T. et al v. Bowling et al

Filing 170

MEMORANDUM OPINION AND ORDER granting in part and denying in part 155 MOTION to Vacate or Modify Preliminary Injunction Order; granting in part the Motion to Vacate or Modify Preliminary Injunction Order to the extent Defendant requests that the Court lift the injunction to allow DHHR to begin implementing the proposed service authorization system as to the named Plaintiffs; otherwise denying said motion; the Court MODIFIES its 122 memorandum opinion and order entered on 9/13/2016 as f ollows: the preliminary injunction will expire individually as to each named Plaintiff on the individual's first anchor date following this memorandum opinion and order's entry unless the anchor date falls within 90 days of entry in which case the preliminary injunction will expire on the individual's second anchor date subsequent to this order's entry; Defendant to provide the Court with an updated status report as to the new system's implementation within 30 days of this memorandum opinion and order's entry. Signed by Judge Thomas E. Johnston on 3/26/2018. (cc: counsel of record; any unrepresented party) (taq)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION

MICHAEL T., et al.,
Plaintiffs,
v.

CIVIL ACTION NO. 2:15-cv-09655

BILL J. CROUCH, in his official capacity
as Secretary of the WEST VIRGINIA
DEPARTMENT OF HEALTH AND HUMAN
RESOURCES,
Defendant.

MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant’s Motion to Vacate or Modify Preliminary
Injunction Order. (ECF No. 155.) For the reasons stated herein, the Court GRANTS IN PART
the motion to the extent Defendant requests that the Court modify its previous memorandum
opinion and order entered on September 13, 2016, to lift the injunction and allow DHHR to begin
implementing the proposed service authorization system as to the named Plaintiffs.
I. BACKGROUND1
Plaintiffs in this case are recipients of West Virginia’s Intellectual/Developmental
Disability Home and Community Based Services waiver program (“I/DD Waiver Program”) and
are challenging reductions in their benefits beginning in 2015. Within West Virginia’s Medicaid

The factual and procedural backgrounds of this case were thoroughly explained in this Court’s memorandum opinion
and order entered on September 13, 2016. (See ECF No. 122 at 1–10.) This section summarizes the background of
the parties’ dispute from the Court’s previous iteration.
1

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plan, administered by the West Virginia Department of Health and Human Resources’ (“DHHR”)
Bureau for Medical Services (“BMS”), the “intermediate care level services for individuals with
intellectual/developmental disabilities” program (“ICF/IDD Program”) is an included program
from the federally recognized optional services. (ECF No. 14 at 36 ¶ 225.) The ICF/IDD Program
provides for individuals with intellectual disabilities institutions that offer residential, health, and
rehabilitative services. (Id. at 36–37 ¶ 226; ECF No. 54 at 9.) See also 42 U.S.C. § 1396d(d). In
part because West Virginia has capped participation in the ICF/IDD Program at 509 individuals
since 1989, (ECF No. 54 at 9), the state implements an alternative option for individuals otherwise
eligible for the ICF/IDD Program to receive home and community based services instead. This
alternative program—the I/DD Waiver Program—is the subject of the current litigation.
The I/DD Waiver Program provides “an array of . . . services that an individual needs to
avoid institutionalization.” 42 C.F.R. § 441.300. (See also ECF No. 54 at 10.) Many of the
individuals enrolled in the program live with family members in their homes while others live in
an “[i]ntensively [s]upported [s]etting,” which involves one to four program members living
together in a residential or group home. (See id. at 11; ECF No. 115 at 76.) The I/DD Waiver
Program currently provides open slots for 4,534 eligible West Virginians and has a waiting list of
over 1,100 eligible individuals. (ECF No. 14 at 38–39 ¶¶ 238–239; see also ECF No. 155-2 at 2
¶ 2.) BMS, as the program’s administrator, contracts with APS Healthcare Inc. (“APS”)2 to help
administer the I/DD Waiver Program. (ECF No. 54 at 10–11.) BMS delegates various tasks to
APS, including “monitoring the member’s health and safety,” (id. at 11), “[e]nsuring each [I/DD
Waiver Program] participant’s medical eligibility is initially established and reestablished on an

2

According to the briefing, APS now operates under the corporate name Kepro. (See ECF No. 155-2 at 4 ¶ 7.) APS
will still be named throughout this memorandum opinion and order’s background section in reference to the old
authorization system while Kepro will be named when referring to DHHR’s newly proposed authorization system.

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annual basis,” and conducting an “annual assessment of each program participant’s abilities and
needs,” (ECF No. 28-3 at 7). Contracted local service provider agencies ultimately provide
individual recipients with their waiver services. (ECF No. 14 at 41 ¶ 252.)
At the time the Court issued the current injunction in this case, an I/DD Waiver Program
recipient’s annual service authorization began with a calculation of their individual “budget” by
APS. (ECF No. 54 at 14.) APS would conduct an “annual assessment” for participants, which
included, in part, an interview with program members, their legal representatives, their case
managers, and other interested parties, (see ECF No. 38-3 at 73), and a compilation of data
regarding each participant’s “abilities, strengths, and support needs,” (id. at 7; see also ECF No.
54 at 14–15). APS applied a proprietary algorithm to the assessment’s results, producing an
individual budget from a multi-variable statistical analysis. (ECF No. 54 at 15; see also ECF No.
14 at 43 ¶ 265.) Due to the proprietary nature of the algorithm, “the exact factors it consider[ed],
the weight it accord[ed] to each factor, and its overall methodology in determining each member’s
budget [were] not publicly available information.” (ECF No. 122 at 5 (citing ECF No. 115 at 145–
50).) After a recipient’s individual budget was determined, APS would send a letter to that member
notifying him or her of the budget amount without explanation as to how that number was
determined. (ECF No. 54 at 15; see, e.g., ECF No. 108, Exs. 3, 4, 9, 13, 14, 20.)
Once notification of an individual’s budget was received, the member’s “interdisciplinary
team” (“IDT”), consisting of the member, a representative from the provider agency, and possibly
“the member’s guardian(s) and health care professionals,” met to create an “Individualized
Program Plan” (“IPP”). (ECF No. 51-1 at 8 ¶ 19; ECF No. 54 at 15.) The IPP detailed “each type
of service needed to meet that recipient’s individually-assessed safety, health, and care needs.”
(ECF No. 14 at 42 ¶ 257; see also ECF No. 54 at 15.) APS reviewed the completed IPP to ensure

