Case 5:02-cv-00044-DWM Doc #1 Filed 03/19/02 Page 1 of 23 Page ID#1

1

UNITED STATES DISTRICT COURT

2

FOR THE WESTERN DISTRICT OF MICHIGAN

3

4 ROBERT EAGER; DORA OATS, through her next friend,
5 Crystal Oats; HOWARD HUGGER,
through his guardian, 6 Sharon Cook; TERRELL KING;
GEORGETTE KRAFT through her 7 husband and next friend, Roy Kraft;
DENNIS LOWE, through his 8 guardian John Munger; EVELYN G. WRIGHT
through her son and next friend, Paul Mayzes; 9 MICHIGAN DISABILITY RIGHTS COALITION;
MICHIGAN ASSOCIATION OF CENTERS 10 FOR INDEPENDENT LIVING; MICHIGAN
CAMPAIGN FOR QUALITY CARE; 11 GREAT LAKES CENTER FOR INDPENDENT
LIVING; and GRAND RAPIDS CENTER 12 FOR INDEPENDENT LIVING,

Case No.
5: 0 2 cv 0 0 4 4
Hon.
David W. McKeague U.S. District Judge

13

Plaintiffs,

14 v.

15 JOHN ENGLER, in his official capacity as Governor of the State of Michigan, and
16 James K. Haveman Jr., in his official capacity as Director of the Michigan Department of Community Health,
17 Defendants.
18

19

20
Mark A. Cody (P42695) 21 Attorney for Plaintiffs
Michigan Protection & Advocacy Service, Inc. 22 106 W. Allegan, Suite 300
Lansing, MI 48933
23 (517)487-1755

Alison E. Hirschel (P57623) Attorney for Plaintiffs
Michigan Poverty Law Program
611 Church St., Suite 4A Ann Arbor, MI 48104 (734) 998-6100

24

25

26

COMPLAINT

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1

I. Introduction

2

1. This is a complaint seeking declaratory and injunctive relief brought by elderly and

3 younger persons with disabilities and by organizations whose mission is to advocate for community

4 placement for people with disabilities to challenge the Defendants' failure to provide needed,

5 community-based long term care services in violation of the Medical Assistance Act ("Medicaid")

6 42 U.S.C. §1396 et seq.; the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq.;

7 and Section 504 ofthe Rehabilitation Act of 1973,29 U.S.C. § 794 ("Section 504"). The plaintiffs

8 individually named are each eligible for, desire, have applied for or have attempted to apply for and

9 have been denied community-based Medicaid-funded services, specifically services available

10 pursuant to the Home and Community Based Waiver Program (hereinafter "the Waiver program"),

11 42 U.S.C. § 1396n. Plaintiffs have been unable to gain access to these critical services because, as of

12 October 1, 2001, Defendants Engler and Haveman have unlawfully restricted funding to the Waiver

13 program, thus resulting in the closure of the program to virtually all new applicants. Because of

14 Defendant Engler's and Haveman's actions, the individually named plaintiffs and those in similar

15 situations on behalf of whom the organizational Plaintiffs advocate will remain unnecessarily

16 institutionalized or remain at imminent risk of unnecessary institutionalization.

17

2. The Medicaid program traditionally funded long term care services only in

18 institutional settings. However, Congress recognized the strong desire of most people with

19 disabilities, like the individual Plaintiffs, to remain in their own homes or to return to their own

20 homes. It therefore authorized states to obtain waivers to provide Medicaid-funded long term care

21 services in the community as an alternative to nursing home placement. 42 U.S.C. § 1396n.

