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Samele v. Zucker

United States District Court, E.D. New York

August 2, 2018

GEMMA SAMELE, SELMA ROHER by her next friend MELANIE ROHER, and S ALVATORE GUAD AGNA, individually and on behalf of all persons similarly situated, Plaintiffs,
HOWARD ZUCKER, as Commissioner of the New York State Department of Health, Defendant.

          New York Legal Assistance Group Attorneys for the Plaintiffs By: Benjamin Wait Taylor, Esq., Elizabeth A. Jois, Esq., Julia Grossman Russell, Esq., Jane Greengold Stevens, Esq., Of Counsel

          Office of the New York State Attorney General Attorneys for the Defendant By: Dorothy O. Nese, Assistant Attorney General



         The Plaintiffs Gemma Samele ("Samele"), Selma Roher ("Roher"), And Salvatore Guadagna ("Guadagna") (the "Plaintiffs") commenced this putative class action against the Defendant Howard Zucker ("Zucker," or the "Commissioner"), as Commissioner of the New York State Department of Health ("DOH"), alleging that the Defendant violated the Medicaid Act 42 U.S.C. § 1396 et seq.; the Americans with Disabilities Act (the "ADA"), 42 U.S.C. § 12131 et seq.\ Section 504 of the Rehabilitation Act, 29 U.S.C. § 794; and the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution.

         Presently before the Court is a motion to dismiss by the Defendant pursuant to Federal Rule of Civil Procedure ("Fed. R. Civ. P." or "Rule") 12(b)(1) and Rule 12(b)(6), as well as a motion by the Plaintiffs to certify the case as a class action pursuant to Rule 23. For the following reasons, the Defendant's motion is granted in part and denied in part, and the Plaintiffs' motion is denied without prejudice with leave to renew.

         I. BACKGROUND

         A. The Relevant Facts

         The Plaintiffs are all Medicaid and Medicare recipients, and current or former enrollees of GuildNet, a New York State managed long-term care plan ("MLTCP"), that provides home care services throughout New York State.

         The Commissioner required the Plaintiffs to enroll in a MLTCP in order to receive long-term services funded by Medicaid.

         On or about March 20, 2017, GuildNet sent a letter (the "March 2017 Letter") informing its enrollees in Nassau, Suffolk, and Westchester counties that it would not be offering managed long term care ("MLTC") services beginning June 1, 2017. Enrollees were told that they should select a new MLTCP before May 18, 2017 to assure a smooth transition, and that they would continue to receive services from GuildNet until the transfer to the new plan was complete.

         The Plaintiffs allege that the DOH did not require other MLTCPs to offer the same level of care that they had received from GuildNet, or to provide notice before reducing care.

         The Commissioner apparently received a number of complaints from GuildNet enrollees about the March 20 Letter, and in May 2017, Zucker sent a new letter to GuildNet enrollees (the "May 2017 Letter") advising them that they did not need to transfer to a new plan by June 1. The Commissioner's letter further stated that

the State requires GuildNet to continue providing your existing services until a smooth transfer can be completed to your new plan of choice. You can contact New York Medicaid Choice (NYMC) for information about plans available to you and assistance with enrolling in a new plan. All plans provide the same core services and benefits.

(Ex. B. to Am. Compl.).

         Samele received 24-hour home care services from GuildNet since 2012. After Samele received the March 20 Letter, her son began looking for an MLTCP that would provide her with the same level of care as GuildNet. On September 1, 2017, Samele enrolled in Elderplan HomeFirst ("Elderplan"), which agreed to provide her with 24-hour home care. Elderplan apparently closed in several counties in 2016, and announced that it intends to close in Suffolk County "imminently." (Am. Compl. ¶ 180). Samele has received 24-hour home care since the March 20 Letter.

         Roher received 24-hour home care from GuildNet beginning in October 2016. After she received the March 20 Letter, her daughter contacted other MLTCPs. On or about November 1, 2017, Roher enrolled in Wellcare, which offered her 24 hour home care. Roher has received 24-hour home care since the March 20 Letter.