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compliance with BMS policies, and if the costs of the requested services fell within the APScalculated budget and complied with BMS policies, then “APS [would] approve service
authorization requests consistent with the [IPP].” (ECF No. 54 at 16.)
If an IPP determined that necessary services cost in excess of the APS-determined budget,
however, then “the service coordinator submit[ted] requests for authorization of services to
APS . . . .” (ECF No. 51-1 at 9 ¶ 21.) Before September 2014, “APS made independent
determinations to grant or deny these requests for funds in excess of the budget and ‘routinely
approved’ such ‘service authorization requests.’” (ECF No. 122 at 6 (citing ECF No. 51-1 at 9–
10 ¶ 22; ECF No. 14 at 44 ¶ 272).) Once BMS discovered in September 2014 that the I/DD Waiver
Program was exceeding its budget and that APS was “approving” IPPs “with service costs in
excess of the budgets,” (ECF No. 115 at 94–96; ECF No. 51-1 at 9 ¶ 22), BMS instructed APS to
“cease unilaterally approving” IPPs that included service costs in excess of the APS-calculated
budget. (See ECF No. 51-1 at 9 ¶ 22.) Thereafter, requests for funding in excess of the APScalculated budget required approval by BMS through a “second[-]level negotiation.” (Id. ¶ 21.)
This second-level negotiation involved BMS employees reviewing the recipient’s file, attached
materials, and an APS recommendation, as well as, if requested, meeting with the recipient and
interested parties before deciding whether to grant or deny the funding request.3 (ECF No. 115 at
88–89.)
Upon denial of a request for funding in excess of the APS-calculated budget via the secondlevel negotiation, BMS sent the member a notice containing appeal rights. (ECF No. 54 at 16.)
To exercise his or her right to appeal the second-level denial, the member could request a fair

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To highlight the effect that the second-level negotiation had on the number of approved IPPs when requested services
cost more than the APS-calculated budget, Patricia Nisbet, BMS Director of the Office of Home and Community
Based Services, provided in a declaration that 1,962 I/DD Waiver Program members were approved under these
circumstances in 2014 while only 466 similarly were approved in 2015. (ECF No. 51-1 at 10 ¶ 23.)

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hearing before West Virginia’s Board of Review. (ECF No. 115 at 91–92; see also ECF No. 54
at 16.) The BMS and I/DD Waiver Program member could present arguments at the fair hearing
as well as any supporting documentation. (See ECF No. 115 at 92–94.) The Board of Review
then issued its decision affirming or reversing the second-level determination by BMS. (Id. at 94.)
If dissatisfied with that decision, the member retained the option of filing a final direct appeal to a
state circuit court. (Id.)
II. CURRENT INJUNCTION
Before addressing the legal standard under which Defendant’s motion must be analyzed,
the Court first will reflect on the current injunction’s purpose and the injustice that it was intended
to prevent. This Court’s memorandum opinion and order entered on September 13, 2016, granted
Plaintiffs’ request for a preliminary injunction and ordered Defendant “to reinstate the named
Plaintiffs’ individualized I/DD Waiver Program budgets to the amounts Plaintiffs received in 2014,
but only for those Plaintiffs that received a reduction in their individualized budgets after 2014.”
(ECF No. 122 at 32.) In that memorandum opinion’s discussion, the Court found that each of the
Winter factors weighed in favor of granting the preliminary injunction.4 (See id. at 14–32.) For
the purposes of the first Winter factor related to whether Plaintiffs were likely to succeed on the
merits, the Court focused on “Plaintiffs’ claim under 42 U.S.C. § 1983 that Defendant violated
Plaintiffs’ procedural due process rights by employing the APS Algorithm when determining
Plaintiffs’ benefits.” (Id. at 14.) The Court found that Plaintiffs have a protected property interest
in continuing to receive benefits from the I/DD Waiver Program and that “the procedures currently

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As explained in the memorandum opinion, the current standard for imposing a preliminary injunction was established
by the Supreme Court in Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008), and requires a party
seeking this extraordinary relief to demonstrate that “(1) they are likely to succeed on the merits, (2) they are likely to
suffer irreparable harm, (3) the balance of hardships tips in their favor, and (4) the injunction is in the public interest.”
(ECF No. 122 at 12 (quoting Pashby v. Delia, 709 F.3d 307, 320 (4th Cir. 2013) (citing Winter, 555 U.S. at 20)).)

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employed by Defendant present a serious risk of erroneous deprivations of Plaintiffs’ interest in
their benefits.” (See id. at 17–20.)
Specifically, the Court emphasized the most significant due process concerns related to the
APS Algorithm in the following passage:
The Court concludes that the APS Algorithm used by Defendant when determining
Plaintiffs’ individualized budgets does not employ ascertainable standards. The
record provides no information as to what factors are incorporated into the APS
Algorithm, how each factor is weighted, or the overarching methodology APS
utilizes in the APS Algorithm to create each I/DD Waiver Program member’s
individualized budget. In short, there is simply no way to determine how the APS
Algorithm generates each waiver recipient’s individualized budget. Further, absent
some indication of the basis for each Plaintiff[’s] benefits determination, Plaintiffs
cannot meaningfully challenge this determination. Indeed, in the letters APS sends
to recipients notifying them of their individualized budget, APS provides only the
budget amounts and does not include any individualized rationale for the recipient’s
budget allocation. Thus, Plaintiffs have a high likelihood of success in
demonstrating that these budget determinations by APS present a serious risk of
resulting in erroneous determinations and deprivations of Plaintiffs’ property
interest in their benefits.
(Id. at 20.) Beyond the secrecy surrounding the APS Algorithm and its inputs, the Court also
addressed concerns with the way BMS handled a recipient’s challenge to his or her budget
determination. (See id. at 20–24 (“This evidence indicates that—regardless of whether Defendant
has a stated policy to increase benefits at the second-level review stage to keep individuals safe
and healthy in the community—Defendant nonetheless eschews this policy in favor of affirming
the recipient’s budget, as determined by the APS algorithm.”).) Ultimately, the Court found that
“the lack of transparency surrounding the proprietary APS Algorithm renders Defendant’s
individualized budget determinations potentially—if not effectively—standardless.” (Id. at 23–
24.)
After finding that the procedure used by Defendant presented substantial due process
concerns, the Court went on to find little evidence “that Defendant would face any form of undue

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burden by employing ascertainable standards when determining each waiver recipient’s budget”
and that Defendant did not have a legitimate interest in further use of the APS Algorithm. (Id. at
24.) As to the remaining Winter factors, the Court found that (1) Plaintiffs were likely to suffer
irreparable harm in the absence of an injunction, (2) “the harm to Plaintiffs’ health and safety
outweigh[ed] West Virginia’s financial concerns,” and (3) “the public interest in safeguarding
Plaintiff[s’] access to healthcare and needed services outweigh[ed] West Virginia’s fiscal
considerations” and federalism interests.

(See id. 25–32.)