22 Michigan, like every other state, thereafter sought and obtained a waiver to provide home and

23 community-based care and began providing services in 1992. Effective October 1, 1999, Michigan

24 made a commitment to provide these waiver services to 15,000 individuals each year and did so until

25 September 30, 2001.

26

3. As of October 1, 2001, the beginning ofthe current fiscal year, however, Defendants

27 chose to reduce funding for the waiver program by $20 million and have thus ensured that the

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1 individual Plaintiffs, like virtually all individuals who are not already receiving waiver services, will

2 be unable to do so during the current fiscal year. The individual Plaintiffs have therefore been forced

3 to seek long term care services in nursing homes or to remain in the community without these

4 essential services and remain at risk of institutionalization. Defendants have therefore unnecessarily

5 segregated and isolated the individual Plaintiffs in nursing homes or put the individual Plaintiffs at

6 risk of unnecessary institutionalization, in violation ofthe ADA, Section 504, and the Medicaid Act.

7 Similarly, Defendants have also unlawfully and unnecessarily segregated and isolated many of the

8 individuals on whose behalf the organizational Plaintiffs advocate or put these individuals at risk of

9 unlawful and unnecessary institutionalization.

10

II. Jurisdiction and Venue

11

4. This court has jurisdiction over this matter pursuant to 28 U.S.C.§§ 1331 and

12 1343(a)(3)-(4).

13

5. This action is authorized pursuant to 29 U.S.C. § 794a, 28 U.S.C. §§ 2201-2202, and

14 by 42 U.S.C. §§ 1983 and 12133.

15

6. Venue is appropriate in this District pursuant to 28 U.S.C. §1391(b) because Plaintiffs

16 Eager, Hugger, Wright, Michigan Association of Centers for Independent Living, Michigan

17 Disabilities Rights Coalition, and Grand Rapids Center for Independent Living reside in this District,

18 Defendants have their official place of business in this District, and because a substantial part of the

19 events or omissions giving rise to the claims set forth in this complaint occurred in this District.

20

III. Parties

21 A. Individual Plaintiffs

22

7. Plaintiff Robert Eager is a 44-year-old Traverse City resident who has been diagnosed

23 with Multiple Sclerosis which causes him to have a disability as defined in the ADA at 42 U.S.C.

24 §12102(2)(A) and a disability as used in Section 504.

25

8. Plaintiff Dora Oats is a 77-year-old resident of Ypsilanti who suffered a devastating

26 stroke in August, 2001 which causes her to have a disability as defined in the ADA at 42 U.S.C.

27 §12102(2)(A) and a disability as used in Section 504. Due to her disability, Ms. Oats brings this

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1 action through Crystal Oats, her granddaughter and next friend.

2

9. Plaintiff Howard Hugger is a 100-year-old resident of Lansing who suffers from

3 leukemia, chronic obstructive pulmonary disease, cognitive impairments, and other conditions that

4 cause him to have a disability as defined in the ADA at 42 U.S.C. §12102(2)(A) and a disability as

5 used in Section 504. Due to his disabilities, Mr. Hugger brings this action through his niece and

6 guardian, Sharon Cook.

7

10. Plaintiff Terrell King, age 29, is paralyzed from the neck down as the result of a

8 football injury which causes him to have a disability as defined in the ADA, 42 U.S.C. §12102(2)(A)

9 and a disability as used in Section 504.

10

11. Plaintiff Georgette Kraft is an 81-year-old resident of the Rivergate Convalescent

11 Center in Riverview, Michigan. Ms. Kraft has Alzheimer's disease and arthritis, which causes her to

12 have a disability, as defined in the ADA at 42 U.S.C. §12102(2)(A) and a disability as used in

13 Section 504. Due to her disabilities, Ms. Kraft brings this action through her husband and next

14 friend, Roy Kraft.

15

12. Plaintiff Dennis Lowe, age 42, has a cognitive impairment and seizure disorder as a

16 result of a traumatic brain injury and thus has a disability as defined in the ADA at 42 U.S.C.

17 §121 02(2)(A) and a disability as used in Section 504. Due to his disability, Mr. Lowe brings this

18 action through his guardian, John Munger.

19

13. Plaintiff Evelyn G. Wright, age 82, is a resident oflrons, Michigan, who has organic

20 brain syndrome and severe arthritis which causes her to have a disability as defined in the ADA at 42

21 U.S.C. §12102(2)(A) and a disability as used in Section 504. Due to her disabilities, Ms. Wright

22 brings this action through her son and next friend, Paul Mayzes.

