
of
No.
16-cv-9842;
Regency
Care
of
Donna
Passini,
Morris
business
(“Morris”),
who
testified about fifteen patient plaintiffs in Case No. 17-cv640; Lisa Gordon, collections manager for Heritage Enterprises
(“Heritage”),
named
who
plaintiffs
presented
evidence
in
No.
Case
regarding
16-cv-10614;1
twelve
Gail
of
the
McGinnis,
collection director for Petersen Healthcare (“Petersen”), who
gave testimony concerning thirty-one Petersen residents who are
1
In a June 23, 2017, order, I certified a class of residents in
Case No. 16-cv-10614 according to the following definition:
All disabled and/or medically needy persons who
require long term care at a skilled nursing facility
and are residing at a skilled nursing facility managed
and operated by Heritage Operations Group, LLC, who
are eligible for Medicaid and who submitted Medicaid
applications and either 1) have not received a
determination on their application by Defendant within
forty-five days of submitting their application, or 2)
who were approved for Medicaid benefits, and who have
not received payment for their nursing care within
twelve months of the date that benefits were approved
to begin.
4
plaintiffs in Case No. 16-cv-9922; and Kayla Klauser, director
of accounting at Sunset Home (“Sunset”), who presented evidence
concerning
three
patient
plaintiffs
in
Case
No.
17-cv-104.2
Together, plaintiffs’ witnesses presented testimony and hundreds
of
pages
of
documents
in
support
of
sixty-six
patient
plaintiffs’ claims.
Defendant called two witnesses. HFS’s Manager of Policy and
Rules
for
the
Bureau
of
Long-Term
Care
Janene
Brickey
gave
testimony about a chart she compiled (Defendant’s Exhibit 1)
with data she gathered from the state’s Medicaid databases about
the patient plaintiffs’ application statuses. Defendant’s other
witness, Mark McCurdy, the Acting Bureau Chief of the Bureau of
Long-Term
Care,
(Defendant’s
discussed
Exhibit
2),
another
which
demonstrative
compiles
the
exhibit
state’s
data
concerning long-term benefit claims it has paid.3 Although these
witnesses both gave testimony concerning information they had
personally gathered from the state’s electronic databases, both
2
Plaintiffs did not call witnesses or present evidence
concerning three of the captioned cases: Doctors Nursing &
Rehab. Ctr., Case No. 16-cv-9837, Lexington Health Care Ctr.,
Case No. 16-cv-10255, and Generations Rock Island, Case. No. 17cv-1750. I will assume that this is because plaintiffs no longer
seek preliminary injunctive relief in these matters.
3
Defendant moved to enter both demonstrative exhibits into
evidence pursuant to F.R.E. 1006. Although plaintiffs’ counsel
had not been afforded an opportunity to examine the underlying
data, she explained that she had no reason to believe the
exhibits inaccurately represented the information in the state’s
databases. Instead, she argued the witnesses had no personal
knowledge of the underlying facts of each applicant’s case.
5
admitted that they could not speak from personal knowledge as to
any
particular
plaintiff.
They
could
only
speak
to
the
information contained in the state’s databases, not how that
information arrived there.
Of the patient plaintiffs discussed at hearing, plaintiffs
assert that twenty-one4 of them have not received Medicaid or
long-term care eligibility determinations despite applying for
benefits more than ninety days ago. To support these claims,
plaintiffs offered the testimony described above, and, in most
cases,
documentation
showing
application
dates,
information
requests, and any other status updates plaintiffs received. At
the hearing, defendant disputed the status of many of these
applications and offered explanations for the delay with respect
to the others. She identified two applicants – A. Hanks and L.
DeChausse – as deceased.5 She also indicated that five applicants
– C. Gleason, D. Katner, C. Marcoux, D. Cargnoni, and H. Mahair
– were recently approved. The other fifteen patient plaintiffs
in
this
group
have
either
had
4
their
applications
denied,6
Plaintiffs actually presented evidence regarding twenty-two
applicants but then informed the court that they received a
denial notice for R. Lake’s application on August 23, 2017.
5
Plaintiffs’ evidence indicates that F.J. Rush is also
deceased.
6
These individuals are B. Ostermueller, R. Lynes, F. Stroud, B.
Noel, A. Martinez, J. Watson, S. Vogel, R. Gilbertson, and C.
Doss.
6
canceled,7 or sent to HFS’s Office of Inspector General (“OIG”)
for
review,8
according
contend
that
several
purported
received,
several
that
at
to
defendant.
denied
denial
or
least
one
Conversely,
applications
were
cancellation
applicant
reopened,
notices
had
plaintiffs
were
multiple
that
never
pending
applications, and that regulatory time limits were not reset by
OIG’s involvement.