Thus, Plaintiffs adequately

demonstrated a need for the preliminary injunction, and the Court ordered the extraordinary
equitable relief. (Id. at 31–32.)
Defendant filed the current motion on May 12, 2017, based on a change in circumstances
after developing a new service authorization system. (ECF No. 155.) Plaintiffs responded on May
31, 2017, pursuant to a Court order extending the deadline to file a response, (ECF No. 163), and
Defendant filed his reply brief on June 7, 2017, (ECF No. 167). As such, the motion is fully briefed
and ripe for adjudication.
III. LEGAL STANDARD
The prospective features of an injunction entered by a district court may be modified under
Federal Rule of Civil Procedure 60(b).5 See, e.g., Rufo v. Inmates of Suffolk Cty. Jail, 502 U.S.
367, 380–93 (1992); see also Dombrowski v. Pfister, 380 U.S. 479, 492 (1965) (citations omitted)
(“[T]he settled rule of our cases is that district courts retain power to modify injunctions in light
of changed circumstances.”); Thompson v. U.S. Dep't of Hous. & Urban Dev., 404 F.3d 821, 825–

Rule 60(b) allows for relief from a judgment where “the judgment has been satisfied, released or discharged; it is
based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer
equitable . . . .” Fed. R. Civ. P. 60(b)(5). As the Supreme Court noted in Horne v. Flores, the “[u]se of the disjunctive
‘or’ makes it clear that each of the provision’s three grounds for relief is independently sufficient and therefore that
relief may be warranted even if petitioners have not ‘satisfied’ the original order.” 557 U.S. 433, 454 (2009). The
rule also allows for relief based on “any other reason that justifies relief.” Fed. R. Civ. P. 60(b)(6).
5

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26, 830 (4th Cir. 2005). Pursuant to Rule 60(b)(5), which encompasses courts’ “inherent authority
to modify a consent decree or other injunction,”6 see Thompson, 404 F.3d at 826, 830, a court may
find that the injunction’s purpose and prospective application may no longer be equitable given a
“significant change in circumstances,” whether those be factual or legal changes. Rufo, 502 U.S.
at 380, 383 (noting that this standard is “less stringent” and “more flexible” than the Court’s
previous iterations of the rule for modifying injunctions). The Fourth Circuit has long held that
“an injunctive order may be modified or dissolved in the discretion of the court when conditions
have so changed that it is no longer needed or as to render it inequitable.” Tobin v. Alma Mills,
192 F.2d 133, 136 (4th Cir. 1951) (citations omitted); see also Alexander v. Britt, 89 F.3d 194, 197
(4th Cir. 1996) (“[A] district court’s task is to determine whether it remains equitable for the
judgment at issue to apply prospectively and, if not, to relieve the parties of some or all of the
burdens of that judgment on ‘such terms as are just.’”). “A court errs when it refuses to modify an
injunction or consent decree in light of such changes.” Agostini v. Felton, 521 U.S. 203, 215
(1997) (citation omitted); see also Nelson v. Collins, 700 F.2d 145, 146–47 (4th Cir. 1983)
(citations omitted) (“Because the district court substantially modified the original injunction
without finding that any change had occurred, we must vacate its order . . . . If the state fails to
prove such changes, the original injunction may not be disturbed.”).
Determining a change in circumstances necessitating relief from an existing injunction
involves a flexible test, and the party seeking relief bears the burden of showing such a change.

The Fourth Circuit noted in the following passage from Thompson that “[t]he hallmark of equity, of course, is its
flexibility:”
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The essence of a court’s equity power lies in its inherent capacity to adjust remedies in a feasible
and practical way to eliminate the conditions or redress the injuries caused by unlawful action.
Equitable remedies must be flexible if these underlying principles are to be enforced with fairness
and precision.
404 F.3d at 830 (quoting Freeman v. Pitts, 503 U.S. 467, 487 (1992)) (citation omitted).

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See Horne v. Flores, 557 U.S. 433, 450 (2009). District courts consider several factors when
deciding whether to modify or dissolve an injunction, including the following:
(1) the circumstances leading to entry of the injunction and the nature of the conduct
sought to be prevented; (2) the length of time since entry of the injunction; (3)
whether the party subject to its terms has complied or attempted to comply in good
faith with the injunction; (4) the likelihood that the conduct or conditions sought to
be prevented will recur absent the injunction; (5) whether the moving party can
demonstrate a significant, unforeseen change in the facts or law and whether such
changed circumstances have made compliance substantially more onerous or have
made the decree unworkable; and (6) whether the objective of the decree has been
achieved and whether continued enforcement would be detrimental to the public
interest.
Crutchfield v. U.S. Army Corps. of Eng’rs, 175 F. Supp. 2d 835, 844 (E.D. Va. 2001) (citing
Alexander, 89 F.3d at 197; Bldg. & Constr. Trades Council of Phila. & Vicinity v. NLRB, 64 F.3d
880, 888 (3d Cir. 1995); 42 Am. Jur. 2d § 312 (Injunctions); 12 James Wm. Moore et al., Moore’s
Federal Practice § 60.47[2][c] (3d ed. 1999)). The consideration of public interest may be
heightened in cases of public institutional reform. See Rufo, 502 U.S. at 392; see also Horne, 557
U.S. at 448 (“Such litigation commonly involves areas of core state responsibility . . . . Federalism
concerns are heightened when, as in these cases, a federal court decree has the effect of dictating
state or local budget priorities.”). While some courts have emphasized the importance of judgment
finality, most agree that this is more important in private litigation than institutional reform cases.
See 12 James Wm. Moore et al., Moore’s Federal Practice § 60.47[2][c] (3d ed. 2017) (collecting
cases); see also Rufo, 502 U.S. at 381 (noting that “the public interest is a particularly significant
reason for applying a flexible modification standard in institutional reform litigation because such
decrees reach beyond the parties involved directly in the suit and impact on the public’s right to
the sound and efficient operation of its institutions”).
The factors considered by a district court may vary depending on whether the relief sought
is a complete dissolution of the injunction or only a modification of the injunction. See 12 James
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Wm. Moore et al., Moore’s Federal Practice § 60.47[2][c] (3d ed. 2017). For example, if a party
is seeking modification of an injunction, relief may be justified on a wide variety of circumstances
and should be “tailored to resolve the problems created by the change in circumstances.” Rufo,
502 U.S. at 391. Otherwise, if a party is seeking to set aside an injunction, then it must show that
the decree has served its purpose and that there is no longer any need for the injunction. See Bd.
of Educ. v. Dowell, 498 U.S. 237, 247 (1991) (noting that a finding that the school district “was
being operated in compliance with the commands of the Equal Protection Clause . . . and that it
was unlikely that the school board would return to its former ways” meant that the litigation’s
purposes “had been fully achieved”). Notably, simple compliance with an injunction’s terms, even
for an extended period, is not alone sufficient to justify the injunction’s termination. See SEC v.
Coldicutt, 258 F.3d 939, 941–45 (9th Cir. 2001) (finding that nine years of full compliance with
the injunction coupled with evidence that the defendant’s trading licenses expired and that she had
left the securities field did not amount to a change in circumstances requiring relief from the district
court’s injunction).
In addition to the standard set forth in subsection (5) of Rule 60(b), subsection (6) provides
that the Court may grant relief for “any other reason that justifies relief.” This catchall provision
“may be invoked in only ‘extraordinary circumstances’ when the reason for relief from judgment
does not fall within the list of enumerated reasons given in Rule 60(b)(1)–(5).” Aikens v. Ingram,
652 F.3d 496, 500 (4th Cir. 2011) (citing Liljeberg v. Health Servs. Acquisition Corp., 486 U.S.
847, 863 n.11 (1988)). “[I]t provides the court with a grand reservoir of equitable power to do
justice in a particular case and vests power in courts adequate to enable them to vacate judgments
whenever such action is appropriate to accomplish justice where relief might not be available under
any other clause in 60(b).” Compton v. Alton S.S. Co., Inc., 608 F.2d 96, 106–07 (4th Cir. 1979).