23 B. Organizational Plaintiffs

24

14. Plaintiff Michigan Disability Rights Coalition (MDRC) is a non-profit, state-wide

25 network of individuals and organizations that advances the interests of Michigan's disability

26 community through community capacity building, grassroot activism, public education and

27 advocacy. The Michigan Disability Rights Coalition has several thousand members and partners

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1 with other organizations as part of its coalition. As a result of the Defendants' omissions or actions,

2 as more full described herein, MDRC is forced to expend time and organizational resources

3 advocating for additional community placements for individuals with significant disabilities.

4

15. Plaintiff Michigan Association of Centers for Independent Living (MACIL) is a

5 nonprofit corporation whose members are Centers for Independent Living (CILs). See 29 U.S.C. §

6 796f. Its purpose it to promote the independent living philosophy and to advocate for the individual

7 and collective program, service and financial needs of CILs throughout Michigan. As a result of

8 Defendants' omissions or actions, as more fully described herein, MACIL is forced to expend time

9 and organizational resources advocating for additional community placements for individuals with

10 significant disabilities

11

16. PlaintiffMichigan Campaign for Quality Care is an unincorporated, grassroots

12 organization of consumers who seek better care and better choices for Michigan's nursing home

13 residents. As a result ofthe acts or omissions of Defendants as more fully described herein, many

14 Campaign members are unable to leave of substandard nursing homes and return to the community

15 or move their family members in substandard nursing homes back to the community where the

16 residents would prefer to live. The Michigan Campaign for Quality Care and its members continue

17 to suffer injury as a result ofthe Defendants' actions due to the needs of the organization and its

18 members to spend time and resources advocating for community alternatives for themselves and

19 their family members.

20

17. Plaintiff Great Lakes Center for Independent Living (GLCIL), as a center for

21 independent living, is a nonprofit corporation funded through the Rehabilitation Act, 29 U.S.C. §

22 796f, to serve and represent people with disabilities in the Detroit area. GLCIL assists clients in

23 achieving community integration and avoiding unnecessary institutionalization. Many of its clients

24 face continued and unwanted institutionalization or are at risk of unnecessary institutionalization

25 because of the acts or omissions of Defendants, as more fully described herein.

26

18. Plaintiff Grand Rapids Center for Independent Living (GRCIL), as a center for

27 independent living, is a nonprofit corporation funded through the Rehabilitation Act, 29 U.S.C.

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1 §796f, to serve and represent people with disabilities in the Grand Rapids area. GRCIL assists

2 clients in achieving community integration and avoiding unnecessary institutionalization. Many of

3 its clients face continued and unwanted institutionalization or are risk of unnecessary

4 institutionalization because of the acts or omissions of Defendants, as more fully described herein.

5

19. As a result of the defendants' actions, the Great Lakes Center for Independent Living

6 and the Grand Rapids Center for Independent Living have been forced to spend time and resources

7 to advocate for community based services, rather than assisting persons with disabilities with other

8 issues, including obtaining accessible and affordable housing, equal employment opportunities, and

9 access to places of accommodation. These injuries will continue in the future so long as defendants'

10 actions and practices are unchanged.

11 C. Defendants

12

20. Defendant John Engler is Governor ofMichigan and, pursuant to Const 1963, art 5,

13 §1, all executive power of the State of Michigan rests with him. Defendant Engler also has the

14 responsibility, pursuant to Const. 1963, art. 5, § 18, to prepare and submit a budget to the Michigan

15 Legislature.

16

21. Defendant James K. Haveman, Jr. is the Director of the Michigan Department of

17 Community Health (hereinafter "MDCH"), appointed by the Governor of Michigan. As such,

18 pursuant to MCL 330.1104, all executive authority ofthe MDCH rests with him. MDCH is the

19 single state agency responsible for administering the Michigan Medicaid Program, including the

20 Home and Community Based Services Waiver Program. See 42 U.S.C. § 1396a(a)(5).

21

IV. Factual Allegations

22 A. Plaintiffs' need for community-based services

23

22. Plaintiff Robert Eager was diagnosed in 1991 with multiple sclerosis while employed

24 as a supervisor in a steel fabrication plant. One year later, as his disability worsened, Mr. Eager was

25 no longer able to perform his duties and was forced to leave work. Mr. Eager has continued to

26 experience a progressive loss of function in his hands and legs and now uses a wheelchair and is

27 challenged and exhausted by virtually every activity of daily living.

