Case 4:02­cv­00762­JHP­PJC Document 3 Filed in USDC ND/OK on 10/03/02

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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA

Katherine Fisher, Earlee Heath, and Karol Loy, on behalfof themselves and all others similarly situated,
Plaintiffs
v.

Civil Action No. 02-CV-762P

Oklahoma Health Care Authority and
Mike Fogarty, in his capacity as CEO ofthe Oklahoma Health Care Authority,

Class Action

Defendants

MOTION FOR PRELIMINARY INJUNCTION

Pursuant to Rule 65, F.R.C.P., named and class plaintiffs move this COllrt to issue a

preliminary injunction and aver in support:

1. The three named plaintiffs and the class who seek relief are all disabled low-income

persons who are able to and currently do live at home. lfDefendants' recently promulgated

Medical Assistance policy that limits their prescription medications to five per month is not
will enjoined, in order to stay alive Plaintiffs be forced to go to inpatient hospitals and nursing

homes to receive the prescription medications they need.

2. Named Plaintiffs are Earlee Heath, a 73 year old woman who is an insulin-dependant

diabetic who also has hypertension, asthma; congestive heart failure, residual bilateral paresis and

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., ,

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deep vein thrombosis; Karol Loy, a 46 year old woman who has a seizure disorder and cardiac malfunction; and. Katherine Fisher, a 48 year old woman who has cerebral palsy and a history of multiple cerebrovascular accidents.
3. Named and class plaintiffs are all eligible for and enrolled in Defendants' federallyfunded Medical Assistance program. They all currently reside in their own homes and apartments.
4. Named and class plaintiffs all also eligible for and enrolled in Defendants Medical Assistance Home and Community-Based Services Waiver Program (hereinafter e'waiver program"), 42 U.S.C. § 1396n(c), which was intended to avoid the unnecessary institutionalization in nursing homes, hospitals and other segregated settings, all of which are more expensive than residing in the community. In order for Plaintiffs to participate in the waiver program, they must meet the "level of care" ofthe institution for which they would otherwise be institutionalized. In order for Defendants to receive federal reimbursements, they must file an application with the U.S. Department ofHea1th and Human Services providing sufficient infonnation to establish that the community-based waiver program services are less expensive than the institutional services.
5. Named and class plaintiffs all require more than five prescription medications per month, which Defendants paid for before October 1, 2002, when the new policy limited the number of prescriptions to persons.
6. Defendants will provide more than five prescription medications per month to named and class plaintiffs in nursing homes, hospitals and other institutions funded with federal medical assistance funds.
7. In order for named and class plaintiffs to receive the necessary prescriptions per
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month they require, they will have to go to hospitals and nursing homes. 8. Named and class plaintiffs cannot live without their medications. NOW WHEREFORE, named and class plaintiffs request this Court to issue a preliminary
injunction prohibiting defendants from putting into effect the announced limitation on prescription coverage for participants in the HeBS Waiver Program, pending the final disposition of this matter.
Respectfully submitted,
Morris D. Bernstein OBA# 16087 University ofTulsa Boesche Legal Clinic 407 S. Florence Avenue Tulsa, OK 74104 918-631-5799 Attorney for Plaintiffs
Of Counsel: Stephen F. Gold Attorney ID # 09880 3

Case 4:02­cv­00762­JHP­PJC Document 3 Filed in USDC ND/OK on 10/03/02 Page 4 of 5
v
125 South Ninth Street Suite 700
Philadelphia, PA 19107
215-627-7100 Date: October 3, 2002
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CERTIFICATEOF SERVICE I, Morris D. Bernstein, certiry that on'tbis 3rd day of October, 2002, I served a copy of this Motion and accompanying Briefby facsimile upon: Courtney Shropshire Legal Department Oklahoma Health Care Authority 4545 N. Lincoln Blvd. Oklahoma City, OK 73105 Fax #405-522-3444
ffi~o.k-
Morris D. Bernstein

Case 4:02­cv­00762­JHP­PJC Document 4 Filed in USDC ND/OK on 10/03/02 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA

Katherine Fisher. Earlee Heath, and Karol Loy. on behalf of themselves and all others similarly situated,
Plaintiffs
v.

Civil Action No. 02-CV-762P

Oklahoma Health Care Authority and
Mike Fogarty, in his capacity as CEO of the Oklahoma Health Care Authority,

Class Action

Defendants

Memorandum of Law In Support of Motion for a Preliminary Injunction

The three named plaintiffs~ and the class of persons whom they represent, i.e. medical

assistance recipients who are on the Home and Community-Based Services waiver program

(hereinafter "waiver program") and who require more than five prescription medications per

month, seek a temporary restraining order andlor preliminary injunction to enjoin Defendants

from implementing their newly promulgated policy that limits the number of prescriptions to five

per month.

All of the plaintiffs are disabled. low-income, recipients of medical assistance, and have

been found eligible and are enrolled in Defendants' Medical Assistance waiver program. They all

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currently reside in the community in their o\'lIl,homes and apartments. Unless Defendants newly implemented policy is enjoined. in order for plaintiffs to stay alive they will be forced to move to a hospital or nursing home, where Defendants' medical assistance program will pay for as many prescription medications as plaintiffs require. That is, Defendants VYiIl provide more than five prescription medications per month, but only if plaintiffs reside in an institution, whether it be a hospital or nursing home. both ofwhich"Defc"ridants will reimburse under its medical assistance program at an expense much greater than under the waiver program. Introduction
Medicaid is a joint federal-state program designed to provide medical assistance to low income families and individuals "to help such families and individuals attain or retain capability for independence or self care," 42 U,S,c' § 1396, As part of the program, Congress reimburses for both nursing home care and inpatient acute hospitalization. When persons are institutionalized in either a nursing home or a hospital, they receive all the prescription medications that are medically necessary. There are no arbitrary limits on the number of prescriptions a person may receive in either a 1U1rsing home or hospital. They receive whatever is medically appropriate.
As part of its medical assistance statute, Congress also provides for Home and Community-based services ("HCBS") in its "waiver program," 42 u'S,c, § 1396n(c), In order for a person to be eligible to participate in the waiver program, they must meet the level of care for admission into an institution, whether a 'nursing home or hospital. Additionally. a state must
will certify that placement in the waiver program be "cost neutral," that is, the aggregate costs for
persons in the waiver program will be less than if those persons were in the institution. PlaintiffEarlee Heath is a 73 year o\dwoman who is currently enrolled in the Medicaid
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Home and Community-Based Services (HCBS) Waiver Program administered by Defendant Oklahoma Health Care Authority (OHCA).She is an insulin-dependant diabetic who also has hypertension, asthma, congestive heart failure, residual bilateral paresis and deep vein thrombosis. Plaintiff Karol Loy is a 46 year old woman and current participant in the HeES Waiver Program who has a seizure disorder and cardiac malfunction. Plaintiff Katherine Fisher is a 48 year old woman and current participant in the HCBS Waiver Program who has cerebral palsy and a history of multiple cerebrovascular accidents,
But for Defendants' HCBS Waiver Program, the named and dass plaintiffs would all be unnecessarily segregated in nursing homes or other institutions. They all reside in the community with appropriate HCBS services, including prescription services in excess offive per month. Effective October \, 2002, Defendants changed their medical assistance program so that persons on the HeSS Waiver Program would not be pennitted to receive more than five prescription medications per month if they continued to reside in the community. If. however. they resided in an institution, they would receive more than five prescriptions per month. Thus, only if Plaintiffs relinquish their independence and live in a nursing home or hospital. both of which are far more expensive than residing in the community, will'plaintiffs receive the appropriate number of prescription medications. The Standard for issue of a Temporary Restraining Order andlor Preliminary Injunction.
The standard for issuance of a temporary restraining order or preliminary injunction requires that the Plaintiffs demonstrate (\) a probability of success on the merits of the claim; (2) the danger of irreparable harm; (3) that the balance of hardships tips in plaintiffs' favor; and (4) that the public interest will be further by the.issuance of the order. Federal Lands Legal
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Consortium ex rel.Robart Estates y. U.S. 195 F.3d 1190, 1194 (10" Cir., 1999).
This standard is a flexible one. Ifplaintiffs' probability of success is high, the severity of the irreparable injury need not be great. ConverselyI if the injury to the plaintiff is great, plaintiffs
need only demonstrate that their legal c1aims are so "serious, substantial, difficult and doubtful, as to make them a fair ground for litigation and thus for more deliberate investigation," Hamilton Watch Co. v. Benrus Watch co., 206 F. 2d 738, 740 (2" Cir. 1953); accord, Continental Oil Co. v. Frontier Ref. Co., 338, F. 2d 780 (10· Cir. 1964); Alameda Counly v. Einberger, 520 F. 2d 344 (9· Cir. 1975); Wright & Miller, Federal Practice and Procedure: Civil section 2948 at pp 453-455.
Plaintiffs easily meet each ofthe aboy_e requirements.
ARGUMENT 1. The Plaintiffs Are Likely to Succeed On the Merits of their Claims:
The Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., is a far reaching statute designed ''to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities. 42 U.s.c. § 12101(b)(l). Congress recognized that isolation, segregation and utulecessary institutionalization ofindividuals with disabilities are forms of discrimination that must be eliminated. 42 U.S.C. § 12101(a)(2),(3) and (5).
Congress noted specifically that discrimination persists in the provision of"heaIth services," 42 U.S.C. § 12101(a)(3), and established as a national goal "to assure... independent living ". for such individuals." 42 U.S.C. § 12101(a)(8).
Congress directed the Attorney General to promulgate regulations implementing the
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public services title of the ADA. 42 U.S.C. § 12134. The Attorney General's ADA public
services regulations are codified at 28 eFR 35.101 et seq. The subpart of these regulations that is
directly on point in the present action that Defendants violate is at 28 CFR 35.130(d) that provides that a public entity in providing any aid, benefit or service discriminates against persons with disabilities when it violates these regulations, including the following:
"(d) A public entity shall adrriinister services, programs and activities in the most integrated setting appropriate to the needs ofqualified individuals with disabilities." (Emphasis added).
By limiting the number of prescription medications to five per month in the community and providing unlimited in the institution, Defendants discriminate against the named and class plaintiffs because they deny the services in community-based settings but provide it only in unnecessarily segregated settings.
This regulation is the ADA's "Integration Mandate." In Olmstead v. L.C. 527 U.S. 119 S.Ct 2176 (1999), the Supreme Court specifically considered the Title II integration mandate and concluded, not only that it was within the scope the Attorney General's rulemaking discretion, but that it was virtually required by the underlyi~g purpose of the ADA and its text. As the Court explained:
Recognition that unjustified institutional isolation of persons with disabilities is a fonn of discrimination reflects.two evident judgments. First. institutional placement of persons who ·C'atrhandle and benefit from community settings perpetuates unwarranted assumptions that persons so isolated are incapable or unworthy of participating in community life.. ,Second, confinement in an institution severely diminishes life activities ofindividuals, including family relations, social
contact, work options. economl'c independence, educational advancement and
cultural enrichment. Olmstead.at 2187.
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Virtually on all fours with the present case, the Supreme Court went on to hold that IIDissimilar treatment correspondingly exists in this key respect: In order to receive needed medical services. persons with disabilities must. because of those disabilities. relinqyish participation in community life they CQuid enjoy given reasonable accommodations." Olmstead at 21 87.(Emphasis added).
In the present case, aU of the plaintiffs seeking preliminary relief have been screen and
evaluated by the Defendants for medical assistance services in the community and all have been determined to be qualified for such services in the community. As the Olmstead court noted, there can be "no genuine dispute concerning the status of [the plaintiffs] as individuals 'qualified' for non-institutional care. Olmstead 119 S.C!. at 2188; see also Kathleen S. v. Dept of Public Welfare, 10 F. Supp. 2d 460, 470-474 (B.D. Pa. 1998).
Lower courts which have considered whether states must provide appropriate medical assistance services to persons able to reside in the community with such services have determined that the integration mandate requires provision of such services. Helen L. v. DiDario, 46 F. 3d 325,336-339 (3d Cir. 1995; see also, Sanon v. Wing, 2000 N.Y. Misc. LEXIS 139 at 12-24 (Sup. Ct. N.Y.2000). In Helen L, the Third Circuit detennined that where Pennsylvania had a program to provide personal care services in the nursing home, it could not deny or delay providing those services in the community to an individual who qualified for them.
The Court emphasized that "The fact that it is more convenient either administratively or fiscally. to provide services in a segregated m_~nner, does not constitute a valid justification for separate or different services under Section 504 ... or under [title ii of the ADA]." Helen L., 46 F. 3d at 338 (quoting H.R.Rep. 485 (Ill), 101" Congo 2d Se88.50 (emphasis in original».
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In the present case, Defendants will pay for more than five prescription medications per month, but only ifthe person is in a segregated setting - a nursing home or a hospitaL The irony is that Defendants pay substantially more for persons in these institutions than they do for persons in the community. 2_ The Balance ofHarms Tips Decidedly in Favor of Granting the Requested Relief
The harm to plaintiffs if an injunction is not granted is palpable. Without the requested relief: the plaintiffs will either die or go utulecessarily into the hospital or nursing facility - not because they need to reside in those institutions, but only because those are the only settings where they can receive their medically necessary prescriptions. Those are the draconian harms that the disabled plaintiffs will face_
Not surprisingly, courts which have considered the question have concluded readily that "the possibility that the plaintiffs would be forced to enter nursing homes constitutes irreparable harm_" McMillan v_ McCrimon, 807 F_ Supp_ 475 (CD-1111992); see also, Kathleen S_, 10 F_ Suppp_ 2d at 481("these class members are irrepara bly if\iured every day they remain unnecessarily segregated in violation of the ADA"); Daniel B- v_ White, 1991 US_ Dist LEXIS 4925 at 7 (B.D. Pa. 1991)("Continued institutionalization of the class members, even for a short period oftime, will cause irreparable harm'} Plaintiffs easily satisfY the irreparable injury requirements for issuance of a preliminary injunction.
Measured against the severe and irreparable harm that will befall the plaintiffs in the absence of court intervention, the hardship to the defendants is virtually non-existent.
If the Plaintiffs are denied their prescription medications in the community, they will be forced to enter either a hospital or a nursing home to obtain such services. They currently qualify
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for such services, by dint afbeing eligible for the HCBS Waiver services. Defendants will

certainly expend substantially more for the class members in the institutions than what they

presently spend on the same persons in the community.

Granting the requested reHefwill save the state substantial funds.

The balance of hardships tips decidedly in favor ofthe plaintiffs.

CONCLUSION

For the foregoing reasons, plaintiffs respectfully request that this Court enter a temporary

restraining order andlor a preliminary injunction enjoining the defendants from failing or refusing

to provide the named and class plaintiffs with Medicaid coverage in the community as it provides

to persons in institutions. pending the hearing and determination ofthis action.

Respectfully submitted,
(Y/ ~ (/ .ih,--,,-=

Dated: 103/02

Morris D. Bernstein

OBA# 16087

University ofTulsa Boesche Legal Clinic

407 S. Florence Avenue

Tulsa, OK 74104

918-631-5799

Attorney for Plaintiffs

Of Counsel: Stephen F. Gold
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Attorney ID # 09880
125 South Ninth Street Suite 700 Philadelphia, PA 19107 215-627-7100

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 Case 4:02-cv-00762-JHP-PJC Document 10 Filed in USDC ND/OK on 10/08/02 Page 1 of 3
,""'",

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA

Katherine Fisher, Earlec Heath, and Karol Loy, on behalf of themselves and all others similarly situated,

Plaintiffs

v.

Civil Action No.02eV762P(C!

State of Oklahoma, Oklahoma Health Care Authority and Mike Fogarty, in his capacity as CEO of the Oklahoma Health Care Authority,

Class Action

Defendants

AMENDED COMPLAINT

Plaintiffs amend their complaint to clarify issues raised at the hearing on October 4, 2002

and to address the Defendants' motion to dismiss.

1. The Complaint was filed on Tuesday, October 1, 2002.

2. The Court denied a temporary restraining order on October 2, 2002 and scheduled

a preliminary injunction hearing for October 4,2002.

3. Plaintiffs filed a motion for a preliminary injunction and memorandum in support

on October 3,2002.

4. At the hearing on October 4, 2002, the Court announced that the hearing was a

consolidated preliminary and permanent injunction hearing.

5. Plaintiffs drop with prejudice as a party Defendant "State of Oklahoma" from all

Case 4:02-cv-00762-JHP-PJC Document 10 Filed in USDC ND/OK on 10/08/02 Page 2 of 3

CL·unts and claims.

6.

The Americans v.~th Disabilities Act claim (42 ns.c. § 12101 et seq.) is

addressed again~t solely Defendant Mike Fogarty, in his official capacity as CEO of the

Oklahoma Health Care Authority.

7. Plaintiffs add one claim, Section 504 of the Rehabilitation Act of 1973,29 USC.

§ 794.

8. The Section 504 of the Rehabilitation Act of 1973 claim is addressed against

Defendants Oklahoma Health Care Authority and against Mike Fogarty in his official capacity

violate.

9. In support of the Section 504 claim, Plaintiffs allege that Defendants testified at

the October 4, 2002 hearing that they were recipients of federal financial assistance in the form of

Medical Assistance reimbursements for prescription medications, the Home and Community

Based Services and Nursing Home care pursuant to 42 U.S.C. § 1396 ct seq.

10. Under both the Section 504 and the Americans with Disabilities Act claims,

Plaintiffs seek only prospective inj1..IDctive and declaratory relief and do not seek any monetary

damages.

Respectfully submitted,
~rl-/~)J;I
/
,/
Stephen F. Gold Attorney ID # 09880 125 SouD1 Ninth Sttcct Suite 700 Philadelphia, PA 19107 215-627-7100

Case 4:02-cv-00762-JHP-PJC Document 10 Filed in USDC ND/OK on 10/08/02 Page 3 of 3
Morris D. Bernstein OBA # 16087 University of Tulsa Boesche Legal Clinic 407 S. Florence Avenue Tulsllo OK 74104 918-631-5799 Attorney for Plaintiffs
Filed October 7, 2002 by Fax and overnight mail.
Certificate of Service I declare and affirm that the attached on October 7, 2002 was faxed and overnight mailed to:
Andrew Tevington, OBA #11545 Deputy General Counsel Okl. Health Care Authority
P.O. Drawer 18497 4545 N. Lincoln Blvd. Ste 124
Oklahoma City, OK 73105 405-522-7431 fax 405-522-7472

 
 Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 1 of 49

IN THE UNITED STATES DISTRICT COURT FOR

(1)

1 L E: DJ THE NORTHERN DISTRICT OF OKLAHO~

KATHERINE FISHER, (2) )

OCI 0

EARLEE HEATH, and (3) KAROL )

920D2

LOY, on behalf of themselves and all )

U.~hi~LOmb"di '

others similarly situated,

)

. ISTFller' Glonr.

)

COUAT

)

v,

Plaintiffs,

) ~

)

(1) OKLAHOMA HEALTH CARE )

AUTHORITY, and (2) MIKE )

FOGARTY, in his official capacity as )

CEO of the Oklahoma Health Care )

Authority

)

)

)

)

Defendants.

)

Case No, 02CV 762P (C) )

DEFENDANTS' MOTION FOR SUMMARY.TUDGMENT AND BRIEF IN SUPPORT
Pursuant to Fed. R. Civ. Pro. 56, Defendants Oklahoma Health Care Authority (OI-ICA) and Mike Fogarty, in his official capacity as chief executive officer of OHCA (Fogarty), move for summary judgment on all claims made by PlaintiITs Katherine Fisher, Earlee Heath, and Karol Loy (Medicaid Recipients) because the pleadings, affidavits, and other evidentiary materials in this case show there is no genuine issue of material fact and the Defendants are entitled to judgment as a matter of law.
STATEMENT OF UNDISPUTED FACTS 1. Plaintiffs Katherine Fisher, Earlee Heath, and Karol Loy are Medicaid recipients
with disabilities \vho are part of the Home and Community-Based Waiver

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Program (sometimes referred to hereafter as Advantage). Complaint ~~ 1, 13, 14, and 15. 2. During the current State Fiscal Year and prior to October 1, 2002, the Oklahoma Medicaid program provided Advantage recipients with unlimited prescription drugs. Complaint ~~ I and 7. 3. On September 18, 2002, the OHCA Board reduced the drug benefit for all Advantage recipients across the State of Oklahoma to five prescriptions per month. OHCA Board Minutes, attached as Exhibit E, page 5, "Board Voted Upon Item 2." 4. The reduction was occasioned by a statewide revenue shortfalL Affidavit of OHCA Chief Executive Officer Mike Fogarty, attached as Exhibit B to Defendants' Memorandum of Law Opposing Plaintiffs' Request for Preliminary Injunction; and Defendants' Motion to Dismiss and Brief in Support (Motion to Dismiss), ~~ 4 and 5. 5. On or about September 19,2002, OHCA informed the Medicaid Recipients that Advantage recipients' drug benefits would be limited to five per month. Complaint ~ 3. 6. OHCA did not provide the Medicaid Recipients with an opportunity for a hearing about the benefit reduction. Complaint' 4. 7. As part of the creation of the Home and Community-Based \Vaiver Program, the U.S. Secretary of Health and Human Services ¥laived the requirement that Medicaid services for waiver recipients be comparable to tho::;e for other Medicaid recipients. Oklahoma's Advantage Program 1915(c) Waiver Renewal
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Document, 2002-2006, attached without appcndiccs as Exhibit D", 10 and 11(s) at pages 4 and 5. 8. With proper scheduHng of Earlee Heath's prescription purchases, Earlee Heath's monthly cost for prescription drugs could be reduced to approximately tvventyfive dollars rather than the two hundred fifty-five dollars alleged in the Medicaid Recipients complaint. Affidavit ofNancy Nesser, D.Ph., J.D., attached to Motion to Dismiss as Exhibit C, -U 6 9. Even that cost could be reduced if Ms. Heath's diabetes prescriptions were
managed to avoid drug interactions and conflicting drugs. Exhibit C, '1 6.
10. With scheduling, Karol Loy's monthly prescription cost could be reduced to two hundred dollars instead of four hundred seventy-six dollars alleged in the
complaint. Exhibit C, ,-r 7
11. Management of Ms. Loy's prescriptions to avoid drugs working at cross purposes could reduce the cost further. Exhibit C, ~ 7.
12. With scheduling, Katherine Fisher's prescription cost could be reduced to iortyfive to sixty dollars per month instead of two hundred seventy-four dollars as alleged in the complaint. Exhibit C, ~ 5.
13. Management to eliminate duplicate drug therapy and intenlction could reduce Ms. Fisher's cost further. Exhibit C, ~ 5. STANDARD FOR SUMMARY JUDGMENT Summary judgment is appropriate "if the pleadings, depositions, ffilswers to
interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled to a
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· ·ette"· ."
judgment as a matter of law." Fed. R. Civ. Pro 56(c). "[A] motion for summary judgment should be granted only where the moving party has established the absence of any genuine issue as to a material fact." Mustang Fuel Corp. v. Youngstown Sheet & Tube Co., 561 F.2d 202, 204 (10'h Cir. 1977).
The movant bears the initial burden of showing a lack of genuinely di~puted material fact and thus requiring judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A fact is material if it is essential to the proper disposition of the claim. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). If the movant carries this burden, then the non-movant must set forth "specific facts" outside the pleadings and admissible in evidence that would convince a rational trier of fact to find for the non-movant. Fed. R. Civ. Pro. 56(e).
STATEMENT OF THE CASE After the Court conducted a hearing on the Medicaid Recipients' request for a preliminary injunction (combined with the hearing on the merits), the Plainti:ffs amended thcir complaint so this lawsuit now stands on four legs: The first leg, brought solely against Fogarty in his official capacity, claims violation of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., as the State has limited prescription drug coverage for individuals on Advantage to five prescriptions per month 'while allowing nursing home residents unlimited prescriptions. The second leg, again brought solely against Fogarty in his official capacity, alleges the prescription limitation violates the Medicaid Act, 42 U.S.C. § 1396 ef seq. The violation alleged appears to be of the Act's "comparability" requirement.
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The third leg, brought against Fogarty in his official capacity alone, alleges denial of due process requirements under the Fourteenth Amendment of the U.S. Constitution because OHCA did not provide individual hearings before changing each Advantage recipient's prescription benefit. The final leg is brought against both Fogarty in his official capacity and OIICA and rests on Section 504 of the Rehabilitation Act of 1973,
29 U.S.C. § 794. Exactly what the allegation is, is not clear from the Amended
Complaint, but as best the Defendants can tell the claim alleges discrimination against the Medicaid Recipients.
Medicaid is a joint State/federal program designed to provide medical care for various groups in the }\merican population, particularly low-income individuals who are children, pregnant, elderly, or blind or otherwise disabled. 42 U.S.C. § 1396.(.)(I0)(A) and (C). Each State has the option to participate with the federal government in Medicaid or to forgo participation. Once a Stat~ enters into a partnership with the federal government, Congress requires the State to provide a minimum level of benefits generally known as the mandatory program. 42 U.S.C. § 1396a(a)(10)(A)(i); 42 C.FR §§ 440.210 and 440.220, Mandatory services are nursing home care, hospital care, laboratory and X-ray services, physician care, nurse-midvvife care, and pediatric nurse practitioner care. Id.
States may also expand the program with celtain optional coverages. 42 U.S,C. § 1396a(a)(lO)(A)(ii). Pharmacy benefits outside hospital and nursing home stays are part of the optional program and are implicated in this suit. Id. and 42 U.S,C. § 1396d, The Home and Community-Based Waiver Program, which is also relevant to this action, is part of the optional program. 42 U.S.C. §§ 13960, 1396t and 1396u.
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n OM'