         Guadagna received 24-hour live-in care, as well as Adult Day Health Care ("ADHC"). He attended the Adult Day Health Care program one day a week, and received medical model adult day health services, including physical therapy, occupational therapy, and a bath. After receiving the March 2017 Letter, Guadagna's daughter reached out to MLTCPs to find one that would offer the same services as GuildNet. At the time, he was temporarily residing in a rehabilitation center where he was recovering from an episode of gout. On May 1, 2017, he enrolled in Northwell. Northwell offered Guadagna 24-hour live-in care, but did not approve his ADHC services. As a result, Guadagna came home from the rehabilitation center on or about May 1, 2017. Guadanga has not received occupational therapy or physical therapy since he transferred to Northwell, and has not had a proper bath or shower since that time. On November 1, 2017, Guadanga transferred to Agewell. Agewell also agreed to provide 24-hour care, but did not agree to provide ADHC services. On December 19, 2017, the Commissioner sent a letter to Guadagna informing him that it had directed Agewell to restore his services to the level he received from GuildNet. The services would have to continue for 120 days, or until he agreed to a new plan of care.

         On September 22, 2017, after the Plaintiffs initiated this action, the Commissioner issued MLTC Policy 17.02: MLTC Plan Transition Process-MLTC Market Alteration (the "Transition Policy"), which updated the DOH's transition policy. The Transition Policy was sent to all MLTCP providers in New York State, and was posted on the DOH website.

         Pursuant to the Transition Policy, MLTCPs must send notices to affected consumers when they intend to discontinue operations. The notices must list available plans; a direction to select a new plan within sixty days of the date of the letter; and state that any enrollee who does not select a new plan within that time frame will be automatically assigned to a new MLTCP. The DOH will review notices prior to their transmittal, and will require Maximus, a DOH contractor, to send out additional notices to affected enrollees to help them select a new MLTCP. The new MLTCP must provide enrollees with the same level of services that they previously received for 120 days. During that 120 days, the MLTCP must conduct a new assessment of the enrollee to determine their plan and services.

         On September 25, 2017, Maximus began sending "Outreach Letters" to affected GuildNet enrollees. The Outreach Letters were drafted by the DOH. The first Outreach Letter told current GuildNet members who were concerned about maintaining their current service levels to remain with GuildNet until the Transition Policy is in place. As to those former GuildNet enrollees who were receiving fewer services with a new MLTCP than they had with GuildNet, the letter instructed them to contact New York Medicaid Choice ("NYMC") within ninety days. NYMC would then determine whether those individuals were eligible to have their previous services restored. Individuals would be so eligible if they left GuildNet after March 20, 2017; were still eligible for Medicaid; and received fewer hours of care and services from their current MLTCP than they had under GuildNet.

         On October 16, 2017, Maximus sent the second Outreach Letter to individuals who were still enrolled in GuildNet. The letter stated that the DOH had finalized the Transition Policy. GuildNet enrollees had sixty days to select a new MLTCP. If they did not select a new plan by December 15, 2017, one would be selected for them, and their enrollment would be effective on January 1, 2018. The new MLTCP would provide the same level of services for 120 days after the transfer date, unless the enrollee and the plan agreed to a different plan before that time. The letter included a list of MLTCPs available in the Medicaid recipient's area, and told the recipient to call NYMC to select an MLTCP.

         On November 30, 2017, Maximus sent the third Outreach Letter to affected current and former GuildNet enrollees. The third Outreach Letter referenced the first two Outreach Letters and reminded current and former GuildNet enrollees of their rights to maintain the levels of care they received from GuildNet, and of the impending deadlines outlines in the first two Outreach Letters.

         B. Procedural History

         On June 6, 2017, Samele, along with former Plaintiffs Marie Turano and Leonard Turano, commenced this action by filing a complaint. The original complaint alleged violations of the Medicaid Act, the Due Process Clause of the Fourteenth Amendment to the United States Constitution, the ADA, and the Rehabilitation Act. The original complaint sought an order certifying the action as a class action; declaratory and injunctive relief; costs; and attorneys' fees.

         On August 3, 2017, the Defendants filed an answer to the original complaint.

         On August 31, 2017, the original Plaintiffs filed a motion to amend the complaint pursuant to Rule 15 to add additional Plaintiffs and additional facts. On November 4, 2017, the Court granted the Plaintiffs' motion to amend their complaint.