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23. Mr. Eager has two sons, Donald, 11, and Justin, 15, as well as, 18-year-old stepson,

2 Brent Diehl, whom he raised. Mr. Eager is divorced and, although his children live with their

3 mother, they visit Mr. Eager regularly and sometimes spend the night with him. Mr. Eager values

4 tremendously the time he and his children spend together at his home. If Mr. Eager is forced to seek

5 nursing home placement, both the quantity of time his children will spend with him and the quality

6 of their relationship will be severely diminished.

7

24. Currently, Mr. Eager receives no services and manages to survive in the community

8 only because of the extraordinary efforts and kindness of friends, but he is uncertain whether the

9 friends who assist him will be able to continue to do so in the future.

10

25. There is no dispute that Mr. Eager has been determined financially and medically

11 eligible for the Home and Community Based Waiver program. As recently as January 18, 2002, at a

12 hearing in front of an administrative law judge of the MDCH, representatives of the Area Agency on

13 Aging ofNorthwest Michigan, the waiver agent designated to provide services in Mr. Eager's region

14 of the state, acknowledged that the only reason they were not able to provide services to Mr. Eager

15 was because Defendants reduced available funding for the waiver program.

16

26. Because of his disabilities and his financial status, Mr. Eager is eligible to enter a

17 nursing home today and have his care paid for by Medicaid at far greater cost to the State than the

18 cost of maintaining him in the waiver program. Although Mr. Eager is a generally a genial,

19 optimistic and determined man, because he so values his independence and his family life, he has

20 repeatedly stated that he would refuse food and water if he were forced to enter a nursing home.

21

27. Plaintiff Dora Oats was completely independent prior to her devastating stroke in

22 August, 2001. She is now paralyzed on her right side; needs supervision or assistance with many

23 activities of daily living such as bathing, toileting, and transferring herself from her bed to her

24 wheelchair; is unable to perform routine chores such as cooking, cleaning, shopping, and money

25 management; suffers from confusion and disorientation; requires round-the-clock supervision; is at

26 risk of falling; and needs assistance managing her household.

27

28. Ms. Oats' granddaughter, Crystal Oats, provides round-the-clock care to her at Ms.

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1 Oats' home and was forced to leave her job in October to take care of Ms. Oats. Other family

2 members provide some additional assistance when they are able. Ms. Oats receives only four hours

3 per week of homemaker services from the Area Agency on Aging. Because Crystal Oats has three

4 children, and because both she and Plaintiff have very limited resources, she will soon have to return

5 to work to support her family. In the absence of services pursuant to the Home and Community

6 Based Waiver Program, Ms. Oats will then require nursing home placement.

7

29. Crystal Oats and her family are unaware of a local nursing home that would accept

8 Plaintiff and provide high quality care to her. They also believe that Plaintiff would become more

9 disoriented and deteriorate iftaken out of her familiar surroundings. Moreover, Plaintiff Dora Oates

10 has repeatedly expressed her pride in her home of more than 40 years and her strong desire to remain

11 there. Therefore, Plaintiff and her family are anxious to ensure Ms. Oats does not need to be

12 institutionalized.

13

30. PlaintiffDora Oats applied for the waiver program in September 2001, was found

14 eligible for waiver services after a telephone screen, but was denied services because no waiver slots

15 were available. Crystal Oats appealed the decision on behalf of her grandmother and a hearing was

16 held on November 29, 2001. However, in December, Administrative Law Judge Gregory J. Kershul

17 denied the appeal, concluding that administrative law judges had no authority to allot more funds to

18 a region or contractor than the state determines it will provide and cannot order the provision of

19 services if there are insufficient funds to pay for them.