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Pursuant to this standard, the question before the Court becomes whether the injunction entered
on September 13, 2016, has outlasted its efficacy and purpose. In other words, the Court must
determine whether DHHR’s proposed authorization system, which the agency is prepared to begin
implementing, removes the necessity for the previously ordered immediate and equitable relief.
IV. DISCUSSION
A. Defendant’s New Proposal
Defendant has notified the Court and carefully explained in Exhibit One attached to the
current motion that DHHR developed a “new service authorization system” set for implementation
that it believes satisfies the Court’s concerns expressed in the previous memorandum opinion and
order granting the preliminary injunction. (See ECF No. 155-1; ECF No. 156 at 6–12.) The
changes to the service authorization system include replacement of the proprietary algorithm with
matrices employing a number of clearly identified variables based on a combination of a member’s
living situation and answers to specific questions during the member’s annual assessment. (See
ECF No. 156 at 7.) In addition to the development of this matrix model, Defendant avers that
individual members will be able to review and check the accuracy of answers used in calculating
where they fall within the “budget matrix.” (See id. at 8.) Further, DHHR has updated its Budget
Letter that informs members of an “individualized rationale for the recipient’s budget allocation.”
(Id.) If the member believes there is a mistake in how the budget matrix was applied, then he or
she may challenge the calculation first “by bringing the error to DHHR’s attention,” and further
“by requesting a Medicaid Fair Hearing.” (Id. at 9.) Moreover, Defendant provides that DHHR
has created “a new Exceptions Process designed to evaluate and accommodate requests from
individuals who believe they require services beyond what can be purchased within the budget.”
(Id.) Lastly, Defendant states that “DHHR has revised and will further clarify its policies to make

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clear that services in excess of the budget can be authorized when necessary to avoid a heightened
risk of institutionalization.” (Id. at 11 (citing ECF No. 155-1 at 10–11).)
Defendant states that the newly developed service authorization process, which he insists
is transparent, clear, and accurate, is based on an annual assessment conducted for each I/DD
Waiver Program member. (See ECF No. 155-1 at 2–3.) Kepro, formerly known as APS, will meet
with a member’s IDT to complete an Inventory for Client and Agency Planning (“ICAP”)
assessment related to the member’s “health, functionality, and behavior.” (Id. at 3.) That meeting
will also involve the completion of an Adaptive Behavior Assessment System II (“ABAS II”) form
and a “[s]tructured [i]nterview” that is “more robust and detailed” than before. (Id. at 3–4.) In
terms of how each individual’s budget will be calculated, Defendant provides the following:
1. Each year, each member receives a base budget range, determined by the member’s
setting;
2. Each member will receive additional funding if they exhibit one or more of the
traits identified as statistically significant through a regression analysis completed
by the Lewin Group.7 This will be determined by the annual ICAP assessment
responses, which is completed by Kepro at the annual assessment, with assistance
from the individual’s IDT Team and family. The IDT Team and the Family will
have the opportunity to review the form before it is used to develop the budget.
(Id. at 4.)
Based on the annual assessment and taking into consideration the individual’s living
situation, he or she is given a base budget range.8 (See id. Table 1.) Defendant states that the

Defendant notes that the Lewin Group is a national health care consulting firm that DHHR hired “to analyze the data
provided by these annual assessments and actual expenditures for each waiver member in 2016, in order to identify
characteristics that are statistically significant drivers of spending.” (ECF No. 156 at 6–7 (explaining that “[t]he Lewin
Group determined that the statistically significant variables driving spending are: an individual’s living situation;
Asocial Problem Behaviors; Externalized Problem Behaviors; Adaptive Behaviors for Motor Skills; and Adaptive
Behaviors for Personal Living Skills”); see also ECF No. 155-1 at 7–8; ECF No. 155-2 at 4 ¶ 7.)
8
Defendant presents the following table with the currently proposed base budget ranges:
7

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budget ranges will be “based on a matrix that will be publicly available and is easily
understandable . . . .” (ECF No. 156 at 5.) The information gained during Kepro’s annual
assessment allows for various “add-ons” at or below designated maximum amounts within four
categories: Externalized Problem Behavior; Asocial Problem Behavior; Adaptive Behavior: Motor
Skills; and Adaptive Behavior: Personal Living Skills.9 (See ECF No. 155-1 at 5.) “In order to

(ECF No. 155-1 at 4.) Defendant notes that these budget ranges, in addition to the add-on values, see infra note 9,
will be “re-base[d] . . . after the first year of implementation, and then annually or bi-annually thereafter.” (Id. at 8.)
This re-basing serves to “make the model even more accurate over time.” (Id.)
9
Defendant explains in Exhibit One attached to the motion how, “of the hundreds of factors [the Lewin Group]
analyzed,” these four variables were chosen in addition to considering a waiver member’s living situation as follows:
To develop this model, Lewin analyzed spending data collected by DHHR for the 2016 IPP year,
and compared each individual’s spending with that individual’s setting, functionality, and
behavioral information, reported through the State’s yearly assessment tests. Using this data, Lewin
ran several regression models to identify the variables that were statistically significant in explaining
members’ spending patterns across the program.
(ECF No. 155-1 at 7.) The various add-on amounts available to waiver members are denoted in the following table:

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provide full and clear transparency as to how each individual’s budget is calculated, DHHR plans
to release the base budgets and add-on amounts on its website, along with an explanation for how
the budgets are calculated . . . .” (Id. at 8.)
The budget calculated by Kepro may not result in an individual’s final budget if the figure
is more than 20% above or below the individual’s “2016 IPP year’s spend.”10 (See id. at 5–6.)

