The opinion of the court was delivered by: LARIMER
On June 22, 1995, this Court issued a Decision and Order directing the parties to work together to prepare a final plan to implement the Court's preliminary injunction, which was entered on March 31, 1994. The parties were further directed to submit to the Court their plan or, if they could not agree on one, their areas of dispute.
Defendant Dowling ("the State") submitted the State's proposed plan and supporting materials on August 25, 1995. On August 31, plaintiffs submitted their plan, which differs from the State's in several respects.
The parties were able to agree on many areas, and to a great extent both their plans are the same. Plaintiffs' plan, in fact, is simply a copy of the State's with certain portions changed to reflect the differences of opinion between the parties about certain issues.
The disputed matters fall into two categories: one concerning the right of Certified Home Health Agencies ("CHHAs") to refuse to accept patients, and the other concerning the necessity of obtaining written physician's orders before a CHHA may reduce or terminate a recipient's care. Since the parties have been unable to resolve these remaining areas of dispute, the Court must determine what provisions should be adopted to effectuate the preliminary injunction. The following Decision and Order contains my findings on these issues; the exact language to be incorporated into the final plan is set forth in the plan attached as Appendix A to this Decision and Order. The Court has utilized the plaintiff's proposed plan and has modified it as necessary to reflect those matters resolved in this decision.
CHHAs' REFUSAL TO TAKE PATIENTS
The State's plan would allow a CHHA to refuse to accept a patient even after a professional director or fair-hearing decision has determined that the recipient should receive home health services. The State's plan would also allow CHHAs not to provide aid-continuing to recipients who have requested a fair hearing to dispute a proposed reduction or elimination of services. Plaintiffs would require CHHAs to provide services in both those instances.
In my June 22, 1995 decision, I deferred deciding this issue, noting that it had not been fully addressed as part of the preliminary-injunction motion, and that the issue concerning the extent to which CHHAs are state actors was then before the Second Circuit on appeal from my prior decision. I therefore stated that my ruling on this matter would await "further guidance from the Court of Appeals ..." Decision and Order, June 22, 1995, at 9.
The Court of Appeals' decision on July 13, 1995 has provided that guidance. The court expressly "rejected the State's argument that the CHHA's determinations should not be deemed state action." 60 F.3d 113, 119. The court noted that CHHAs "are deeply integrated into the regulatory scheme" of New York's Medicaid system. Id. The Court of Appeals' holding that "CHHA action is state action," 60 F.3d at 118, compels the conclusion that CHHAs may not refuse unilaterally to accept patients as provided in the State's plan.
I am not persuaded by the State's contention that the Court of Appeals' decision has no effect on the issue of whether a CHHA may refuse to accept or provide aid-continuing to a qualifying patient. While it is true that the Court of Appeals did not directly address this question, the implications of its reasoning are clear, and support plaintiffs' position.
In its decision, the Second Circuit emphasized that CHHAs are in effect arms of the State whenever they are carrying out the State's statutorily mandated obligations. The court stated that it found "persuasive" the statement in my July 28, 1994 decision that it would be "patently unreasonable to presume that Congress would permit a state to disclaim federal responsibilities by contracting away its obligations to a private entity." 60 F.3d at 118 (quoting July 28, 1994 decision at 18). Thus, the court held, "CHHAs are not 'independent actors doing business with the state,' but are entities that have assumed the 'responsibility for [the State's] mandated health care duties.'" Id. at 120 (quoting J.K. v. Dillenberg, 836 F. Supp. 694, 697-98 (D.Ariz. 1993)).
By the same token, then, the State cannot relieve itself of the obligation to provide home health care to eligible applicants merely because a CHHA does not wish to provide care. The State's position that the "Court of Appeals holding simply means that the State is responsible for certain CHHA decisions to deny, reduce, or discontinue home care," State's Report at 3, would be made meaningless if CHHAs could refuse to provide care even when the State itself is obligated to provide care. The State's "responsibility" would provide cold comfort to the applicant if that responsibility could be evaded simply by delegating these decisions to CHHAs. As the Court of Appeals held, that delegation of duty transforms CHHAs into state actors, and therefore the State's position on this issue is untenable.
In my June 22, 1995 decision, I held that when the treating physician approves a reduction or elimination of services for a patient, the CHHA cannot reduce or eliminate those services without first obtaining a written order from the physician. The State now asks the court to reconsider this ruling. The State contends that requiring written orders is contrary to prevailing practices within the health care industry and that it would impose severe financial and administrative burdens on CHHAs and others in the system.
After reviewing the materials submitted by the State, I remain convinced that written orders should be required for reductions or discontinuances of services, essentially for the same reasons stated in my June 22, 1995 decision. The Medicaid statutes and regulations clearly show the importance of written orders in this area.
I am not convinced that a written-order requirement would be as onerous as the State maintains. This is not a matter of physicians composing extensive, intricately detailed directives every time they believe that services should be reduced. There appears to be no reason why the order could not be reduced to a relatively simple form with a few appropriate blanks or boxes so that the physician could easily and quickly indicate the action prescribed. When measured against the importance of what is at stake for the recipient, that hardly seems to be a crushing burden.
At the same time, however, I recognize that medical exigencies and administrative difficulties may make it impracticable to expect a prior written order for every reduction in services. Certainly medical personnel dealing with the day-to-day care of patients with potentially changing needs, ought to have a certain degree of flexibility in giving and carrying out orders regarding patients' care.
I do not find it unreasonable, therefore, to allow CHHAs to act upon oral orders when the physician orally directs the CHHA to comply immediately with the order, provided that written confirmation of that order is promptly forthcoming. Such a procedure would balance recipients' interests in avoiding erroneous reductions or eliminations of care with the CHHAs' interests in efficiency and flexibility in carrying out physicians' orders.
The State's plan provides that written confirmation of oral orders must be provided within three (3) business days of the order. However, in further materials submitted by the State, the State requests that that period be lengthened to thirty (30) days. The State contends that this is necessary because of the practical difficulties involved in obtaining written confirmations.
After reviewing the State's submissions, I do believe that three (3) days may be an unrealistically short period in many instances. I am not convinced, however, that a full thirty (30) days is appropriate, especially considering the recipients' interests in these matters. I find, therefore, that when a physician directs a CHHA to comply immediately with an oral order to reduce or discontinue a recipient's care, the CHHA may comply, but that written confirmation must be obtained within seven (7) days of the oral order.
The plan attached as Appendix A to this Decision and Order ("the Plan") is to be adopted by defendants in order to implement the court's preliminary injunction entered on March 31, 1994. It is therefore
ORDERED that defendants are enjoined and restrained from:
(1) suspending, terminating or reducing the amount of home health care services received by members of plaintiffs' class otherwise than in accordance with the Plan;
(2) implementing the fiscal assessment procedures outlined in N.Y. Soc. Serv. L. § 367-j, 18 NYCRR § 505.23 and 92-ADM-50 otherwise than in accordance with the Plan; and it is further
ORDERED that defendant Dowling and his successors ("the State") must:
(1) ensure that local social services districts and CHHAs do not suspend, terminate or reduce the amount of home health care services received by members of plaintiffs' class otherwise than in accordance with the Plan; and
(2) take immediate steps in accordance with the Plan to provide notice and hearing rights to members of plaintiffs' class who have had their home health care services suspended, terminated or reduced without the benefit of notice, the right to a hearing or aid-continuing since November 15, 1993; and it is further
ORDERED that the process and procedures under the Plan mandated by this Decision and Order be implemented immediately but, in no event, no later than twenty (20) days after entry of this Order.
UNITED STATES DISTRICT JUDGE
Dated: Rochester, New York
The text of the proposed letter to social services districts and CHHAs will read as follows:
"This is to advise you that the Department has been ordered to issue the following directive by Order of the United States District Court, Western District of New York, in an action entitled "Catanzano et al. v. Dowling et al" 89 CV 1127L.
The Order is limited to adverse actions taken contrary to a treating physician's orders with respect to home health services.
I. HOME HEALTH SERVICES APPLICANTS:
A. APPLICANT DENIALS BASED ON HEALTH AND SAFETY:
§ 100. Instructions to CHHAs:
(b) When a CHHA determines that the home health services that an MA recipient's physician has ordered would not maintain the recipient's health and safety, the CHHA must consult with the physician. The purpose of this consultation is for the physician and the CHHA to develop, if possible, a plan of care that would maintain the recipient's health and safety.
§ 101. If, after consulting with the MA recipient's physician, the CHHA determines not to admit the recipient because the CHHA and the physician are unable to develop a plan of care that the CHHA believes would maintain the recipient's health and safety, the CHHA must follow the procedures set forth below:
(a) Hospitalized recipients:
The CHHA must refer a hospitalized recipient's case to the hospital discharge planner who, in accordance with existing procedures, will attempt to locate another CHHA that will agree to admit the recipient and provide home health services in accordance with the physician's order. If the discharge planner is unable to locate another CHHA, the discharge planner or the original CHHA must refer the recipient's case to the social services district. The referral must include a copy of the CHHA's assessment of the recipient, all other documentation that the CHHA has either prepared regarding the recipient or has received from the recipient's physician, and the name and telephone number or fax number of the recipient's physician. The CHHA or the discharge planner must inform the recipient and the recipient's physician that the recipient's case has been referred to the social services district.
(b) Non-hospitalized recipients:
The CHHA must refer a non-hospitalized recipient's case to the social services district. The CHHA's referral must include a copy of the documentation set forth in (a), above. The CHHA must inform the recipient and the recipient's physician that it has referred the recipient's case to the social services district.
§ 102. Instructions to social services districts:
(a) When a CHHA or a hospital discharge planner refers an MA recipient to the social services district in accordance with the procedures outlined in § 101(a) or (b) above, the social services district must forward the recipient's case and all relevant documentation to the local professional director or designee.
(b) The local professional director or designee will review the documentation and determine, on behalf of the social services district, whether home health services should be denied contrary to the physician's order or ...