Michael T. v. Bowling

MICHAEL T., et al., Plaintiffs, v. KAREN BOWLING, in her official capacityas Secretary of the WEST VIRGINIA DEPARTMENT OF HEALTHAND HUMAN RESOURCES, Defendant.

CIVIL ACTION NO. 2:15-cv-09655

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

September 13, 2016

MEMORANDUM OPINION AND ORDER

Pending before the Court is Plaintiffs' Motion for Preliminary Injunction. (ECF No. 28.) For the reasons provided herein, the Court GRANTS IN PART Plaintiffs' Motion for Preliminary Injunction to the extent that Plaintiffs request preliminary injunctive relief pertaining to the named Plaintiffs.

I. Background

This case involves an action by recipients of West Virginia's Intellectual/Developmental Disability Home and Community Based Services waiver program (the "I/DD Waiver Program") who are challenging reductions in their benefits that began in 2015.

A. Medicaid and the I/DD Waiver Program

"Medicaid is a cooperative federal-state program that provides health care to low-income families and individuals." (ECF No. 54 at 7.) "The program is administered by the States and overseen by the federal Centers for Medicare & Medicaid Services . . . ." (Id. at 7-8.) "Costs of the [Medicaid] program are shared by the federal and state governments . . . ." (ECF No. 14 ¶ 222.) "States are not obligated to participate in the Medicaid program." (Id. ¶ 223.) "If a state chooses to participate, however, it must operate its program in compliance with federal statutory and regulatory requirements." (Id.)

"West Virginia has chosen to participate in the Medicaid [p]rogram." (Id. ¶ 224.) The Bureau for Medical Services ("BMS"), a part of the West Virginia Department of Health and Human Resources, "is the state agency responsible for administering the Medicaid program in West Virginia." (ECF No. 54 at 8.)

"Medicaid identifies certain core services that are mandatory for any participating state." (ECF No. 14 ¶ 225); see, e.g., 42 U.S.C. § 1396a(a)(10)(A); 42 C.F.R. § 440.210. "In addition, states may choose to cover federally recognized . . . optional services . . . ." (ECF No. 14 ¶ 225.) Once a state elects to provide an optional service, it must adhere to the pertinent federal statutes and regulations. (See id.)

One optional Medicaid program is "intermediate care level services for individuals with intellectual/developmental disabilities" (the "ICF/IDD Program"). (Id.) The ICF/IDD Program "provides residential, health, and rehabilitative services." (Id. ¶ 226.) In other words, the ICF/IDD Program provides "[i]nstitutions for individuals with intellectual disabilities." (ECF No. 54 at 9); see also 42 U.S.C. § 1396d(d) (providing that the term "intermediate care facility for the mentally retarded" means, in part, "an institution . . . for the mentally retarded or persons with related conditions if . . . the primary purpose of such institution . . . is to provide health or rehabilitative services for mentally retarded individuals").

"West Virginia has chosen to include" an ICF/IDD Program "in its Medicaid state plan." (ECF No. 14 ¶ 227.) However, "West Virginia has capped the number of individuals who can receive services" through the ICF/IDD Program "at 509 since 1989." (ECF No. 54 at 9.)

Another optional Medicaid service—which is the subject of the instant litigation—is the I/DD Waiver Program. This program is an alternative to the ICF/IDD Program and provides home and community based services "for individuals with intellectual and developmental disabilities who would be eligible to receive care" through the ICF/IDD Program. (ECF No. 54 at 10.) 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 (providing a list of services included in the I/DD Waiver Program).) "Many I/DD Waiver [Program] members live in the homes of family members," and "[s]ome . . . members live in an '[i]ntensively [s]upported [s]etting' . . . , which is a residential home shared by one to four . . . members." (ECF No. 54 at 11; see also ECF No. 115 at 76 (providing the testimony of Patricia Nisbet, the Director of the Office of Home and Community Based Services in BMS, in which she states that "[a]pproximately 75 percent" of "waiver members live in family homes" and the remaining "[a]pproximately 25 percent" of "members live in [intensively supported settings] or group homes").)

West Virginia has included the I/DD Waiver Program in its state Medicaid plan. (See, e.g., ECF No. 14 ¶ 232; ECF No. 54 at 10.) The I/DD Waiver Program currently "provides 4,534 . . . program . . . slots . . . for West Virginians who are eligible for and receiving community-based services." (ECF No. 14 ¶ 238.) There is also a waiting list of over 1,100 eligible individuals awaiting a slot in the I/DD Waiver Program. (Id. ¶ 239.)