--,

,

ARGUMENT
The Social Security Act, of which Medicaid is part, "is among the most intricate
ever drafted by Congress. Its Byzantine construction, as Judge Friendly has observed,
makes the Aet 'almost unintelligible to the uninitiated,'" &:hweiker v, Gray Panthers,
453 U.S. 34, 43 (1981), quoting Friedman v. Berger, 547 F.2d 724, 727 (2d Cir. 1976).
There can be no doubt but that the statutes and provisions in question, involving the financing of Medicare and Medicaid, are among the most completely impenetrable texts within human experience. Indeed, onc approaches them at the level of specificity herein demanded \",ith dread, for not only are they dense reading of the most torowus kind, but Congress also revisits the area frequently, generously cutting and pruning in the process and making any solid grasp of the matters addressed merely a pa::>sing phase.
Rehabilitation Ass 'n ojVirginia: Inc., v, Kozlowski, 42 F,3d 1444, 1450 (4th Cif. 1994),
The statutes at i::>sue in this case are abominable, but the Deiendants approach
them \vith three goals in mind: to show that (1) an ovcrall change in the State's Medicaid
program does not require individual hearings, (2) the Medicaid Recipients have not been
discriminated against b~cause of their disabilities, and (3) the waiver of federal law under
which the State operates the Home and Community-Bast:d Waiver Program includes
waiver of the statutory requirement that the Medicaid Recipienls receive the same
package of benefits as all other Medicaid clients.
PROPOSITION I: WHEN A STATE EFFECTS A MASS WELFARE BENEFIT REDUCTION, INDIVIDUAL HEARINGS ARE NOT REQUIRED TO SATlSFV DUE PROCESS.
A welfare entitlement program, such as Medicaid, creates a property interest in
recipients, which typically cannot be affected without adherence to due process. Atkins v,

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Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 7 of 49
Parker, 472 U.S. 115, 128 (1985). Due process, however, does not ah;~ys include the
right to individual notice and its attendant hearing. In Atkins, the Supreme Court considered another portion of the State/federal
social welfare program, namely food stamps. In that case, the Massachusetts Department of Public Welfare was required to make a "mass change" in the food stamp program, which resulted in some individuals losing eligibility for food stamps and other individuals receiving fewer food stamps. Parker and other food stamp recipients argued they should have received individualized notice of the change so each person could detennine whether he or she should seek a hearing.
The Court ruled that when alterations in a welfare benefit are not due to individual adverse actions but are instead caused by a "mass change" in program benefits, traditional individual due process is not required. Atkins, 472 U.S. at 129-30. "[LJegislative determination provides all the process that is due." Id. at 130. The Court explained:
General statutes within the state power are passed that affect the person or property of individuals, sometimes to the point of min, without giving them a chance to be heard. Their rights are protected in the only way that they can be in a complex society, by their power, immediate or remote, over those who make the rule. Id., quoting Bi-Metallic Investment Co. v. State Bd. of Equalization, 239 U.S. 441, 445 (1915).
In the case at bar, the Oklahoma Legh;lature appropriated a certain sum of money
for the mandatory and optional portions of Medicaid progran1. State revenues fell short of expectations, and all State administrative agencies were forced to cut budgets by the provisions of Oklahoma's Balanced Budget Amendment, Okla. Const. 10 § 23 " 1 and
7

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 8 of 49

wrtl#w..

tt

6. Acting in its quasi-legislative capacity, the Oklahoma Health Care Authority Board
chose to enact de facto rulcs effecting mass reductions in optional program benefits. As
recognized by the Supreme Court in Atkins, such mass change does not require
individualized notice or hearings.
Oklahoma's implementation of these mass reductions is abo consistent with
fcderal Medicaid regulations which provide, "The agency need not grant a hearing [to
recipients] if the sale issue is a Federal or State law requiring an automatic change
adversely affecting some or all recipients." 42 C.F.R. § 431.220(b). The law requiring
automatic change here is Oklahoma's Balanced Budget Amendment.
Since individual due process hearings arc not required for mass changes in the
Medicaid program, the Medicaid Recipients fail to state a due process claim for which
relief can be granted. Judgment for Fogarty as a matter of law is required.
PROPOSITION II: DIFFERENCES IN DRUG BENEFITS FOR NURSING HOME RESIDENTS AND THE PLAINTIFFS ARE NOT BASED ON DISABILITY; THEREFORE, CLAIMS BASED ON THE ADA AND REHARTLTTATION ACT FAIL AS A MATTER OF LAW. Two of the ADA's three titles are relevant to the State; the first deals with discrimination in employment against persons with disabilities, and the second, with public access for disabled individuals to facilities and programs. The case at bar implicates Title II, the public access provisions, Title 11 provides: No qualified individual with a disability shall, by r(!a~'on of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity. 42 U.S.C. § 12132 (emphasis added).

8

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 9 of 49
Likewise, the Rehabilitation Act, recently raised by the Medicaid Recipients, provides:
No otherwise qualified individual \.vith a disability in the United States, as defined in section 7(20) shall, solely by reason of her or his disability, bc excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistan(;e.... 29 U.S.C. § 794(a) (emphasis added). At the hearing of this case, the Medicaid Recipients made clear that they believe they are being discriminated against because nursing horne residents receive unlimited prescription benefits while the waiver clients have been limited to five prescriptions per month. Each Plaintiff acknowledged that she could receive the unlimited benefit by going to a nursing home but each refused Lo move. The Medicaid Re(;ipients acknowledge that to participate in the Advantage program they must be qualified for nursing home care. The only physical or mental differen(;e shov.'U between nursing home residents and the Medicaid Recipients is that tv.:o of them are younger than the
stereotypi(;al nursing horne resident. Por ail intents and .purposes, the Advantage
recipients and the nursing home recipients are the same medically. The real difference between them is the Advantage recipients' choice to remain in the community. The difference in phamlacy benefit, therefore, is not based on disability.
There is, in fact, a difference in pharmacy benefit"> for ·persons with disabilities mld persons without disabilities. Recipients without disabilities receive only three prescriptions per month compared with five for Advantage recipients and unlimited prescriptions for nursing home residents. Oklahoma Administrative Code (OAC) 317:30~5~57(19), attached as Exhibit H. If there is discrimination on the basis of disability, it is reverse discrimination against individuals without disabilities.
Because the Medicaid Recipients have not been discriminated against on the basis of their disabilities the actions against Fogarty under the ADA and Rehabilitation Act fail
9

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 10 of 49
, to ' -
as a matter of law, as does the Rehabilitation Act claim against OHCA. Judgment must be entered for the Defendants.
PROPOSITION III: OKLAHOMA HAS RECEIVED A WAIVER OF "COMPARABILITV" REQUIREMENTS FOR PRESCRIPTION DRUG BENEFITS; THEREFORE, THE STATE MEDICAID PROGRAM NEED NOT PROVIDE THE SAME BENEFITS TO NURSING HO:l-IE RESIDENTS AND WAIVER PROGRAM RECIPIENTS. Generally, when medical assistance is provided under the Medicaid program, whether through mandatory or option services, benefits must be comparable among recipients. 42 U.S.C. § 1396a(a)(10)(B). The Secretary of Health and Human Services, however, can waive the comparability requirement for programs such as the Home and Community-Based Waiver Program. 42 U.S.C. § 1396n(c)(3). The Secretary waived that requirement for the State of Oklahoma. Oklahoma's Advantage Program 1915(c) Waiver Renewal Document, 2002-2006, attached without appendices as Exhibit D, " 10 and lICs) at pages 4 and 5. (The waiver is accomplished through a form provided by the Centers for Medicare and Medicaid Services [eMS] within the Department of Health and Human Services. That fonn is almost as confusing as the Medicaid statutes. In this case, the State indicated the comparability waivers it sought by marking a checklist.) Originally, the State contemplated providing Advantage recipients and nursing home Medicaid recipients' with the same bendit; however, the OHCA Board changed that policy at its September 18 meeting. OHCA Board Minutes, attached as Exhibit E, page 5, "Board Voted Upon Item 2." Pursuant to CMS procedure, the change may be made during the current State fiscal year and may have retroactive effect to the beginning of the fiscal year, although this change was prospective. eMS State Medicaid Manual § 4445(A), attached as Exhibit F. ("HCFA" referred to in Section 4445(A) was the Health Care Financing Administration, which has been renamed eMS.) The State Medicaid
10

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 11 of 49

•

?) .""--

Manual is the official eMS interpretation of its rules and Medicaid statutes. State Medicaid Manual Ponvard, attached as Exhibit G.
The Secretary's statutorily allowed waiver of comparability requirements defeats the Medicaid Recipients' contention that the Medicaid Act has been violated. Judgment for Fogarty as a matter of law is appropriate.
PROPOSITION IV: APPROPRIATE SCHEDULING OF DRUG PURCHASES AND MANAGEMENT OF PRESCRIPTIONS TO AVOID DRUG INTERACTIONS REDUCES MEDICAID RECIPIENTS' OUT-OF-POCKET COSTS TO ZERO OR A MANAGEABLE LEVEL. The Medicaid Recipients do not show harm. Although the new rules limit them to five prescriptions per month, that does not mean they may receive only five of their drugs through Medicaid. The program allows monthly filling of a prescription with one hlmdred units (usually pills) or a thirty-four-day supply of the drug, whichever is greater. OAC 317:30-5-77.1. attached as Exhibit 1. Obviously, a medication which is taken only once a day, can be stretched into a three-month supply paid for by Medicaid by buying
a one hlmdred units in month. That drug would not need to be purchased the following
month and would be replaced by another drug for Medicaid purchase. By carefully scheduling their drug purchases and managing prescriptions to avoid drug interactions, the Medicaid Recipients can obtain full or nearly full payment for their prescriptions.
As shown in the Affidavit of Nancy Nesser, D.Ph., lD., attached to Motion to Dismiss as Exhibit C, ~ 6 (and by Nesser's testimony at the injunction hearing), Earlee Heath's monthly cost could be reduced to approximately twenty-five dollars rather than the two hundred fifty-five dollars alleged in the Medicaid Recipients complaint with proper scheduling. Exhibit C, ~ 6. Even that cost could be reduced if Ms. Heath's diabetes prescriptions were managed. Exhibit C. ~ 6.
11

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 12 of 49
With scheduling, Karol Loy's monthly cost could be reduced to two hundred dollars instead of four hundred seventy-six dollars alleged in the complaint. Exhibit C, ~ 7. Management of her prescriptions to avoid drugs working at cross purposes-such as toxic levels of acetmninophen---couJd reduce the cost further. Exhibit C, ~ 7.
With scheduling, Katherine Fisher's cost could be reduced to forty-five to sixty dollars per month instead of two hundred seventy-four dollars as alleged in the complaint.
,
Exhibit C"r 5. Managemt:nt to eliminate duplicate drug therapy and interaction could reduce the cost furtht:r. Exhibit C, ~ 5.
Without going to a nursing home and by engaging the ORCA-paid services of the case manager who testified at the hearing, the Medicaid Recipients can obtain the drugs they requir€----Qften apparently to the improvement of their health as they avoid impropcr medicating. The Medicaid Recipients have not shown harm that requires the Court to enter an injunction as requested. Judgment is appropriate for the Defendmlts.
PROPOSITION V: DIFFERENCES BETWEEN HIGHER AND LOWER INCOME RECIPIENTS CREATES A CONFLICT THAT PRECLUDES CLASS STATUS. The Medicaid Recipients have asked the Court to declare their suit a class action
• on behalf of about two hundred Advantage waiver c1ients in the Tulsa area. The class action status cannot be granted because of a conflict among the class members.
At the hearing on this matter, the Medicaid Recipients, acting through their counsel, suggested cutting off all benefits for Advantage recipients whose income is two hundred or two hundred fifty percent of Supplemental Security Income or higher while retaining the unlimited pharmacy benefit for lower-income recipients: Obviously, this is a conflict with those recipients with greater income.
12

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 13 of 49
To obtain class status, the Plaintiffs must to prove that they as the class representatives are capable of representing the rights of all the members of the class. The
analysis encompasses m'o factors. The first is whether the named Plaintiffs counsel is
adequate and secondly whether the named Plaintiffs have interests antagonistic to those of the class. Ro:mrio v. Lfvuditis, 963 F.2d 1013, 1018 (7th Cir. 1992). "A class is not fairly and adequately represented if class members have antagonistic or conflicting claims." Id at 1018-19.
By the suggested "fix" for the State funding problem, the Medicaid Recipients
have shown there is a fundamental antagonism between the interests of the potential
class. These differing interests require a rejection of the Medicaid Recipients' goal of fonning a class.
CONCLUSION (1) Individual due process hearings arc not required when amass change is made in a social welfare program. (2) The Medicaid Recipients have not been discriminated against on the basis of disability. (3) Thc federal government has exercised its statutory power to waive the comparability requirements of the Medicaid Act for the Plaintiffs. For these reasons, the requested relief should be denied and judgment entered for Fogarty and OHCA.
Respectfully Submitted,
(htd'?uJ~~
Andrew Tcvington, OBA #11545 Deputy General Counsel Oklahoma Health Care Authority P.O. Drawer 18497 4545 N. Lincoln Blvd., Suite 124 Oklahoma City. OK 73105
13

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 14 of 49

(405) 522-7431, Fax (405) 522-7472

Attorney for Defendants

CERTIFICATE OF SERVICE
On this 9th day of October, 2002, the undersigned caused the above and foregoing document to be faxed to and placed in the U.S. Mail, postage prepaid, addressed to:

Morris D. Bernstein University of Tulsa Boeschc Legal Clinic 407 South Florence Avenue Tulsa, Oklahoma 74104 Fax: 918-631-5798

Stephen F. Gold 125 South Ninth Street Suite 700 Philadelphia, Pennsylvania 19107
Fax: 215-627-3183

flu~j~h'
Andrew Tevington

14

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 15 of 49

• 7

\.J

.,

Oklahoma's

ADvantage Program 1915(c) Waiver

Renewal Document

•

2002-2006

[Original]
•

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 16 of 49
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VERSION 06-95

• • •

SECTION 1915(c) WAIVER FORMAT

1. The State of Oklahoma

requests a Medicaid home

and community based services waiver under the authority of

section 1915(c) of the Social Security Act. The

administrative authority under which this waiver will be

operated is contained in Appendix A.

This is a request for a model waiver.

a, _ _ __ Yes

b ' _--'X"----_ No

If Yes, the State aSSures that no more than 200 individuals will be served by this waiver at anyone time.

This waiver is requested for a period of (check one) :
a, ____ 3 years (initial waiver)

b,_--,X,-_ 5 years (renewal waiver)

2, This waiver is requested in order to provide home and community-based services to individuals who, but for the provision of such services, would require the following levels (s) of care, the cost of which could be reimbursed under the approved Medicaid State plan:

a, _ _"X~_

Nursing facility (NFl

b. Intermediate care facility for mentally retarded or persons with related conditions (IeF/MRl

c,-'-_ __

Hospital

d, _ __

NF (served in hospital)

e, _ __

ICF/MR (served in hospital)

3. A waiver of section 1902(a) (10) (B) of the Act is requested to target waiver services to one of the select group(s) of
individuals who would be otherwise eligible for waiver services:

a, _ __

aged (age 65 and older)

STATE: _ _O~KL~AH~O~MA~_ _ _ __

1

DATE: July 1, 2001

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 17 of 49

Vi

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VERSION 06-95

• •

b, _ __
c, _ _X,,-_
d, _ __ e, _--,X,,-_
f, _ __
g,---

cjisabled
aged and diSabled
mentally retarded
developmentally disabled without coqnitive
impairment related to the developmental disability
mentally retarded and developmentally disabled
chronically mentally ill

4. A ~laiver of section 1902 (a) (lO) (B) of the Act is also requested to impose the'following additional targeting restrictions (specify):

a ,_--,X,--_

Waiver services are limited to the following age groups (specify): 21 years or older

b, _ __

Waiver services are limited to
individualswith the following disease{s) or
condition(s) (specify):

•

c, _ _ __ d, _ __
STATE: OKLAHOMA

Waiver services are limited to individuals who are mentally retarded or developmentally disabled, who currently reside in general NFs, but who have been shown, as a result of the Pre-Admission Screening and Annual Resident Review process mandated by P.L. 100203 to require active treatment at the level of an reF/MR.
Other criteria. (Specify)

2

DATE: July 1, 2001

o>a-.

~,
c0:::t.1

U enl

- '" , w"',
..J "' ,
u. .. ,

:so..J
o

"'

i,'

[i; ,

uo. ''

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 18 of 49
., ,(!

v

VERSION 06-95

•

e. _ _ __

Not applicable.

5. Except as specified in item 6 below, an individual must meet the Medicaid eligibility criteria set forth in Appendix C-l in addition to meeting the targeting criteria in items 2 through 4 of this request.

6. This waiver program includes individuals who are eligible under medically needy groups.

a. _ _ __ Yes

b._-"X_ No

•

7. A waiver of '1902{a) (10) (el (i) (III) of the social Security Act has been requested in order to use institutional income
and resource rules for the medically needy.

a. _ _ __ Yes

b. _ _"x~_ No

c. ____ N/A

8. The State will refuse to offer home and community-based services to any person for whom it can reasonably be expected that the cost of home or community-based services furnished to that individual would exceed the cost of a level of care referred to in item 2 of this request.

a. _--=X'--_ Yes

b. ____ No

EXCEPTION See Page 3-a

•

9. A waiver of the "statewideness" requirements set forth in section 1902(a) (1) of the Act is requested.

a. _ _ __ Yes

b ._---'X"-..., No

If yes, waiver services will be furnished only to individuals in the following geographic areas or political
subdivisions of the State (Specify):

STATE _ ,_--"O",K",L",AH"-",O,,MA~ __

3

DATE, July 1, 2001

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 19 of 49
• 6

v

VERSION 06-95

•

EXCEPTIONS TO INDIVIDUAL COST-CAP

or The cost of home

community-based services furnished to

a person may exceed the reasonably expected cost of

serving a person in a nursing facility when all of the

increased expenditures above the reasonably expected cost

are due solely to (1) a one time purchase of home

modifications and/or specialized medical equipment and/or

(2) a documented need for a temporary (not to exceed a 60

day limit) increase in frequency of service or number of

services to prevent institutionalization, andlor (3)

e:xpenditures are for ADvantage Hospice Care and/or (4)

expendi tures are· for prescribed drugs, which would be

paid by Medicaid if the individual were receiving

services in a nursing facility, and the annualized

expenditures for waiver home or comrnunity~based services

to a person under these circumstances can reasonably be

expected to be no more than 200% of an expected

annualized cost of nursing facility care.

•

•

STATE: __~O~K=LAH~~O~MA~______

3-a

DATE: July 1, 2001

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 20 of 49
'Nr aWN -
VERSION 06-95

• • •

10. A waiver of the" amount, duration and scope of services requirements contained in section 1902(a) (10) (B) of the Act is requested, in order that services not otherwise available
under the approved Medicaid State plan may be provided to individuals served on the waiver.

11. The State requests that the following home and communitybased services, as described and defined in Appendix B.l of this request, be included under this waiver:

a ° _-'X"---_
bo _ __

Case management
Homemaker

Co _ __
do _ __

Home health aide services Personal care services

eo _ _~X~_

Respite care

fo_-",-X~
go _ __

Adult day health (Including Enhancements: Personal Care, Physical, Occupational, SpeAr.h/Language and Rp.~pi yat.ory Therapies)
Habilitation

Residential habilitation

Day habilitation

Prevocational services

Supported employment services

Educational services

ho_-,X,,-_

Environmental accessibility adaptations

io_~X~_
Jo _ _ __

Skilled nursing Transportation

k ° _---'X"-_ 1. _ __
mo _ _ __

Specialized medical equipment and supplies Chore services Personal Emergency Response Systems

STATE: __~O~K~L~A~H~O~MA~_____

4

DATE: July 1,

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 21 of 49

• •

VERSION 06-95

n. o. p. q. r.
s._~X,,-_

Companion services

~rivate duty nursing

Family training-

Attendant care

Adult Residential Care

Adult foster care

Assisted living

Extended State plan services (Check all that apply) :

physician services

Home health care services

Physical therapy services

Occupational therapy services

Speech, hearing and language services

x

Prescribed drugs

Other (specify):

t . _--,X,,-_

Other services {specify): Advanced Supportive/Restorative Assistance; HomeDelivered Meals; Physical Therapy; Occupational Therapy;' Speech and Language Therapy; Respiratory Therapy; Comprehensive Home Care; Hospice.

•

u. _ _ __

The following services will be provided to individuals with chronic mental illness:

STATE: __~O~K~L~AH~O~MA~______

5

DATE:

July 1,

>-~
0O.C"
...,,~
iw..L. q~ "~
!!:c 2001 ~
~

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 22 of 49

VERSION 06-95

•

Day treatment/Partial hospitalization
Psychosocial rehabilitation
Clinic services (whether or not furnished
in a facility)

12. The state assures that adequate standards exist for each
provider of services under the waiver. The State further
assures that all provider standards will be met.

•

13. An individual written plan of care will be developed by
qualified individuals for each individual under this waiver. This plan of care will describe the medical and other
services (regardless of funding source) to be furnished, their frequency, and the type of provider who will furnish each. All services will be furnished pursuant to a written plan of care. The plan of care will be subject to the approval of the Medicaid agency's designated Administrative Agent for the waiver. FFP will not be claimed for waiver services furnished prior to the development of the plan of care. FFP will not be claimed for waiver services which are not included in the individual written plan of care.
14. waiver services will not be furnished to individuals who are inpatients of a hospital, NF, or reF/MR.

•

15. FFP will not be claimed in expenditures for the cost of room and board, with the following exception(s) (Check all that
apply) :

ao_--,X,-_

When provided as part of respite care in a
facility approved by the State that is not a private residence (hospital, NF, foster home, or community residential facility).

b ° _--,X,,-_

Meals furnished as part of a program of adult day health services.

Co _ _ __

When a live-in personal caregiv,er (who is unrelated to the individual receiving care) provides approved waiver services, a portion of the rent and food that may be reasonably attributed to the caregiver who resides in the same household with the waiver recipient. FFP f,or rent and food for a live-in caregiver

STATE: __-zO~K~L~A~H~O~MA~______

6

DATE: July 1, 2001

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 23 of 49

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VERSION 06-95

•

is not available if the recipient lives in the
caregiver's home, or in a residence that is 9wned or leased by the provider of Medicaid
is services. An explanation of the method by
which room and board costs are computed
included in Appendix G-3.
For purposes of this provision, "board" means 3 meals a day, or any other full nutritional regimen.