The remaining forty-four patient plaintiffs discussed at
the evidentiary hearing are those who, plaintiffs argue, have
not had their claims for long-term care benefits promptly paid
in the twelve months permitted by regulations. Based on the
evidence presented at hearing, it appears that at least eleven,
and perhaps thirteen, of these plaintiffs are now deceased.9
Another eight of the individual plaintiffs identified do not
have any pending claims for services older than twelve months.10
Excluding these groups, plaintiffs have presented testimony and
documents showing that at least twenty-seven patient plaintiffs
in this category have been approved for Medicaid full coverage
7
The three purportedly canceled applications were for D. James,
M. Urban, and B. Lawrence.
8
According to defendant, OIG is currently reviewing applications
for G. Ostermueller at Carlyle and F.J. Rush at Heritage.
9
The deceased plaintiffs are S. York, E. Kuchar, D. Pogliano, P.
Schmidt, E. Buckley, D. Rose, D. Frazier, E. Elliott, R.
Biggins, W. Kaufman, and S. Wrone. Plaintiffs’ hearing documents
also suggest that R. Hess and R. McGrew may have also passed
away.
10
These individuals are A. Blunt, D. Burkhart, H Choudin, K.
Reitz, P. Fawbush, R. Brinkley, O. Ishmael, and W. Suckrach.
7
or long-term care benefits or both, and have unpaid claims for
service
periods
plaintiffs’
approval
more
than
evidence,
notices
more
some
than
twelve
of
months
these
twelve
old.
According
individuals
months
ago
and
to
received
are
still
awaiting payment for services predating approval.11 Others have
received
approval
notices
more
recently,
but
still
have
unprocessed claims for service periods more than a year old.12
In response, defendant elicited testimony concerning the
differences
between
the
Medicaid
eligibility
process
and
the
process for approving an applicant’s long-term care benefits.
Defendant
also
offered
testimony
about
the
changes
in
claim
processing that have taken place in the last year. According to
Mr. McCurdy, claims for long-term care services performed before
December 1, 2016, cannot be paid until a beneficiary is approved
and added to a facility’s roster. Hr’g Tr. vol. 2, 50-54 (Aug.
23,
2017).
For
these
pre-December
2016
services,
HFS
is
responsible for generating the actual claims for payment based
on the information it has in its system. Id. HFS then processes
these claims and sends them to the Illinois Comptroller’s office
for payment. Claims for benefits after December 1, 2016, on the
11
This group includes D. Virkler, N. McKinzie, D. Simpson, M.
Steffan, W. Toufexis, W. Taylor, D. Anderson, M. Grasseschi, J.
Icenogle, V. Lane, L. Morgan, A. Turner, A. Winters, C. MerryAzimi, E. Smith, and R. Strickle-Solin.
12
These eleven individuals are R. Dragon, J. Adkins, D. Hall, B.
Kroll, S. Case, R. Pursell, T. Mercier, C. Mondy, M. VanWinkle,
L. Koehler, and G. Fathauer.
8
other hand, are left to healthcare providers to generate and
submit
to
HFS.
Id.
Finally,
through
Mr.
McCurdy,
defendant
provided some information in Defendant’s Exhibit 2 concerning
payments that have been made for certain members of this group
awaiting
benefits.
Comparing
this
information
with
the
plaintiffs’ evidence, however, it appears there are still claims
pending for most of these individuals.
II.
To
determine
whether
a
moving
party
is
entitled
to
a
preliminary injunction, courts evaluate whether the party has
demonstrated: (1) a likelihood of success on the merits; (2) a
likelihood that he will “suffer irreparable harm in the absence
of preliminary relief”; (3) “that the balance of the equities
tips in his favor”; and (4) "that an injunction is in the public
interest.” Winter v. Nat’l Res. Def. Council, 555 U.S. 7, 20
(2008); see also Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6,
11-12
(7th
Cir.
1992).
A
court
deciding
whether
to
grant
a
preliminary injunction “weighs all four factors ... seeking at
all
times
Labs.,
971
to
minimize
F.2d
at
12
the
costs
(internal
of
being
quotation
mistaken.”
marks
Abbott
omitted).
Because these considerations are “interdependent,” a court may
determine that a greater showing as to one factor may lessen the
showing needed for another. Judge v. Quinn, 612 F.3d 537, 546
(7th Cir. 2010).
9
In the instant actions, plaintiffs move for a preliminary
injunction
related
addressing
cases
and
a
individual
class
of
patient
plaintiffs
approximately
in
three
seven
hundred
patients in a related class action. Because the claims in these
cases are the same, I will examine the preliminary injunction
factors for both categories of claims – pending applications and
pending payments – generally.