(Id. at 5.) Employing this chart in addition to the base budget range chart provided above, see supra note 8, Defendant
provides the following example:
[A]n individual who lives in a natural family setting, and exhibits “extremely serious externalized
problem behavior[],” and has a “motor skills” functioning level of 4, would have a budget equal to:
the base budget for living in a family home and the add-on amounts associated with “extremely
serious externalized problem behavior[]” and “motor skills Level 4.” This would yield a budget
range between $47,087 and $53,035. A waiver member receiving this budget will be able to spend
up to $53,035 in the waiver program, unless the member is authorized to receive additional services
through the Exceptions Process . . . .
(ECF No. 156 at 7.)
The Court notes that the calculation in the above example, based on the charts provided, appears incorrect.
A budget determined by “the base budget for living in a family home and the add-on amounts associated with
‘extremely serious externalized problem behaviors’ and ‘motor skills Level 4,’” (id.), actually yields a budget range
between $48,406 ($38,283 + $4,287 + $5,836) and $54,354 ($44,231 + $4,287 + $5,836). The calculation in
Defendant’s memorandum of law mistakenly incorporates the add-on amount associated with “moderately serious or
slightly serious externalized problem behavior” as opposed to “extremely serious externalized problem behavior.”
Nonetheless, the example illustrates how an individual’s situation is used to calculate his or her base budget under the
new system.
10
Defendant provides data showing that 35.2% of the waiver population will receive budgets under the new model
that are greater than 20% above their 2016 IPP spend amount. (See ECF No. 155-1 at 7.) This percentage of the
population would be assigned a budget capped at 120% of their 2016 IPP spend pursuant to the stop-gain policy.

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This “stop-loss/stop-gain policy” assigns to a member a budget that is 80% of the 2016 IPP year
spend amount if the calculated budget would otherwise be less than that amount. (See id. at 5.)
Similarly, a member’s budget will be capped at 120% of the 2016 IPP year spend if the new budget
calculation yields an amount higher than that. (See id.) The stop-loss/stop-gain policy applies
year to year “so long as the member does not change his or her living setting or otherwise ha[s] a
significant change in circumstances.” (Id. at 6.) This policy takes into account the previous year’s
budget unlike the proprietary algorithm subject to the injunction, which Plaintiffs criticized in their
First Amended Complaint (“Complaint”) for “ignor[ing] the amount of benefits and services
authorized and provided in the immediately preceding budget year . . . .” (See ECF No. 14 at 42–
43 ¶¶ 262–263, 43–44 ¶¶ 268–269, 45 ¶ 275.)
Once an individual’s budget is finalized either by the matrix calculation or by the stoploss/stop-gain policy, the member will be sent a budget letter that sets out the budget amount and
“a short, clear explanation for how the budget was calculated.” (ECF No. 155-1 at 6; see also ECF
No. 155-1 at 13–16; ECF No. 156 at 5 (arguing that “notices will be revised to clearly identify the
factors that resulted in the individual’s budget”).) This budget letter will explain why a budget has
changed from the prior year, if it has, and what information from the ICAP assessment led to that
change. (ECF No. 155-1 at 6.) The budget letter will also explain the stop-loss/stop-gain policy
if it has been applied to a particular member’s budget, or it may explain why an individual has
become ineligible for the policy based on a changed setting or significant change in health
circumstances. (See id.) The budget letter will inform the individual that their ICAP assessment
is with their service coordinator and that they and their guardian have the right to review that
assessment and contact DHHR if they believe the budget determination is inconsistent with their

Conversely, the data shows that “6.8% of the population will receive budgets that are 20% or more below their 2016
spend. Any decreases in these members’ budgets will be capped at 20% under the stop-loss policy.” (Id.)

15

ICAP answers. (See id.; ECF No. 156 at 5 (noting that “waiver members, their families or
guardians, and service coordinators will have an opportunity to review and confirm the information
that was used in determining the budget”).) DHHR will retain the ability to “immediately review
. . . and correct any errors” brought to its attention by the individual if it agrees the inputs were in
error. (ECF No. 155-1 at 6.) This new budget letter appears to alleviate the concerns raised in
Plaintiffs’ Complaint that the form “do[es] not explain that DHHR is actually cutting the
recipient’s benefits; do[es] not specify the amount of the proposed cut; do[es] not state the facts
allegedly justifying the cuts . . . ; [and] do[es] not explain how a person might object to the
proposed reduction . . . .” (ECF No. 14 at 48 ¶ 294.)
After receipt of the budget letter, the process to develop each member’s IPP begins. (See
ECF No. 155-1 at 9.) If the IPP’s services are “within budget and otherwise compliant with DHHR
policies,” then DHHR will authorize the services developed by the IDT and/or member. (Id.) The
IDT and member must create two IPPs if the team believes that the member needs services in
excess of the calculated budget. (See id.) The first IPP must be within budget and compliant with
DHHR policies while the second should reflect “all the services that the IDT team believes the
member needs.” (Id.) Both IPPs are submitted to Kepro, and DHHR will evaluate requests for
specific services that the member may require but are unavailable within their budget. (See id.)
Members also may request additional services that they believe are necessary through the
“exceptions process.” (See id.; see also id. at 18–25; ECF No. 156 at 5 (“DHHR’s waiver policy
manual will be revised to clarify and explain that members may receive service[s] in excess of
their budget when necessary to avoid institutionalization . . . .”).) These requests “will be
considered and decided by a panel of at least three individuals employed by DHHR or its
contractor” with at least one individual who “will have medical training.” (See ECF No. 155-1 at

16

10.) Taking into consideration whether “the services are necessary to keep the member safe and
healthy in order to avoid a heightened risk of institutionalization during the IPP year,” the panel
will consider relevant documentation and rule on the request within fifteen days of submission.
(Id.)
A denial in whole or in part of services requested through the “exceptions process” will
result in a newly developed denial notice. (See id. at 27–30.) The notice includes “a specific and
individualized explanation for the reason or reasons” for the denial. (Id. at 10.) It will detail the
documentation reviewed by the panel as well as specific facts relied upon in reaching the decision.
(Id.) If the denied services were granted during the previous IPP year, then the notice will explain
why the current year’s decision departs from the previous year’s determination. (See id.) Lastly,
the notice will explain to the member that he or she has a right to appeal the decision through a
Medicaid Fair Hearing “and to continue to receive services at the previously-approved levels
throughout the appeal process if the request for a hearing is received within 13 days of receipt” of
the notice. (Id.; see also id. at 29–30.) The Medicaid Fair Hearing involves an appellate-type
review by the Board of Review, which may review challenges to “an error on the ICAP answers,
as input into the Kepro database,” or challenges to “the [exceptions process] Panel’s denial of an
individual’s request for additional services in excess of the budget.” (Id. at 10.) The Board of
Review only makes factual determinations; it “does not have the authority to second-guess or
overturn policy judgments made by DHHR and BMS . . . .” (Id. at 11.)
On September 15, 2017, Defendant’s counsel submitted a letter-form status report to the
Court informing that DHHR is “mov[ing] ahead with implementation of this new system . . . .”
(ECF No. 168.) DHHR provided the following timeline by which it plans to abide:

17

Date

Action

November 15, 2017

DHHR issues notice to the public for
changes to the I/DD Waiver Policy
Manual to implement the proposed
new service authorization system