• •

16. The Medicaid agency provides the following assurances to
HeFA,
a. Necessary safeguards have been taken to protect the health and welfare of persons receiving services under this waiver. Those safeguards include:
1. Adequate standards for all types of providers that furnish services under the waiver (see Appendix
B) ;
2 . Assurance that the standards of any State licensure or certification requirements are met for services or for individuals furnishing services that are provided under the waiver (cec Appendix B). The State assures that these requirements will be met on the date that the services are furnished; and
3. Assurance that all facilities covered by section 1616 (e) of the Social Security Ac't, in which home and community-based services will be provided, are in compliance with applicable State standards that meet the requirements of 45 CFR Part 1397 for board and care facilities.
b. The agency will provide for an evaluation (and periodic reevaluations, at least every 36 months arG"tUully) of the need for a level of care indicated in item 2 of this request, when there is a reasonable indication that individuals might need such services in the near future (one month or less), but for the availability of home and community-based services. The requirements for such evaluations and reevaluations are detailed in Appendix D.
c. When an individual is determined to be likely to require a level of care indicated in item 2 of this request, and is included in the targeting criteria

7

DATE, July 1, 2001

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 24 of 49

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VERSION 06-95
v
included in items 3 and 4 of this request, the individual or his or her legal representative will be:
1. Informed of any feasible alternatives under the waiver; and

• •

2. Given the choice of either institutional or home and community-based services.
d. The agency will provide an opportunity for a fair hearing, under 42 CFR Part 431, subpart E, to persons who are not given the choice of home or community-based services as an alternative to institutional care indicated in item 2 of this request, or who are denied the service(s) of their choice, or the provider(s) of their choice.
e. The average per capita expenditures under the waiver. will not exceed 100 percent of the average per capita expenditures for the level(sl of care indicated in item 2 of this request under the State plan that would have been made in that fiscal year had the waiver not been granted.
The agency's actual total expenditure for home and community-based and other Medicaid services under the waiver and its claim for FPP in expenditures for the services provided to individuals under the waiver will not, in any year of the waiver period, exceed 100 percent of the amount that would be incurred by the State's Medicaid program for these individuals in the institutional setting(s) indicated in item 2 of this request in the absence of the waiver.
g. Absent the waiver, persons served in the waiver would receive the appropriate type of Medicaid-funded institutional care that they require, as indicated in item 2 of this request.
h. The agency will provide HCFA annually with information on the impact of the waiver on the type, amount and cost of services provided under the State plan and on the health and welfare of the persons served on the waiver. The information will be consistent· with a data collection plan designed by HCFA.
i. The agency will assure financial accountability for funds expended for home and community-based services, provide for an independent audit of its waiver program (except as HCFA may otherwise specify for particular

STATE, __~O~K~L~AH~O~MA~______

8

DATE, July 1, 2001

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 25 of 49 ------

.

v

v

VERSION 06-95

•

waivers), and it will maintain and make available to HHS, the Comptroller General, or other designees, appropriate financial records documenting the cost of services provided under the waiver, including reports of any independent audits conducted.

The State conducts a single audit in conformance with the Single Audit Act of 1984, P.L. 98-502.

a. _ _-"X~_ Yes

b. ____ No

17. The State will provide for an independent assessment of its
waiver that evaluates the quality of care provided, access to care, and cost-neutrality The results of the assessment will be submitted to HCFA at least 90 days prior to the
expiration of the approved waiver period and cover the first 24 months (new waivers) or 48 months (renewal waivers) of the waiver.

a. _ _ _~ Yes

b . _--,X,--~ No

•

18. The State assures that it will have in place a formal system by which it ensures the health and welfare of the individuals served on the waiver, through monitoring of the quality control procedures described in this waiver document (including Appendices). Monitoring will ensure that all provider standards and health and welfare assurances are continuously met, and that plans of care are periodically reviewed to ensure that the services furnished are
consistent with the identified needs of the individuals.. Through these procedures, the State will ensure the quality of services furnished under the waiver and the\ State plan to waiver perSQPS served on the waiver. The State further assures that all problems identified by this monitoring will be addressed in an appropriate and timely manner, consistent
with the severity and nature of the deficiencies.

18. An effective date of July I, 2002

is requested.

19. The State contact person for this request is--,P:-,h,,'''''",1-c~,.­ Forslund / Michael Fogarty, who can be reached by telephone
at (405) 522 7476.

•

20. This document, together with Appendices A through G, and all attachments, constitutes the State's request for a hoe and community-based services waiver under section 1915(c) of the

STATE :. ~--"D"K"LAH~D,!'MA~_ __

9

DATE: July 1, 2001

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 26 of 49
...

•

VERSION 06-95

•

Social security Act. The State affirms that it will abide
by all terms and conditions set forth in the waiver
(including Appendices and attachments), and certifies that any modifications to the waiver request will be submitted in ,writing by the State Medicaid agency. Upon approval by
HCFA, this waiver request will serve as the State's
authority to provide home and community services to the
target group under its Medicaid plan. Any proposed changes to the approved waiver will be formally requested by the
State in the form of waiver amendments.

•

The State assures that all material referenced in this waiver
application (including standards, licensure and certification
requirements) will be kept on file at the Medicaid agency.
Signature ,--"llQ_'~C)---I'''-t~''='..D",,,-
Print Name: __EM~i~c~h~a~e~l~F~o~g~a~r~t~y"-___________
Title: Chief Executive Officer
Oklahoma Health Care Authority
Date: ______________________________________
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0933-0449. The time required to complete this information collection is estimated to average 160 hours for each new and renewed waiver request and an average of 30 hours for each amendment, including the time to review instructions, searching existing data resources, gather the data needed, and complete and review the information collection. If you have any comments concerning the accuracy of the time estimates or suggestions for improving this form, please write to: HCFA, P.O. Box 26684, Baltimore, Maryland 21207 and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, D.C. 20503.

•

10

DATE, July 1, 2001

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 27 of 49

MINUTES OF A SPECIAL BOARD MEETING OF THE OKLAHOMA HEALTH CARE AUTHORITY
Held at Oklahoma Health Care Authority 4545 N. Lincoln Blvd. September 18, 2002 2:00 p.m.

Manner and Time of Notice of Meeting: A public notice was placed on the front door of the Oklahoma Health Care Authority on September 16, 2002.

Pursuant to a roll call of the members, a quorum was declared to be present, and Chairman Brickner called the meeting to order at 2:00 p.m.

BOARD MEMBERS PRESENT:

Chairman Brickner, Member Rounds, Member McFall, Member Roggow, Member Humble

ABSENT:

Member Hoffman, Member Miller

OTHERS PRESENT:

Sally Venator, HHPO Jodi Price, Unicare Kelli McNeal, OICA Belinda Rogers, OlGA Christine Eagleson, United Care Dewayne Anderson, OU College of Medicine
Tamara Pratt, J<!NTV
David Ward, KWTV Laura Brookins, OAHP Karen Utterback, Stepping Stones Tom Dunning, DHS Sara Barry, IBH Ron Graham, CO P Tanya Case, Prime Advantage Mary Brinkley, OKAHSA Barabara Hoberock, Tulsa World Jim Killackey, Daily Oklahoman Gerry Clancy, MD., OU Tulsa Leeland Alexander, OU Tulsa Belinda Summers, Evergreen Community Services William Guinn, Office of Handicapped Concerns Jim Nicholson, DHS DDSD Daniel Sorrells, Unicare

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 28 of 49
'an . ,
-; ~
David Hobert, IBH Bill Bateman, KTOK Steve Anderson, OSF Bob Parks, DRS Dena Thayer, DHS Rick Lewis, Progressive Independence Jeff Hughes, Progressive Independence Jeff Wagner, OPCA Chris Campbell, REM Lisa Smith, OCCY Jimmy Durant, SSM Health Care Ric Munoz, CAPTC Marc F., KOCO Damone Butler, OETA Jean Kelsey, Variety Shawn Black, House Staff Beverlee Brown, DHS Windy Rinehart, Evergreen
Chairman Brickner asked the Board members to review the letters submitted by Mr Craig Jones, Mr. Milton Evans, and Representative Mitchell and Senator Monson, while waiting for Member Roggow to arrive.
General Discussion regarding Item 2. Consideration and Vote Upon Emergency Eligibility & Service Reductions, and Service Eliminations Made to Allow the Oklahoma Health Care Authority to comply with Article 10, Section 23 of the Oklahoma Constitution
Chairman Brickner asked Mr. Fogarty to update the financial situation and the CEO asked Ms. Garcia to give an update. Ms. Garcia stated that during the first two months of the new fiscal year general revenue collections were below 13,5% of the estimate in July. The Director of State Finance declared a staterevenue shortfall and ordered all agencies to have a general revenue appropriations cut of 4.75% for the fiscal year. The cut was effective immediately and was 17.6 million dollars in general revenue. Ms. Garcia stated that the agency has been directed to make these decisions timely and to file a revised budget work program by the end of this month.
Chairman Brickner asked the record to reflect that Member Roggow had arrived and five board members were now present for more than a quorum.
CEO Fogarty stated that the situation had not changed since the regular Board meeting of September 12, 2002. Dr. Mitchell related comments of the staff regarding the cuts to be made. The staff realizes that the Board is having to
2

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 29 of 49
.
make difficult decisions and wanted to state their support of the Board for their continuing efforts.
Chairman Brickner summarized his thoughts about getting more money for the agency and the difficulty in getting federal dollars. He stated that because the agency could not generate additional monies, the Board needed to address cutting costs. CEO Fogarty stated that if we laid the entire staff off for 700 days we might solve our financial problem but that is not possible. CEO Fogarty stated that the agency is cutting costs by not filling positions, travel budget limitations, being extremely cautious about expenditures, and enhancing revenue. Furloughs would not be effective for the agency.
Presentations regarding Item 2. Consideration and Vote Upon Emergency Eligibility & Service Reductions, and Service Eliminations Made to Allow the Oklahoma Health Care Authority to comply with Article 10, Section 23 of the Oklahoma Constitution
The first speaker was Mr. Steven Dow, the Executive Director of the Community Action Project of Tulsa, which is a private anti-poverty agency. He urged that the Board not roll back eligibility for children below 185% of the poverty level. He stated that the option to provide coverage under federal law does not exist under state law in Oklahoma.
Mr. Charles Campbell, Oklahoma Silver Haired Legislators Alumni Association, asked that the Board not abuse seniors by cutting prescriptions, eyeglasses, hearing aids, nursing homes.
Dr. Joseph Ferritti, Provost of the OU Health Sciences Center, introduced Dr. Dwayne Andrews, Executive Dean of the OU College of Medicine. He stated that the College of Medicine will work with the OHCA and urged as we do this that the Board keep the managed care system in place.
Dr. Gerry Clancey, Dean of the College of Medicine of the University of Oklahoma in Tulsa. He addressed eligibility, his support of managed care and the relationship of the OHCA and OU College of Medicine.
Chairman Brickner addressed the letter from Co-Chairmen Mitchell and Monson. The OHCA is voting on a rule to suspend state-legislated eligibility temporarily. The Board can do this under the Attorney General's opinion in a state of emergency due to a budgetary imbalance.
Howard Pallotta reported that the Conflict of Interest Panel recommends that Member McFall abstain from Items Nos. 2(i) and 2(n) because he is a pharmacist
provider and asked that he abstain from discussion, deliberation or vote on those
items. There was still a quorum.
3

- - - . , . - - - - - - - - - - - Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 30 of 49 · . - .---------~----.- ..
. ,
Member McFall accepted the recommendation of the Conflicts Panel and will abstain on Item Nos. 2(i) and No. 2(n).
CEO Fogarty stated that rates of payments to providers will not be affected. All recommendations will be reversible. Seven recommendations were made.
Agency Recommendations Regarding Item 2. Consideration and Vote Upon Emergency Eligibility & Service Reductions, and Service Eliminations Made to Allow the Oklahoma Health Care Authority to comply with Article 10, Section 23 of the Oklahoma Constitution
Recipient Eligibility Changes
Mr. Fogarty reported to the Board what staff recommendations were made regarding each item. The recommendations were as follows:
Concerning Item No. 2(a), staff would recommend the elimination of the medically needy program by accepting no new certifications on or after October 1, 2002, effective October 1, 2002.
Staff recommended that no action be taken on Item No. 2(b). Dr. Mitchell agreed that no change be made to this item.
Staff would recommend to the Board that Item No. 2(c), eligibility standards for children ages one through five, be reduced to 133% of the federal poverty level, effective November 1, 2002.
Staff would recommend the approval of Item No. 2(d), decreasing the eligibility standard for children ages six through 18 from 185% of the federal poverty level to 115% of the federal poverty level, with November 1,2002 as the effective date.
On Item No. 2(e) staff would recommend the approval of decreasing the eligibility standard for aged, blind and disabled recipients who are not institutionalized from the current standard of 100% of the federal poverty level to the previous standard for state supplemental cash assistance program, or about 80% of the federal poverty level, effective November 1, 2002.
Staff would recommend no action be taken on Item No. 2(f).
Service Reductions or Eliminations
Staff would recommend eliminating Item No. 2(h), the optional adult dental services, with an effective date of October 1, 2002.
4

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 31 of 49

v
.-

Staff would recommend eliminating Item No. 2(i), reduction of prescription drug coverage for all recipients in a Home and Community Based Waiver from an unlimited number of prescriptions, to a maximum of five per month. The effective date would be October 1, 2002.

Staff would recommend no action on Item Nos. 20), (k), (I), (m), and (n).

Staff would recommend on Item No. 2(0) the reduction of paid annual hospital day Medicaid coverage from 24 days per year to 15 days per year, with an effective date of October 1, 2002.

Board Vote Upon Item 2, Consideration and Vote Upon Emergency Eligibility & Service Reductions, and Service Eliminations Made to Allow the Oklahoma Health Care Authority to comply with Article 10, Section 23 of the Oklahoma Constitution

Based upon staff recommendations, the Board took the following actions:

Motion:

Member Humble moved that the Board accept the recommendation of the staff to reduce the number of prescription drugs for all recipients in a Home and Community Based Waiver from an unlimited number of drugs to five prescriptions, effective October 1, 2002. Member Rounds seconded.

For the Motion:

Chairman Brickner, Member Humble, Member Rounds, Member Roggow.

Abstained:

Member McFall.

Absent:

Member Hoffman, Member Miller

Motion:
For the Motion: Absent:

Member McFall moved that we accept the recommendation of the staff to eliminate the optional adult dental services in the Fee for Service program, effective October 1, 2002. Member Humble seconded.
Chairman Brickner, Member McFall, Member Humble, Member Rounds, Member Roggow.
Member Hoffman, Member Miller.

5

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 32 of 49
,

Motion:
For the Motion: Absent: Motion: For the Motion: Absent: Motion:
For the Motion: Absent: Motion:

Member McFall moved for the reduction of paid annual hospital day Medicaid coverage from 24 days to 15 days in the Fee for Service and Choice program for adults, effective October 1, 2002. Member Roggow seconded.
Chairman Brickner, Member McFall, Member Humble, Member Rounds, Member Roggow.
Member Hoffman, Member Miller.
Member McFall moved for the temporary suspension of the Medically Needy Program, effective October 1, 2002. Member Roggow seconded the motion.
Chairman Brickner, Member McFall, Member Humble, Member Rounds, Member Roggow.
Member Hoffman, Member Miller.
Member McFall moved for decreasing the eligibility standards for children from one through five from 185% of the poverty level to 133% of the poverty level effective November 1, 2002, and decrease the eligibility standard for children ages 6 through 18 from 185% of the federal poverty level to 115% of the federal poverty level, effective November 1, 2002. Member Humble seconded the motion.
Chairman Brickner, Member McFall, Member Humble, Member Rounds, Member Roggow.
Member Hoffman, Member Miller.
Member McFall moved to decrease the eligibility standard for those aged, blind or disabled recipients who are not living in an institution from 100% of the current poverty level and reduced to the state supplemental income eligibility effective November 1, 2002. Member Humble seconded.
6

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 33 of 49

For the Motion: Absent:
ADJOURNMENT Motion: For the Motion: Absent:

Chairman Brickner, Member McFall, Member Humble, Member Rounds, Member Roggow. Member Hoffman, Member Miller.
Member McFall moved for adjournment of the meeting. Member Roggow seconded. Chairman Brickner, Member McFall, Member Humble, Member Rounds, Member Roggow. Member Hoffman, Member Miller.

7

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 34 of 49
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---
State Medicaid Manual

4445. HOME AND COMMUNITY-BASED SERVICES - AMENDMENTS
A. When an Amendment Is Required.--An amendment is required when a change in a waiver results in the waiver document no longer accurately reflecting the policies and procedures in the approved waiver document. The amendment usually must be approved by HCFA prior to the implementation of the proposed change. However, there are instances where amendments may be approved with a retroactive effective date as far back as the beginning of the waiver year in which it is submitted. Some examples of sucl' situations would be revisions to the cost estimates, deletion of a waiver service, or compliance
with revised State rules or regulations.
B. Submission.--An amendment request is processed like a waiver request. (See §4441 for process related instructions.) Amendment requests consist of two types: substantive requests and technical requests.

It is to your benefit to submit technical amendments under separate cover from substantive amendments. This maximizes the likelihood of approval without the delay caused by a request for additional information, which is often necessary on substantive amendments.
1. Technical Amendment.--A technical amendment is any amendment in which the change has no impact on cost or utilization of services (directly or indirectly). Such amendments must be accompanied by specific assurances that there will be no change to the costs, utilization of services, or number of persons served by the waiver, and an explanation of why this is so.

4-482

Rev.70

06-98

REQUIREMENTS AND LIMITS APPLICABLE TO SPECIFIC SERVICES
'F . ·"···DI!EXFEHNDIBA'rNfT'S.

4446

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 35 of 49

2. Substantive Amendment.--A substantive amendment is any amendment which directly or indirectly affects any of the values under which the waiver was shown to be cost effective or cost neutral at its approval. Therefore, in most cases, a change in any of the following would constitute a substantive amendment:
a. Any change in the number of waiver recipients served, the cost of waiver services, or the mix of beneficiary groups or services provided.

NOTE:

Although the C x D FFP limitation has been eliminated effective for waiver applications (or renewals) filed before, on, Or after April 7, 1986 and for services furnished on or after August 13, 1981, if you anticipate substantial changes in your cost estimates, submit these changes in the form of an amendment to your waiver. This amendment should provide a complete explanation of the reasons for the change and recomputed cost effectiveness or cost neutrality formulas documenting the continued cost effective or cost neutrality of the waiver program.

b. Changes to the definition of services.
c. Changes to who is eligible to participate.
d. Changes to who may provide services.
e. Changes in health and safety standards for providers which would increase the cost of services (e.g., change in the number of individuals who can be cared for in a foster home).
f. Changes necessary to implement specific statutory provisions, e.g., the 1985 COBRA provisions pertaining to habilitation services or maintenance of income standards and the

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 36 of 49
. ,
1997 BBA provisions which deleted the requirement that individuals be discharged from an NF or ICFIMR to be eligible for expanded habilitation.
Requests for substantive amendments must be accompanied by a
revised formula which demonstrates that the waiver will remain cost effective or cost neutral with the amendment. The formula format to be used must comply with the formula given in 42 CFR 441.303(f) for amendments approved on or after August 24, 1994.

Case 4:02-cv-00762-JHP-PJC
- - - - - State Medicaid Manual ~

Document 11 Filed in USDC ND/OK on 10/09/02
• . r>

Page 37 of 49 Page 1 of3

nters for Medicare & Medicaid I
rvices
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I I I I Home About eMS Frequently asked questions Send feedback Receive updates I Careers with eMS

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State Medicaid Manual
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FOREWORD
A. E_ungion of the State Medicaid Manual (SMM).--This manual makes available to all State Medicaid agencies, in a form suitable for ready reference, Informational and procedural material needed by the States to administer the Medicaid program. It is an official medium by which the Health Care Financing Administration (HCFA) issues mandatory, advisory, and optional Medicaid policies and procedures to the Medicaid State agencies.
B. Contents and Organization.--
1. Contents.--The manual provides instructions, regulatory Citations, and information for implementing provisions of Title XIX of the Social Security Act (the Act). Instructions are official interpretations of the law and regulations, and, as such, are binding on Medicaid State agencies. This authority is recognized in the introductory paragraph of State plans. Interpretations and Instructions relating to common policy under Titles I, IV-A, X, XIV, XVI, and XIX of the Act are also included.
2.0rganization.--The material is organized into major Parts, which are divided into chapters and sections. The manual is structured as close as possible to the codification of Medicaid regulations. A crosswalk of manual sections and regulations is also included.

The instructions interpret or clarify issues in the regulations and set forth procedures you are required to follow in implementing the regulations.
~ DEFENDANT'S EXHIBIT
G

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 38 of 49

State Medicaid Manual

Page 2 of3

C. The SMM and Other Reference Material.--Title XIX is the statutory basis for the Medicaid program and the foundation for the regulations and all manual material. Medicaid regulations are contained in Parts 42 and 45 of the Code of Federal Regulations. Regulation citations are included in the manual text.
D. Manual Revisions.--The manual is designed to accommodate new pages as text is added or revised. Substitute pages containing revised sections or chapters are, therefore, issued as needed. The transmittal pages summarize the changes and include the effective dates of the revisions. When a major change in regulations, pOlicies, or procedures is involved, the background is provided. New or changed materials are indicated in the left margin of a page in the following manner:
Line on which change begins.
Line on which change ends.
Note that Internet manuals to not have the red vertical bar in the margin, which is present in paper manuals; but do have red font to show change.
The revision transmittal sheet identifies new page numbers and the pages replaced. If at a later date, you need to refer to the background explanation given on a transmittal sheet, you can identify the transmittal by its number which appears on each manual page.
E. U§EH)f the Revision Transmittal Check List.--Each manual Part has its own check sheet for recording receipt of revisions since different parts of the manual have different distributions. Each Part will have its own numerical sequence of transmittals. File revised manual transmittals in transmittal number order as a safeguard against discarding a more recent page in favor of an older one.
Transmittals are not always distributed in strict numerical sequence. Therefore, if it appears that you have not received a particular transmittal, allow 15 working days after receipt of a higher numbered transmittal before requesting a transmittal that you have not received.
Rev. 1

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 39 of 49

. State Medicaid Manual

Page 3 on

mReturn tQ Table of Contents for State Medicaid Manual

m!!.etl.lrn to Program Manuals

Last Modified on Wednesday, AUlgUSI

.78

Centers for Medicare & Medicaid Services

7500 Security Boulevard, Baltimore MD 21244-1850

Itlo~tulm;[l!1l!lli~~Y.~iC,,~_ I Privacy & Security I Accessibillty 1Help I Sitemap I Medi!=are.gp'y:

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 40 of 49

. ,':;;'

;

MEDICAL PROVIDERS-FEE FOR SERVICE 317:30-3-57. General Medicaid coverages

OAC 317:30-3-57 p(ll categorically needy

The following are general Medicaid coverages for the categorically needy:

(1) Inpatient hospital services other than those provided in an institution for mental diseases.

(A) Adult coverage limited to 24 compensable inpatient hospital days per State fiscal year {July 1 through June
30 1 .

(B) Coverage for persons under 21 years of age is not limited. All admissions must be medically necessary. All psychiatric admissions require prior authorization for an approved length of stay.

(2) Emergency department services.

(3) Dialysis in an outpatient hospital or free standing dialysis facility.

(4) Outpatient therapeutic radiology or chemotherapy for proven malignancies or opportunistic infections.

(5) Outpatient surgical services

facility payment for

selected outpatient surgical procedures to hospitals which

have a contract with the Authority.

(6) Outpatient Mental Health Services for medical and remedial care including services provided on an outpatient basis by certified hospital based facilities who are also qualified mental health clinics.

(7) Rural health clinic services and other ambulatory services furnished by rural health clinic.

(8) Optometrists' services - only as listed in Subchapter 5, Part 45, Optometrist specific rules of this Chapter.

(9) Maternity Clinic Services through the Oklahoma State Health Department.

(10) Outpatient diagnostic x-rays and lab services. Other outpatient services provided adults, not specifically

GENERAL PROVIDER POLICIES

REVISED 01-23-01

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 41 of 49

, .
"", ,
OAC 317:30-3-57 p(2)

MEDICAL PROVIDERS-FEE FOR SERVICE

addressed, are covered only when prior authorized by the Medical Professional Services Units of the Oklahoma Health Care Authority.

(II) One screening mammogram (76092) and one follow-up mammogram (76090 and 76091) every year for women beginning at age 30. Additional follow-up mammograms are covered when medically necessary. Additional follow-up mammograms require a prior authorization from the Medical Professional Services Division of the Oklahoma Health Care Authority,

(12)Nursing facility services (other than services in an institution for tuberculosis or mental diseases).

