United States District Court, E.D. New York
Neil Fishman, by his legal guardian, Selma Fishman, and Suruj Sirikeshun, individually and on behalf of all others similarly situated, Plaintiffs,
Richard F. Daines, M.D., as Commissioner of the New York State Department of Health, and John Paolucci, as Deputy Commissioner of the Office of Temporary and Disability Assistance of the New York State Department of Family Assistance, Defendants.
MEMORANDUM AND ORDER
F. BIANCO United States District Judge.
Neil Fishman, through his legal guardian
(“Fishman”), and Suruj Sirikeshun
“plaintiffs”) bring this class action pursuant to
42 U.S.C. §§ 1983 and 1396a(a)(3) against the
Commissioner of the New York State Department of Health
(“DOH”) and the Commissioner of the Office of
Temporary and Disability Assistance of the New York State
Department of Family Assistance
(“OTDA”) (collectively, “defendants”).
Memorandum and Order dated September 16, 2014, the Court
denied plaintiffs' motion for a preliminary injunction
requiring defendants to mail a “default notice”
to members of the plaintiff class before their Medicaid
appeals are deemed abandoned because they missed a scheduled
hearing. The Court found that plaintiffs failed to make a
clear showing that they were likely to succeed on the merits
of their due process or statutory claims. Plaintiffs appealed
this decision, and by Summary Order dated October 15, 2015,
the Second Circuit reversed this Court's denial of the
preliminary injunction and remanded the case for further
proceedings. The Court subsequently granted plaintiffs'
motion for a preliminary injunction by Memorandum and Order
dated March 4, 2016, as amended on March 10, 2016.
on April 20, 2016, plaintiffs moved for partial summary
judgment, seeking to make the preliminary injunction
permanent. Defendants oppose the motion on the sole ground
that plaintiffs lack standing to bring this action. For the
reasons discussed below, the Court finds defendants'
position to be without merit, grants plaintiffs' motion
for partial summary judgment in its entirety, and hereby
orders that defendants are permanently enjoined from
dismissing administrative appeals of defaulting Medicaid
appellants ho are not given at least ten (10) days to respond
to a written notice from defendants inquiring as to whether
they would like their hearings rescheduled.
Facts and Legal Framework
defendants' opposition is restricted to standing, the
Court limits its analysis to those facts set forth in the
parties' Rule 56.1 statements, as well as the
parties' affidavits and exhibits, pertaining to that
issue. Upon consideration of the motion for
partial summary judgment, the Court will construe the facts
in the light most favorable to defendants as the nonmoving
party, and it will resolve all factual ambiguities in their
favor. See Capobianco v. New York, 422 F.3d 47, 50
n.1 (2d Cir. 2001).
background facts of this case, including an overview of the
Medicaid system and appeals process, are set forth in this
Court's opinions (1) denying, in large part,
defendants' motion to dismiss, see Fishman v.
Daines, 743 F.Supp.2d 127 (E.D.N.Y. 2010)
(“Fishman I”); (2) denying the
preliminary injunction, see Fishman ex rel. Fishman v.
Daines, No. 09-CV-5248 JFB ARL, 2014 WL 4638962,
(E.D.N.Y. Sept. 16, 2014) (“Fishman
II”), vacated and remanded sub nom. Fishman v.
Paolucci, 628 F. App'x 797 (2d Cir. 2015); and (3)
granting the preliminary injunction following remand, see
Fishman v. Daines, 164 F.Supp.3d 409 (E.D.N.Y. 2016)
(“Fishman III”). In addition, the Second
Circuit summarized the contours of the Medicaid program in
its order remanding this action. See Fishman, 628 F.
App'x at 797. Because defendants do not contest either
this Court's or the Second Circuit's analysis of the
relevant legal scheme (see Defs.' Opp'n Br.,
ECF No. 159, at 12 n.6), the Court will briefly outline the
law and regulations at issue.
short, this case involves the procedures by which defendants
determine that a Medicaid appeal is abandoned. After
defendants conclude that a claimant is no longer entitled to
Medicaid benefits, they inform the claimant by letter and
advise him that he may request a fair hearing. See
Fishman II, 2014 WL 4638962, at *1-2. If the request is
timely made, the claimant may continue to receive
“aid-continuing” Medicaid coverage pending the
outcome of the hearing, and defendants send two additional
letters: first, an acknowledgement that a fair hearing has
been requested; and second, a notice that the fair hearing
has been scheduled, which includes instructions for
requesting adjournments. Id.
claimant does not attend his fair hearing, whether because he
did not receive a notice or for any other reason, he is
considered to have defaulted his hearing, and risks having
his appeal deemed abandoned. See 18
N.Y.C.R.R. § 358-5.5(a). It is possible to
restore a defaulted hearing to the calendar, but the timing
of the request to do so affects the continuing provision of
Medicaid coverage. See Id. § 358-5.5(c).