December 15, 2017 - January 31, 2018

DHHR reviews and considers public
comments

February 1, 2018

DHHR finalizes and publishes
changes to the I/DD Waiver Program
Manual

February 1 - March 31, 2018

DHHR works with KEPRO to put in
place practices and procedures to
implement the new service
authorization system

April 1, 2018

DHHR begins evaluating waiver
members and calculating their service
authorization levels pursuant to the
new system, based on anchor dates

90 days after evaluation

Waiver members begin receiving
services pursuant to service
authorization levels developed under
the new system

July 1, 2018

DHHR adds 50 new slots to the I/DD
Waiver Program

(Id. at 1–2.) DHHR recognized its responsibility to continue providing the named Plaintiffs in this
case their 2014 service authorization levels, if necessary, pursuant to the current injunction. (Id.
at 2.)
B. Analysis
A review of the new authorization system reveals that the proposal does not appear to suffer
from similar due process infirmities and, therefore, does not promote the injustices that this Court’s

18

injunction was designed to remedy.11 The Court found in its prior memorandum opinion that
Plaintiffs in this case have both a substantial and self-evident private interest in receiving
appropriate benefits through the I/DD Waiver Program. (See ECF No. 122 at 18 (citation
omitted).) The Court further found that “the procedures currently employed by Defendant present
a serious risk of erroneous deprivations of Plaintiffs’ interest in their benefits” because the factors
incorporated into the APS algorithm, including the weight assigned to each factor, and the
methodology used in calculating benefits were unclear. (See id. at 18–19 (noting that the record
was absent a description of “what specifically is included in either the ‘assessment tools’ or the
‘statistical analysis’” as well as what variables in the algorithm were “statistically significant”).)
The authorization system that DHHR now proposes first assigns members a base budget
range from a publicly available matrix with defined setting categories and dollar ranges based on
answers provided during each member’s annual assessment, where the ICAP, the ABAS II, and
the structured interview are completed. (See ECF No. 155-1 at 3–4.) Then, a single dollar amount,
up to $18,895, may be added to the base budget range figures according to the add-ons for which
the individual qualifies. (See id. at 4–5.) The categories of available add-ons are derived from the
ICAP survey and applied as needed directly based on answers provided by the member, their
guardians, and the IDT.12 (See id.) The Lewin Group chose these categories as inputs for the add-

“[T]he Due Process Clause provides that certain substantive rights—life, liberty, and property—cannot be deprived
except pursuant to constitutionally adequate procedures.” Cleveland Bd. of Educ. v. Loundermill, 470 U.S. 532, 541
(1985). “The essential requirements of due process . . . are notice and an opportunity to respond.” Id. at 546.
12
ICAP’s website confirmed that the variables included in the add-on chart, see supra note 9, are part of the ICAP
questionnaire and used to calculate each participant’s ICAP Service Score. See ICAP Service Score, Inventory for
Client and Agency Planning, http://icaptool.com/icap-information/icap-service-score/ (last visited July 27, 2017). The
website provides the following as to problem behaviors, which discusses the two problem behavior categories within
DHHR’s “add-ons” chart:
11

These four dimensions (the description of specific problem behaviors, frequency of occurrence,
severity, and the usual management response by others) represent the primary bases for evaluating
the effects of problem behavior on the individual, his/her peers, and his environment. This
information is necessary for developing individual plans, as well as for planning service intensity.
The ICAP yields normed numeric scores that vary by age for problem behaviors in three areas

19

ons chart based on a statistical regression analysis; these categories were determined to be the four
“statistical drivers of spending” in addition to an individual’s setting, which is the basis for the
initial base budget range before add-ons. (See id. at 8; ECF No. 156 at 6–7; ECF No. 167 at 7 n.1.)
Unlike before, members will know exactly which statistically significant variables affect their
budget level and the dollar amount associated with each variable. (Compare ECF No. 155-1 at 7–
8 (detailing why the five variables considered in the budget determination were selected), with
ECF No. 115 at 83 (providing Patricia Nisbet’s testimony that she was unaware of the individual
variables considered within the proprietary algorithm or how they were weighted).)
The funding levels denoted in the base budget matrix and the add-ons chart are
ascertainable standards that provide Plaintiffs a definitive basis on which to challenge any
miscalculation. See Prestera Ctr. for Mental Health Servs., Inc. v. Lawton, 111 F. Supp. 2d 768,
779 (S.D. W. Va. 2000) (citations omitted) (“Due process further requires that decisions regarding
entitlements to government benefits must be made according to ‘ascertainable standards’ that are
applied in a rational and consistent manner.”). First, Plaintiffs can establish for themselves based
on their setting which base budget range they are eligible to receive. In turn, they also know how
their base budget range will be affected by future setting changes. While Plaintiffs contest the two
inputs considered when determining the base budget level, (see ECF No. 163 at 12 (“[I]n actuality,
the only individual information DHHR’s base budget calculation use[s] to determine the amount
of medical assistance benefits a class member will receive is the person’s age and the “Setting”

(internalized, externalized, and asocial) as well as a total score. Scores range from +10 (good) to -74
(extremely serious) with an average of 0 and a standard deviation of 10.
Id. (emphasis added). However, the Court notes that while information is available as to how the adaptive behaviors
are assigned, such as the motor skills and personal living skills categories in DHHR’s “add-ons” chart, the website did
not provide any information related to DHHR’s four adaptive behavior sub-category breakdowns. Presumably, DHHR
itself has created the four levels within each of the two adaptive behavior categories by dividing the range of possible
scores into the four separate levels, but it is unclear from the record exactly how the assigned level of each individual’s
adaptive behavior add-ons are determined. Nevertheless, Plaintiffs do not raise this specific issue in the response.

20

category in which that person lives.”)), they do not argue that they are unable to calculate their
own base budget level. In other words, Plaintiffs do not appear to contest that the base budget
matrix represents “ascertainable standards.”
Moreover, Plaintiffs can determine via their ICAP answers how much additional funding
they should be awarded based on three factors: what categories of add-ons they qualify for, the
specific dollar amounts associated with each, and the maximum additional funds allowed. Put
simply, each Plaintiff, along with his or her guardians and IDT, will have the ability to establish
what budget range DHHR should assign before the agency puts a budget letter in the mail.13 This
is remarkably different than Plaintiffs’ previous inability to predict what dollar figure would result
from a seemingly arbitrary and secret proprietary algorithm for which inputs and methodologies
were unknown. For these reasons, the Court does not find support for Plaintiffs’ argument that the
proposed system “would eschew the legislated and publicly adopted ‘person-centered planning
process’ required by both federal and DHHR regulations, in favor of a bureaucratic construct to
prevent class members from receiving Medicaid benefits in the amount, duration, and scope
needed to meet their needs and achieve the purpose of the waiver program.” (Id. at 21.) The
setting is selected by the individual from various options, add-ons are determined based on the

13

The Court noted in the previous footnote that the record is not clear how the adaptive behavior ICAP scores within
the motor skills and personal living skills categories translate into four different levels, but the Court assumes that
DHHR divides the range of possible scores into a distinct range for each of the four levels. Nevertheless, while
Plaintiffs challenge the definitions of “extremely or very serious” and “moderately serious or slightly serious” within
the problem behavior categories, (see ECF No. 163 at 21–22; see also ECF No. 163-6 at 2 ¶ 7 (“[T]he factors used to
determine eligibility for the ‘add-ons’ are vague, and thus we cannot be certain that our calculations are accurate at
this time. For example, we do not know how DHHR will differentiate between ‘extremely or very serious’ and
‘moderately or slightly serious’ with regard to a member’s ‘externalized problem behavior.’”)), they do not challenge
how the adaptive behavior scores from the ICAP fit into the four levels associated with motor skills adaptive behavior
and personal living skill adaptive behavior. Rather, they generally challenge how the add-ons are determined. (See
ECF No. 163 at 22 (“The ‘add on’ proposal does not provide ‘ascertainable standards’ since one must guess at the
meaning and application of it to individual circumstances, and it provides no factual basis by which a recipient may
judge whether their exclusion was erroneous.”).) Again, Defendant states that the application of the various add-on
categories is determined by the individuals’ ICAP answers, (see ECF No. 155-1 at 4–5), and the Court is not persuaded
that the add-on categories are wholly standardless like the previously used algorithm as Plaintiffs argue.

21

individual’s specific ICAP answers, and protocols are in place for participants to register
grievances or complaints regarding the way the individual budget is determined.
In addition to the procedure for initially calculating each individual’s budget level, the
proposed method for challenging that budget level appears to comport with the requirements of
due process and affords Plaintiffs the opportunity to meaningfully challenge that determination.
With regard to the authorization system subject to the Court’s injunction, Defendant argued that
DHHR would “‘make exceptions’ and increase a recipient’s budget ‘where additional services are
necessary to keep individuals safe and health in the community, and out of institutions.’” (ECF
No. 122 at 21 (citing ECF No. 101-1 at 3–4 ¶ 8; ECF No. 51-1 at 9 ¶ 21).) The Court previously
found that the record and, in particular, BMS’s second-level review practice did not support that
assertion. (See id. at 21–22 (noting that the policy manual provided that recipients must purchase
services within the budget and that BMS rejected any funding request beyond an assigned budget
unless there was a change in circumstances occurring after the budget determination).)
Defendant now represents, and the Court finds, that the proposal remedies this defect in
both form and effect. (See ECF No. 156 at 9–12; ECF No. 155-1 at 9–11.) Plaintiffs and their
IDTs initially can challenge an assigned budget calculation based on factual discrepancies between
the member’s living situation, ICAP answers, and the actual variables and amounts applied in the
calculation. After review of the budget letter, Plaintiffs and their representatives may contact
DHHR directly with any disputes. Even beyond this initial procedure, a member requiring services
outside the assigned budget may create two IPPs for submission to Kepro and evaluation by
DHHR, one of which will reflect all services the individual believes is necessary regardless of the
assigned budget.

22

Further, DHHR plans to implement a new “exceptions process” for individuals “who
believe they require services beyond what can be purchased within the budget.” (ECF No. 156 at
9.) A member will no longer be required to show “‘a change in the recipient’s need for benefits
that occurs after’ the individualized budget determination.” (Id. at 10 (quoting ECF No. 122 at
21).) The standard used by the three-person exceptions panel will be whether “the services are
necessary to keep the member safe and healthy in order to avoid a heightened risk of
institutionalization.” (Id.) This allows exceptions to be made on a case-by-case basis as opposed
to the previous practice of not allowing exceptions if the request involved spending more than the
individual’s allocated budget. Plaintiffs contend that the new “exceptions process” does not allow
members to obtain clinically-appropriate services that are medically necessary, (see ECF No. 163
at 22, 23), but this argument does not comport with a reading of DHHR’s new proposal. 14 (See
ECF No. 155-1 at 9–10 (“In determining whether to grant additional services as requested, the
[exceptions] panel will apply the following standard: are the services [] necessary to keep the
member safe and healthy in order to avoid a heightened risk of institutionalization during the IPP
year?”).) Moreover, if the panel either denies in whole or in part an individual’s exceptions
request, DHHR will send a revised denial letter with information regarding what documents were
considered and a specific and individualized rationale for the decision. (Compare id. at 10–11,
with ECF No. 108-16 (providing a 2015 notice of denial with a blanket explanation: “Your
assessed annual budget would have been exceeded or has been exceeded and therefore this request
is denied.”).) Plaintiffs retain the ability to appeal an unfavorable decision through a Medicaid

Plaintiffs also challenge the exceptions process on the ground that it “would not allow class member[s] to obtain
clinically-appropriate services if doing so would exceed [] across-the-board caps imposed on class members residing
in a family home.” (ECF No. 163 at 23 (emphasis in original).) As Defendant notes in his memorandum of law in
support of the current motion, however, these service caps are specified in DHHR’s federally approved 1915(c) waiver
application and “are not part of this litigation” as Plaintiffs’ Complaint does not challenge them. (See ECF No. 156
at 12 & n.1; ECF No. 167 at 21–22 & n.6.)
14

23

Fair Hearing. Finally, “DHHR has revised and will further clarify” policies that allow services in
excess of the budget to be authorized “when necessary to avoid a heightened risk of
institutionalization.” (ECF No. 156 at 11 (stating that “the Board of Review may grant specific
services that require funding in excess of the budget if such services are necessary to avoid
institutionalization” regardless of the panel’s decision at the “exceptions process” stage (emphasis
in original)).)
In sum, the Court is convinced that the due process injustices inherent in the old system
addressed by the injunction are not repeated in DHHR’s proposed authorization system. Initial
budget determinations are individualized and based on transparent and discernible standards in
stark contrast to the old system. Plaintiffs may alert DHHR directly if they notice an error in the
budget calculation such as the misapplication of a particular input. After receiving a detailed
budget letter, Plaintiffs may take advantage of the exceptions process if they believe that their
required services are not adequately covered by their budget. Plaintiffs’ ability to navigate the
exceptions process is open and obvious on many fronts, and there is no evidence that service
requests in excess of a base budget will be denied in a blanket manner as in the old system.
Moreover, if Plaintiffs receive an unfavorable outcome from the panel that reviewed their case
during the exceptions process, Plaintiffs may choose to appeal that decision and request a Medicaid
Fair Hearing in front of the Board of Review as detailed in the updated denial notices. The Board
of Review has the authority to overturn factual determinations previously made and to grant
services requiring funding beyond an individual’s initial budget. All these procedures are outlined
in the letters and notices that DHHR transmits to members as well as DHHR’s updated policy
manual. As such, the proposed system does not appear susceptible to the “high risk of arbitrary