20

31. Plaintiff Howard Hugger is a 100-year-old man who suffers from some cognitive

21 declines, leukemia, diabetes, chronic obstructive pulmonary disease, and a thyroid condition. Until

22 July, 2001, Mr. Hugger lived alone in his home and received services under the Home and

23 Community Based Waiver program. After a fall in his home and treatment in several local health

24 care facilities, he was no longer able to live independently and moved in with his niece, Sharon

25 Cook. Ms. Cook is a 61-year-old woman who suffers from fibromyalgia, chronic fatigue syndrome,

26 arthritis and back problems and who has herself been receiving Social Security Disability payments 27 since 1996.

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1

32. In September, 2001, Mr. Hugger suffered two more falls and became disoriented.

2 After a brief hospital stay, he was placed in the Eaton County Medical Facility, a local nursing

3 home. Pursuant to a petition filed in Probate Court by Cass County Protective Services, an agency

4 named Guardianship Alternatives was appointed as Mr. Hugger's conservator and Ms. Cook was

5 appointed to serve as his guardian.

6

33. During the more than three months in which Mr. Hugger lived in the nursing home,

7 Ms. Cook alleges he lost approximately one pound per week, did not receive appropriate care for

8 several medical conditions, became sluggish and depressed, and asked constantly when he could

9 return to Ms. Cook's home.

10

34. Because Mr. Hugger's condition and spirits were deteriorating in the nursing home,

11 Ms. Cook agreed to bring Mr. Hugger home again on Christmas Day, 2001 and he has remained in

12 her home since that time. His spirits and energy have markedly improved and he has repeatedly

13 expressed his desire to remain in his niece's home. However, because of her own disabilities, Ms.

14 Cook has been overwhelmed by Mr. Hugger's needs including constant assistance with toileting,

15 feeding, and ambulation; 24 hour supervision; sleep interruptions as often as a dozen times a night;

16 the responsibility for arranging for Mr. Hugger's continuing health care and benefits; and the

17 responsibility for sorting through the contents of Mr. Hugger's former apartment.

18

35. Until February 20, 2002, Medicare paid for an aide to bathe Mr. Hugger, but that

19 service was discontinued on February 21, 2002, Mr. Hugger's lOOth birthday. On or about

20 February 22, 2002, counsel for Mr. Hugger was informed by Marion Owen, Acting Director for the

21 Tri-County Office on Aging, that there were approximately 100 people on the waiting list ahead of

22 Mr. Hugger for assistance with basic needs like bathing. Subsequently, after Mr. Hugger was

23 hospitalized with pneumonia, Sparrow Hospital arranged temporarily for additional services,

24 including assistance with bathing, but could not guarantee how long those services would continue

25 to be provided. Because Ms. Cook is unable to lift Mr. Hugger and bathe him, Ms. Cook might be

26 forced to place Mr. Hugger in a nursing home for his last days when his temporary services are

27 discontinued.

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1

36. Plaintiff Terrell King is a 29-year-old resident of Madonna Nursing Home in Detroit

2 whose spinal cord was severed as a result of a football injury in 1992. Mr. King entered the nursing

3 home seven years ago to spare his mother the burden of caring for him.

4

37. Mr. King is essentially paralyzed from the neck down, although he has limited range

5 of motion in his arms. Mr. King uses a power wheelchair for ambulation.

6

38. A lifelong resident ofthe City of Detroit, Mr. King regularly leaves the nursing home

7 to visit with family and friends and to attend social activities in the community. Mr. King

8 desperately seeks to move out of the nursing home so that he can enjoy a more normal and integrated

9 lifestyle, spend more time with people his own age, and pursue an education.

10

39. Mr. King has contacted the Defendants' waiver agent more than once and as recently

11 as February 4, 2002. On that date, he encountered a telephone recording which asked him to leave a

12 message. He did so and asked that he be contacted concerning the availability of a slot in the waiver

13 program. To date, Mr. King has not heard back from Defendants' waiver agent.