(13) Early and Periodic Screening r Diagnosis and Treatment Services (EPSDT) are available for each eligible individual

under 21 years of age to provide access to regularly scheduled

examinations and evaluations of the gene.ral physical and

mental health, growth, development, and nutritional status of

infants, children, and youth.

Federal regulations also

require that diagnosis and treatment be provided for

conditions identified during a screening whether or not they

are covered under the State Plan, as long as federal funds are

available for these services.

These services must be

necessary to ameliorate or correct defects and physical or

mental illnesses or conditions and will require prior

authorization. EPSDT services include payment for:

(A) Child health screening examinations for eligible children by a medical or osteopathic physician.

(i) SCheduled screenings include:

(I) Six screenings during the first year of life;

(II) two screenings in the second year;

(III) one screening yearly for ages 2 thru 5 years; and

(IV) one screening every other year for ages 6 thru 20 years.

REVISED 01-23-01

GENERAL PROVIDER POLICIES

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 42 of 49

------~

01", or, '''',-,

0' ' •

," '.

M_.E==D~I~C~A~L~P~R~O~V~I~D~E~R=S~-~F~E=E~F~O~R~S~E~R~V~I~C~E~~~~~~OAC 317,30-3-57 p(3)

-

(ii) Interperiodic screenings outside the periodicity

schedule for screening examinations are allowed at

necessary intervals when a medical condition is

suspected.

(B) Diagnostic x-rays, lab, and/or injections when prescribed by a physician.

(C) Immunizations.

(D) Outpatient care.

(El Dental services, including inpatient services in an eligible participating hospital, outpatient dental screening every 12 months, two bite wing x-rays, and/or oral prophylaxis one each 12 monthsi emergency services for relief of pain and/or acute infection; limited restoration, repair and/or replacement of dental defects after the treatment plan submitted by dentist has been authorized.

(F) Optometrists' services. The EPSDT periodicity schedule provides for at least one visual screening and glasses each l~ months. In addition, payment is made for glasses for children with congenital aphakia or following cataract removal. Interperiodic screenings and glasses at intervals outside the periodicity schedule for optometrists are allowed when a visual condition is suspected.

(G) Hearing services include hearing evaluation at least once every 12 months, hearing aid evaluation if indicated and purchase of a hearing aid when prescribed by a state licensed audiologist who holds a certificate of clinical competence from the American Speech and Hearing Association and preauthorized. Interperiodic hearing examinations are allowed at intervals outside the periodicity schedule when a hearing condition is suspected.

(H) Prescribed drugs.

(I) Outpatient Psychological services for eligible individuals under 21 years of age must be prior authorized. Payment is made to eligible psychologists who are duly licensed to practice. Outpatient testing and diagnosis is limited to one hour per patient each 12 months. Additional hours may be prior authorized.

GENERAL PROVIDER POLICIES

REVISED 01-23-01

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 43 of 49

OAe 317:30-3-57 p(4)

MEDICAL PROVIDERS-FEE FOR SERVICE

(J) Inpatient Psychotherapy Services. Payment is made to

eligible psychologists and psychiatrists.

Inpatient

psychotherapy by a psychologist must be prior authorized.

(K) Inpatient psychological testing for eligible

individuals under 21 years of age. Limited to one hour per

recipient each 12 months.

If medically necessary,

additional hours must be prior authorized. Payment is made

to eligible psychologists who are duly licensed to

practice.

(L) Transportation. Provided when necessary in connection
with examination or treatment when not otherwise available.

(M) Inpatient hospital services.

(N) Medical supplies, equipment, appliances and prosthetic devices beyond the normal scope of Medicaid.

(0) EPSDT services furnished in a qualified child health center.

(14) Family planning services and supplies for individuals of

Child-bearing age, including counseling, insertion of

intrauterine device and sterilization for persons 21 years of

age and over who are legally competent, not institutionalized

and have signed the ltConsent Form I! at least 30 days prior to

procedure. Reversal of sterilization procedures for the

purposes of conception are not covered.

Reversal of

sterilization procedures may be covered when medically

indicated and substantiating documentation is attached to the

claim. The Norplant System for birth control is covered;

however, removal of the Norplant System prior to five years is

covered only when documented as medically necessary.

Reinsertion of Norplant contraceptive will be considered on a

case by case basis.

(15) Family planning centers. (16) Physicians' services whether furnished in the office, the patient's home, a hospital, a nursing facil i ty, reF /MR, or elsewhere. For adults, payment will be made for up to 24 hospital days paid on hospital claims during a state fiscal

REVISED 01-23-01

GENERAL PROVIDER POLICIES

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 44 of 49

----

'*.......'''"....... "" "r

MEDICAL PROVIDERS-FEE FOR SERVICE~~~~__~O~A_C__3_1_7~:3~0-3-57 p(5) year for each individual recipient. These days will be maintained on the recipient record. Physician claims for hospital visits will be paid until the last compensable hospital day is captured. After 24 hospital days have been captured, inpatient physician services will not be paid beyond the last compensable hospital day. Office visits for adults are limited to two per month except when in connection i-lith emergency medical conditions.

(17) Medical care and any other type of remedial care recognized under State law, furnished by licensed
practitioners within the scope of their practice as defined by State law. See applicable provider section for limitations to covered services for:

(A) Podiatrists' services

(B) Optometrists' services

(e) Psychologists' services

(D) Certified Registered Nurse Anesthetists

(El Certified Nurse Midwives

(F) Advanced Practice Nurses

(18) Free-standing ambulatory surgery centers.

(19) Prescribed drugs not to exceed three prescriptions per month. Medically necessary prescribed drugs for persona in nursing facilities, IeF/MR's, Home and Community Based Waivers, and the Advantage Program Waiver. Prescriptions are not limited for persons under 21 years of age.

(20) Rental and/or purchase of durable medical equipment.

(21) Adaptive equipment, when prior authorized, for persons residing in private IeF/MR's. (22) Dental services for persons residing in private ICF/MR's in accordance with the scope of dental services for persons under age 21.

(23) Prosthetic devices limited to catheters and catheter accessories, colostomy and urostomy bags and accessories,

GENERAL PROVIDER POLICIES

REVISED 01-23-01

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 45 of 49

OAC 317:30-3-57 p(6}

MEDICAL PROVIDERS-FEE FOR SERVICE

tracheostomy accessories, nerve stimulators, hyperalimentation and accessories, home dialysis equipment and supplies, oxygen/oxygen concentrator equipment and supplies, respirator
or ventilator equipment and supplies, and those devices
inserted during the course of a surgical procedure.
(24) Standard medical supplies.
(25) Eyeglasses under EPSDT for individuals under age 21 . Payment is also made for glasses for children with congenital aphakia or following cataract removal.
(26) Payment to blood banks for blood when not included in the hospital per diem cost.
(27) Blood and blood fractions for eligible persons suffering from a congenital or acquired disease of the blood.
(28) Inpatient services for individuals age 65 or older in institutions for mental diseases, limited to those persons whose Medicare, Part A benefits aye exhAll .. t.ed for this particular service and/or those persons who are not eligible for Medicare services.
(29) Nursing facility services, limited to individuals preauthorized and approved by OHCA for such care.
(30) Inpatient psychiatric facility admissions for individuals under 21 are limited to an approved length of stay effective July I, 1992, with provision for requests for extensions.
(31) Transportation and subsistence (room and board) to and from providers of medical services to meet patient's needs (ambulance or bus, etc.), to obtain medical treatment. (32) Extended services for pregnant women including all pregnancy-related and postpartum services to continue to be provided, as though the women were pregnant, for 60 days after the pregnancy ends, beginning on the last date of pregnancy.
(33) Nursing facility services for patients under 21 years of age.

REVISED 01-23-01

GENERAL PROVIDER POLICIES

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 46 of 49
-.

MEDICAL PROVIDERS-FEE FOR SERVICE

OAC 317:30-3-57 p (7)

(34 ) Personal care in recipient's home, prescribed in

accordance with a plan of treatment and rendered by a

qualified person under supervision of an R.N.

(35) Part A deductible and Part B medicare Coinsurance and/or deductible.

(36) Home and Community Based Waiver Services for the mentally retarded.

(37) Home health services limited to 36 visits per year and standard supplies for 1 month in a 12-month period. The visits may be any combination of Registered Nurse and nurse aide visits, not to exceed 36 per year.

(38) Organ and tissue transplantation services for children and adults, lim,ited to bone marrow, stem cells, cornea, heart, kidney, liver, lung, SPK (simultaneous pancreas kidney), PAK (pancreas after kidney), and heart-lung, are covered services based upon the conditions listed in (A)-(D) of this paragraph:

(Al All transplantation services, except kidney and cornea, must be prior authorized to be compensable.

(8) To be prior authorized all procedures are reviewed based on appropriate medical criteria.

(el To be compensable under the Medicaid program all organ transplants must be performed at a Medicare approved transplantation center.

(D) Finally, procedures considered experimental or investigational are not covered.

(39) Home and community-based waiver services for mentally retarded individuals who were determined to be inappropriately placed in a NF (Alternative Disposition Plan - ADP).

(40) Case Management services for the chronically and/or severely mentally ill.

(41) Emergency medical services including emergency labor and delivery for illegal or ineligible aliens.

GENERAL PROVIDER POLICIES

REVISED 01-23-01

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 47 of 49

·" ..

.. J

OAC 317:30-3-57 p(8)

MEDICAL PROVIDERS-FEE FOR SERVICE

(42) Services delivered in Federally Qualified Health Centers. Payment will be made on an encounter basis. An encounter is all medical or dental services provided by the center in one day.
(43) Early Intervention services for children ages 0-3.
(44) Residential Behavior Management in therapeutic foster care setting.
(45) Birthing center services.
(46) Case management services through the Department of Mental Health and Substance Abuse.
(47) Home and Community-Based Waiver services in limited geographic areas for aged or disabled individuals.
(48) Outpatient ambulatory services for persons infected with tuberculosis.

RBVISBD 01-23-01

GENERAL PROVIDER POLICIES

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 48 of 49
317:30-5-76. Generic drugs All eligible providers are required to subsL.i tute generic medicatio:1s for prescription name brand :nedicatio::1s ·witlc the exception of prescriptions in w~ich a brFl.nd necess<lry certification as provided in OAe 31'1:30-5-77 is made by a prescribing provider.
317:30-5-77. Brand necessary certification (a) Unless the prescri.bing provider certifies a brand name drug pc::'oduct is medically necessctry for the wRII being of the patient a generic must be substituted for the name brand product. The requirements ::or a brand name certificat.ion are as fo110","'s:
(J) The certification must be written ir. the physician's or other prescribing provider's 'h2ndwrit':"ng. (2) Certification must be written di.recLly on t:"1e prescription blank or on a separate sheet whic.'l is attached to t":1e original prescription. (3) A standilrd phrase indicating the need for Fl. specific brand is reql·,ired. The AI:t:'1ority recommends use of tr:e phrase ":Orand Necessary". (i,) ! l. is "C.nacceptable to use a printed box 0::1 the prescription blank that: could be checked by the physician to indicate brand necessary, or to use a :'1and-written state:nent tha--.:. is transferred to 2. rubber stamp and then stamped onLo the prescription blank. (5) If a pr.ysieian phones a prescript jon --':'0 t.he pharmacy and indica--.:.es the need for a specific :Orand, the physician should be informed o.t the need for a hand..;r-=-tten certification. T~e pharma.cy can eiL"1er request that t~"1e certiticatjon cc:cument be given to the patier.t who then delivers it to the pharmacy upon receipt of the prescription, or requesL t~e physician send the certificat Lon t.hrough the mail. (b) The Brand Necessary Ce:::-tification applies to HCF1\ Upper Limit and State Maximum A1lo..:able Cost (Stv]f:\C) products.
317:30-5-77.1. Dispensing limitation Prescription quantities are to be lim.:..ted to 31 day supply or
:00 dosage units, whichever is greater, except in instances where tt.e m3.nufacturer recommends a lessor amount. Refills are to be provided only if authorized by the prescriber and should be in accordance 1i,i-;::h the best medic.al and pharmacological practices. nll maintenance medications must be filled at the max':'mum qnantity allovled, except ";:'1en determined medically impruder.t. For products covered by the Okla~'1oma Vendor Drug Program --.:.he metric quantity shown on the claim form must. be in agreement with the descriptive unit of measure applicable to the speci Uc NDe. Only numeric charac".:ers s:-tould be ente:ced. Designations, such as the form of drug, i.e., Tabs, Caps, Suppositories, etc., rr.ust not

Case 4:02-cv-00762-JHP-PJC Document 11 Filed in USDC ND/OK on 10/09/02 Page 49 of 49
be used. Products s':1ould be billed in 3. manner consistent Wit:'l quantity measurements.
317:30-5-77.2. Pr~or authorization [Revised 4-24-02] (2..) Definition. The t.erm prior 2..utho;::,iz3.tion mea::lS an authorizat"ion by OHCA to th.e pharmacist to fill t~e prescr~ption before it is filled by the pharmacist. (b) Process. Because of the required inr.eraction between a prescribing provider (such as a physician) ar.d a pharrr.acist to receive a pd or authorization, oncP. allows a p~"larmacist up to a 30 calendar day period from the point of sale notifical ~_on t.o provide ~he data necessary for or-ICA to rFi'ike a decision regardi::1g prior authorization. Should a pharmacist fill a p"escription prior to the actual authorization he/she t.akes a business risk that t.he claim for filling the prescription will be denied. In the case ':.hat information rega.rding t:le -prier authorizaL:,on is not provided within the 30 day calendar period~ clains will be der::ied. (c) Documentation. OHCA administers a p?: i,o~_' authorization progri:1m through a cont::cact with an <1gent. Pr':'or Authorizat.ion reques':.s with clinical exceptions must be nailed or f-axed to the M8dication Authorizatlon uni-:: of the agent. Other autr.orization requests, claims processing questio:1s and qt:cstiens pertaining to DUR alerts must be addressed by contctctir.g t:.he Phar:nClcy help desk. Authorization requests "lith complete information are revie"w"ed and a response returned '~o tr.e dispensing pharmacy within 24 hou:::,s. (dl Emergencies. In an energency sitLati,m the HcalL1 Care Authority 'tiill aut:,orii'.e a 72 hour supply cf medicat.-ions to a client. The authorization for a 72 hour emergency su:;ply of medications does not COl:.nt against t:'1e J:-1edicaid ,1 imit described in OAC 32.7: 30-5-72 (a) (1) . (e) Utilization and scope. There are three reasons for the use of prior aut:'1orization: utilization cor.trols, product based controls, and scope controls. Scope controls :::-efcr to constraints used to 3nsure a drug :'s used for approved indicatio::1s and is therapeutically appropriate.
(1) Utilization. (A) Quantity. Toradol is covered for eligible individUClls for a quantity up to 22 tableLs or a 5 day supply which ~ver is less, each month. Pr:'or author':'zation is requir8d ,,,hen addi:.ional coverage is medically necessary beyond this limi t. (B) Duration. (i) H2 antagonists/proton pump inhibitors/carafate. H2 receptor antagonists and Carafate are covered fer eligible individuals for 90 days of therapy in the previous 360 days. H2 antagonists and Carafate do not

 
 Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 1 of 21
_~. _~_ _ _ _ _ _ _ _ _ _ _ _ _ _,_''1"'_''tI_O_ __

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA

Katherine Fisher, Earlee Heath, and KaroI Loy, on behalf of themselves and all others similarly situated,
Plaintiffs
v.
State of Oklahoma, Oklahoma Health Care Authority and Mike Fogarty, in his capacity as CEO of the Oklahoma Health Care Authority,
Defendants

J F I LED OCT 16 2002

Puh.sil,

lombardi, Clerk
DISTRICT COURT

Civil Action / No.02cv762P(C).j
Class Action

PLAINTIFFS' MEMORANDUM OF LAW IN OPPOSITION TO
DEFENDANTS' MOTION TO FOR SUMMARY JUDGMENT
Stephen F. Gold 125 S. 9'" Street. Sle 700 Phila.• Pa. 19107
215~627~7100
215~627~3183 (fax)

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 2 of 21

TABLE OF CONTENTS

1. Defendants Inadequate Funding Is Not Legally Sufficient to Violate the

Medical Assistance Act's Home and Community-Based Waiver

Requirements

1

2. Defendants Misunderstand Plaintiffs' ADA and 504 Argument

3

3. Oklahoma's Waiver Does Not Waive Comparability of Prescriptions As

Defendants Argue

7

4. Defendants' "Scheduling" of Prescriptions Argument Violates Title XIX 9

A. Defendants' Testimony and Affidavit of Nancy Nesser Cannot

Substitute for Plaintiffs' Treating Doctors! Determination that the

Number, Frequency and Type of Prescriptions Were IiMedically

Necessary"

10

B. Waiver Services Cannot Limit the Number of Medically Necessary

Prescriptions

13

5. No Conflict Exists Among the Class Members

15

Conclusion

16

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 3 of 21 - - - - - - ~~-~~~-

TABLE OF AUTIIORITIES

FEDERAL CASES

Alabama Nursing Home Association v. Califano, 433 F. Supp. 1325 (MD. Ala. 1977) .......................................................... .................................. 4

Alabama Nursing Home Association v. Harris, 617 F.2d 388 (5th Cir. 1980) ............. 2,4

Beal v. Doe, 97 S. Ct. 2355 (1977) ................................................................. 11

Clark v. Coye, 967 F.2d 585 (9th Cir. 1992) ...

...................... 3

Clark v. Kizer. 758 F. Supp. 572 (B.D. Cal. 1990) ............... .

..... 3

Coalition for Basic Human Needs v. King, 654 F.2d 838 (1st Cir 1981) ..........

.. 3

Cramer v. Chiles, 33 F. Supp. 2d 1342 (SD. Fla. 1999) . ......................

3,5,13

Doe v. Chiles, 136 F.3d 709 (11th Cir. 1998) ............................. ..

.. ....... 2

Helen L v. DiDario, 46 F.3d 325 (3rd Cir. 1995) .....

. .............. 6

Hem v. Beve, 57 F.3d 906 (10th Cir. 1995) ............................ .

9,10

Linton v. Carney, 779 F. Supp. 925 (M.D. Tenn. 1990) ............................................ 3

Martine, v. Ibarra, 759 F. Supp. 664 (D.Colo.1991) ............ . ........................... 14

McMillau y. McCtirnon, 807 F. Supp. 475 (C.DJllI992) .. . ......................... 3, 12

Morgan v. Cohen, 665 F. Supp. 1164 (B.D. Pa. 1987) ...................................... .. .. 3

Olmstead v.Le. 119 S. Ct.2176 (1999) ................ .... .... ..... .......... ............ ............. 5

Robertson v. Jackson, 766 F. Supp. 470 (B.D. Va. 1991), afPd, 972 F.2d 529 (4th Cir. 1992) .................... .................. ........ ....................... 3

Schweikerv. Gray Panthers, 453 U.S. 34 (1981) ......................... .

................. 2

Sobky v. Smoley, 855 F. Supp. 1123 (ED. Cal. 1994) ................................. .

3

Visser v.Taylor, 756 F. Supp. 501 (D. Kan.1990) .......................................

11,12

Weaver v. Reagen, 886 F.2d 194 (8th Cir. 1989) ....

11, 12

White v. Beal, 555 F.2d 1146 (3d Cir. 1977) .......

............... 7

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 4 of 21
·,,:001 .' '.......

STATE CASES
Madrid Home for the Aging v, Iowa Department ofHuman Services, Division o[Medical Assistance, 557 NW.2d 507 (lowa 1996) ....................................... 3

FEDERAL STATUTES

42 C.FR. § 35.130(d) ........................ d

••••••••••••••••••••••••••••••• d

............... 6

42 CF.R 440.230(d) ....... ............................................ .

...... 10

42 US.C 12101(3) .............

. ......... 6

42 U.S.C § 1396,(0)(10)(B) ... . ........................................................................ 7

42 US.C. § 1396n ......... .

.......................................................................... 12

42 US.C § 1396n(c)(I) ................. d •••

12

42 US.C § 1396n(c)(2)(D) ......................... ............ ................................... 14

42 US.C § 1396n(c)(3) ..............d ....

.... 7

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 5 of 21
v

IN THE UNITED STATES DISTRICT COURT FOR

THE NORTHERN DISTRICT OF OKLAHOMA

Katherine Fisher, Earlee Heath, and Karol Loy, on behalf of themselves and all others similarly situated,

PlaintifiS

v.
State of Oklahoma, Oklahoma Health Care Authority and Mike Fogarty, in his capacity as CEO ofthe Oklahoma Health Care Authority,

Civil Action "o.02cv762P(C)
Class Action

Defendants

PLAINTIFFS' MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS' MOTION TO FOR SUMMARY JUDGMENT

On October 9, 2002, Defendants filed a motion for summary judgment and a brief in

support. For the following reasons, Defendants' motion should be denied and this Court should

grant Plaintiffs' motion lor a permanent injunction.