A. Likelihood of Success on the Merits
To show that preliminary injunctive relief is appropriate,
plaintiffs must demonstrate that they are likely to succeed on
the merits of their claims. The threshold for this requirement
is low. D.U. v. Rhoades, 825 F.3d 331, 338 (7th Cir. 2016)
(citing Michigan v. U.S. Army Corps of Eng’rs, 667 F.3d 765, 782
(7th Cir. 2011)). To satisfy their burden, plaintiffs “must show
that [they have] a ‘better than negligible’ chance of success on
the merits of at least one of [their] claims.” Girl Scouts of
Manitou Council, Inc. v. Girl Scouts of U.S. of Am., Inc., 549
F.3d 1079, 1096 (7th Cir. 2008) (quoting Ty, Inc. v. Jones Grp.,
Inc., 237 F.3d 891, 897 (7th Cir. 2001)). If plaintiffs can show
that
they
have
at
least
“some
likelihood
of
success
on
the
merits,” they will meet this threshold requirement. Stuller, Inc.
v. Steak N Shake Enterprises, Inc., 695 F.3d 676, 678 (7th Cir.
2012).
10
Plaintiffs of course argue that they are likely to succeed
on all of their claims, but, for present purposes, I assess the
likelihood that they will succeed on their section 1983 claims
alleging violations of the Medicaid Act’s reasonable promptness
requirement,
lawsuits.
the
cause
According
to
of
action
plaintiffs,
at
the
center
defendant
has
of
these
violated
42
U.S.C. § 1396a(a)(8), which requires state Medicaid agencies to
“provide that all individuals wishing to make application for
medical assistance under the plan shall have opportunity to do
so, and that such assistance shall be furnished with reasonable
promptness to all eligible individuals.” Plaintiffs argue — and
I agree — that section 1396a(a)(8) creates enforceable rights
that may be pursued through section 1983 actions. See Mem. Op. &
Order [Doc. No. 50] at 17 (June 7, 2017). To prevail on these
section
1983
claims,
plaintiffs
will
need
to
prove
that
defendant Norwood, in her capacity as HFS Director, has deprived
them of their rights to reasonably prompt Medicaid eligibility
determinations and benefits pursuant to section 1396a(a)(8).
Defining
“reasonable
promptness”
is
key
to
determining
whether section 1396a(a)(8) has been violated. The accompanying
federal
regulations
determination
provide
context,
the
some
clarity.
regulations
In
the
require
eligibility
that
state
Medicaid agencies establish certain timeliness and performance
standards for processing Medicaid applications. See 42 C.F.R. §
11
435.912. These mandatory timeliness standards permit agencies no
more than ninety days to determine the eligibility of applicants
who apply for Medicaid on the basis of disability and forty-five
days to determine the eligibility of all other applicants. 42
C.F.R. § 435.912(c)(3). Because all plaintiffs in these cases
applied based on disability, only the ninety-day requirement is
involved. Hr’g Tr., vol. 1, at 6 (Aug. 22, 2017). According to
the regulations, these timeliness requirements “cover the period
from the date of application ... to the date the agency notifies
the applicant of its decision.” 42 C.F.R. § 435.912(c)(1). In
other words, after a Medicaid applicant submits an application,
a state agency may take no more than ninety days to notify the
applicant,
agency’s
reasonable
or
the
applicant’s
eligibility
promptness
recipient,13
designated
determination
requirement.14
13
in
order
The
to
only
of
meet
the
the
permissible
Pursuant to the Medicaid regulations, an applicant may
“designate an individual or organization to act responsibly on
[his] behalf in assisting with [his] application and renewal of
eligibility and other ongoing communications with the agency.”
42 C.F.R. § 435.923(a)(1). Applicants may authorize their
representatives to perform various Medicaid-related tasks,
including receiving copies of notices and other communications
from the state agency. 42 C.F.R. § 435.923(b)(3). Pursuant to 42
C.F.R. § 435.917, state agencies “must provide all applicants
and beneficiaries with timely and adequate written notice of any
decision affecting their eligibility, including an approval,
denial, termination or suspension of eligibility, or a denial or
change in benefits and services.”
14
At hearing, the parties disagreed about the state agency and
the applicant’s respective burdens regarding the collection of
information needed to determine eligibility. The federal
12
exceptions
to
these
timeliness
standards
are
for
“unusual
circumstances,” which include instances where an agency cannot
reach
a
determination
because
an
applicant
or
examining
physician fails to take a required action, or where there is an
emergency “beyond the agency’s control.” 42 C.F.R. § 435.912(e).