14

40. Mr. King's caseworker at the Great Lakes Center for Independent Living believes he

15 can find an appropriate apartment for Mr. King in Detroit and that Mr. King would be able to live

16 independently ifhe had waiver services to help him with basic care, food preparation, and other

17 activities of daily living. Without the services of the Home and Community Based Waiver Program,

18 however, Mr. King will be forced to remain in the nursing home, surrounded by many individuals

19 who are decades older than he is and who do not share his interests or participate in similar activities.

20

41. Plaintiff Georgette Kraft is an 81-year-old woman who resides in a nursing home in

21 Riverview, Michigan and has lived there for more than two years. Ms. Kraft lives in a nursing home

22 so that she may receive long-term care services she needs to survive. Ms. Kraft could live in her

23 apartment with her husband, where she could be provided with long-term care services through the

24 Home and Community Based Waiver Program.

25

42. Ms. Kraft and her husband, Roy Kraft, have had a long and happy marriage. It is

26 their mutual hope that they will be able to spend their remaining days together in their apartment.

27

43. Mr. Kraft comes to the nursing home to provide services to his wife on an almost

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1 daily basis. He provides for her what the nursing home cannot or will not provide. He provides her

2 the type of personal attention and loving care that only a family member can provide.

3

44. Georgette Kraft's son, David Kraft, contacted a local waiver provider in an attempt to

4 obtain services for his mother but was informed there were no waiver slots available. Absent those

5 waiver services, Mr. Kraft is unable to care for his wife in their apartment. With the provision of

6 those services, Mrs. Kraft can return to her home and live with her husband.

7

45. Plaintiff Dennis Lowe is a 42-year-old resident of Rochester Hills, Michigan who

8 resides in an assisted living facility. Mr. Lowe has a cognitive impairment and a seizure disorder

9 that are the result of a traumatic brain injury. He lives in his own apartment which he has furnished

10 and which he pays for out of his disability income.

11

46. Due to his disability, Mr. Lowe requires assistance with certain activities of daily

12 living, including showering, shaving and, occasionally, dressing. Mr. Lowe also requires assistance

13 with meal reminders and with the dispensing of medications.

14

47. Each of those services that Mr. Lowe requires can and would be paid for by the Home

15 and Community Based Waiver. However, the waiver agent that was contacted by Mr. Lowe's sister,

16 Etta Dahlen, of Royal Oak, Michigan, informed her that no waiver slots were available and thus Mr.

17 Lowe cannot be admitted to the Waiver Program. Absent these services through the Home and

18 Community Based Waiver Program, Mr. Lowe will be forced to enter a nursing home.

19

48. Plaintiff Evelyn G. Wright is an 82-year-old resident oflrons, Michigan, a rural

20 community. Ms. Wright has Organic Brain Syndrome and severe arthritis.

21

49. Because of her cognitive impairments, Ms. Wright has significant difficulty in

22 managing her medication and requires assistance to help her with this task. She also requires

23 assistance with the activities of daily living and with cleaning and maintaining her household.

24

50. Ms. Wright is a proud and independent woman. She has a true horror of

25 institutionalization because of the trauma she suffered when she was institutionalized as a young girl

26 in a home for children. Entering a nursing home now would greatly diminish the quality of her life,

27 separate her from friends and family, and rob her of her independence.

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1

51. Ms. Wright has been evaluated by the Defendants' local waiver agent, the Area

2 Agency on Aging of West Michigan. She was found to be eligible for services under the Home and

3 Community Based Waiver Program. However, the waiver agent was unable to provide those

4 services, due to the actions of Defendants in reducing funding to the program.

5

52. Absent waiver services, Ms. Wright will continue to rely upon the assistance ofher

6 son, who himself has a disability, and her daughter-in-law, Barbara Mayzes. However, her son and

7 daughter-in-law do not have the resources to provide the complete array of services that Ms. Wright

8 requires to ensure a high quality of life and to ensure her safety while at home.