1. Defendants Inadequate Funding Is Not ),egaJIy Sufficient to Violate the Medical Assistance Act's Home and Communitv-Based Waiver Requirements

At the heart of the Defendants' Motion for Summary Judgment and their opposition to

Plaintiffs' Motion for A Pennanent Injunction is Defendant Mike Fogarty's testimony and the

minutes ofa meeting of Defendant Oklahoma Health Care Authority (Defendants' Motion for

1

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 6 of 21
... - -w....•...... W'
Summary Judgment, Ex. "E"). 1 Mr. Fogarty testified the ~tate was experiencing a "state revenue shortfall," and the Oklahoma Director of State finance "ordered all agencies to have a general revenue cut of 4. 75% for the fiscal year." (Ex. "E" at 2, emphasis added). The specific reductions were those recommended by Medicaid agency staff, not the Director of State Finance. Thus, there is no dispute that the only reason Defendants cutback the number of prescription medications to persons in the Oklahoma Advantage Home and Community-Based Wavier was to save money.
Assuming arguendo that a ,estate revenue shortfall" exists and that savings had to come from all departments, nevertheless Defendants cannot escape the legal obligations they have undertaken when they decided to participate in the Medicaid program and when they accepted federal funds. Once a state has elected to participate in Medicaid, it "must comply vl/ith the requirements imposed both by the Act itself and by the Secretary of Health and Human Services." Schweiker v. Gray Panthers, 453 U.S. 34, 36-37 (1981).
Courts have consistently held that States must comply \vith Title XIX. Neither alleged inadequate funding nor other proffered administrative constraints excuse States from providing the Medical Assistance services required by Title XIX. For example, in Doe v. Chilcs, 136 F3d 709,722 (11'" Cir. 1998), the cou1~ held that the stale Medicaid agency had violated the "reasonable promptness" mandate in Title XIX and, thus, had been properly enjoined from denying Medical Assistancc services. In so doing, the court noted that '''inadequate state appropriations do not excuse noncompliance [with the Medicaid Act]. '" ld. at 722 (quoting
Because Plaintiffs are not pursuing their due process claim, they will not address Defendants' Motion for Summary Judgment, Proposilion I at 6 - 8.
2

