Davis v. Shah

HARRY DAVIS, et al., Plaintiffs v. NIRAV SHAH, individually and in his official capacity as Commissionerof the New York State Department of Health, Defendant

12-CV-6134 CJS

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK

Dated: December 9, 2013

DECISION AND ORDER

APPEARANCES

For Plaintiffs:

Bryan D. Hetherington, Esq.

Geoffrey A. Hale, Esq.

Jonat han Feldman, Esq.

Empire Justice Center

Martha Jane Perkins, Esq.

Sarah Jane Somers, Esq.

National Health Law Program

For Defendant:

J. Richard Benitez, Esq.

Office of the New York State

Attorney General

INTRODUCTION

This is an action brought by Medicaid recipients to challenge New York State's decision to provide Medicaid payment for prescription footwear and compression stockings to treat certain medical conditions but not others. Specifically, Plaintiffs challenge two provisions of the New York State Social Services Law: The first, § 365-a(2)(g)(iii), which provides Medicaid payment only for prescription footwear "used as an integral part of a lower limb orthotic appliance, as part of a diabetic treatment plan, or to address growth and development problems in children;" and the second, § 365-a(2)(g)(iv), which provides Medicaid payment only for compression stockings "for pregnancy or treatment of venous stasis ulcers." Plaintiffs suffer from a variety of other illnesses for which prescription footwear and compression stockings are medically necessary. Prior to the enactment of those provisions, New York's medicaid statute covered Plaintiffs' orthopedic shoes and compression stockings. However, Plaintiffs are now excluded from such coverage because their medical conditions are not listed within the two statutory provisions quoted above.

Defendant maintains that the challenged provisions reflect a reasonable legislative compromise, whereby, out of economic necessity, the State of New York limited the provision of optional items (orthopedic shoes and compression stockings) to persons with the most serious medical needs, rather than eliminatingcoverage for such items altogether.¹ However, Plaintiffs maintain that the challenged provisions violate the federal Medicaid Act, federal anti-discrimination laws and the U.S. Constitution.

The Court previously granted Plaintiffs' applications for preliminary injunctive relief and class certification. Now before the Court is Plaintiffs' motion for summary judgment (Docket No. [#26]) and Defendant's cross-motion [#28] for summary judgment.

BACKGROUND

New York State participates in Medicaid, which "is a jointly funded Federal and state medical assistance program that was established by Title XIX of the Social Security Act [("SSA")] (42 USC §§ 1396 et seq.)." Jennings v. Commissioner, N.Y.S. Dept. of Social Servs., 71 A.D.3d 98, 114, 893 N.Y.S.2d 103, 115 (2d Dept. 2010). In that regard,

Title XIX of the Social Security Act, 42 U.S.C. [ §§ ] 1396 [et seq.], authorizes each state to participate in a cooperative federal-state program for medical assistance to the needy, known as Medicaid, and to operate a medical assistance plan, subject to federal statutory andregulatory guidelines. If a state chooses to participate, it must adopt a statutory plan setting forth the coverage to be extended to recipients, including the terms upon which individuals will be eligible and it must extend benefits to those who are eligible for federally-funded financial assistance, such as recipients of Supplementary Security Income (SSI) for the aged, blind and disabled, known as the "categorically needy."

Caldwell v. Blum, 621 F.2d 491, 494 (2d Cir. 1980).

New York's statutory plan for providing "medical assistance for needy persons" under the Medicaid program is set forth in Article 5, Title 11 of the New York Social Services Law ("NY Soc. Serv. Law"), § 363 et seq. As indicated above, the instant case involves NY Soc. Serv. Law § § 365-a(2)(g)(iii) & (iv), which, inter alia, set limits on payments for prescription footwear and compression stockings. Specifically, the statute states, in pertinent part:

2. [Medical assistance] shall mean payment of part or all of the cost of medically necessary medical, dental and remedial care, services and supplies, as authorized in this title or the regulations of the department, which are necessary to prevent, diagnose, correct or cure conditions in the person that cause acute suffering, endanger life, result in illness or infirmity, interfere with such person's capacity for normal activity, or threaten some significant handicap and which are furnished an eligible person in accordance with this title and the regulations of the department. Such care, services and supplies shall include the following medical care, services and supplies, together with such medical care, services and supplies provided for in subdivisions three, four and five of this section, and such medical care, services and supplies as are authorized in the regulations of the department:

* * *

(d) home health services provided in a recipient's home and prescribed by a physician . . . .