9 B. The Importance of Community Integration

10

53. People forced to accept long term care in an institutional setting experience separation

11 from family, friends, and familiar surroundings and a significant loss of privacy. They may also

12 experience difficulty adjusting to new environments, depression, loneliness, boredom, and physical

13 and mental deterioration.

14

54. In 1990, when enacting the ADA, Congress expressly recognized that "historically,

15 society has tended to isolate and segregate individuals with disabilities, and despite some

16 improvements, such forms of discrimination against individuals with disabilities continue to be a

17 serious and pervasive social problem." 42 U.S.C. § 12101(a)(2).

18

55. The Supreme Court has expressly recognized that "unjustified institutional isolation

19 of persons with disabilities is a form of discrimination" in violation of the ADA. Olmstead v. L. C. ,

20 ex. Rel. Zimring, 119 S.Ct. 2176,2187 (1999).

21

56. On January 10, 2001, the U.S. Department of Health and Human Services, in a letter

22 to State Medicaid directors, identified the Home and Community Based Waiver Program as a

23 primary vehicle for states to satisfy their obligations pursuant to the Olmstead decision.

24

57. On June 18, 2001, President George W. Bush issued an Executive Order asserting

25 that the United States is committed to community-based alternatives for individuals with disabilities,

26 that unjustified isolation or segregation of qualified individuals with disabilities through

27 institutionalization is a form of disability-based discrimination prohibited by Title II of the

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1 Americans with Disabilities Act, and that the federal government must assist States to implement

2 swiftly the Olmstead decision "so as to help ensure that all Americans have the opportunity to live

3 close to their families and friends, to live more independently,"... and to participate in community

4 life." Exec. Order No. 13217,66 Fed Reg. 33155 (June 18, 2001).

5

58. The Michigan legislature long ago recognized the importance ofthe Home and

6 Community Based Waiver Program by codifying a requirement in 1988 that the State make the

7 program available to individuals who would otherwise require institutional care. See MCL

8 400.109c.

9

59. Unlike the vast majority of states, Michigan has not adopted a plan to comply with

10 the Olmstead decision and has engaged in only minimal implementation of initiatives that would

11 hasten community integration or reduce unnecessary institutionalization. In fact, in addition to

12 reducing funding for the waiver program for the current fiscal year, as more fully set forth below,

13 paragraphs 85-88, infra, as of December 12,2001, the Michigan Department of Community Health

14 has instructed waiver providers that they may no longer seek additional waiver funding to assist

15 residents transitioning out of nursing homes into community settings. See Appendix 1,

16 Memorandum from Kathie Black, Michigan Department of Community Health to MI Choice Waiver

17 Executive Directors, MI Choice Waiver Program Managers, Elizabeth O'Hara and Ellen Weaver,

18 Michigan Association of Centers for Independent Living.

19

60. Up until this point, the waiver program has been the State's primary vehicle for

20 furthering community integration. The effective closure of the program to new applicants including

21 eligible individuals who seek to return to the community from nursing homes means that the state is

22 moving backwards, not forwards, in pursuing community integration and that individuals with

23 disabilities, like the individual plaintiffs and the individuals who are represented by or members of

24 the organizational plaintiff groups, face continued discrimination and despair.

25 C. The Medicaid Home and Community Based Waiver Program

26

1. Overview

27

61. The Medicaid program is a joint federal-state program in which states may choose to

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1 participate and is designed to provide medical care to indigent populations. 42 U.S.C. §1396 et seq.

2

62. Michigan, like all states, has chosen to participate in Medicaid.

3

63. The federal government provides the majority of funding for state Medicaid

4 programs.

5

64. All states must designate a single state agency to administer the Medicaid program.

6 MDCH is the agency so designated by the state of Michigan. MCL 400.105.

7

65. States must provide a certain array of services to designated indigent populations

8 pursuant to federal law, 42 U.S.C. § 1396(a)(l0), but may also serve additional populations and/or

9 provide optional coverage for additional medical services.