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 7 of 21
~~~--..,----
Alabama Nursing Home Ass'n v. Harris, 617 r. 2d 388,396 (5'" Cir. 1980». Many other cases
and decisions stand for the same legal principle. See also, e.g., Robertson v. Jackson, 766 P.
Supp. 470, 476 (E.D. Va. 1991), affd, 972 F.2d 529 (4'" Cir. 1992) ("Lack of resources and lack
of bad faith on the part of the agency officials [are] no excuse for failing to provide the plaintiffs
their statutOlY entitlements"); Sobky v. Smoley. 855 F. Supp. 1123, 1149 (E.D. Cal. 1994)
("insufficient funding by the State and counties of methadone maintenance treatment slots has
caused providers ... to place eligible individuals on waiting lists for treatment .. , precisely the
sort of state procedure the reasonable promptness provision is designed to prevent"); Madrid
Home for the Aging v. 10\'113 Dep't of Human Services. Division of Medical Assistance, 557
N.W.2d 507, 514 (Iowa 1996) ("Budget considerations cannot excul::>e noncompliance with
federal Medicaid law."). Sec generally Coalition for Basic Human Needs v. King, 654 F.2d 838,
843 (1 St Cir. 1981) ("reasonable promptness" prohibited state fi'om delaying AFDC benefits
checks while the state legislature resolved a budget disputc). 1-
2 Inadequate funding cannot adversely affect any Title XIX services that must be provided. See, e.g., Cramer v. Chiles, 33 F. Supp. 2d 1342 (S.D. Fl•. 1999) (legislature cannot deny persons with disabilities a choice between waiver and institutional care); McMillan v. McCrimon, 807 F. Supp. 475 (C.D.Ill 19982)(granting preliminary injunction on plaintiff,,' claim that §1396a(a)(8) required Medicaid agency to accept applications for home and communitybased waiver program); Morgan Y. Cohen, 665 F. Supp. 1164, 1177 (E.D. Pa. 1987) (Medicaidcovered transportation services "must be furnished V\-ith reasonable promptness"); Linton v. Carney, 779 F. Supp. 925, 936 (M.D. Tenn. 1990) (policy of limiting tile number of nursing homes beds that could be used for Medicaid patients violated the rea<;onable promptness provision by causing those patients "to experience extended delays and waiting lists in attempting to gain access to long tenn nursing home care"); Clark v. Kizer, 758 F. Supp. 572, 580 (E.D. Cal. 1990), affd in part and vacated in part on other grounds sub nom., Clark v. Coye, 967 F.2d 585 (9th Cil'. 1992) (granting summary judgment on reasonable promptness claim where declarations of county public health officials indicated that a shOltage of Medicaidparticipating dentists caused "class members frequently [to] experience delays in obtaining appointments for regular and emergency dental care[.]")
3

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 8 of 21

· . -- ,

w_

Defendants' budgetary constraint argument must fail because it cuts out the heart of the Medicaid program: "If a state could evade the requirements of the [Medicaid] Act simply by failing to appropriate sufficient funds to meet them, it could re...vrite the congressionally imposed standards at wilL The conditions which Congress ha:; laid down for state participation in Medicaid and other programs would be utterly meaningless." Alabama Nursing nome Ass'n v. Califano, 433 F. Supp. 1325,1330 (M.D. Ala. 1977) rev'd in part on other grounds sub n0111., Alabama Nursing Home Ass'n v. Harris, 617 F.2d 388 (5'" Cir. 1980).
2. Defendants Misunderstand Plaintiffs' ADA and 504 Argument Despite Defendants assertion to the contrar'Y~ Plaintiffs recognize that "there is~ in fact, a difference in pharmacy benefits for persons mth di::;abilities and persons without dbabilities. Recipients without disabilities receive only three prescriptions per month compared with five for Advantage recipients and unlimited prescriptions for nursing home residents." Defendants' Motion for Summary Judgment, Proposition II at 9. But that difference is not what Plaintiffs allege violates the ADA and Section 504. Plaintiffs have never suggested that the ADA or Section 504 violation was because people with disabilities were treated differently than nondisabled persons. Plaintiffs' discrimination argument is not premised 011 the race or gender model of discrimination, namely comparing aU people ",ith disabilities against all people without disabilities, a disparate treatment model. Rather, in the ADA (and Section 504) Congress recognized that people with disabilities were often discriminated against in ways other groups of people (e.g., race or gender) were not. Plaintiffs' discrimination argument is that persons with disabilities - those in the waiver who reside in the community and those who reside in the nursing home - are the same people,
4

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 9 of 21

_ _ _ _ _ _ _ _ _ _ _..o...W.'M. .' ....

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

~'·~·~

with the same disabilities, and the same need for prescription medications. In fact, in order to be eligible for a 'waiver slot, the person must meet the level of care of the nursing home and the state
must so certifY, See Cramer v. Chiles, 33 F. Supp.2d 1342,1347-49 (S.D. Fla. 1999)( "The
regulations provide ... 'an array of home and community-based services that an individual needs to avoid institutionalization'. 42 c.p.R. § 441.300. Under the waiver provisions... states may include as 'medical assistance' the cost ofhome and community-based services which, ifnot provided j 'would require care to be provided in a nursing home ... 42 C.P.R. §435.217.") (emphasis in original).
The discrimination in the instant case is that Oklahoma provides unlimited prescriptions to persons with a disability only if those Medical Assistance recipients reside in a nursing home or move from the community into a nursing home where they are eligible for and will receive unlimited prescription medications. The discrimination is that Oklahoma provides unlimited prescriptions only if the persons with disabilities accept the unnecessary segregation in that institution. That form of discrimination does not compare disabled and llondisabled. That form of discrimination is solely against people with disabilities and it violates both the ADA and Section 504.
The two leading ADA/unnecessary institutionalization cases both confronted the argument that Defendants in the instant case pose (i.e., that discrimination against people with disabilities can be based only on disparate treatment), and both cases rejected that argument and found for the disabled plaintiffs. In Olmstead v.L.C, 119 S.Ct.21 76, 2185 (1999), the plaintiffs were two developmentally disabled women who wanted to live in the community, hut the State of Gcorgia would provide them services only in an institution. This claim was not premised on
5

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 10 of 21
v
discrimination between the two disabled women and nondisabled people, because only disabled persons received services in the institution. The Supreme Court stated that "Unjustified isolation... is properly regarded as. discrimination based on disability." (Emphases added). That is the claim in the present case - unlimited prescriptions for people with disabilities 'Will be provided under the Medical Assistance program only ifthe persons with disabilities go into the nursing home institutions. Similarly, in Helen L v. DiDario, 46 F3d 325, 336 (3 fd Cif. 1995), the Court stated that
Congress has stated that 'discrimination against individuals with disabilities persists in such critical areas as ,n institutionalization. '42 U.S.C. 12101 (3), If Congress were only concerned about disparate treatment of the disabled as compared to their nondisablcd counterparts, this statement would be a non sequitur as only disabled persons are institutionalized,")(Emphases added). Both Olmstead and Helen L construed the same ADA regulation at issue in the instant case. The regulation, 42 C.F,R. § 35.130(d), included as prohibited discrimination the unnecessary and unjustified isolation of persons with disabilities. The federal regulation and discrimination in the instant case focus on the "setting" 'INhere the services are provided, not a disparate treatment analysis (which other ADA regulations focus on and include as discrimination). That nondisabled people are not in nursing homes and receive a maximum of three prescriptions per month is irrelevant to the discrimination under the "integrated mandate" regulation in the ADA and Section 504. The discrimination is because the unlimited number of prescriptions arc available to persons 'With disabilities only in the segregated setting of a nursing home and not "in the most integrated setting appropriate,j to the persons with disabilities, i.e., their communities and homes.
6

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 11 of 21

_ _ ____ ._._. __ ._ _ _ _ _ _ _ __ ~"_==_,..

~n_""_'""'"

3. Oklahoma's Waiver Does Not Waive Comparability of Prescriptions As Defendants Argue
Defendants attach to their Motion for Summary Judgement one part of their Waiver
Renc\\IlIl Document, 2002-2006 as their Exhibit D from which they argue (Defendants' Motion
for Summary Judgment, Proposition III, at 10) from which they argue that they "Received a
Waiver of 'Comparahility' Requirements for Prescription Drug Benefits." There is nothing in
their Waiver application that in any\~'ay refers to setting a limit of prescription drug benefits to no
more than five month for persons in the Advantage waiver, let alone requesting or receiving from
I-ICFA an approva1 of a waiver.
The federal statute provides that a waiver "may include a waiver of the requirements of
Section 1396a(a)(10)(B) of this title (relating to comparability)",," 42 U.S,c, § 1396n(c)(3),)
Plaintiffs assume that this is the comparability requirement that Defendants refer to in their Proposition III, because it is the one listed in the Oklahoma waiver document: "A waiver of the
amount, duration and scope of services requirements contained in 1902(a)(1 O)B) of the Act is
requested, in order that services not othenvise available under the approved Medicaid State plan
may be provided to individuals served on the waiver." (DeC Ex. "D" at 4, Statement
1O)(Emphases added). Oklahoma checked those services for which it sought a waiver, including
3 By its terms, 42 U,S.C, § 1396a(.)(10)(13) requires states to assure that categorically needy Medicaid recipients receive Medicaid assistance that is not less than in amount, duration or scope than that received by other categorically needy recipients. See, White v. Beal, 555 F. 2d 1146,1149 (3d Cir, 1977) ("[A]lI persons within a given category [of eligibility] must be Ireated equally.") For example, a state cannot deny "the same service to the categorically needy members of the plaintiff class that is received by other categorically needy person..., the State violates § 1396a(a)(10)(B)," Sobky v, Smoley, 855 F. Supp, 1123, 1140 (E,D, Cal. 1994) (§ 1396a(a)(10)(B) violated when some Medicaid beneficiaries are placed on waiting lists for the same treatment others receive immediately.)
7

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 12 of 21

.-";"-- '"

v

v

for example respite care, adult day health, environmental accessibility adaptations and, with regards to prescribed drugs, it was an 'Extended State plan service." Def. Ex. "D" at 1, Statement 11.
The entire purpose of waiving 42 U.S.C. §1396a(a)(IO)(8) was to provide persons in the waiver with services that people not eligible for the waiver would not have a right to receive, Le.,services "not otherwise available ... may be provided to individuals served on the waiver."
That is, the waiver of the "amount, duration and scope" provision in 1396a(a)(10)(B) means the
state can legally provide fewer prescriptions to persons not in the waiver than they do [or persons in the waiver. The waiver permits the state to provide "services not othernrise available under the approved Medicaid State plan ." For example, nondisabled persons who are Medical Assistance recipients (and even persons with disabilities who are Medical Assistance recipients but who have not been accepted into or do not quality for the waiver) do not have a right to "respite care," "environmental accessibility adaptations," or "specialized medical equipment and supplies." Oklahoma's Advantage waiver checked off those services for waiver of comparability. Thus, while persons in the waiver have a right to those services~ other Medical Assistance recipients do not.
Defendants have flipped the waiver of comparability on its head. A state obtains a waiver so it can affinnatively provide services to participants in the waiver that Oklahoma does not then have to provide to persons not in the waiver. That is, \vhile persons not in the waiver are limited to three prescriptions per month, the state sought and obtained a vvaiver to provide more than three to persons in the waiver. By this process, persons not in the waiver have no right to sue for more than three prescriptions 'under the "amount, duration and scope" comparability
8

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 13 of 21

---------

v

v

requirements. It is critical to understand the basic purpose of the home and community~based waiver is
to avoid institutionalization (as long as the waiver services are cost~effectivc), Waiver of comparability is intended to provide persons, "vho would otherwise be institutionalized in expensive nursing homes, with services that other persons in the community (but who do not meet the level of care of the institution andlor who are not in the waiver) do not have a right to receive under the State's Medical Assistance plan. By providing those extra waiver services in the waiver, those persons in the waiver can avoid the need for institutionalization (and the state saves money).
4. Defendants' "Scheduling" of Prescriptions Argument Violates Title XIX Defendants claim, based on the testimony of Nancy Nesser, that she believes that some of the Plaintiff's' prescriptions could be unnecessary, duplicative, purchased for more than one month), thereby reducing the Plaintiffs' outMof-pocket expenses. (Defendants' Motion for Summary Judgment, Proposition IV, at 11. This argument flies in the face of we11Mestablished case law that defines the "medical necessity" standards. The Tenth Circuit in Hem v. Beye, 57 F.3d 906, 910 (10'" Cir. 1995) held that Colorado's abortion restrictions violated Title XIX because Colorado's restriction of abortion funding was "essentially a limit based on the patient's degree of medical necessity pursuant to 42 C.F.R. § 440.230(d): It restricts Medicaid funding for abortions to those instances when the expectant mother's life is at stake." Id. (Emphasis added). In the instant case, the five prescriptions is similarly a Iirll.itation based on the extent of disability, with those persons with the most severe disabilities who require more than five
9

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 14 of 21 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _,,_, 0_-,_"- - - - - -
0
prescriptions per month being denied the benefit of medically necessary prescriptions. The Hetn Circuit held that Colorado's "abortion funding restriction impennissibly discriminates in its coverage of abortions on the basis ofa patients' diagnosis and condition." 57 F3d at 91 O. The Circuit emphasized that "a slate may not single out a particular, medically necessary service and restrict coverage to those instances where the patient's life is at risk." Id (emphasis added).
Thus, a state may not restrict coverage to people whose disabilities arc more severe -those are prohibited conditions. Tn the present case, the uncontroverted evidence is that the challenged limitation is based on the Plaintiffs' condition -- they are more severely disabled than persons who require less than five prescriptions per monlh. That violates Tille XIX's "medical necessity" prohibition because it is based on the condition ofthe members ofthe class; Oklahoma's limitation of prescriptions is based on the degree of severity.
As in Hem, 57 F. 3 at 910-11, limiting the prescriptions to five per month is also "inconsistent with. the basic objective of Title XIX ~ - to provide qualified individuals with medically necessary care, The purpose of Medicaid as stated in the Act is to enable states to provide medical treatment to needy persons 'whose income and resources are insufficient to meet the costs of necessary medical services',:' (Emphasis added by Court).
A. Defendants! Testimony and Affidavit 9fNancy Nesser Cannot Substitute for Plaintiffs' Treating Doctors' Determinati9Il that the Number. Frequency and Type of Prescriptions Were "Medically Necessary"
Defendants' Motion for Summary Judgment, Proposition IV at 11-12, assumes that a non-m.edieal person, who testified at the hearing, regarding the named Plaintiffs whom she had
10

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 15 of 21

v

v

never met and who has no medical training. can trump the medical judgments of the Plaintiffs'
treating doctors. That is, Nancy Nesser opined at the hearing that some of the Plaintiffs' prescription~ might be unnecessary, duplicate, some prescriptions might conflict with other
medications, and some could be prescribed for larger amounts than the treating doctors had
prescribed. 4
The Eighth Circuit in Weaver v. Reagen, 886 F.2d 194 (8th Cif. 1989), noted that while
"r all prescription drugs were an "optional medical service" under Title XIX, 0 ]nce a state
chooses to offer such optional services it is bound to act in compliance with the Act..., including
the rcquirem.ent that "[e]ach service must be sutlicient in amount, duration and scope to
reasonably achieve its purpose:' (Quoting 42 C.F.R. § 440.230(b)).
Citing the Supreme Court's decision in Beal v. Doe, 97 S.C!. 2355, 2371 (1977), the
Eight Circuit pointed out that "a State Medicaid plan [must] provide treatment that is deemed
'medically necessary' in order to comport with the objectives of the Act." 886 F. 2d at 198.
Most relevant to the instant case and the opinions of Nancy Nesser, a state employed pharmacist,
the Wcaver court noted
the importance of professional medical judgment in the determination of medical necessity. 'The decision of whether or not certain treatment [or certain prescriptions, either the amount of the prescriptions, whether medications are compatible, or a particular prescription] is 'medically neccssmy' rests with the individual recipient's physician and not with clerical personnel or government officials.' (Quoting Pinncke v. Preisser and citing to a Senate Report that 'the phvsician is to be the key figure in determining utilization of health services. ').
886 F. 2 at 199 (emphasesadded). Sec Visser v.Taylor, 756 F. Supp. 501, 507 (D. Kan.1990)
4 Plaintiffs have no objection to reasonable "utilization control procedures" for determining appropriate and "medically necessary" prescriptions. See 42 CFR 440.230(d). IIowevcr, the ad hoc process used by the witness in the instant case is not what HCF A intended.
11

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 16 of 21
(Kansas enjoined from denying a specific medication used to treat schizophrenia. "The determin;;ttion of whether treatment is medically necessary, for purposes of Medicaid, is a professional judgment which must be decided and certified by thc treating physician.")
Under the Medicaid program, a State's prescription drug program must be "designed to make medically necessary drugs available to eligible recipients in a speedy and efficient manner" or the program violates the provisions that require that the "amount, duration and scope" must be "sufficient... to reasonably achieve its purpose." Visser, 756 F. Supp. at 506-07 (citing numerous circuit and district decisions in support),
The Medicaid Act requires states to cover certain mandatory services, and States may choose to cover additional services, including home and community-based waiver services for individuals with disabilities, see 42 U.S.C, § 1396n, Once a state chooses to provide an optional Medicaid service, it must comply with all federal Medicaid rcquirernents, as the waiver and its services become part of the state's "medical assistance" plan, 42 U,S,C. § 1396n(c)(1). Sec,
~ We.verY. Reagan, 886 F.2d 194, 197 (8'" Cir. 1989) ("Once a state chooses to offer ... optional services it is bound to act in compliance with the [Medicaid] Act and the applicable
regulations in the implementation of those services[.]"). The "medical necessary" requirement:;; apply to all services included in the state's
Medicaid plan, whether mandatory (for example, EPSDT) or optional (for example, intermediate care level services, prescription medications or home and community-based waiver services).
See McMillan v. McCrimon, 807 F. Supp. 475, 481-82 (C.D. Ill. 1992) ("The fact that the HSP
[home services program] waiver is an optional servicc does not exempt it from the requirements
of section 1396.(a)(8)").
12

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 17 of 21
Thus, Oklahoma is not exempt from providing both "optional" and "mandatory" services that must be sufficient to meet Plaintiffs' treating doctors' "medically necessary" standards. Those doctors prescribed Plaintiffs' medications and review them on a monthly basis. Those doctors have determined that the Plaintiffs' prescription medications are "medically necessary" and Defendants cannot undercut their professional judgments. Oklahoma cannot lo\-ver either a mandatory or an optional service, like prescription drugs, to below medical necessity. Medical services capped at levels below medical necessity endanger the health, safety, welfare, and the lives of people with severe disabilities,
B, Waiver Services Cannot Limit the Number of Medically Necessary Prescriptions
Defendants' limitation on number of prescriptions for persons in the waiver program misunderstands what Congress and HCFA intended, and what the Supreme Court recognized in Olmstead. Namely, persons who meet the State's "level of care" criteria for admission into a nursing home have the right to choose to receive appropriate and cost effective (i,e., less than the cost in the nursing home) community~based services in the waiver.
Tn Plaintiffs' Supplemental Memorandum of Law In Support of Their Motion for
Injunctive and Declaratory Relief <at 22)(fiIed on October 9,2002), they argued that the Medical Assistance Act'::; \\-1tiver provisions mandate that persons with disabilities had to be given the "choice" of whether to receive services in the community or in the nursing home, That is directly related to the ADA's "integration mandate." Namely, while many people with disabilities may prefer to reside in nursing homes, others who wish to reside in the community must be give that "choice." In Cramer v. Chiles, 33 F. Supp. 2d1342 (S.D.FIa.1999), the Court pointed out that
13

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 18 of 21

- _. _ . - -

",_",If

'I[t)he freedom of choice provision creates binding obligations on any state that elects to pro"vide
SUppOlts and services in homes pursuant to the Home and Community-Based Waiver." Id at
1351. Cramer recognized that a choice had to be a "real choice." The Court pointed out that to
provide for a real choice required that a State's waiver must provide "supports and services [that]
will meet individuals needs.~' Td at 1352. This decision correctly understood how
e'[u]nderfl.mding of the Home and Community-Based \Vaiver program compels
institutionalization, thus negating a meaningful choice," id at 1353 (emphasis added), and violated both the ADA and the Medical Assistance Act. 5 Oklahoma's limitation evj~cerates a
meaningful or real choice for those persons with disabilities who require more than five
prescriptions a month 10 live.
Lewis v. New Mexico Dept. of Health confronted that state's limitation on the number of
persons for whom waiver sen-ices were provided~ where the slate argued there was "righl to
[waiver] services." 94 F. Supp.2d 1217,1233 (D.N.M.2000). That Cowi pointed out that
Defendants also reason that because waiver services must cost less dlan institutional services, 42 U.S.C. § 1396n(c)(2)(D), the State can only provide such services to a limited number of persons, This does not stand to reason. If the State were able to provide home-and community-based services for less than institutional services to all recipients this provision [capping the number of recipients of waiver services] would not stand as a barrier to the former services,
Id at 1233, fn 3 (emphases added). The Levvis court pointed out, despite Defendants' argmncnt
that "the State applies for a waiver for a certain number of individuals does not prcvent
5 In 1981 when Congress enacted the 'Naiver provisions of the Medical Assistance Act, the focus was on the individual's needs. See OMNIBUS BUDGET RECONCILIATION ACT OF Inl, P.L. 97-35, P.965, 97" Cong., I" Sess., reprinted in 1982 U.S.C.C.A.N. 362,1327-8 ("The determination of which 1ong-term care options are feasible in a particular instance should be based on the individual's needs, as determined by evaluation, and not shot1-term cost savings.") Cf. Martinex v. Ibarra, 759 F. Supp. 664 (D.Colo.1991).
14

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 19 of 21
the State from applying for a waiver to serve enough persons that it can provided services to all eligible applications with 'reasonable promptness'." Id at 1234. The Lev,,'is court quoted the Supreme Court's decision in Wilder v. Virginia Hospital Ass'n, with regards to setting of "reasonable" reimbursement rates, noting that "some rates [wcre1 outside the range that no State could ever tind to be rea.<;onable and adequate under the Aet." 94 P. Supp. 2 at 1234 (emphasis in original).
By analogy to both Le\vis and Wilder, while Oklahoma's waiver program could achieve
some savings in its waiver program as it computes cost~effectiveness in comparison to the costs in nursing homes, it is not reasonable or adequate to denude the waiver program by limiting th.e
number of prescriptions to five, while at the same time doing nothing to limit either the overall reimbursements to nursing homes nor even the number of prescriptions in nursing homes. That undercuts the purpose of the community~based waiver.
After the Olmstead decision, if a State opted to participate in the Medical Assistance
program, and therefore provided nursing home services, it must offer persons with disabilities the real choice of receiving appropriate services in the commilllity via a waiver program. To not offer a meaningful choice, or as in the instant case, to offer a "choice" but without appropriate medically necessary services that are within the cost-effectiveness panunetcrs, violates the ADA, Section 504, and Title X1X,
5. No Conflict Exists Among the Class Members Defendants conillse Plaintiffs' cOilllsels cross examination at the October 4, 2002 injunction hearing with the requirements of a class action. (Sec Defendants' Molion for
15

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 20 of 21
Summary Judgment, Proposition V, at 12-13). 6 At the hearing, Mr. Fogarty testified regarding what the state had considered to save funds. On his direct examination, he testified regarding eligibility for nursing home and waiver services, explaining that in Oklahoma persons whose income was 300% of Supplemental Security Income ("SSI") were eligible for both nursing home and waiver services. On cross examination, counscl for Plaintiffs asked ifMr. Fogarty had considered the fiscal savings from reducing the eligibility for both nursing homes and waiver services to less than 300% of SSL That cross examination does not in anyway undercut the ability of counsel to represent everyone on the waiver whose prescriptions have been limited to five per month. Cross examination does not, as Defendants suggest, undercut the existence of a class of recipients of waiver services who, effective October 1, 2002, have had their presctiptions limited to five per month.
CONCLUSION This Court should deny Defendants' Motion for Summary Judgment and grant Plaintiffs a permanent injunction~ declaring that the Defendants limitation of five prescriptions per month violates the ADA, Section 504 and the Medical Assistance Act.
Re, c ull' SUb~
tep n F. Gold Attorney ID # 09880 125 South Ninth Street Suite 700 Philadelphia, PA 19107
6 In referencing the class, the Complaint at ,[20 did refer to the Tulsa metropolitan area, However, from a res iudicata perspective, it makes sense to apply a decision statewide. Otherwise, if the Court issues an injunction forPlaintiffs in the instant action, defendants arc collaterally estopped in a second action on the same legal claims.
16

Case 4:02-cv-00762-JHP-PJC Document 17 Filed in USDC ND/OK on 10/16/02 Page 21 of 21
215-627-7100 Morris D. Bernstein OBA # 16087 University of Tulsa Boesche Legal Clinic 407 S. Florence Avenue Tulsa, OK 74104 918-631-5799 Attorney for Plaintiffs Filed October 15,2002 by Fax and overnight mail. Certificate of Service I declare and affirm that on October 15,2002 the attached Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment was faxed and overnight mailed to:
Andrew Tevington, ODA #11545 Deputy General Counsel Okl. Health Care Authority P.O. Drawer 18497 4545 N. Lincoln Blvd, Ste 124 Oklahoma City, OK 73105 405-522-7431 fax 405-522-7472
Stephen F. Gold
17

 
 Case 4:02-cv-00762-JHP-PJC Document 26 Filed in USDC ND/OK on 11/01/02 Page 1 of 7
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA
(1) KATHERINE FISHER, (2) EARLEE HEATH, and (3) KAROL LOY, on behalf of themselves and all others similarly situated,
Plaintiffs, v. (1) OKLAHOMA HEALTH CARE AUTHORITY, and (2) MIKE FOGARTY, in his official capacity as CEO of the Oklahoma Health Care Authority,
Defendants.
ORDER
Now before the court is Defendants' Motion for Summary Judgment, Plaintiffs' Response to said motion and Defendants' Reply.
Plaintiffs arc medical assistance recipients who are on the Home and Community.Based Services Waiver Program, sometimes called «Advantage." Plaintiffs currently reside in the community
in their own homes and apartments. Plaintiffs seek prospective injunctive and declaratory relief in regard
to Defendants' newly implemented policy of limiting Plaintiffs' prescriptions to five per month. The Defendants will provide more than five prescription medications per month, but only if Plaintiffs reside in an institution, whether it be a hospital or nursing home. Plaintiffs contend the policy will force them into unjustified institutional isolation.
Plaintiffs amended their Complaint on October 8, 2002. The Plaintiffs allege a causc of action
u.s. against Defendant Fogarty in his official capacity pursuant to theAmericans with DisabilitiesAct, 42 C
§12101 et seq. ("ADA"), as the State has limited prescription drug coverage for individuals on Advantage to five prescriptions per month while allowing nursing home residents unlimited prescriptions; a cause

Case 4:02-cv-00762-JHP-PJC Document 26 Filed in USDC ND/OK on 11/01/02 Page 2 of 7
of action against Defendant Fogarty in his official capacity alleging the prescription limitation violates the Medicaid Act, 42 U.S.C §1396 et seq.; a cause of action against Defendant Fogarty in his official capacity
alleging denial of due process requirements under the Fourteenth Amendment of the u.s. Constitution
because OHCA did not provide individual hearings before changing each Advantage recipient's prescription benefit; and a cause of action against Defendant Fogarty in his official capacity and the
OHCA pursuant to Section 504 oftbe Reha,bilitation Act of1913, 29 u.s.c. §794.
Defendants argue Medicaid is a joint State/federal program designed to provide medical care for various groups in the American population, particularly low-income individuals who are children, pregnant, dderly, or blind or otherwise disabled. 42 U.s.c. § 1396a(a)(10)(A) and (C). Each State has the option to participate with the federal government in Medicaid or to forgo participation. Once a St:ne enters into a partnership with the federal government, Congress requires the State to provide a minimum
u.s. level of benefits generally known as the mandatOty progntm. 42 C. §1396a(a}(1O}(A}(i}; 42 C.l'R.
§§440.210 and 440.220, Mandatory services are nursing home care, hospital care, laboratory and X-ray services, physician care, nurse-midwife care, and pediatric nurse practitioner care, [d.
States may also expand the program with certain optional coverages. 42 V,S,c. §1396a(a)(10)(A)(iU. Pharmacy benefits outside hospital and nursing home stays are part of the optional program and are implicated in this suit. Jd. and 42 V.S.C §1396d. The Home and Community-Based Waiver Program,
u.s. which is also relevant to this action, is part of the optional program. 42 C §§1396n, 1396t and 1396«.
It is the contention of the Defendants that the Oklal10ma Legislature appropriated a certain sum
of money for the niandatory and optional portions of the Medicaid program. State revenues fell short of expectations, and all State administrative agencies were forced to cut budgets by the provisions of Oklahoma's Balanced Budget Amendment, Okla. Const. 10 §23. Defendants allege due to the revenue shortfall they were forced to limit the number of prescriptions available to those enrolled in the Home and Community-Based Waiver Program. Defendants contend this was the most equitable solution to the deficit, without abolishing the optional Home and Community-Based Waiver Program altogether.
DISCUSSION In general, summary judgment is proper where the pleadings depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). An issue of fact is "genuine" if the evidence is significantly probative or more than merely colorable such that a jury could reasonably return a yerdict for the nonmoving party. Anderson v. Liberty Lobby,

Case 4:02-cv-00762-JHP-PJC Document 26 Filed in USDC ND/OK on 11/01/02 Page 3 of 7
Inc.. 477 U.S. 242, 248 (1986). An issue is "material" if proof thereof might affect the outcome of the
lawsuit as assessed from the controlling substantive law. !ft. at 249.
In considering a motion for summary judgment, this court must examine the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment. Gray v. Phillips Petroleum Co., 858 F.2d 610, 613 (10th Cir. 1988). Furthermore, if on any part of the prima facie case there is insufficient evidence to require submission of the case to the jury, summary judgment is appropriate. Anderson v. Liberty Lobi!)!, Inc., 477 U.s. 242 (1986). In addition, one of the principal purposes of summary judgment is to isolate and dispose of factually unsupported claims or defenses, and the nlle should be interpreted in a way that allows it to accomplish this purpose. Celotex Corp. v. Catrett, 477 U.S. 317,323-24 (1986).
The following facts are undisputed: 1 1. Plaintiffs Katherine Fisher, Earlee Heath, and Karol Loy are Medicaid recipients with disabilities who are part of the Home and Community.Based Waiver Program or sometimes called «Advantage. " 2. During the current State Fiscal Year and prior to October 1, 2002, the Oklahoma Medicaid program provided Advantage recipients with unlimited prescription drugs. 3. On September 18, 2002, the OHCABoard reduced the drug benefit for all Advantage recipients across the State of Oklahoma to five prescriptions per month. 4. The reduction was occasioned by a statewide revenue shortfall. 5. On or about September 19, 2002, OHCA informed the Medicaid Recipients that Advantage recipients' drug bendits would be limited to five per month. 6. OHCA did not provide the Medicaid Recipients with an opportunity for a hearing about the benefit reduction. 7. As part of the creation of the Home and Community-Based Waiver Program, the U.S.
1 Plaintiffs' brief is required to begin with a concise, numbered statement of material facts as to which the Medicaid Recipients contend genuine issues of fact exist. N.D. LR 56.1(B) Movant's alleged facts not so disputed shall be deemed admitted. Id. The Plaintiffs' Brief contains no such disputation of the Defendants' listed facts, therefore all Defendants listed facts are deemed admitted. Further, Plaintiffs did not address Defendants' argument in regard to the Fourteenth Amendment due process cause of action anq it is therefore confessed.
3

Case 4:02-cv-00762-JHP-PJC Document 26 Filed in USDC ND/OK on 11/01/02 Page 4 of 7
Secretary of Health and Human Services ,waived the requirement that Medicaid services for waiver recipients be comparable to those for other Medicaid recipients.
8. With proper scheduling of Earlee Heath's prescription purchases, Earlee Heath's monthly cost for prescription drugs could be reduced to approximately twenty-five dollars rather than the two hundred fifty-five dollars alleged in thc :Medicaid Recipients complaint.