Defendant argues that these timeliness standards apply only
to initial determinations of Medicaid eligibility and not to
decisions
regarding
the
provision
of
specific
benefits
under
state healthcare programs like long-term care benefits. Despite
defendant’s contentions, the regulations do not appear to carry
this limitation. According to 42 C.F.R. § 435.911, a regulatory
section
implementing
42
U.S.C.
§
1396a(a)(8)
as
well
as
§
1396a(a)(10)(A), which requires the provision of skilled nursing
services
to
eligible
individuals,
Medicaid
agencies
must
“promptly and without undue delay consistent with [the section
435.912] timeliness standards ... furnish Medicaid to eligible
regulations permit the state agency to “accept attestation of
information needed to determine the eligibility of an individual
for
Medicaid
...
without
requiring
further
information
(including documentation) from the individual.” 42 C.F.R. §
435.945(a). State Medicaid agencies are required to request
financial information from other state agencies and to check
federal electronic databases for required information. 42 C.F.R.
§§ 435.948-435.949, 435.956. The agency must promptly evaluate
information gathered to determine its effect on eligibility. 42
C.F.R. § 435.952(a). The agency must not require an individual
to provide additional information or documentation “unless
information needed by the agency ... cannot be obtained
electronically or the information obtained electronically is not
reasonably compatible.” 42 C.F.R. § 435.952(c).
13
individuals” who submit applications for benefits. 42 C.F.R. §
435.911(c)(1); see also 42 C.F.R. § 435.930 (“The agency must—
(a) Furnish Medicaid promptly to beneficiaries without any delay
caused by the agency's administrative procedures; (b) Continue
to furnish Medicaid regularly to all eligible individuals until
they are found to be ineligible....”). If Medicaid benefits must
be promptly furnished to eligible individuals consistent with
the timeliness standards, then it stands to reason that state
agencies
must
also
render
long-term
care
eligibility
determinations within ninety days of the date of application for
these benefits.
With respect to the provision of benefits, the regulations
also impose requirements for the timely processing of Medicaid
claims for payment. Pursuant to 42 C.F.R. § 447.45(d),15 state
agencies must pay all Medicaid claims within twelve months of
the
date
of
receipt.
Plaintiffs
contend
that,
under
this
regulation, any unpaid claims for service dates more than twelve
15
It should be noted that 42 C.F.R. § 447.45 implements 42
U.S.C. § 1396a(a)(37), a section of the Medicaid Act not at
issue in this lawsuit. These provisions focus on processing
provider claims, rather than providing services to individuals.
However, because 42 U.S.C. § 1396a(a)(8) requires that “medical
assistance” be “furnished with reasonable promptness” and 42
U.S.C. § 1396d(a) defines “medical assistance” as “payment of
part or all of the cost of the following care and services or
the care and services themselves, or both,” I will analyze
section 447.45’s timely processing requirements, which concern
payments for medical assistance, as part of HFS’s reasonable
promptness obligation. Defendant has not disputed section
447.45’s applicability.
14
months
old
Defendant
violate
the
conversely
reasonable
argues
that
promptness
the
agency’s
requirement.
payment
window
does not expire until twelve months after a claim is received.
To
this
system,
point,
only
plaintiffs
HFS
can
respond
generate
that,
claims
under
for
HFS’s
services
payment
predating
December 1, 2016. Starting the twelve-month payment window from
the date HFS receives a claim that only HFS can generate would
permit the agency to indefinitely delay the delivery of Medicaid
benefits,
plaintiffs
argue.
Because
providers
are
unable
to
submit actual claims for long-term care services before December
1,
2016,
it
is
appropriate
to
count
the
claim
processing
timeline not from the date the agency generates a claim, but
from the date it receives notice of the request for payment.16
This
way,
“any
delay
caused
by
the
agency's
administrative
procedures” will be resolved against the defendant, rather than
beneficiaries.
42
C.F.R.
§
912.930.
Thus,
for
purposes
of
determining which patient plaintiffs have claims that have been
pending for more than twelve months, I will consider the date of
services
plaintiff
to
be
had
the
an
operative
date
application
for
so
long
long-term
as
the
care
patient
services
approved or pending for more than ninety days at the time of
16
The federal regulations clearly contemplate a process where
providers are able to submit claims for payment. See 42 C.F.R.
§447.45(d)(1) (imposing time limits on providers submitting
claims); 42 C.F.R. §447.45(d)(4)-(5) (calculating agency payment
time limits from “the date the agency receives the claim”).
15
those services that would have put the agency on notice of the
claim.
In
sum,
a
violation
of
section
1396a(a)(8)’s
reasonable
promptness requirements may be shown when an application for
Medicaid or long-term care eligibility has been pending for more
than
ninety
days
or
when
a
claim
for
payment
for
medical
assistance goes unpaid for more than twelve months after the
agency has notice, as described above. If any of the individual
plaintiffs in these cases can show either type of delay, then
they will pass the threshold inquiry because they have “a better
than negligible chance” of succeeding on at least one of their
claims. Girl Scouts, 549 F.3d at 1096. Likewise, if the named
plaintiffs in Heritage can make either of these showings, it may
be appropriate to preliminarily enjoin defendant’s conduct as to
the Heritage class.
At
hearing,
plaintiffs
provided
enough
evidence
to
demonstrate that they have at least some likelihood of success
on these section 1983 claims for certain plaintiffs. I begin
with a few examples from the group of patient plaintiffs still
awaiting
eligibility
determinations.
G.
Ostermueller
is
a
plaintiff in Carlyle Healthcare Ctr., 16-cv-9842. According to
plaintiffs’ evidence, Mr. Ostermueller applied for benefits on
March 25, 2016. As of the hearing on August 22, 2017, he had not
received an eligibility determination. In other words, he has
16
waited seventeen months for a determination. This is far beyond
the ninety days permitted by 42 C.F.R. § 435.912. Defendant
submits that Mr. Ostermueller’s case is pending with the OIG,
but nothing in the regulations authorizes an extension of the
eligibility
determination
time
limits
for
OIG
review.
The
defendants have not submitted evidence of any delay caused by
plaintiffs that would qualify for an exception under 42 C.F.R. §
435.912(e).
Mr.
Ostermueller
therefore
has
demonstrated
some
likelihood of success on his claim.17
Other plaintiffs with pending applications include D. Jones
from Sunset Home, 17-cv-104, and J. Watson from Morris, 17-cv640. Plaintiffs presented evidence at hearing that Ms. Jones
applied
for
Medicaid
on
June
2,
2016,
and
that
Mr.
Watson
applied a month later on July 6, 2016. Plaintiffs’ witnesses
testified that neither Jones nor Watson had received eligibility
determination
Defendant’s
notices
as
demonstrative
of
the
exhibits
August
22,
indicate
2017,
that
Ms.
hearing.
Jones’s
application was canceled for some unknown reason and that Mr.
Watson’s
application
was
denied
17
as
of
November
2016.
The
The one other application identified as pending with the OIG
is for named plaintiff F.J. Rush from the Heritage class.
Although it was not addressed at hearing, it appears from
plaintiffs’ documents that Ms. Rush has been deceased since May
2017. Preliminary injunctive relief would thus be inappropriate
for this individual. As she is the only Heritage class
representative with a pending application claim, plaintiffs will
need to substitute another named plaintiff to make preliminary
injunctive relief appropriate for this subclass.
17
timeliness
requirements,
application
until
the
however,
date
an
apply
applicant
from
is
the
date
notified
of
of
the
agency’s decision. 42 C.F.R. § 435.912(c)(1). Because there is
no evidence that D. Jones, J. Watson, and others18 were ever
notified of the agency’s determination, it is possible that they
may prevail on their section 1983 claims.
Finally, there is another group of patient plaintiffs who,
although they received determinations, assert that their cases
have since been “reopened,” thus resetting the ninety-day clock.
For two of these individuals, F. Stroud and R. Lynes, plaintiffs
have not shown that their cases were reopened. In another case,
that
of
B.
Ostermueller,
the
application
was
reopened
too
recently to show a violation of the ninety-day time limit. There
is one individual, however, B. Noel, who, after receiving a
denial in January of 2017, requested that her case be reopened
and
has
since
received
several
requests
for
additional
information from defendant’s agents. These subsequent requests
suggest that defendant reopened the case in January of 2017. If
HFS is treating Ms. Noel’s application as open, the timeliness
standards in 42 C.F.R. § 435.912 apply.
18
This includes A. Maritnez, S. Vogel, M. Urban, and B.
Lawrence. R. Gilbertson is not included in this group because
plaintiffs’ documents indicate that he received a determination
in January 2017.
18
Because the plaintiffs discussed above have waited, in many
cases,
far
more
time
than
is
permitted
by
the
Medicaid
regulations to receive the Medicaid determinations and benefits
to which they claim to be entitled, they have at least some
likelihood
of
showing
that
defendant
Norwood
has
violated
section 1396a(a)(8) of the Medicaid Act by failing to render
eligibility determinations in her capacity as the director of
HFS.
Plaintiffs also presented enough evidence to demonstrate a
likelihood
of
succeeding
on
the
other
group
of
patient
plaintiffs’ section 1983 claims, those concerning the failure to
promptly provide long-term care benefit payments. As discussed
above, I evaluate these claims based on the date of services, so
long as the agency had notice at the time of the services,
because testimony revealed that providers were unable to submit
claims before December 1, 2016. In my review of plaintiffs’
evidence,
I
find
twenty-seven
individuals19
who
have
unpaid
claims for services that are more than twelve months old. All of
these individuals applied for long-term benefits more than one
19
Heritage, 16-cv-10614: (1) R. Dragon, (2) J. Adkins, (3) D.
Hall, (4) B. Kroll, (5) S. Case, (6) R. Pursell, (7) D. Virkler,
(8) N. McKinzie, and (9) W. Taylor. Petersen, 16-cv-9922: (10)
D. Simpson, (11) M. Steffan, (12) W. Toufexis, (13) T. Mercier,
(14) C. Mondy, (15) M. VanWinkle, (16) L. Koehler, (17) G.
Fathauer, (18) D. Anderson, (19) M. Grasseschi, (20) J.
Icenogle, (21) V. Lane, (22) L. Morgan, (23) A. Turner, (24) A.
Winters, (25) C. Merry-Azimi, and (26) E. Smith. Morris, 17-cv640: (27) R. Strickle-Solin.
19
year ago, have since been approved for these benefits, and have
not yet received the medical assistance that is due for service
periods the agency has been aware of for twelve months or more.
Because the agency has had notice of these medical assistance
claims
for
longer
than
the
timeliness
requirements
allow,
defendant Norwood’s delay in paying arguably violates Medicaid’s
reasonable promptness requirement.
At
the
evidentiary
hearing,
defendant
provided
various
explanations for the delays in processing claims. Some claims
are waiting to be paid by the Illinois Comptroller’s office, and
some claimants have not had their long-term care eligibility
processed until recently. These circumstances, however, do not
negate
the
evidence
that
the
medical
assistance
that
these
individuals have been approved to receive has not been furnished
with reasonable promptness.
In addition to her individualized explanations for delays
in claim processing, defendant raises another more fundamental
concern in her response brief that, in her view, prevents these
patient
plaintiffs
claims.
As
Norwood
asserts
payments
from
she
from
argued
that,
the
prevailing
in
at
state,
her
motion
bottom,
which
on
the
to
merits
dismiss,
plaintiffs
are
of
barred
seek
by
their
defendant
retroactive
the
Eleventh
Amendment. Defendant is correct that the Eleventh Amendment bars
claims
for
retroactive
money
damages
20
against
the
state.
See
Edelman v. Jordan,
415 U.S. 651, 663 (1974);
BT Bourbonnais
Care, LLC v. Norwood, No. 16-3655, 2017 WL 3392101, at *6 (7th
Cir. Aug. 8, 2017); McDonough Assocs., Inc. v. Grunloh, 722 F.3d
1043, 1050 (7th Cir. 2013). As I explained in my June 7, 2017,
memorandum
Eleventh
opinion
Amendment
officials
for
and
order
does
[Doc.
not
prospective,
No.
preclude
injunctive
50],
claims
relief
to
however,
against
stop
the
state
ongoing
violations of federal law. See Ex Parte Young, 209 U.S. 123,
159-60
(1908).
Indeed,
in
such
cases,
a
federal
court
may
require a state officer to prospectively comply with federal
law, even when that compliance might require the state to expend
funds. See Milliken v. Bradley, 433 U.S. 267, 289-90 (1977);
Antrican v. Odom, 290 F.3d 178, 185 (4th Cir. 2002) (“But simply
because
the
implementation
of
such
prospective
relief
would
require the expenditure of substantial sums of money does not
remove a claim from the Ex Parte Young exception.”). The focus
must be “whether the injunctive relief sought is prospective or
retroactive in nature.” Antrican, 290 F.3d at 186; see Zych v.
Wrecked Vessel, 960 F.2d 665, 669 (7th Cir. 1992) (“Edelman
holds
that
courts
may
command
public
officials
to
obey
the
Constitution and federal statutes as they carry out their duties
in
the
future
but
may
not
direct
them
treasury to make good for past misdeeds.”).
21
to
invade
the
state
Plaintiffs
here
defendant
Norwood
benefits.
Although
are
to
seeking
process
defendant
equitable
applications
has
relief
and
attempted
requiring
furnish
to
timely
characterize
plaintiffs’ requested relief as payment for past due services,
the actual violation that plaintiffs seek to correct is the
state’s ongoing failure to meet Medicaid’s timeliness standards.
Plaintiffs are not seeking to impose any new liabilities on the
state of Illinois; they seek only to force the state to provide
whatever
services
promptness.
Tenth
This
Circuit
or
payments
requested
recognized
relief
as
are
due
closely
permissible
with
reasonable
resembles
under
the
what
the
Eleventh
Amendment in Lewis v. New Mexico Dep't of Health, 261 F.3d 970
(10th
Cir.
2001),
a
case
concerning
New
Mexico’s
delayed
provision of Medicaid waiver services. There the court affirmed
a district court’s order denying a motion to dismiss on Eleventh
amendment grounds. The court held:
The plaintiffs in the case before us clearly seek
prospective equitable relief: they ask that state
officials be compelled to comply with federal statutes
that allegedly entitle them to the reasonably prompt
provision of waiver services. They are not, for
example, asking to be reimbursed for past home or
community-based services. The relief sought simply
requires that officials conform their future actions
to federal law ... and any effect on the state
treasury is, therefore, ancillary.
Lewis, 261 F.3d at 977–78 (10th Cir. 2001) (omitting internal
quotation marks and citations). Because the Lewis plaintiffs’
22
requested injunctive relief concerned the state’s future conduct
with respect to timeliness, it was sufficiently prospective to
fit within the Ex Parte Young exception.
Similarly,
plaintiffs’
request
to
enjoin
defendant
Norwood’s future processing of long-term care benefit claims is
sufficiently forward-looking. Plaintiffs have identified ongoing
violations of the Medicaid Act and its implementing regulations
by providing evidence of claims that have remained pending for
greater than twelve months. While the Eleventh Amendment does
not permit a damages award against the state for these past due
payments, this court, acting within the limits of the Ex Parte
Young
exception,
can
craft
injunctive
relief
compelling
defendant Norwood’s future compliance with Medicaid timeliness
standards.
B. Irreparable Harm
To show irreparable harm, a moving party must demonstrate
that, absent preliminary relief, she will suffer an injury that
cannot be later rectified with “compensatory or other corrective
relief.” Sampson v. Murray, 415 U.S. 61, 90 (1974). Litigants
will
not
meet
the
standard
for
irreparable
harm
if
“money
damages could make [them] whole again should [they] prevail”
after a trial. Rhoades, 825 F.3d at 339. If moving parties,
however,
they
can
will
be
show
that
denied
without
necessary
23
preliminary
medical
injunctive
care,
then
relief
they
may
demonstrate that they lack an adequate remedy at law and stand
to suffer irreparable injury. See Bontrager v. Indiana Family &
Soc. Servs. Admin., 697 F.3d 604, 611 (7th Cir. 2012); O.B. v.
Norwood, 170 F. Supp. 3d 1186, 1196 (N.D. Ill. 2016), aff’d, 838
F.3d 837 (7th Cir. 2016).
The evidence before me reflects that patient plaintiffs all
have
significant
outstanding
balances
at
the
nursing
care
facilities where they are residing, and that they cannot afford
to pay for the care they are receiving. See, e.g., Reis Decl. ¶¶
3-5
[Doc.
No.
35-3];
Crowder
Decl.
¶¶
3-5
[Doc.
No.
35-6].
Meanwhile, the institutional plaintiffs state that they can no
longer continue to provide care without payment. Reis Decl. ¶ 9;
Crowder Decl. ¶ 9. Plaintiffs argue that in these circumstances,
the patient plaintiffs face the threat of discharge, and that a
preliminary injunction is appropriate because if they are in
fact discharged and the nursing care they require is terminated,
damages will not make them whole for the harms that will result.
Defendant
shown
that
responds
the
that
nursing
plaintiffs
homes
are
have
taking
not
adequately
steps
toward
involuntarily discharging the patient plaintiffs. Because they
have
not,
remedy
at
plaintiffs
defendants
law
have
argue,
available
not
the
in
asserted
plaintiffs
state
that
court.
the
have
It
is
nursing
an
adequate
true
that
homes
have
initiated the process of discharging the patients who are in
24
arrears. But this is not necessary. What is needed is a showing
that plaintiffs face irreparable harm if forced to wait for
post-trial
relief.
Plaintiffs
providing
affidavits
from
have
met
several
this
requirement
representatives
of
by
the
institutional plaintiffs. According to these sworn statements,
the facilities cannot continue to foot the patient plaintiffs’
medical
bills
indefinitely.
It
is
fair
to
infer
from
these
statements that, without preliminary relief, patient plaintiffs
may soon face discontinuation of their long-term care services.
Potential termination of necessary medical care is enough to
establish a risk of irreparable injury.20 See Bontrager, 697 F.3d
at 611; Beltran v. Myers, 677 F.2d 1317, 1322 (9th Cir. 1982);
O.B. v. Norwood, 170 F. Supp. 3d at 1196. This is not a risk to
which these elderly and disabled patients should be subjected.