10

66. Mandatory services include, inter alia, nursing facility services for eligible

11 individuals requiring long term care. 42 U.S.C. § 1396a(a)(l O)(A).

12

67. Pursuant to 42 U.S.C.§1396n, however, states may seek a waiver from the federal

13 Centers for Medicare and Medicaid Services (CMS) to pay for long term care services to eligible

14 individuals in the community. This program is commonly known as the Home and Community

15 Based Waiver program.

16

2. Administration of the Michigan Waiver Program

17

68. In 1992, the Michigan Medicaid Program received approval from the federal

18 government to implement in 11 counties a Home and Community Based Waiver program for elderly

19 and disabled individuals who were determined to be financially eligible for Medicaid and medically

20 eligible for long term care services.

21

69. Services available under the waiver program include homemaker services, adult day

22 care, transportation, personal care, personal emergency response systems, counseling, environmental

23 modifications, respite services, chore services, private duty nursing, medical supplies and equipment

24 not covered by the State Medicaid plan, and training in a variety of independent living skills. See 42

25 C.F.R. 440.180; MCL 400.109c.

26

70. Waiver services are provided by designated regional waiver agents including area

27 agencies on aging and other nonprofit organizations. These organizations enter into contracts with

28

14

Case 5:02-cv-00044-DWM Doc #1 Filed 03/19/02 Page 15 of 23 Page ID#15

1 MDCH that set forth how the waiver program is to be administered and how the waiver agent will be

2 reimbursed.

3

71. These designated waiver agents accept applications for the waiver program and

4 screen applicants to determine their medical eligibility and appropriateness for waiver services. For

5 individuals found eligible for waiver services, the waiver agents develop a plan of care and oversee

6 the delivery of services.

7

72. The MDCH has committed in its waiver application to the federal government, see

8 paragraphs 74-78 infra, that it will be not limit the cost of services that can be provided to an

9 individual waiver client. However, in FY 2001, the average per diem cost was less $42 per waiver

10 client.

11

73. Until October 1, 2001, each waiver agent was allotted a specific number ofthe 15,000

12 waiver slots statewide. The allocation of these slots was based on a fiscal year starting on October 1

13 and ending on September 30.

14

3. Michigan's Federal Waiver Application

15

74. In 1995, MDCH submitted, and the federal government approved, a five-year waiver

16 plan.

17

75. On March 2, 2000, the MDCH received approval from CMS to expand its waiver to

18 serve 15,000 people statewide retroactive to October 1, 1999.

19

76. The terms ofthe waiver program approved by the federal government are set forth in

20 the state's waiver application and in subsequent amendments contained in correspondence between

21 the state and the federal government concerning the program.

22

78. The 1995 waiver application granted by the federal government expired in 2000.

23 MDCH submitted a renewal application to continue the waiver program for a period of five years for

24 15,000 unduplicated individuals per year. Subsequently, the State sought, and CMS has approved,

25 multiple 90 day extensions of the terms of the 1995 waiver to permit continued services to 15,000

26 eligible individuals during the fiscal year.

27

28

15

Case 5:02-cv-00044-DWM Doc #1 Filed 03/19/02 Page 16 of 23 Page ID#16

1

4. The Demand for Waiver Services

2

79. Despite the requirements of federal law, the MDCH has in place no procedure for

3 advising individuals eligible for Medicaid-funded long term care services of the availability of

4 services under the waiver program.

5

80. Despite this lack of a procedure to ensure that individuals entering nursing homes are

6 advised of their right to seek community based services under the waiver, waiver agents generally

7 filled all oftheir allocated slots long before September 30.

8

81. Because waiver agents were specifically directed by MDCH not to maintain waiting

9 lists, the full extent of the unmet community need for waiver services is not known nor is there any

10 mechanism to determine how long people who seek waiver services wait before they receive them.

11 Upon information and belief, however, hundreds of people with disabilities seeking waiver services

12 to avoid institutionalization were formally or informally denied those services in previous fiscal

13 years once all slots were filled.

14

82. