The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.
On behalf of themselves and a putative class, Charles Strouchler, Sara Campos, and Audrey Rokaw have brought this lawsuit against the Commissioner of the New York State Department of Health, in his official capacity ("DOH" or "the State") and the Administrator of the New York City Human Resources Administration, in his official capacity ("HRA" or "the City"). Plaintiffs are elderly and disabled recipients of 24-hour continuous home care services, administered by the State through its agent the City using Medicaid dollars. They now seek a preliminary injunction (and eventually a permanent injunction) preventing defendants from reducing or terminating these services without adequate notice and legitimate reasons that comply with federal and state law and the federal Constitution.*fn1 They also seek the restoration of services that have been wrongly reduced or terminated since October 4, 2011. On July 17, 26, and 27 I held a hearing to evaluate the parties' evidence. They have submitted both pre-and post-hearing briefs.*fn2
New York State, like many states whose tax revenues were severely reduced by recent economic circumstances, has faced a significant budget crunch in recent years. Simultaneously, medical care is consuming an ever-larger portion of the state's budget and it is understandable that state and local governments are exploring ways to reduce costs. Indeed, reforming our health care system has been a dominant topic of the nation's political discourse in recent years.
While these goals may be laudable, the evidence here establishes a substantial likelihood that defendants' actions have violated federal law and the Constitution's guarantee of due process. Any change in the provision of health care must result from the legislative and regulatory process. But administrators -- even when faced with major budget crises -- may not deprive citizens of the care to which they are legally entitled. Because plaintiffs have established a substantial likelihood of success on the merits and of imminent irreparable harm, their motion for a preliminary injunction is granted, although its scope is narrower than what they seek.
A. The Medicaid Program in New York City
As the Second Circuit recently explained,
Medicaid is a cooperative federal-state program through which the Federal Government provides financial assistance to States so that they may furnish medical care to needy individuals. The federal and state governments share the cost of Medicaid, but each state government administers its own Medicaid plan. State Medicaid plans must, however, comply with applicable federal law and regulations.
Any state that participates in Medicaid must designate "a single State agency" . . . to administer -- or to supervise the administration of -- the state's Medicaid plan. See 42 U.S.C. § 1396a(a)(5). Although the State agency may delegate to local entities the performance of certain responsibilities, see 42 C.F.R. § 431.10(e), the State agency must (1) "[h]ave methods to keep itself currently informed of the adherence of local [entities] to the State plan provisions and the agency's procedures for determining eligibility," and (2) "[t]ake corrective action to ensure their adherence," 42 C.F.R. § 435.903 (some quotations and citations omitted).*fn3
In New York State, DOH is the state agency responsible for the implementation of the State's Medicaid plan.*fn4 The City HRA administers the Medicaid program in New York City as the local agent of the State. As part of that program, plaintiffs and others receive help with personal hygiene, dressing, feeding, walking, and other activities of daily life, and are therefore able to continue living in their homes rather than in hospitals or other institutions. This assistance, known as "personal care services," is governed by federal and state regulations.*fn5
The State offers various types of personal care services, depending on a patient's need. The most expansive (and expensive) type is known as "split-shift care," because it involves multiple care givers each working a separate shift so that a patient can have up to 24 hours per day of care. The next type is known as "livein" or "sleep-in" care, whereby one attendant lives with the patient full time and is able to sleep during the night without waking up to provide care except on rare occasions.*fn6
In order to obtain personal care services, Medicaid recipients apply to the City, which conducts an assessment and determines the level of care that it believes is medically necessary.*fn7 Before split-shift care is authorized, the initial determination must be reviewed and approved by an independent physician called a "local medical director" or "LMD."*fn8 Authorizations of personal care services are reviewed either once or twice per year. Before reducing or terminating care, defendants must provide notice to the recipient detailing their reasons for doing so, must provide the recipient the opportunity for an administrative hearing to challenge the change in services, and must refrain from making the changes pending the outcome of that hearing.*fn9
In 2011, the United States intervened on behalf of a City employee who had brought a false claims action alleging that "the City has maintained a policy . . . of reauthorizing split-shift services without any LMD determination," in violation of State regulations.*fn10 As part of the settlement terminating the lawsuit, the City committed "to obtain independent medical reviews in connection with reauthorizing 24-hour split-shift care."*fn11 Also in 2011, the State made certain amendments to its regulations governing personal care services although, according to subsequent clarifications by the State, the relevant changes to the regulations were only semantic, not substantive.
Beginning around April or May of 2011, the City began an initiative "to review all split-shift cases . . . that were being reauthorized."*fn12 This initiative was part of an effort by the City to "reduce or transfer split-shift cases" and to revisit all previous decisions in light of the Feldman settlement.*fn13 Plaintiffs argue that these actions were taken in order to reduce the cost of the program.*fn14
The City has responded by arguing that, because of the structure of the Medicaid program under New York law, it would not benefit financially from a reduction in the number of split-shift recipients.*fn15
Between January 1, 2010 and May 1, 2011, the number of patients on split-shift care fell from 1,356 to 1,274. From August 2011 through April 2012, the number of recipients fell from 1,135 to 945. As plaintiffs point out, "during this more recent period, [the City] reduced its split-shift census twice the amount in half the time."*fn16 Between August 1, 2011 and June 15, 2012, 270 recipients of split-shift care appealed the decision by the City to reduce or terminate their care. After conducting fair hearings, the State's Administrative Law Judges ("ALJs") reversed 262 of these decisions.*fn17 That is, the City's decisions were reversed by the State over ninety-seven percent of the time.
C. Regulations and Interpretations of Regulations Challenged by Plaintiffs Many of the City's termination or reduction notices rely on one or
more of the following reasons, which plaintiffs challenge as improper under state regulations and/or federal law:
1. "Some" Versus "Total" Assistance
Since 1987, New York State's Medicaid regulations have distinguished between a patient's need for "some assistance" with the activities of daily living and a patient's need for "total assistance" with those activities. The distinction is crucial because only those patients who require "total assistance" are entitled to split-shift care. The regulations define the terms as follows:
(i) Some assistance shall mean that a specific function or task is performed and completed by the patient with help from another individual.
(ii) Total assistance shall mean that a specific function or task is performed and completed for the patient.*fn18
The distinction is between those tasks that are completed by the patient with help and those that are completed for the patient. "[I]n the wake of the Feldman case," the administrative leadership at the HRA placed a new "focus" on these definitions to ensure that all split-shift recipients fit within the regulations.*fn19
Instead of ensuring proper implementation of the regulation, however, the City's renewed focus led it to adopt a strained interpretation of "total" and "some" assistance that conflicts with the plain language of the regulation.
According to Anita Aisner, its chief medical director, the City's new understanding of the regulation was this: "some assistance is when the task is completed with the assistance of the patient so that the patient at least minimally assists with the task."*fn20
Rather than focusing on who is the primary person performing the task -- i.e, whether the task is performed by the patient or for the patient -- the City has decided that if a patient can lend even minimal assistance in the performance of the task, she requires only "some assistance" with it. This interpretation resulted in certain unsupportable decisions. Most notably, according to Aisner, an incontinent patient who requires a diaper change needs only "some assistance" with that change if she is able to "help keep [her] body [on its side] by holding onto the side of the bed" so as to make it easier for the home attendant to change the diaper.*fn21
But such a scenario cannot possibly fit the definition of "some assistance," which requires that "a specific function or task is performed and completed by the patient with help from another individual." A patient is not changing her own diaper, with help, when she grabs hold of a bar on the side of a bed. Rather, the task is being "performed and completed for the patient."
On approximately twenty-six occasions since last fall, the State's ALJs have reversed the City's determination that an individual only needs "some" assistance and is thus not eligible for split-shift care.*fn22 In one illustrative case, the ALJ rejected the City's conclusion that an individual needed only "some" assistance with using the toilet:
[The City's conclusion is] not supported by the record at all . . . . Appellant has only partial limbs; no hands and no fingers . . . and she cannot assist in toileting because she cannot ambulate her body at all . . . This Appellant cannot even hold a spoon, nor sit up, nor even turn her head . . . [She is] unable to even turn her body even an inch.*fn23
Despite this individual's severe disability, the City made a determination that she could "perform the task" of using the toilet.*fn24 As the ALJ put it in that opinion, "Partial Assistance by definition means the patient does most of the task,"*fn25 and that was surely not the case here.
2. Care at Times that Cannot Be Predicted
Prior to October 4, 2011, split-shift services were available for a patient only if he or she "requires total assistance . . . at unscheduled times during the day and night."*fn26 After that date, the services were available only if the patient "requires total assistance . . . at times that cannot be predicted."*fn27 On April 9, 2012, the State issued an administrative directive clarifying that the new language "is not a substantive change from past practice."*fn28 This position was reiterated by the State in written testimony.*fn29
Although Aisner testified on behalf of the City that it never treated the change as substantive,*fn30 the City began to rely on the "predictability" of a person's nighttime needs to eliminate split-shift care and began to reduce care for dozens of patients because their need for care was predictable.*fn31 The City's interpretation of the regulation led to the following distinction. If a patient could verbally express her need for a diaper change during the night, she would be eligible for care because her need for the care was not predictable. However, if a patient could not call to his attendant when he needed a diaper change -- for example, because he had dementia -- then he would be ineligible for care. His diaper changes would be regularly scheduled, rather than as-needed, and therefore under the City's interpretation he would not be covered by the regulation.*fn32
In August 2011, a doctor for the City determined that Plaintiff Strouchler's need for catheterization two to three times a night and need to be turned every two hours were "unschedulable" and therefore merited split-shift care; but six months later, the same doctor denied reauthorization of Strouchler's care because those needs were predictable and could be scheduled. He determined that "a mistake occurred in the prior authorization."*fn33 His decision was reversed by an ALJ.
The State's witness confirmed that according to the State's understanding of the regulations, a person who needs regular care (such as diaper changes or repositioning) every two hours throughout the night would be eligible for split-shift care, even though the timing of the care was "predictable."*fn34 On approximately fifty-six ...