24

and erroneous benefits determinations” that due process forbids. (See ECF No. 122 at 23–24
(citing Town of Castle Rock v. Gonzales, 545 U.S. 748, 792 (2005) (Stevens, J., dissenting)).)
While Plaintiffs challenge the proposed authorization system through a due process lens at
times, the majority of their response and its attached exhibits seem to dispute the impact of the
dollar figures involved in the proposal. The Court understands Plaintiffs’ concerns that an
overhaul to the I/DD Waiver Program’s budget authorization system may lead to decreased
budgets for certain individuals within the program. However, the Court’s decision to enjoin
Defendant from using the proprietary algorithm and accompanying process did not focus on or
consider the budget amounts assigned to the named Plaintiffs in 2015 versus the previous year.
(See ECF No. 122 at 23 (“To be clear, the Court is not stating that the substance of the benefits
determinations for Plaintiffs is impermissible under the Due Process Clause.”).) Nor could the
Court’s decision take into account the dollar figures themselves because the injunction was based
on Plaintiffs’ likelihood of success on the merits of their procedural due process claim, which “is
simply a guarantee of fair procedures—typically notice and an opportunity to be heard.” See Mora
v. City of Gaithersburg, 519 F.3d 216, 230 (4th Cir. 2008) (citations omitted); see also Matthews
v. Eldridge, 424 U.S. 319, 335 (1976) (citation omitted). Further, the Court is convinced by
Defendant’s argument that the evidence proffered by Plaintiffs supporting the proposition that the
new system will affect significantly and negatively the class members in this case is based partly
on statistical flaws that empirical methodologies typically seek to avoid. (See ECF No. 167 at 20–
21 n.5.)
Nevertheless, the Court emphasizes that its role in analyzing the constitutional adequacy
of an institutional process is different from an evaluation of the state agency’s reasons for making
certain decisions. Due process in this context is concerned with the procedures and not the

25

substance of the state’s decisions. “The quality of an agency’s reasoning is decidedly not a process
issue.” Lightfoot v. District of Columbia, 448 F.3d 392, 401 (D.D.C. 2006) (citing Motor Vehicle
Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50–51 (1983)). Thus, Plaintiffs’
argument that the new authorization system will decrease their I/DD Waiver Program budgets
across the board, (see ECF No. 163 at 14–15), cannot be the focus—regardless of its truth—in
deciding whether to modify or vacate the current injunction, which was based in part on a finding
that Plaintiffs were likely to succeed on their claim under procedural due process. As the Supreme
Court emphasized in Horne, “structural and managerial improvements” may constitute a relevant
change in circumstances for purposes of modifying or vacating an injunction because the “adopted
policies . . . ameliorated or eliminated many of the most glaring inadequacies discussed by the
district court.” 557 U.S. at 465–66, 468 (citation omitted). Based on the new authorization system,
which DHHR presumably has begun implementing with regard to the unnamed members of the
class, (see ECF No. 168), the Court finds that the deficiencies discussed within its previous
memorandum opinion and order enjoining Defendant do not exist within the new and improved
authorization system.
Because the procedural due process concerns addressed by the preliminary injunction have
been alleviated, it is no longer equitable based on the reasons stated in the Court’s previous
memorandum opinion and order to require Defendant to continue providing to the named Plaintiffs
the budget amounts they received in 2014 if those Plaintiffs received a budget reduction after that
year. Defendant has complied with the injunction to this point, which was put in place over oneand-a-half years ago. There is no indication that the faulty conditions of the old system will recur
as the new system is in the process of being implemented for all I/DD Waiver Program members.
Thus, continued enforcement of the extraordinary and prospective relief previously ordered is

26

against the public interest, particularly in light of the fact that continued enforcement will delay or
preclude DHHR from adding new slots to the I/DD Waiver Program. (See ECF No. 156 at 15.)
For those reasons and pursuant to Federal Rule of Civil Procedure 60(b)(5), the Court finds that
Defendant has met his burden of showing a change in circumstances necessitating relief from the
existing injunction, see Horne, 557 U.S. at 450, and grants in part Defendant’s motion to modify
the previous memorandum opinion and order entered on September 13, 2016, (ECF No. 122), to
allow the preliminary injunction to expire for the named Plaintiffs as set forth below. See Rufo,
502 U.S. at 380–93; Dombrowski, 380 U.S. at 492; Thompson, 404 F.3d at 825–26, 830; see also
infra Section V.
The Court notes that while the discussion has focused on the procedural due process
infirmities in the old system—as that was the basis for the injunction—Plaintiffs also argue in the
response that the preliminary injunction should remain in place because they are likely to succeed
on their claims pursuant to the Americans with Disabilities Act (“ADA”) and Rehabilitation Act,
even under the new system. The briefing in the record regarding Plaintiffs’ claims under the ADA,
Rehabilitation Act, and other federal statutes and regulations only analyzes the likelihood of
success on those claims under the old system that DHHR has abandoned. Consequently, the record
is undeveloped as to whether it would remain equitable for the injunction to apply prospectively
based on Plaintiffs’ likelihood of success on the merits of their other claims. Because the Court
has modified its previous memorandum opinion and order in a way that leaves the injunction in
place for each named Plaintiff until an adequate annual assessment can be conducted before his or
her next anchor date, see infra Section V, time remains for Plaintiffs to file a renewed motion for
preliminary injunction, if necessary, based on the new system.

27

V. CONCLUSION
For these reasons, the Court GRANTS IN PART Defendant’s Motion to Vacate or Modify
Preliminary Injunction Order, (ECF No. 155), to the extent Defendant requests that the Court lift
the injunction to allow DHHR to begin implementing the proposed service authorization system
as to the named Plaintiffs. The motion is otherwise DENIED. The Court further MODIFIES its
memorandum opinion and order entered on September 13, 2016, (ECF No. 122), as follows: the
preliminary injunction will expire individually as to each named Plaintiff on the individual’s first
anchor date15 following this memorandum opinion and order’s entry unless the anchor date falls
within ninety days of entry in which case the preliminary injunction will expire on the individual’s
second anchor date subsequent to this order’s entry.16 Defendant is further ORDERED to provide
the Court with an updated status report as to the new system’s implementation within thirty days
of this memorandum opinion and order’s entry.
IT IS SO ORDERED.
The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and any
unrepresented party.
ENTER:

March 26, 2018

A recipient’s “anchor date” is “the anniversary of that recipient’s admission to the program.” (ECF No. 29 at 11.)
According to Defendant’s description of the new system, Kepro will conduct an annual assessment of each
individual approximately ninety days before his or her anchor date. (See ECF No. 155-1 at 3.) Therefore, the nature
of the expiration ensures that a named Plaintiff will continue receiving the benefits of the preliminary injunction until
Kepro, the member, and his or her IDT have had adequate time to conduct the annual assessment prior to the anchor
date.
15
16

28