         The amended complaint added Roher and Guadagna as Plaintiffs. The amended complaint alleged the same violations as the original complaint, and sought the same types of relief. Specifically, the Plaintiffs seek an order declaring that the Commissioner's failure to ensure that the Plaintiffs would have their long-term benefits maintained at current levels unless and until they have notice and a fair hearing to challenge any proposed reduction or termination violates the Medicaid Act and the Due Process Clause; the Commissioner's failure to ensure that Plaintiffs would not have their long-term care benefits reduced or terminated based on non-individualized criteria when GuildNet terminates its services in their counties violates the Due Process Clause; and that his failure to ensure that Plaintiffs maintain their long-term care benefits during an involuntary transfer to a new MLTCP threatens to result in unnecessary institutionalization of class members, in violation of the ADA and the Rehabilitation Act.

         To that end, the Plaintiffs seek an order enjoining the Defendant to ensure that the Plaintiffs continue to receive long-term care benefits at their current levels unless and until they receive notice and a fair hearing to challenge any proposed reduction or termination; to ensure that class members who are former GuildNet enrollees currently receiving fewer services than they received from GuildNet be restored their previous levels of care unless and until they are provided with notice and a fair hearing to challenge the reduction; and to ensure that GuildNet provides continuous coverage to its enrollees at their current level of care until they transition to a new MLTCP that provides the same level of care.

         On November 21, 2017, former Plaintiffs Marie Turano and Leonard Turano voluntarily dismissed their claims against the Defendants pursuant to Rule 4l(a)(1)(A)(ii), and they were removed as Plaintiffs from the action.

         On December 1, 2017, the Plaintiffs filed their motion for class certification pursuant to Rule 23.

         On December 21, 2017, the Defendants filed their motion to dismiss for lack of jurisdiction pursuant to Rules 12(b)(1) and 12(b)(6).


         Although the Defendant's motion to dismiss was made by cross-motion, it will be addressed first, since a disposition in the Defendant's favor would render the Plaintiffs' motion for class certification moot.

         A. As to the Defendant's Motion to Dismiss for Lack of Subject Matter Jurisdiction

         1. The Parties' Arguments

         The Defendant contends that Samele and Roher's claims are not ripe for review because they have not suffered an injury in fact in that their services were never terminated or reduced. Further, the Commissioner argues that all of the Plaintiffs' claims are moot because the Plaintiffs have already been given all of the relief that they seek because the series of letters sent by the DOH and Maximus state that all GuildNet enrollees must receive the same level of care when they transfer to a new MLTCP for 120 days.

         On the other hand, the Plaintiffs assert that all of the Plaintiffs' claims are ripe, and that the Plaintiffs therefore have standing, because the DOH never sent a constitutionally and statutorily mandated notice to the Plaintiffs. The Plaintiffs contend that the Commissioner's failure to send such a notice, and the Plaintiffs' risk of having their services reduced or being institutionalized, constitute an injury in fact. As to the Defendants' mootness argument, the Plaintiffs contend that their claims are not moot because the DOH did not send a notice to GuildNet enrollees who lost care, and has not mandated that such notices be sent when an MLTCP intends to discontinue service in an area.

         2. The Legal Standard

         On a motion to dismiss pursuant to Rule 12(b)(1), a court must dismiss a claim if it "lacks the statutory or constitutional power to adjudicate it." Morrison v. Nat'l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008) (internal quotation marks omitted), aff'd, 561 U.S. 247, 130 S.Ct. 2869, 177 L.Ed.2d 535 (2010).

         "The plaintiff bears the burden of proving subject matter jurisdiction by a preponderance of the evidence." Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005).

         In deciding a Rule 12 motion to dismiss, the Court "must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff," Morrison, 547 F.3d at 170 (quoting Natural Res. Def. Council v. Johnson,461 F.3d 164, 171 (2d Cir. 2006) (citation and internal quotation marks omitted)), but "jurisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it," id. (quoting APWU v. Potter,343 F.3d 619, 623 (2d Cir. 2003)). In deciding the motion, the court "may consider affidavits and other materials beyond the pleadings to resolve the jurisdictional issue, but [it] may not rely on conclusory or hearsay statements contained in the affidavits." J.S. ex rel. N.S. v. Attica Cent. Schs.,386 F.3d 107, 110 (2d Cir. 2004); see also Makarova v. United States,201 F.3d ...

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