Plaintiffs contend that many class members lost
aid-continuing coverage, at least temporarily, because they
did not realize that they missed their fair hearing.
Fishman II, 2014 WL 4638962, at *2. The default
notice requested by plaintiffs, and temporarily put in place
by the Court when it granted the preliminary injunction,
would inquire as to whether the defaulting Medicaid appellant
wanted his or her hearing rescheduled and would give the
appellant at least ten (10) days to respond to the notice
before dismissal of the administrative appeal. Id.;
see also Fishman III, 164 F.Supp.3d at 418.
the Court issued its opinion on the motion to dismiss in
2010, see Fishman I, 743 F.Supp.2d at 127, the
parties reached a comprehensive stipulation, which the Court
ordered effective on April 6, 2011 (ECF No. 61). Among other
things, the stipulation certified this case as a class
action, on behalf of “[a]ll past, present, and future
applicants and recipients of Medical Assistance . . . in New
York State who: (a) requested or will request an
administrative fair hearing . . . (b) failed or will fail to
appear in-person . . . and (c) suffered or will suffer
dismissal of their administrative appeal without
defendants' prior written inquiry.” (Id.
¶ 1.) The stipulation also required defendants to begin
issuing letters to prospective class members who defaulted
their fair hearings. (Id. ¶ 3(b).) The letters
asked class members if their hearing request was abandoned,
and advised them that if they intended to reschedule their
hearing, they must provide good cause for having defaulted.
(Id.) The letter also required the class members to
respond within ten (10) days of the letter's mailing
date, or else their hearing request would be deemed
abandoned. (Id.) The letters were issued for
approximately two years, between the date the Court
so-ordered the stipulation on April 6, 2011, and the date it
was vacated on September 16, 2013.
stipulation also included a provision exempting prospective
class members from the requirements of 18 N.Y.C.R.R. §
358-5.5. (Id. ¶ 3(f).) At that time, Section
358-5.5 required defaulting Medicaid appellants to request
that their hearing be rescheduled within 15 days of default,
and to show good cause, or to establish within 45 days that
they had not received the initial notice of the hearing.
Fishman II, 2014 WL 4638962, at *3. Under the terms
of the stipulation, the class members were not bound by the
15-and 45-day timelines, but instead by the single timeline
of ten days from the mailing date of the default notice.
Section 358-5.5 did not, and still does not, address the
issuance of a written default notice.
and 45-day requirements were eliminated when Section 358-5.5
was amended, effective October 23, 2012. Medicaid appellants
now have one year to request that their hearings be
rescheduled, but are also subject to a new timeline. They
must request that their hearing be rescheduled within 60 days
of the date of default, or they will be unable to recover
retroactive benefits for any period of lost coverage after
they defaulted. See 18 N.Y.C.R.R. §
358-5.5(c)(1). If their request to reschedule the hearing is
made 60 days or more after the default, they will only
receive medical coverage prospectively, from the date of
their request. Id. § 358-5.5(c)(2).
Section 358-5.5 was amended, plaintiffs moved to alter the
stipulation so that the plaintiff class could benefit from
the longer one-year timeline, and from the provision
addressing retroactive and prospective coverage, which was
not addressed by the terms of the stipulation. (ECF No. 91.)
Defendants opposed the motion. Ultimately, the Court vacated
the stipulation, pursuant to Fed.R.Civ.P. 60(b)(5),
concluding that it was not equitable to bind defendants to
both the stipulation and the amended regulation at the same
time, because defendants had negotiated the stipulation with
the former regulation in mind. (See ECF No. 101.) If
defendants were required to extend the new regulation to the
prospective class members, the Court held that they should
receive the opportunity to litigate the necessity of a
written default notice in light of the new regulation.
September 16, 2014, the Court denied plaintiffs' motion
for a preliminary injunction, which would have prohibited
defendants from dismissing the administrative appeals of
defaulting Medicaid appellants who were not given at least
ten days to respond to a post-hearing notice. See Fishman
II, 2014 WL 4638962, at *11. The Court concluded that
plaintiffs failed to make a clear showing that they were
likely to succeed on their due process or statutory claims.
Id. Plaintiffs appealed that decision, and by
Summary Order dated October 15, 2015, the Second Circuit
reversed this Court's denial of the preliminary
injunction and remanded the case for further proceedings
consistent with its Summary Order. See Fishman, 628
F. App'x at 797. Specifically, the Second Circuit found
that this Court “did not separately conduct an analysis
of 42 U.S.C. § 1396a(a)(3)” and remanded the
motion “to provide [this Court] with the opportunity to
do so in the first instance.” Id. at 802. The