9. Even that cost could be reduced if Ms. Heath's diabetes prescriptions were managed to avoid drug interactions and conflicting drugs.
10. With scheduling, Karol Loy's monthly prescription cost could be reduced to two hundred dollars instead of four hundred seventy-six dollars alleged in the complaint.
11. Management of Ms. Loy's prescriptions to avoid drugs working at cross purposes could reduce the cost further.
12. With scheduling, Katherine Fisher's prescription cost could be reduced to forty-five to sixty dollars per month instead of two hundred seventy-four dollars as alleged in the complaint.
13. Management to eliminate duplicate drug therapy and interaction could reduce:Ms. Fisher's cost further.
Medicaid provides medical assistance to low income families and individuals. As part of the program, Congress reimburses for both nursing home care and inpatient acute hospitalization. When persons are institutionali7,ed in cither a nursing home or a hospital, they receive all the prescription medications that are medically necessary, Medicaid also provides Home and Community-based services through its waiver program. 42 U.S.c.§ §1396n, 1396t and 1396u. In order for a person to be eligible to participate in the waiver program, they must meet the level of care for admission into an institution, whether a nursing home or hospital. Additionally, a state must certify that placement in the waiver program will be "cost neutral," that is, the aggregate costs for persons in the waiver program will be less than if those persons were in an institution.
Plaintiffs contend that but for the Defendants' Home and Community-Based Waiver Program, they would be unnecessarily segregated in nursing honles or other institutions. Plaintiffs reside in the community with appropriate HCBS services, including prescriptions in excess of five per month, prior to October 1,2002. Effective October 1, 2002, Defendants changed their medical assistance program so that persons on the Home and Community-Based Waiver Program would not be permitted to receive more than five prescription medications per month if they continued to reside in the community. If,
4

Case 4:02-cv-00762-JHP-PJC Document 26 Filed in USDC ND/OK on 11/01/02 Page 5 of 7
however, they resided in an institution, they would receive marc than five prescriptions per month. Thus, Plaintiffs contend only if they relinqt1ish th;eir independence and live in a nursing home or hospital, both of which are morc expensive than residing in the community, will they receive the appropriate number of medications.2
The Americans with Disabilities Act, 42 U.S.C. §12101 et seq., is a far reaching statute designed "to provide a dear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities. 42 U.S.c. §12101(a)(2), (3) and (5). Congress noted specifically that discrimination persists in the provision of "health services," 4'2 U.S.c. §12101(a)(3), and established a national goal "to assure ... independent living ... for such individuals." 42 U.S.c. §12101(a)(8).
Congress directed the Attorney General to promulgate regulations implemcnting the public services title of the ADA. 42 U.S.c. §12134. The Attorney General's ADA public services regulations are codified at 28 C.P.R. 35.101 ct seq. Plaintiffs allege Defendants have violated 28 c.F.R. 35.130(d) which provides that a public entity in providing any aid, benefit or service discriminates against persons with disabilities when it violates these regulations, including the following, " (d) A public entity shall administer services, programs and activitics in the most integrated setting appropriate to the needs of qualified individuals with disabilities." Plaintiffs arguc by limiting the number of prescription medications to five per month in the community :and providing unlimited prescriptions in institutions, Defendants discriminate against Plaintiffs because they deny the services in the community-based settings but provide it only in unnecessarily segregated settings.
" In Olmstead v. L. C, 527 U.S. 119 (1999), the Supreme Coun specifically considered the Titlc II integration mandate and explained:
Recognition that unjustified institutional isolation of persons with disabilities is a form of discrimination reflects two evident judgments. First, institutional placement of persons
2 Generally,when medical assistance is provided under the Medicaid program, whether through mandatory or optional services, benefits must be comparable among recipients. 42 U.S.C. §1396a (a) (10) (B). The Secretary of Health and Human Services, however, can waive the comparability requirement for programs such as the Home and Community-Based Waiver Program. 42 U.S.C. §1396n(c) (3). Under such a waiver, the State may pay for "part or all of the cost of home or community-based services." 42 U.S.C. §1396n(c) (1). The record re'veals the secretary waived this requirement for the State of Oklahoma.
5

Case 4:02-cv-00762-JHP-PJC Document 26 Filed in USDC ND/OK on 11/01/02 Page 6 of 7
•
who can handle and benefit from community settings perpetuates unwarranted assumptions that persons so isolated are incapable or unworthy of participating in community life ... Second, confinement in an institution severely diminishes life activities of individuals, including family relations, social contact, work options, economic independence, educational advancement and cultural enrichment.
Olmstead v. LC, 527 U.S. at 2187. In the instant case, Plaintiffs argue Olmstead is on point because like the Plaintiffs in Olmstead,
Plaintiffs in this case must also "relinquish participation in community life they could enjoy given reasonable accommodations," in order to receive needed medical services. Id. at 2187. In Olmstead the Court found unjustified disparate treatment, or unjustified institutional isolation, constitutes discrimination under the ADA. Id.
This court finds Olmstead is factually and materially distinguishable from this case. Unlike the plaintiffs in Olrnstead who challenged their continued confinement in a mental institution once they had
been qualified for community-based care, the Plaintiffs in the instant case are not confined to a segregated environment. To the contrary, the undisputed record reveals Plaintiffs are presently living in their homes and utilizing the Home and Community-Based Waiver Program. Plaintiffs have produced no
evidence at this time that they will be forced into institutional settings if their prescriptions are limited
pursuant to the Defendants' policy changes. In fact, the unrefuted testimony of Defendants' expert revealed with appropriate scheduling of drug purchases, management of prescriptions to avoid drug interactions, and alternative community resources, Plaintiffs could completely avoid institutional care.' Therefore, Defendants have not subjected Plaintiffs to unjustified institutional isolation.
Further, when a Plaintiff requests rdief that requires modification of a State's servlces or programs, the State may assert, as an affirmative defense, that the requested modification would cause a
~ Plaintiffs labeled their Amended Complaint a "class action." The issue is not the subject of a motion to certify at this time. The court notes that based on the testimony in this case, there appear to be significant problems with such a certification. Foremost would be the lack of similarly situated plaintiffs evidenced by different medical conditions and their corresponding treatment regimens, as well as their differing financial situations.
6

Case 4:02-cv-00762-JHP-PJC Document 26 Filed in USDC ND/OK on 11/01/02 Page 7 of 7
. • -

fundamental alteration of a State's service~ and programs. Olmstead v. L.c., at 597. This "cost-based
defense .... [allows Defendant] to show that, in the allocation of available resources, immediate relief for the plaintiffs would be inequitable, given the responsibility the State has undertaken for the care and treatment of a large and diverse population of persons with [disabilities]." ld. at 603-604. The inquiry requires not simply an asseSSInent of the cOSt of the accommodation in relation to the recipient's overall budget, but a "case-by-casc analysis weighing [several] factors." See, Olmstead at 606, n. 16 citmg 28 C.F.R. §42,511{c}{1998} and 45 CF.R, §84, 12{c}{1998/
In the instant case, the undisputed record reveals the State is required to provide an unlimited nursing home program because of the mandatory nature of such carc. 42 U.S.c. §1396a(a)(10)(A)(i); 42 C.P.R. §§440,210 and 440.220, The State, however, may amend its optional programs, such as the Advantage Waiver, Given this reality and the State financial crisis, the court finds Defendants have made a reasonable move to reduce the optional program rather than eliminate it altogether as the State could
pursuant to 42 U.s,c. §1396a(a)(10)(A)(ii),
Accordingly, Defendants' Motion for Summary Judgment is granted.

IT IS SO ORDERED this

S - l- day of October, 2002.
"

JAMESf.PA ITED STATES DISTRICT JUDGE
7

 
 Case 4:02-cv-00762-JHP-PJC Document 36 Filed in USDC ND/OK on 11/19/03 Page 1 of 1 .;1"\ .....
",:,--: -,

UNITED STATES DISTRICT COURT
NORTIIERN DISTRICT OF OKLAHOMA

FISllER,

v.

Plaintiff(s)

) ) ) )

J Case No. 02-CV-762-P[C]

)

OKLAHOMA llEALTH CARE

)

AUTHORITY,

)

Defendant( s).

F I LED
NOV 19200~

Phil Lombardi. Clerk U.S. DISTRICT COURT

ORDER DISMISSING ACTION BY REASON OF SETTLEMENT

The Court has been advised by counsel that this action has been settled, or is the process of
being settled. Therefore, it is not necessary that the action remain upon the calendar of the Court.

IT IS ORDERED that the action as to all clajms is dismissed without prejudice. The Court retains complete jurisdiction to vacate this order and to reopen the action upon cause shown that settlement has not been completed and further litigation is necessary. The Parties are granted 30days in which to submit final closing papers for filing.
IT IS SO ORDERED this 1'1~ day of '--'c,..... " _04\'" ) . 2003

J es H Payne, U . D strict Judge

'3p
v. (

 
 Case 4:02-cv-00762-JHP-PJC Document 1 Filed in USDC ND/OK on 10/01/02 Page 1 of 9

•

r

Ii

IN THE UNITED STATES DISTRICT COliRT FOR THE NORTHERN DISTRICT OF OKLAHOMA

Katherine Fisher, Earlee Heath, and Karol Loy, on behalf of themselves and all others similarly situated,
Plaintiffs
v.
State of Oklahoma, Oklahoma Health Care Authority
and Mike Fogarty, in his capacity as CEO ofthe Oklahoma Health Care Authority,
Defendants

Civil Action No.
02CV 762P (C)Class Action

COMPLAINT
Introduction
1. Plaintiff Earlec Heath is a 73 year old woman who is currently enrolled in the Medicaid Home and Community-Based Services (HCBS) Waiver Program administered by Defendant Oklahoma Health Care Authority COHCA). She is an insulin-dependant diabetic who also has hypertension, astluna, congestive heart failure, residual bilateral paresis and deep vein thrombosis. Plaintiff Karol Loy is a 46 year old woman and current participant in the HCBS Waiver Program who has a seizure disorder and cardiac malfunction. Plaintiff Katherine Fisher is a 48 year old woman and current participant in the HCBS Waiver Program who has cerebral palsy and a history ofmultiple cerebrovascular accidents.
2. Defendant, Oklahoma Health Care Authority (OHCA) administers the Medical Assistance program for the state. In that capacity, it provides services to eligible recipients to enable them to remain in their homes rather than being forced into a nursing home or other institution, under the Medicaid Home mId Community-Based Services (HCBS) Waiver Program.
3. On or about September 19, 2002, ORCA infonned Plaintiffs by letter that, effective October 1, 2002, those enrolled in the HCBS Waiver Program would receive coverage of no more than five (5) prescriptions per month through the program.

\

Case 4:02-cv-00762-JHP-PJC Document 1 Filed in USDC ND/OK on 10/01/02 Page 2 of 9
4. OHCA did not provide plaintiffs and class members with notice of their opportnnity to request a hearing and their right, upon filing a timely appeal, to continue to receive prescriptions as needed without a set limit during the pendency ofthe appeal.
5. The Americans with Disabilities Act, 42 U.S.C. § 1201 et seq.(ADA), and its
regulations require that "A public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 CFR § 35.130(d).
6. By federal statutory definition, all those eligible for the HCBS Waiver Program must
establish their need for the level of care provided by the institution ill which they would reside
but for the waiver program. Thus, al1 of the named and class plaintiffs meet the state's medical
criteria for nursing home Medical Assistance.
7. OHCA will continue to provide unlimited prescription benefits to recipients of medical
assistance who are residents of nursing homes and other institutional care facilities. The limit of
five (5) prescriptions per month applies only to those enrolled in the HCBS Waiver Program. In
this respect, the action taken by ORCA violates the rule that services to disabled persons must be
delivered in the most integrated setting possible, as set forth in the ADA and by the United States
Supreme Conrt in Qlmstead v. L.C. ex reI. Zimring 527 U.S. 581 (1999) and by the Third Circuit
Conrt of Appeals in Helen L. v. DiDario, 46 F.3rd 325 (C.A. 3, 1995); cert.den. 116 Sup. Ct. 64
(1995).
8. IfOHCA is pennitted to impose this limitation upon waiver program participants those disabled persons who, like the named and class plaintiffs, require more than five (5) prescription
medications per month to maintain their health and simply to survive, will be forced to make this choice: enter a nursing home or risk serious physical hann and even death. Defendants' action
therefore violates the ADA and Olmstead because the receipt of more than five (5) prescriptions per month will be covered under its Medical Assistance plan only if the recipient resides in a nursing home, hospital, or other institution, settings that are wholly segregated from the community.
9. Plaintiffs, who cnrrently reside in their homes amongst family and mends and as fully integrated members of their communities, require more than five (5) prescriptions per month to survive. Effective October 1, 2002, they must either enter a hospital (where defendants will cover the prescriptions plaintiffs need under their Medical Assistance program) or a nursing home (where defendants will also cover necessary prescriptions under Medical Assistance).
10. Absent the actions of defendants in failing to continue to provide the same prescription coverage to recipients residing in their homes as to those residing in institutions, plaintiffs could
continue to live their lives integrated within their communities. This class action challenges the provision of necessary prescriptions without a fixed limit to those residing in institutions, but not to those in the community.

Case 4:02-cv-00762-JHP-PJC Document 1 Filed in USDC ND/OK on 10/01/02 Page 3 of 9
II. Jurisdiction and Venue
II. This Court has jurisdiction over this action pursuantto 28 U.S.C. §§ 1331 and 1343 (3)-(4).
12. Plaintiffs claims are authorized by 42 U.S.c. § 1983, Title XIX of the Social Security Act (cite) the Americans with Disabilities Act (cite). Declaratory relief is authorized by 28 U.S.C. §§ 2201 and 2202 and Federal rule of Civil Procedure 57.
m. Parties
13. Plaintiff Earlee Heath is 73 year old individual with type one (insulin-dependent) diabetes and other serious health problems, who resides in Tulsa, Oklahoma.
14. PlaintiffKarol Loy is a 46 year old individual with a seizure disorder and other serious health problems, who resides in Tulsa, Oklahoma.
IS. Plaintiff Katherine Fisher is a 48 year old individual with cerebral palsy and related health problems, who resides in Tulsa, Oklahoma.
16. Defendant Oklahoma Realth Care Authority (ORCA) is a statc agency responsible for administering the Medical Assistance Program in Oklahoma. Plaintiffs only assert a claim against OHCA pursuant to the Americans with Disabilities Act.
17. Defendant Mike Fogarty is the Chief Executive Officer of ORCA. Defendant Fogarty is sued in his official capacity for his actions or inactions taken under color of state law. Plaintiffs only assert claims against Fogarty pursuant to Title XIX of the Social Security act and the Due Process Clause of the Fourteenth Amendment.
IV. Class Allegations
18. The named plaintiffs bring this law suit against defendants on behalf of themselves and a class comprised of all participants in the HCBS Waiver Program in the Tulsa metropolitan area who require more than five (5) prescriptions per month to survive, and who will be forced by defendants' actions to enter an institution in order to receive the prescription coverage that will allow them to survive.
19. The prerequisites ofFRCP 23 (a) are met.
a. The size ofthe class is so great as to make joinder of all class members impracticable. On infoffilation and belief, there are about two hundred class members.
b. There are questions oflaw and fact common to the class, including: (1) whether Defendant Fogarty violated Title XIX of the Social Security Act by failing to give class members adequate notice and opportunity to be heard prior to reducing their prescription coverage;

Case 4:02-cv-00762-JHP-PJC Document 1 Filed in USDC ND/OK on 10/01/02 Page 4 of 9
(2) whether Defendant Fogarty violated Title XIX by reducing class members' semces prior to a hearing; (3) whether Defendant ORCA violated the Americans with Disabilities Act by discriminating against class members on the basis of their disabilities; and (4) whether Defendant Fogarty violated the Due Process Clause by failing to provide class members with adequate notice and opportunity to be heard by failing to infonn them of their right to continue to receive prescription coverage as needed upon timely filing of an appeal.
c. Plaintiffs' claims arc typical of the claims of class members. Defendants have violated the same statutory rights of class members as ofthe named plaintiffs.
d. Plaintiffs will fairly and adequately represent the interests of the class. Plaintiffs have no interests adverse to or in conflict with those of other class members.
e. This action may proceed as a class action pursuant to FRCP 23 (b) (2). Defendants have acted or refused to act on grounds generally applicable to all members ofthe class, making final declaratory and injunctive relief appropriate with respect to the class as a whole.
V. Factual Background
20. Barlee Heath is a 73-year-old individual, who has insulin-dependent diabetes, hypertension, astluna, congestive heart failure, residual bilateral paresis and deep vein thrombosis. Rer monthly income is $307.00. She is receiving services through the RCBS Waiver Program and lives with her elderly spousc. Her income is barely sufficient to cover her minimum living needs. Her spouse's income is approximately $863 per month. He also has health prob1ems and medical expenses that are not covered by Medicare. Thus, their combined income is not great enough to purchase needed prescriptions that will no longer be covered through the HeBS Waiver Program.
Mrs. Heath is currently taking 16 different prescription medications. If she does not get the
required medications, she is a high risk for exacerbation of her heart failure, hypertenSion and
diabetes. The total prescription costs pcr month is $838.79. ill addition, she must purchase over the counter medications that are not covered by Medicaid. If she obtains five (5) prescriptions in October. she will have to pay $255.77 for the remaining required prescriptions in October to meet her minimum medication needs.
Mrs, Heath is a high risk consumer, and failure to continue necessary medications will
result in admission to an acute care facility and subsequent transfer to a nursing home where she will have access to unlimited prescription medications. Thus, the reduction in prescription drugs
will result in her moving from the most integrated environment to the least integrated, in direct
violation of the mandate of the Americans with Disabilities Act (ADA) and of the holding in Olmstead.
21. Karol Loy is a 46-year-old individual who has Acute Mixed Connective Tissue Disease with a seizure disorder, residual from a cerebral vascular accident and cardiac malfunction. Her monthly income is $547. She is receiving services through the HCBS Waiver Program and lives independently in a subsidized apartment. She has an 18-year-old child, who is still in high schooL Her income is barely sufficient to cover her minimum living needs.

Case 4:02-cv-00762-JHP-PJC Document 1 Filed in USDC ND/OK on 10/01/02 Page 5 of 9
n ./
Ms, Loy's total prescription costs per month are $1539.34, In addition, she must purchase over the counter medications that are not covered by Medicaid. If she obtains five (5) prescriptions in October, she will have to pay $476.71 for the other prescriptions to meet her medication needs for the month. Her income is not sufficient to cover the amount she must pay as a result of the reduction in HCBS coverage.
IfMs. Loy does not receive the needed twenty-four (24) prescriptions, she is in immediate danger of having another stroke, and there is a high probability that she will need admission to an acute care facility, Following this, she will be transferred to a nursing home where she will have access to unlimited prescription medications. Not only would this have a profound adverse effect on her high-school-age son, it would result in her moving from the most integrated envirorunent to the least integrated, in violation of the ADA and of Olmstead.
22. Katherine Fisher is a 48-year-old individual who has cerebral palsy and has had more than one cerebrovascular accident. Her monthly income is $725. She is receiving services through the HeBS Waiver Program, and these allow her to live independently in an apartment. Her income is barely sufficient to cover her minimum living needs - honsing, food~ psychological counseling, necessary transportation via the Lift Program, etc. Additionally, she has past medical bills on which she is making payments. She has no infonnal support or assistance.
Ms. Fisher is currently taking nineteen (19) different prescribed medications. The total cost of the prescriptions drugs is $857.84. With the reduction in prescription drug benefits through the HCBS Waiver Program, she will have to pay $274.40 for the other required prescriptions drugs during the month of October. However, she does not have sufficient income to purchase those medications. Thus, ifher coverage is cut to five (5) prescriptions per month, she will suffer irreparable hann.
The llllavailabity of the needed medications will almost certainly result in Ms. Fisher's requiring admission to a critical care facility~ due to exacerbation of hypertension and attendant complications. She will then be placed in a nursing home, where she will have access to lllllimited prescriptions. TIlls will mean a move from the most integrated environment to the least integrated, in violation of the ADA and ofOlmstead.
23, On or about September 19, 2002, defendants infonned the naroe and class plaintiffs by letter that, effective October I, 2002, participants in the HCBS Waiver Program would have their prescription drug coverage limited to no more than five (5) prescriptions per month.
24. Defendants failed to provide plaintiffs with notice that they could request a hearing and, upon filing a timely appeal, continue to receive prescription coverage without set limit during the pendency of the appeaL
25. For each of the named plaintiffs and others similarly situated, the reduction in prescription drugs will cause irreparable hann by triggering an acute episode, admission into an acute care facility and subsequent admission to a nursing home where they will have access to unlimited prescription drugs. This will result in moving the plaintiffs :from the most integrated envirorunent to the least integrated environment. That result is in direct contradiction afthe dictates ofthe ADA Ohnstead,

Case 4:02-cv-00762-JHP-PJC Document 1 Filed in USDC ND/OK on 10/01/02 Page 6 of 9
.n
VI. Claims
A. Count One - Title XIX of the Social Security Act
26. Plaintiffs incorporate by reference paragraphs 1 through 22, above.
27. This claim is brought solely against Defendant Fogarty in his official capacity.
28. Defendant Fogarty has violated Title XIX by failing to give plaintiffs adequate notice of their opportunity to request a hearing and continue to receive the same level of services if they fi Ie a timely appeal.
B. Count Two - The Americans with Disabilities Act
29. Plaintiffs incorporate by reference paragraphs 1 through 22, above.
30. Plaintiffs assert this claim solely against Defendant ORCA.
31. Defendant OHCA is a public entity as defined by the Americans with Disabilities Act (ADA), 42 U.S.C. §12131 (I) (B).
32. Plaintiffs are qualified individuals with disabilities as defined by the ADA, 42 U.S.C, §§12\o2(2), 12131 (2). Plaintiffs meet the cligibilityrequirements for participation in the RCBS Waiver Program administered by Defendant ORCA.
33. The ADA prohibits public entities from discriminating against individuals with disabilities. 42 U.S.C. §12132; C.F.R.§ 35.130 (a).
34. The ADA mandates that a "public entity administer...programs...in the most
integrated setting appropriate to the needs of qualified individuals with disabilities." 28 CFR §
35.130 (d).
35. The action ofDefendant OHCA in limiting the prescription coverage of plaintiffs,
who as participants in the HeSS Waiver Program are living in their homes and are integrated
into their comm1.U1ities, while imposing no such limit on the coverage of institutionalized individuals receiving prescription under Medical Assistance, will force plaintiffs into segregated settings such as nursing homes to receive the prescription coverage they must have to survive, in violation ofthe ADA.
c. Count Three - Procedural Due Process
36. Plaintiffs incorporate by reference paragraphs 1 through 22 above.
37. This claim is brought solely against Defendant Fogarty in his official capacity.

Case 4:02-cv-00762-JHP-PJC Document 1 Filed in USDC ND/OK on 10/01/02 Page 7 of 9

38. Plaintiffs and class members have a protected liberty and property interest in prescription coverage provided under the HCBS Waiver Program. Once eligible for those services, those services C3Ill1ot be denied, reduced or tcnninated without due proccss.

39. Plaintiffs and class members also have a protected property interest in continued coverage ofprescriptions as needed. Title XIX and state law require taht this be continued, pending the outcome of a hearing on a proposed service reduction, if a timely request for a hearing is submitted. 42 C.F.R. §§ 431.230 (a); 431.231 (a).

40. Defendants have violated the Due Process Clause ofthe Fourteenth Amendment by failing to provide Plaintiffs an class members with adequate notice and an opportunity to be heard and by failing to infol1l1 them of their right to continue to receive unchanged coverage pending the outcome oftimely-requested hearings.

VII. Prayer for Relief

WHEREFORE, Plaintiffs pray that this Court:

1. Exercise jurisdiction over their claims;

2.

CertifY the plaintiff class purSUllllt to Federal Rules of Civil Procedure 23 (a) and

(b) (2);

3. Declare that the above actions and failures to act by Defendants violate Plaintiffs'

and class members' rights under Title XIX of the Social Security Act, the Americans with

Disabilities Act, and the Due Process Clause ofthe Fourteenth Amendment.

4. Grant a preliminary and pennanent injunction to enjoin Defendants to provide

medical transportation to Plaintiffs and class members;

5. Grant such other relief as the Court deems just and equitable, including an award

of attorney's fees, litigation expenses and costs.

Case 4:02-cv-00762-JHP-PJC Document 1 Filed in USDC ND/OK on 10/01/02 Page 8 of 9
Respectfully submitted,
Morris D. Bernstein OBA# 16089 University ofTulsa Boesche Legal Clinic
407 S. Florence Avenue Tulsa, OK 74104 918-631-5799 Attorney for Plaintiffs
Of Counsel: Stephen F. Gold Attorney ID # 09880 125 South Ninth Street Suite 700 Philadelphia, PA 19107 215-627-7100

Case 4:02-cv-00762-JHP-PJC Document 1 Filed in USDC ND/OK on 10/01/02 Page 9 of 9
· .
CERTIFICATE OF SERVICE
I, Moms D. Bernstein, do hereby certilY that on October 1, 2002, I caused to be served a copy of this docwnent, via certified mail, return receipt requested, to:
Oklahoma Health Care Authority 4545 N. Lincoln Blvd, Suite 124 Oklahoma City, OK 73105
Mike Fogarty, CEO Oklahoma Health Care Authority 4545 N. Lincoln Blvd, Suite 124 Oklahoma City, OK 73105
Morris D. Bernstein

 
 USDC ND/OK Case: 4:02-cv-762 As of: 02/18/2013 11:18 AM CST Page 1 of 4
CLOSED, DISCREF, LC−2
U.S. District Court U.S. District Court for the Northern District of Oklahoma (Tulsa)
CIVIL DOCKET FOR CASE #: 4:02−cv−00762−JHP−PJC

Fisher, et al v. Oklahoma Health Care Assigned to: Judge James H Payne Referred to: Magistrate Judge Paul J Cleary Demand: $0 Case in other court: 02−05192(#30ccfeespd/cnsl)
10th Circuit, :02− −05192 Cause: 42:12101 Americans with Disabilities Act (ADA)
Plaintiff

Date Filed: 10/01/2002 Date Terminated: 11/19/2003 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: Federal Question

Katherine Fisher

represented by Louis Werner Bullock Bullock Bullock &Blakemore PLLC 110 W 7TH ST STE 707 TULSA, OK 74119 918−584−2001 Fax: 918−749−4383 Email: lbullock@bullock−blakemore.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Morris D Bernstein 406 S BOULDER STE 400 TULSA, OK 74103 918−582−2209 Fax: 918−582−6106 Email: mobernstein@gmail.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Stephen F Gold 125 9th St Ste 700 Philadelphia, PA 19107 215−627−7100 Fax: 627−3183 LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Earlee Heath

represented by Louis Werner Bullock (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Morris D Bernstein (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Stephen F Gold (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
Karol Loy on behalf of themselves and all others

represented by Louis Werner Bullock (See above for address)

USDC ND/OK Case: 4:02-cv-762 As of: 02/18/2013 11:18 AM CST Page 2 of 4

similarly situated

LEAD ATTORNEY ATTORNEY TO BE NOTICED

Morris D Bernstein (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Stephen F Gold (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

V.
Defendant
Oklahoma Health Care Authority Sued as: State of Oklahoma, Oklahoma Health Care Authority and Mike Fogarty, in his capacity as CEO of the Oklahoma Health Care Authority − Mike Fogarty

represented by Andrew J Tevington Oklahoma Health Care Auth (OKC−PO) General Counsel P O Box 18497 Oklahoma City, OK 73154−0497 405−522−7562 Fax: 405−530−3336 Email: tevingta@ohca.state.ok.us LEAD ATTORNEY ATTORNEY TO BE NOTICED

Date Filed 10/01/2002 10/01/2002 10/02/2002
10/03/2002 10/03/2002 10/04/2002 10/04/2002

# Docket Text
1 COMPLAINT (PLAINTIFF REQUESTS PRELIMINARY AND PERMANENT INJUNCTION) (Consent form sent) (fee status: pd) (lml, Dpty Clk) (Entered: 10/02/2002)
FILING FEE PAID IN FULL by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy on 10/1/02 in the amount of $ 150.00 receipt # 104139 (fee status: pd) (lml, Dpty Clk) (Entered: 10/02/2002)
2 MINUTE ORDER by Judge James H. Payne: After full consideration of the record before the Court, Plaintiff's Application for Temporary Restraining Order is DENIED, there being a failure to demonstrate the requirements set forth in Fed.R.Civ.P. 65. Further, Plaintiffs' counsel states Defendants' counsel was not notified of Plaintiffs' Application for Temporary Restraining Order. Plaintiff's Application for Preliminary Injunction is set for hearing, Friday, October 4, 2002, at 1:30 P.M. Plaintiffs are ordered to serve notice on the defendants. (cc: pltfs counsel &phoned) (fe, Dpty Clk) (Entered: 10/02/2002)
3 MOTION by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy for preliminary injunction (o/j) (crp, Dpty Clk) (Entered: 10/03/2002)
4 BRIEF (MEMORANDUM OF LAW) by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy in support of motion for preliminary injunction [3−1] (crp, Dpty Clk) (Entered: 10/03/2002)
5 MOTION by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy for attorney Stephen F Gold to appear pro hac vice (no fees, o/j) (sac, Dpty Clk) (Entered: 10/07/2002)
6 MINUTES: by Judge James H. Payne ; In−court Preliminary Injunction hearing held 10/4/02 ; witn heard; the app for Prel Inj is cons w/trial of this matter u/R.76(a)(2); the briefing sched will be shortened and taken up by tele conf set for 10:00 10/7/02 before Judge James H. Payne (Karla McWhorter ct rptr) (jcm, Dpty Clk) (Entered: 10/07/2002)

USDC ND/OK Case: 4:02-cv-762 As of: 02/18/2013 11:18 AM CST Page 3 of 4

10/04/2002 10/04/2002 10/04/2002 10/07/2002
10/08/2002 10/09/2002 10/09/2002 10/10/2002 10/10/2002 10/11/2002 10/15/2002
10/15/2002 10/16/2002 10/16/2002 10/18/2002 10/18/2002 10/21/2002 10/22/2002

8 RESPONSE by defendant Oklahoma Health Care to motion for preliminary injunction [3−1]... (sac, Dpty Clk) (Entered: 10/07/2002)
8 ...MOTION w/brf by defendant Oklahoma Health Care to dismiss (oversized doc) (sac, Dpty Clk) (Entered: 10/07/2002)
9 ATTORNEY APPEARANCE for defendant Oklahoma Health Care by Andrew J Tevington (sac, Dpty Clk) (Entered: 10/07/2002)
7 MINUTES: by Judge James H. Payne ; Tele Sched Conf held 10/7/02; pltf to fax to ct a copy of amended complaint; Ct grants permission to file amended cplt and pltf to over−night amended cplt to court clerk for filing; deft to file amended mot/dismiss/SJ by 10/9/02; pltf resp to be filed by 10/11/02 and any reply by deft to be filed by noon on 10/15/02. (Karla McWhorter ct rptr) (jcm, Dpty Clk) (Entered: 10/07/2002)
10 AMENDED COMPLAINT [1−1] by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy (sac, Dpty Clk) (Entered: 10/09/2002)
11 MOTION AND BRIEF IN SUPPORT by defendant Oklahoma Health Care for summary judgment (crp, Dpty Clk) (Entered: 10/10/2002)
12 ANSWER by defendant Oklahoma Health Care to amd complaint [10−1] and complaint [1−1] (sac, Dpty Clk) Modified on 10/10/2002 (Entered: 10/10/2002)
13 RESPONSE by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy to motion to dismiss [8−1]... (sac, Dpty Clk) (Entered: 10/11/2002)
13 ...SUPPLEMENTAL BRIEF by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy in support of motion for preliminary injunction [3−1] (sac, Dpty Clk) (Entered: 10/11/2002)
14 MOTION by defendant Oklahoma Health Care to strike pltfs' brf in oppos to m/dism and suppl in supp of injunc and declaratory relief (crp, Dpty Clk) (Entered: 10/15/2002)
15 MINUTE ORDER by Judge James H. Payne: granting motion to strike pltfs' brf in oppos to m/dism and suppl in supp of injunc and declaratory relief [14−1] [13−1], [13−1] ; SHOW CAUSE HEARING set for 2:00 p.m., 10/22/02, for Plaintiff to show cause why case should not be dismissed for failure to Respond to Deft's Mo/SJ as directed by the Ct during hrg of 10/7/02. [cc: counsel] (fe, Dpty Clk) (Entered: 10/15/2002)
16 REPLY by defendant Oklahoma Health Care to response to motion for summary judgment [11−1] (sac, Dpty Clk) (Entered: 10/15/2002)
17 RESPONSE (MEMORANDUM OF LAW IN OPPOSITION) by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy to motion for summary judgment [11−1] (crp, Dpty Clk) (Entered: 10/17/2002)
18 MOTION by defendant Oklahoma Health Care to strike pltfs' brf in opp to m/sumjgm and brf in supp (crp, Dpty Clk) (Entered: 10/17/2002)
19 MOTION by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy for reconsideration MO to strike of 10/15/02, and alternatively to waive L.R., re appearance at 10/22 hrg. (fe, Dpty Clk) (Entered: 10/21/2002)
21 RESPONSE (REPLY) by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy to motion to strike pltfs' brf in opp to m/sumjgm and brf in supp [18−1] (sac, Dpty Clk) (Entered: 10/21/2002)
20 MINUTE ORDER by Judge James H. Payne : denying motion for reconsideration [19−1] and denying pltf counsel lve to appear by phone at 10/22 hrg. [cc: counsel &phoned pltf counsel] (fe, Dpty Clk) (Entered: 10/21/2002)
22 MINUTES: by Judge James H. Payne: Case called for Show Cause Hrg. for pltf's failure to resp. to deft's mo/SJ as ordered . Louis Bullock enters appearance on behalf of counsel Gold for this hrg only. Deft objs to Bullock's appearance as in conflict w/other filings. Statements made. Deft granted to 11/28 to file Reply to Pltf's resp. re mo/SJ. Reply filed in open ct. Deft's req/sanctions under advisement.

USDC ND/OK Case: 4:02-cv-762 As of: 02/18/2013 11:18 AM CST Page 4 of 4

10/22/2002 10/22/2002 10/31/2002 10/31/2002 11/01/2002 11/01/2002 11/06/2002
11/12/2002 11/12/2002
11/12/2002
11/13/2002
11/21/2002 11/25/2002 08/11/2003
08/13/2003 11/17/2003
11/19/2003 02/06/2004

Deft granted leave to file mo/costs/attys fees in regard to this matter. Pltf counsel is going to file a 'statement of position' [Karla McWhorter−cr] (fe, Dpty Clk) (Entered: 10/23/2002)