* * *

(g) sickroom supplies, eyeglasses, prosthetic appliances and dental

prosthetic appliances furnished in accordance with the regulations of the department; provided further that: . . . (iii) prescription footwear and inserts are limited to coverage only when used as an integral part of a low er limb orthotic appliance, as part of a diabetic treatment plan, or to address growth and development problems in children; and (iv) compression and support stockings are limited to coverage only for pregnancy or treatment of venous stasis ulcers;

McKinney's Soc. Serv. L. § 365-a(2)(g)(iii) & (iv) (West 2013) (emphasis added).

New York State does "not allow exceptions to [the aforementioned] defined benefit limitations" concerning orthopedic footwear and compression stockings. In that regard, the pertinent regulation states:

(g) Benefit limitations. The department shall establish defined benefit limits for certain Medicaid services as part of its Medicaid State Plan. The department shall not allow exceptions to defined benefit limitations. The department has established defined benefit limits on the following services:

(1) Compression and surgical stockings are limited to coverage during pregnancy and for venous stasis ulcers.

(2) Orthopedic footwear is limited to coverage in the treatment of children to correct, accommodate or prevent a physical deformity or range of motion malfunction in a diseased or injured part of the ankle or foot; in the treatment of children to support a weak or deformed structure of the ankle or foot; as a component of a comprehensive diabetic treatment plan to treat amputation, ulceration, pre-ulcerative calluses, peripheral neuropathy with evidence of callus formation, a foot deformity or poor circulation; or to form an integral part of an orthotic brace.²

18 NYCRR § 505.5(g)(1) & (2) (emphasis added).

In 2011, New York State enacted the statutory and regulatory amendments that Plaintiffs are challenging in this lawsuit, as part of an overall cost-cutting review of the State's Medicaid services. See, generally, Bick Aff. [#28-4]. In considering whether to limit coverage for orthopedic shoes and compression stockings, the State observed that,

[w]ith respect to orthopedic footwear, the Medicaid program was paying for orthopedic footwear even for Medicaid recipients whose medical need for the footwear was marginal and could be met, in any event, with off-the-shelf footwear. For example, in [fiscal year] 2010-11 alone, nearly half of the Medicaid payments made for orthopedic footwear were for claims in which the recipient's primary diagnosis was hammertoes or bunions[, which] are relatively common medical conditions. They are also relatively mild medical conditions. Alternatives to Medicaid funded orthopedic footwear exist for patients with these complaints. Wide-toe shoes that would accommodate hammertoes and bunions are readily available off-the-shelf and are relatively inexpensive.

With respect to compression and support stockings, a similar utilization problem prevailed. The Medicaid program was paying for compression or support stockings to address relatively less serious and common complaints, such as varicose veins or to comfort aching legs.

Bick Aff. [#28-4] at ¶ ¶ 66-68. The State contends that it chose to limit coverage to persons with a more-serious medical need for orthopedic shoes and compression stockings, such as diabetics, children, and pregnant women. Id. at ¶ ¶ 73-75. The State also considered that the related Medicare program imposed limits on orthopedic footwear similar to those being challenged in this action, and that the Medicare program's policy with regard to compression stockings was even morerestrictive than that being challenged here, since it only provided compression stockings for persons suffering from "open venous stasis ulcers." Id. at ¶ ¶ 72-75. The State maintains that by making changes to its Medicaid statue, including the subject changes pertaining to orthopedic shoes and compression stockings, it saved $14.6 million, thereby "avoiding other cuts in State Medicaid spending including the possible elimination of optional Medicaid services." Id. at ¶ 78. That is, the State chose to restrict the coverage of optional services, rather than eliminate them entirely.

Plaintiffs do not suffer from the conditions covered by Soc. Serv. L. § 365-a(2)(g)(iii) & (iv) or 18 NYCRR § 505.5(g). Instead, Plaintiffs suffer from conditions including multiple sclerosis, paraplegia, lymphedema, cellulitis, psoriatic arthritis, and trans-metatarsal amputation,³ for which their doctors have prescribed either orthopedic footwear or compression stockings. Amended Complaint [#34] at ¶ ¶ 2-7. Because those medical conditions are not listed in the challenged statute or regulation, Plaintiffs are not eligible to receive prescription footwear or compression stockings under the foregoing provisions, even though it is undisputed that such footwear and...