"BMS contracts with an administrative services organization, APS Healthcare Inc.," ("APS"), "to help administer the I/DD Waiver [Program]." (ECF No. 54 at 10-11.) Under their agreement, BMS delegates numerous tasks to APS, such as "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 annual basis," and conducting an "annual assessment of each program participant's abilities and needs," (ECF No. 28, Ex. 3 at 7). "Waiver services are [ultimately] provided to individual recipients through contracts with local service provider agencies." (ECF No. 14 ¶ 252.)

B. The Annual Authorization and Appeals Processes

Each I/DD Waiver Program member's "annual service authorization begins with APS's calculation of the member's 'budget.'" (ECF No. 54 at 14.) To determine each member's budget, APS conducts an "annual assessment" for each I/DD Waiver Program participant, which includes, in part, (1) conducting an interview with members, their legal representatives, their case managers, and other interested parties, (see ECF No. 28, Ex. 3 at 73); and (2) "compil[ing] comprehensive data pertaining to participants' abilities, strengths, and support needs," (id. at 7; see also ECF No. 54 at 14-15 (providing Defendant's assertion that, as part of its assessment, "APS uses standard assessment tools (the Inventory for Client and Agency Planning and the Adaptive Behavior Assessment System) commonly used in other States to analyze the functionality of individuals receiving long-term supports and services")).

"APS then applies a multi-variable statistical analysis" (the "APS Algorithm"), "which it . . . conduct[s] based on data specific to West Virginia, to the results of each member's functional assessment to produce a . . . budget . . . ." (ECF No. 54 at 15; see also ECF No. 14 ¶ 265 (providingPlaintiffs' assertion that APS began using the APS Algorithm to determine individualized budgets "in or around the fall of 2011").) The APS Algorithm is proprietary to APS and, as such, the exact factors it considers, the weight it accords to each factor, and its overall methodology in determining each member's budget are not publicly available information. (See, e.g., ECF No. 115 at 145-50; see also id. at 145 (providing the testimony of Patricia Nisbet, in which she states that "different variables that have been determined statistically significant" are included in the APS Algorithm, as well as the member's "age, . . . where they live, and if they're in school or not," but that she did not "know specifically" what factors are input into the APS Algorithm).) Once APS determines each I/DD Waiver Program member's budget, it sends a letter to the member notifying them of their budget amount. (ECF No. 54 at 15.) Those communications do not provide any information regarding how APS reached the individualized budget determination. (See, e.g., ECF No. 108, Exs. 3-4, 9, 13-14, 20.)

After the member is notified of their individualized budget, "the member's interdisciplinary team . . . meets to develop an [i]ndividualized [p]rogram [p]lan." (ECF No. 54 at 15. See generally ECF No. 51, Ex. 1 ¶ 19 (stating that the interdisciplinary team "includes the member and a representative from the provider agency, and it may also include the member's guardian(s) and health care professionals").) "In creating [the plan], the interdisciplinary team considers the array of services available through the I/DD Waiver Program, and creates a plan detailing the amount of each type of service needed to meet that recipient's individually-assessed safety, health, and care needs." (ECF No. 14 ¶ 257; see also ECF No. 54 at 15 (stating that the individual member's plan "details" the "member's care needs, how much of each waiver service the member will purchase, and the schedule for receiving those services").) The interdisciplinaryteam "has wide discretion in how it chooses to allocate funding" to various available services. (ECF No. 54 at 15.)

Once the individualized program plan "is complete, APS reviews the [plan] to ensure it complies with BMS policies and addresses the member's health and safety and the provider agency requests APS approval of the service levels in the [plan]." (Id. at 16.) "If the service costs in the [plan] are within the APS-calculated budget and otherwise comply with [the pertinent] policies, APS will approve service authorization requests consistent with the [plan]." (Id.)

The impetus for the present action is what occurs if the individualized program plan submitted by the member's interdisciplinary team exceeds the member's APS-determined budget. If the interdisciplinary team "determines funding in excess of the APS-calculated budget is necessary, the service coordinator submits requests for authorization of services to APS that exceed[] the budget." (ECF No. 51, Ex. 1 ¶ 21.) Prior to September 2014, APS made independent determinations to grant or deny these requests for funds in excess of the budget and "routinely approved" such "service ...