C. Balance of Equities and the Public Interest
Finally,
plaintiffs
must
show
that
the
balance
of
the
equities tips in their favor and that an injunction is in the
public interest. Winter, 555 U.S. at 20. “During the balancing
phase of the preliminary injunction analysis, the goal of the
court is to choose the course of action that minimizes the costs
of
being
mistaken.”
Girl
Scouts,
549
F.3d
at
1100.
Courts
therefore “compare the potential irreparable harms faced by both
20
Obviously, claims on behalf of deceased plaintiffs cannot
satisfy the irreparable harm requirement and will therefore not
be included in any preliminary injunctive relief.
25
parties to the suit — the irreparable harm risked by the moving
party in the absence of a preliminary injunction against the
irreparable
harm
preliminary
greater
risked
injunction
potential
by
is
harm
the
nonmoving
granted”
lies.
—
Id.
to
party
determine
Courts
weigh
if
where
the
the
the
public
interest by evaluating the “consequences of granting or denying
the injunction to non-parties.” Abbott Labs., 971 F.2d at 12.
Here, defendant Norwood merges her balance of equities and
public
interest
arguments.
She
argues
that
a
preliminary
injunction would disserve the public interest and harm the state
of
Illinois
because
it
would
risk
improper
eligibility
determinations and would place further strain on the “already
tenuous” state budget. Def.’s Op. at 16-17 [Case No. 1:16-cv9837, ECF. No. 37].
Plaintiffs counter that the public interest
weighs in favor of the patient plaintiffs, who are elderly and
disabled
Illinois
residents,
receiving
the
eligibility
determinations and timely benefits to which they claim they are
entitled while this case is pending. A preliminary injunction,
plaintiffs argue, will require the defendant to do only what the
law already requires her to do.
Plaintiffs
have
the
better
argument.
The
public
has
an
interest in ensuring that Medicaid eligible individuals promptly
receive
necessary
medical
services.
This,
after
all,
is
why
Medicaid exists. Illinois elected to participate in the Medicaid
26
program and to accept federal funds for the purpose of providing
medical assistance to its needy citizens. There is a public
interest in making sure the state’s designated Medicaid agency
complies with federal law. These interests are not outweighed by
any ancillary impact this preliminary relief may have on the
state’s
budget.
Bontrager,
697
F.3d
at
611
(“The
State's
potential budgetary concerns are entitled to our consideration,
but do not outweigh the potential harm to [plaintiff] and other
indigent individuals, especially when the State's position is
likely in violation of state and federal law.”).
Weighing all of these factors together, I find that the
plaintiffs are entitled to preliminary injunctive relief.
III.
For
the
foregoing
reasons,
plaintiffs’
motion
for
a
preliminary injunction is granted in part. Defendant Norwood is
hereby
ORDERED
to
determine
eligibility
for
certain
patient
plaintiffs’ Medicaid or long-term care applications that have
been
pending
for
more
than
ninety
days
and
to
notify
the
applicants or their authorized representatives by October 16,
2017. This includes all applications for A. Martinez, S. Vogel,
J. Watson, B. Noel, G. Ostermueller, D. Jones, M. Urban, and B.
Lawrence. I will not grant plaintiffs’ request for presumptive
eligibility. This was appropriate in Smith v. Miller, 665 F.2d
172 (7th Cir. 1981), a statewide class action, as a means of
27
avoiding continual monitoring. Id. at 180. That is not a concern
here where we are dealing with eight specific individuals.
Defendant
processing
Norwood
must
additionally
procedures
into
compliance
bring
with
HFS’s
42
claims
U.S.C.
§
1396a(a)(8)’s reasonable promptness requirement and the timely
payment provisions of 42 C.F.R. § 447.45. Defendant Norwood is
hereby
patient
ORDERED,
with
plaintiffs
respect
and
the
to
the
Heritage
twenty-seven
class,
to
identified
prospectively
process claims for payment of services within twelve months of
having notice of those claims. Defendant will be deemed to have
notice either on (1) the date a claim is received or (2) for
claims
for
services,
services
so
long
predating
as
the
December
patient
1,
2016,
plaintiff
at
the
date
of
issue
had
an
application for long-term care services approved or pending for
more than ninety days at the time of those services that would
have put the agency on notice of the claim. The state must
provide
medical
assistance
to
eligible
individuals
with
reasonable promptness, and HFS’s own administrative delays may
not prevent timely payment of claims.
ENTER ORDER:
Elaine E. Bucklo
United States District Judge
Dated: September 1, 2017
28
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