23 REPLY by defendant Oklahoma Health Care to response to motion for summary judgment [11−1] (crp, Dpty Clk) (Entered: 10/23/2002)
24 ATTORNEY APPEARANCE for plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy by Louis W Bullock (crp, Dpty Clk) (Entered: 10/23/2002)
TRANSCRIPT of Mot/Prel Inj before Judge James H. Payne for date(s) of: 10/4/2 (C/R: K McWhorter, Pages: 119) (pll, Dpty Clk) (Entered: 11/01/2002)
25 MOTION w/brf by defendant Oklahoma Health Care to disqualify pltf's cnsl from Bullock &Bullock (oversized doc) (sac, Dpty Clk) (Entered: 11/01/2002)
26 ORDER by Judge James H. Payne granting motion for summary judgment [11−1] (cc: all counsel) (sac, Dpty Clk) (Entered: 11/01/2002)
27 JUDGMENT: by Judge James H. Payne entered for dft &against pltfs; terminating case (cc: all cnsl) (sac, Dpty Clk) (Entered: 11/01/2002)
28 MINUTE ORDER by Judge James H. Payne : finding the motion to disqualify pltf's cnsl from Bullock &Bullock (oversized doc) [25−1] moot, inasmuch as Judgment was entered in this case on 11/27/02. (cc: all counsel) (fe, Dpty Clk) (Entered: 11/06/2002)
29 NOTICE by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy of flg ord/transcript of 10/4/2 hrg (pll, Dpty Clk) (Entered: 11/13/2002)
30 NOTICE OF APPEAL to USCA by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy from District Court decision [27−1], [26−1] ( fees pd/cnsl ) (sac, Dpty Clk) (Entered: 11/13/2002)
APPEAL FEE PAID IN FULL by plaintiff Katherine Fisher, plaintiff Earlee Heath, plaintiff Karol Loy on 11/12/02 in amount of $ 105.00 receipt # 104908 re [30−1] (crp, Dpty Clk) (Entered: 11/13/2002)
31 PRELIMINARY RECORD on Appeal sent to USCA re: appeal [30−1] (Includes: Docket Sheet, Notice of Appeal, and Decision being appealed) (cc: all counsel) (sac, Dpty Clk) (Entered: 11/13/2002)
32 NOTIFICATION by Circuit Court of Appellate Docket Number 02−5192 (#30 cc fees pd/cnsl) (sac, Dpty Clk) (Entered: 11/22/2002)
33 CLERK'S RECORD ON APPEAL sent to USCA re: appeal [30−1] ( 10th Circuit Case No. 02−5192 ) (ltr mld to all counsel) (fe, Dpty Clk) (Entered: 11/25/2002)
34 CERTIFIED COPY of Judgment from USCA reversing and remanding the Decision of the District Court re: appeal [30−1] ( 10th Circuit Case No. 02−5192 ) (sac, Dpty Clk) (Entered: 08/11/2003)
35 MINUTE ORDER by Judge James H. Payne : ; SCHEDULING CONFERENCE set for 10:30 11/24/03 (cc: all counsel) (sac, Dpty Clk) (Entered: 08/13/2003)
REMARK: Per pltf counsel, case has settled; copy of settlement ltr faxed to Ct. SS of 11/24/03 stricken. Ct to enter appropriate Adm Closing Order. [O/J] (fe, Dpty Clk) (Entered: 11/17/2003)
36 ORDER by Judge James H. Payne dismissing case by reason of stlmt (cc: all counsel) (sac, Dpty Clk) (Entered: 11/20/2003)
REMARK: Copy of Settlement Agreement between parties added to file. (fe, Dpty Clk) (Entered: 02/06/2004)

 
 Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175 (2003)

	  
335 F.3d 1175 United States Court of Appeals,
Tenth Circuit.
Katherine FISHER; Earlee Heath; Karol Loy, on behalf of themselves and all others similarly situated, Plaintiffs–Appellants, v.
OKLAHOMA HEALTH CARE AUTHORITY, Sued as: State of Oklahoma, Oklahoma Health Care Authority and Mike Fogarty, in his capacity as CEO of the Oklahoma Health Care Authority; Mike Fogarty, Defendants–Appellees, Oklahoma Disability Law Center, Inc., Amicus– Curiae.
No. 02–5192. | July 15, 2003.
Participants in community-based Medicaid program brought lawsuit challenging decision by the State of Oklahoma to cease providing unlimited, medicallynecessary prescription benefits for program participants as placing them at risk of premature institutionalization in nursing homes and as violative of integration mandate of the Americans with Disabilities Act (ADA). The United States District Court for the Northern District of Oklahoma, H. Payne, J., granted defendants’ motion for summary judgment, and plaintiffs appealed. The Court of Appeals, Lucero, Circuit Judge, held that genuine issues of material fact, as to whether state’s decision to cease providing unlimited, medically-necessary prescription benefits for participants in community-based Medicaid program while continuing to provide such benefits to disabled persons who had been institutionalized, would place participants in community-based program with high prescription drug costs and limited monthly income at high risk for premature entry into nursing homes, and whether continued provision of unlimited, medicallynecessary prescription benefits would result in any fundamental alteration of program, precluded entry of summary judgment.
Reversed and remanded.
Attorneys and Law Firms
*1177 Stephen F. Gold (Morris Bernstein, University of Tulsa Boesche Legal Clinic, Tulsa, Oklahoma, with him on the briefs), Philadelphia, PA, for the Plaintiffs–
1

Appellants.
Andrew J. Tevington, Deputy General Counsel, Oklahoma Health Care Authority, Oklahoma City, OK, for the Defendants–Appellees.
Kayla A. Bower and Joy J. Turner, Oklahoma Disability Law Center, Inc., Oklahoma City, OK, filed a brief for the Amicus–Curiae.
Before LUCERO, BALDOCK, and O’BRIEN, Circuit Judges.
Opinion
LUCERO, Circuit Judge.
Plaintiffs, three disabled individuals receiving statefunded medical care as part of Oklahoma’s Home and Community–Based Services (“HCBS”) Waiver Program, the “Advantage Program,” ask us to decide whether the defendants, the Oklahoma Health Care Authority (“OHCA”)—the state agency that administers the Medicaid program for Oklahoma—and Mike Fogarty, in his official capacity as CEO of the OHCA, are violating federal law by the manner in which they operate their HCBS program. Specifically, plaintiffs object to the defendants’ recent decision to limit prescription medications for participants in the waiver program to five per month, irrespective of medical necessity, and seek declaratory and injunctive relief against the imposition of the five-prescription cap. Plaintiffs assert that due to their precarious medical and financial circumstances, imposition of the five-prescription cap will force them out of their communities and *1178 into nursing homes in order to obtain the care that is medically necessary. The district court granted summary judgment to the defendants, holding that the plaintiffs could not maintain a claim under the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12101 et seq., because they are not presently institutionalized and face no risk of institutionalization. Because we conclude that the plaintiffs may have a meritorious ADA claim, we exercise jurisdiction under 28 U.S.C. § 1291, and reverse and remand for further consideration.
I

Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175 (2003)

Medicaid is a joint federal-state program designed to provide medical assistance to low-income families and individuals “to help such families and individuals attain or retain capability for independence or self-care.” 42 U.S.C. § 1396. Once a state enters into a partnership with the federal government, Congress requires the state to provide a minimum level of benefits known as the mandatory program. § 1396a(10)(A)(i); 42 C.F.R. §§ 440.210, .220. Mandatory services include nursing home care. 42 U.S.C. § 1396a(10)(A) (incorporating § 1396d(a)(4)(A)). Pharmacy benefits, the focus of the instant case, are not part of the mandatory program, and are considered an optional program under Title XIX. §§ 1396a(a)(10), 1396d(a)(12). Along with every other state, Oklahoma has elected to provide prescription drugs as part of its Medicaid program. Persons institutionalized in nursing homes receive all the prescriptions that are medically necessary. Okla. Admin. Code. § 317:35–3–2(15)(B).
As an alternative to institutionalization, Congress provides for home and community-based services as part of an optional waiver program.1 42 U.S.C. § 1396n(c)(1). Once a state obtains a waiver, this program allows individuals who meet the level of care required for institutionalization in a nursing facility to live at home and receive state-funded medical care. Id. “[T]he department of Heath and Human Services (HHS) has a policy of encouraging States to take advantage of the waiver program, and often approves more waiver slots than a State ultimately uses.” Olmstead v. Zimring, 527 U.S. 581, 601, 119 S.Ct. 2176, 144 L.Ed.2d 540 (1999) (quotation omitted). To obtain a waiver, a state must certify that placement of an individual in a waiver program will be cost-neutral, meaning that costs for persons in the waiver program will be less than if those persons were in an institution.2 § 1396n(c)(2)(D). Oklahoma obtained such a waiver from the federal government for its Advantage Program. Okla. Admin. Code. § 317:30–5–760.
Oklahoma has elected to provide prescription benefits to Advantage participants as well as residents in nursing homes. Until recently, Advantage participants were entitled to an unlimited number of medically necessary prescriptions paid for by the state. However, in September 2002, the state notified participants that it would impose a cap of five prescriptions per month on Advantage participants, effective October 1, 2002, while continuing to provide unlimited prescriptions to patients in nursing facilities. This decision was based on a budgetary shortfall; defendants anticipated that capping the *1179 number of prescriptions available would save the state
2

$3.2 million.
On the same day that the five-prescription cap came into effect, plaintiffs Katherine Fisher, Earlee Heath, and Karol Loy, participants in Oklahoma’s Advantage program, filed suit in federal court against the OHCA and its CEO, Mike Fogarty. In their complaint, plaintiffs allege that defendants’ five-prescription cap violates the integration requirements of the ADA, 42 U.S.C. § 12101 et seq., and section 504 of the Rehabilitation Act (“RA”), 29 U.S.C. § 794, because it will force them out of their communities and into nursing homes in order to obtain the care that is medically necessary.3 Plaintiffs further assert that the cap violates Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. All three plaintiffs meet the medical and financial requirements for nursing facility care and would be eligible for admission to a nursing home.
Earlee Heath is 73 years old, uses a wheelchair, and suffers from insulin-dependant diabetes, hypertension, asthma, congestive heart failure, residual bilateral paresis and deep-vein thrombosis. She uses a portable oxygen machine to assist her in breathing. She takes approximately sixteen prescription medications that cost a total of $839 per month, all of which are prescribed by her doctors, who monthly review and monitor them. Assuming that defendants pay for the five most expensive medications, plaintiffs contend that Heath will have to pay $256 per month for the remainder out of her monthly income of $313.
Katherine Fisher is 48 years old, uses a wheelchair, has suffered from cerebral palsy since birth, and has had two strokes that required hospitalization. Fisher takes approximately twenty-one medications that cost a total of $858 per month. Her treating physicians re-evaluate her medications on a monthly basis. Assuming that defendants pay for the five most expensive medications, plaintiffs assert that Fisher, whose monthly income is $725, will have to pay $274 per month for the remainder.
Karol Loy is 46 years old, has difficulty walking and standing, and has acute mixed connective tissue disease with seizure disorder, residual from a stroke and cardiac malfunction. She has been hospitalized for two strokes and a heart attack. Loy takes twenty-four prescriptions daily that cost a total of $2,808 per month. Assuming that defendants pay for the five most expensive medications, plaintiffs claim that Loy will have to pay $644 per month, out of a monthly income of $547, for the remainder.

Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175 (2003)

Defendants contest these figures. According to defendants, adjusting the schedule under which medication is purchased and eliminating drug interactions could reduce the amount plaintiffs would have to pay under the cap.4 By rescheduling and eliminating drugs that have adverse interactions *1180 with other drugs defendants argue that Fisher’s monthly cost could be reduced to $45–60 per month; Heath’s monthly cost could be reduced to $25 per month; and Loy’s monthly cost could be reduced to “an admittedly still high two hundred dollars.” (Appellees’ Br. at 6.) Because the plaintiffs do not contest these projected cost savings, we assume that defendants’ projections are correct.
Plaintiffs filed a motion for a preliminary injunction, which the district court converted into a motion for a permanent injunction. After receiving briefing and conducting a hearing on the matter, the district court granted summary judgment to the defendants, concluding that the plaintiffs could not maintain a claim under the ADA because they are not presently institutionalized and face no risk of institutionalization. This appeal followed.
II
[1] “We review the district court’s grant of summary judgment de novo, applying the same legal standard used by the district court.” Simms v. Okla. ex rel. Dep’t of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir.1999). Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). “When applying this standard, we view the evidence and draw reasonable inferences therefrom in the light most favorable to the nonmoving party.” Simms, 165 F.3d at 1326.
[2] A party requesting a permanent injunction bears the burden of showing: (1) actual success on the merits; (2) irreparable harm unless the injunction is issued; (3) the threatened injury outweighs the harm that the injunction may cause the opposing party; and (4) the injunction, if issued, will not adversely affect the public interest. Fed. Lands Legal Consortium ex rel. Robart Estate v. United States, 195 F.3d 1190, 1194 (10th Cir.1999); Amoco Prod. Co. v. Gambell, 480 U.S. 531, 546 n. 12, 107 S.Ct. 1396, 94 L.Ed.2d 542 (1987).
3

A
[3] Under Title II of the ADA, a public entity may not discriminate against qualified individuals based on a disability:
[N]o qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.
42 U.S.C. § 12132.5 Pursuant to congressional authority, the Attorney General issued regulations implementing provisions of Title II, including the discrimination proscription of § 12132. Olmstead, 527 U.S. at 591–92, 119 S.Ct. 2176. Central to the instant case are two such regulations. The first, known as the “integration regulation” or “integration mandate,” provides that “[a] public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities,” 28 C.F.R. § 35.130(d) (emphasis added).6 In Olmstead, the Supreme Court construed *1181 the ADA’s integration mandate and concluded that the discrimination forbidden under Title II of the ADA includes “[u]njustified isolation” of the disabled. 527 U.S. at 597, 119 S.Ct. 2176. Thus, “the ADA and its attendant regulations clearly define unnecessary segregation as a form of illegal discrimination against the disabled.” Helen L. v. DiDario, 46 F.3d 325, 333 (3d Cir.1995).
[4] [5] Although public entities are required to “make reasonable modifications in policies, practices, or procedures” in order to avoid the discrimination inherent in the unjustified segregation of the disabled, the second regulation at issue, the so-called “fundamental alteration regulation,” relieves a public entity of its duties under the ADA’s integration mandate if “the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service, program, or activity.” 28 C.F.R. § 35.130(b)(7) (emphasis added); see Townsend v. Quasim, 328 F.3d 511, 517–18 (9th Cir.2003). Thus, under Olmstead and the applicable ADA regulations, when treatment professionals have determined that community placement is appropriate for disabled individuals, those individuals do not oppose the

Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175 (2003)

placement, and the provision of services would not constitute a “fundamental alteration,” states are required to place those individuals in community settings rather than institutions.7 527 U.S. at 601–03, 119 S.Ct. 2176.
[6] Arguing that the integration regulation, as interpreted in Olmstead, renders the imposition of the five-prescription cap a violation of the ADA because it will force them to enter nursing facilities in order to obtain necessary prescriptions, the plaintiffs sought declaratory and injunctive relief before the district court. Rejecting this argument, the district court held that Olmstead is “factually and materially distinguishable” from the instant case, in that, unlike the plaintiffs in Olmstead, Fisher, Heath, and Loy are not presently living in an institution and are free to remain in the community. Fisher v. Okla. Health Care Authority, No. 02CV–762P(C), slip op. at 6 (N.D.Okla. Oct. 31, 2002).
Upon de novo review, we conclude that the district court was incorrect in its reading of Olmstead and the integration mandate. First, there is nothing in the plain language of the regulations that limits protection to persons who are currently institutionalized. The integration regulation simply states that public entities are to provide “services, programs, and activities in the most integrated setting appropriate” for a qualified person with disabilities. 28 C.F.R. § 35.130(d). Those protections would be meaningless if plaintiffs were required to segregate themselves by entering an institution before they could challenge an allegedly discriminatory law or policy that threatens to force them into segregated isolation. Second, while it is true that the plaintiffs in Olmstead were institutionalized at the time they brought their claim, nothing in the Olmstead decision supports a conclusion that institutionalization is a prerequisite to enforcement of the ADA’s integration requirements. Although no circuit court appears to have addressed the issue, we find Makin v. Hawai‘i, 114 F.Supp.2d 1017 (D.Haw.1999), to be instructive. In Makin, the district court rejected the argument that Olsmstead is inapplicable in situations where the plaintiffs are not institutionalized, observing that this argument is “misplaced since the only alternative for Plaintiffs *1182 presently is institutionalization if they seek treatment under the statute.” Id. at 1033. We agree, and conclude that Olmstead does not imply that disabled persons who, by reason of a change in state policy, stand imperiled with segregation, may not bring a challenge to that state policy under the ADA’s integration regulation without first submitting to institutionalization.

[7] [8] As we have elaborated, under Olmstead, the failure to provide Medicaid services in a community-based setting may constitute a form of discrimination. Because the OHCA does not allow the plaintiffs to receive services for which they are qualified unless they agree to enter a nursing home, the plaintiffs have presented a genuine issue of material fact as to whether they can prove that the defendants have violated the integration requirement of Title II of the ADA. However, our conclusion that the five-prescription cap may violate the ADA’s integration regulation does not end our inquiry, for “[t]he State’s responsibility, once it provides community-based treatment to qualified persons with disabilities, is not boundless,” Olmstead, 527 U.S. at 603, 119 S.Ct. 2176, and states are permitted “to resist modifications that entail a ‘fundamenta[l] alter[ation]’ of the State’s services and programs,” id. (quoting 28 C.F.R. § 35.130(b)(7)).
In expounding upon the meaning of “fundamental alteration,” the Olmstead Court rejected a construction of the fundamental-alteration defense that required only a comparison of the cost of the community services for the plaintiffs with the state’s budget. Rather, courts are to consider whether “in the allocation of available resources, immediate relief for the plaintiffs would be inequitable, given the responsibility the State has undertaken for the care and treatment of a large and diverse population of persons with ... disabilities.” Id. at 603–04, 119 S.Ct. 2176. With this standard in mind, we proceed to consider whether the plaintiffs have created a genuine issue of material fact as to whether elimination of the fiveprescription cap would constitute a fundamental alteration.
[9] Recognizing that the fundamental-alteration regulation can serve as a defense to the requirements of the integration regulation, the district court noted two things: (1) the waiver program is optional; and (2) “[g]iven ... the State financial crisis, ... [d]efendants have made a reasonable move to reduce the optional program rather than eliminate it altogether as the State could.” Fisher, No. 02CV–762P(C), slip op. at 7. Regarding the fact that the Advantage waiver program is optional, we note that, under Title II of the ADA, a state may not amend optional programs in such a way as to violate the integration mandate. See, e.g., Helen L., 46 F.3d. at 336, 339 (requiring the requested community-based service, attendant care, even though it is an optional Medicaid service). Thus, the mere fact that a program is optional does not support a fundamental-alteration defense; rather, it merely begs the question whether provision of that service would constitute a fundamental alteration.

4

Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175 (2003)

[10] As to the second fundamental-alteration factor cited by the district court, that the decision “to reduce the optional program rather than eliminate it altogether” was “reasonable” because of the reality of Oklahoma’s financial crisis, Fisher, No. 02CV–762P(C), slip op. at 7, we note that public entities have a defense when a modification “would fundamentally alter the nature of the service, program, or activity,” 28 C.F.R. § 35.130(d); that their actions were merely “reasonable” does not constitute a defense. Moreover, the fact that Oklahoma has a fiscal problem, by itself, does not lead to an automatic conclusion that preservation of unlimited medicallynecessaryyyyyyy *1183 y prescription benefits for participants in the Advantage program will result in a fundamental alteration. See Townsend, 328 F.3d at 520. In passing the ADA, Congress was clearly aware that “[w]hile the integration of people with disabilities will sometimes involve substantial short-term burdens, both financial and administrative, the long-range effects of integration will benefit society as a whole.” H.R.Rep. No. 101–485, pt.3, at 50, reprinted in 1990 U.S.C.C.A.N. 445, 473. If every alteration in a program or service that required the outlay of funds were tantamount to a fundamental alteration, the ADA’s integration mandate would be hollow indeed.
The district court appears to have found Oklahoma’s decision “reasonable,” and, by implication, that the elimination of the five-prescription cap would constitute a fundamental alteration, because the alternative to the imposition of the five-prescription cap was to eliminate the entire HCBS Waiver program. However, there is no evidence in the record to suggest that the state considered eliminating the entire program. Fogarty testified that “[the] agency is absolutely committed to [the waiver] program ... It’s a program that’s needed.” (Joint App. at 124.) Given that the cost of institutional care is nearly double that of community-based care, it seems unlikely that the option cited by the district court, elimination of the waiver program, would have solved Oklahoma’s fiscal crisis, because it could have served only to drive participants into nursing homes.
In opposing summary judgment below, the plaintiffs proffered a number of alternatives to the fiveprescription-cap, such as requiring prior authorization for prescriptions or reducing nursing home payments by $160 per year per patient, as examples that would allow the state to save money while preserving unlimited prescription benefits for participants in the Advantage program. Thus, it is not clear from the record or the
5

district court’s summary analysis that the expenses involved in preserving unlimited prescriptions under the Advantage program will “in fact, compel cutbacks in services to other Medicaid recipients,” Townsend, 328 F.3d at 520, or be “inequitable, given the responsibility the State has undertaken for the care and treatment of a large and diverse population of persons with ... disabilities,” Olmstead, 527 U.S. at 604, 119 S.Ct. 2176. Nor is it clear why the preservation of a program as it has existed for years and as approved by the federal government would “fundamentally alter the nature” of the program. 28 C.F.R. § 35.130(b)(7). Plaintiffs are simply requesting that a service for which they would be eligible under an existing state program, unlimited medically necessary prescriptions, be provided in a communitybased setting rather than a nursing home. They are not demanding a separate service or one not already provided by the state. See Townsend, 328 F.3d at 517 (noting the distinction between whether services will be provided and where services will be provided). Given that Oklahoma has, until recently, provided unlimited prescriptions to participants in the Advantage program, and continues to do so for those living in nursing homes, receiving medically necessary prescriptions is clearly in the nature of Oklahoma’s HCBS program.8 The district court’s cursory fundamental-alteration analysis cannot stand up to logical inquiry.
*1184 In sum, in granting summary judgment to the defendants on the plaintiffs’ ADA claim, the district court made errors of law and ignored disputed issues of material fact. There are genuine issues of material fact concerning whether reasonable modifications to Oklahoma’s program must be made under the ADA. If reasonable modifications are required, there are genuine issues of material fact concerning whether they would fundamentally alter the program. Thus, we remand the matter for further consideration.
B
The state argues on appeal that the plaintiffs are not entitled to declaratory or injunctive relief because they cannot show that they will be harmed by the fiveprescription cap. Because plaintiffs can reduce the cost of their prescriptions through scheduling and discontinuance of drugs with harmful interactions, the OHCA argues, the plaintiffs will not suffer irreparable harm absent the issuance of an injunction. On this point, the district court observed that “with appropriate scheduling of drug

Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175 (2003)

purchases, management of prescriptions to avoid drug interactions, and alternative community resources, Plaintiffs could completely avoid institutional care.” Fisher, No. 02CV–762P(C), slip op. at 6.
Under defendants’ figures, plaintiff Loy will face out-ofpocket expenses of $200 per month, which defendants acknowledge to be “admittedly still high.” (Appellees’ Br. at 6.) Given that Loy’s income is limited to $547 per month, an extra $200 per month—36.6% of her income— in drug costs will place a severe burden on her finances and could easily force her to enter a nursing home. Thus, there can be no question that plaintiff Loy will be irreparably harmed absent the issuance of an injunction.
Whether plaintiffs Fisher and Heath will be irreparably harmed under defendants’ figures is a closer question. Defendants assert that Fisher’s expenses will be reduced to $60 per month,9 and Heath’s costs can be reduced to $25 per month. Fisher’s income is $725 a month, which means that her prescription expenses will constitute 8.28% of her income under defendants’ projections. Although Heath’s costs will be small under defendants’ projections, so too is her income—$313 per month. Her prescription expenses will constitute about 8% of her income under defendants’ projections. This may not be devastating, but it will likely have a real effect on Fisher’s and Heath’s finances given their poverty.
The state further argues that the plaintiffs cannot show that they will be harmed by the five-prescription cap because all three plaintiffs stated at a hearing conducted by the district court either that they would rather die than be placed in a nursing home, or that they would not enter a nursing home because they feared they “wouldn’t last long” due to the fact that “they don’t take care of people [there] any more.” (Joint App. at 30.) By their own admission, the state argues, the plaintiffs do not face the segregation and isolation from the community that constitutes discrimination under the ADA. We note, however, that given the plaintiffs’ precarious health and finances, the five-prescription cap places them at “high risk for premature entry into a nursing home.” (Id. at 70.) That they have emphatically stated their desire to remain in the community does not mean that they do not face a substantial risk of harm. An expert witness testified that under the prescription *1185 cap, “some ... would just choose to stay at home and die a premature death. Others will wait until their health has deteriorated and then there will be a hospital admission. Some will eventually end up in a nursing home.” (Id. at 76.)
6

We conclude that plaintiffs have raised a genuine issue of material fact as to irreparable harm even if their expenses can be lowered as suggested by defendants.
C
Plaintiffs make several arguments based on the Medicaid Act that were not included in their initial or amended complaint and were raised for the first time in their “Memorandum of Law in Opposition to Defendants’ Motion to Dismiss and Supplemental Memorandum of Law in Support of their Motion for Injunctive and Declaratory Relief.”10 (Joint App. at 316.) Plaintiffs claim: (1) that defendants are bound by the terms of their HCBS waiver to offer equal prescription benefits to Advantage participants;11 (2) that the Medicaid Act does not authorize a limitation on the number of prescriptions offered to HCBS participants; (3) that the fiveprescription cap violates the Medicaid Act’s “reasonable” and “medical necessity” standards; and (4) that the cap violates the Act’s “choice” and “health and welfare” requirements.
[11] [12] None of these arguments were ruled upon by the district court in its order.12 Because plaintiffs did not make these claims in their initial complaint, raising them only in a subsequent “Supplemental *1186 Memorandum of Law,” (Joint App. at 316), it is not clear that these arguments were properly raised in the district court. However, even if they were properly raised, we see no reason “to depart from the general rule that ‘a federal appellate court does not consider an issue not passed upon below.’ “ Walker v. Mather, 959 F.2d 894, 896 (10th Cir.1992) (quoting Singleton v. Wulff, 428 U.S. 106, 120, 96 S.Ct. 2868, 49 L.Ed.2d 826 (1976)). We therefore remand to the district court to consider (1) whether these claims were properly raised, and, if so (2) whether plaintiffs are entitled to a permanent injunction on these claims.
III
In sum, in granting summary judgment to the defendants on the plaintiffs’ ADA claim, the district court relied on incorrect legal assumptions and ignored genuine issues of material fact. We therefore REVERSE the judgment of the district court granting summary judgment to the

Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175 (2003)

defendants and REMAND the matter for further proceedings consistent with this opinion.

Parallel Citations
14 A.D. Cases 1005, 26 NDLR P 147
	  

Footnotes

1

The program is referred to as a “waiver” because, with express authorization by a federal agency, the state is exempted from

certain Title XIX statutory requirements.

2

In Oklahoma, it costs approximately $28,000 per year to provide care to a disabled individual in a nursing home, and $14,000 to

provide care through the Home and Community Based Waiver program.

3

Plaintiffs’ RA claim is essentially the same as their ADA claim. Regulations under both sections require defendants to administer

“programs, and activities in the most integrated setting appropriate to the needs” of qualified individuals with disabilities. 28

C.F.R. § 35.130(d)(ADA); 28 C.F.R. § 41.51(d)(RA). Because plaintiffs have asserted no right under the RA that is not equally

protected by the ADA, and because the district court focused its analysis on the ADA claim, we primarily address the plaintiffs’

ADA claim.

4

Defendants’ assertion is that, because the Oklahoma Medicaid plan allows participants to obtain either one hundred units (pills) or

a thirty-four day supply, plaintiffs could obtain three months’ worth of pills at once by electing the one-hundred-units option, and

stagger their prescriptions. This “rescheduling” would effectively allow plaintiffs to obtain three times as many prescriptions,

assuming their most expensive drugs are taken no more than once a day.

5

There is no dispute in the instant case as to whether the plaintiffs are qualified individuals with disabilities.

6

Similarly, the RA prohibits discrimination by entities receiving federal funds. See 29 U.S.C. § 794 and 28 C.F.R. § 41.51(d)

(providing that programs and activities shall be administered “in the most integrated setting appropriate”).

7

There is no dispute in the instant case as to whether community placement is appropriate for the plaintiffs.

8

An inescapable irony of the decision to cap prescriptions for participants in the Advantage program is that, given that the cost of

institutional care is approximately twice as high as community-based care, if the plaintiffs are indeed forced to enter a nursing

home to obtain necessary medical services, any cost savings achieved by the prescription cap will be quickly eroded.

9

Because this is an appeal from a summary judgment motion, we must view the facts in the light most favorable to the plaintiff; thus

we assume that Fisher’s expenses will fall at the high end of the $45–60 range projected by defendants.

10

In their initial complaint, plaintiffs raised a single Medicaid Act claim: that defendant Fogarty “violated Title XIX by failing to

give plaintiffs adequate notice of their opportunity to request a hearing and continue to receive the same level of services if they

file a timely appeal.” (Joint App. at 142.) This notice argument is not now before us. Plaintiffs subsequently amended their

complaint, but did not add any new Medicaid Act claims. Only after defendants moved to dismiss did plaintiffs make the Medicaid

Act arguments that are now made to this court.

11

The waiver states that “[t]he prescription drug policy for waiver recipients shall be the same as that for Medicaid clients needing

Nursing Facility Level of Care and who are receiving that care in a Nursing Facility.” (Appellants’ Br., App. B.)

12

The district court observed in a footnote that, generally speaking, “when medical assistance is provided under the Medicaid

program ... benefits must be comparable among recipients. 42 U.S.C. § 1396a(a)(10)(B).” Fisher, No. 02CV–762P(C), slip op. at

5, n. 2. However, noted the district court, the “Secretary of Health and Human Services ... can waive the comparability requirement

for programs such as the Home and Community Based Waiver Program ... [and] the Secretary waived this requirement for the

State of Oklahoma. 42 U.S.C § 1396n(c)(3).” Id. Citing no authority, the defendants essentially argue that this waiver of

comparability forecloses all of the plaintiffs’ arguments under the Medicaid statute because the prescription benefits under the

waiver program are not required to be comparable to those outside of the waiver program.

While the district court did not state what, if any, legal consequences flow from its observation, to the extent that the district

court implicitly concluded that plaintiffs’ arguments under the Medicaid statute are precluded by the waiver of comparability,

that conclusion was incorrect. Simply put, comparability is not at issue. The plaintiffs’ Medicaid claims do not hinge upon a

comparison of benefits in and outside of the waiver program. Rather, they allege violations of the Medicaid statute in absolute

terms. Although courts have understood the waiver of comparability to allow for “more stringent eligibility requirements for the

7

Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175 (2003)
waiver program than for Medicaid as a whole,” Boulet v. Cellucci, 107 F.Supp.2d 61, 76 (D.Mass.2000) (emphasis added) (citing Skandalis v. Rowe, 14 F.3d 173, 181 (2d Cir.1994)), we do not understand the waiver of comparability to give the state virtual carte blanche to disregard all the requirements of the Medicaid statute as to participants in a waiver program, or to amend the waiver program unilaterally once it has been approved by the federal government.

	   	  
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©	  2013	  Thomson	  Reuters.	  No	  claim	  to	  original	  U.S.	  Government	  Works.	  

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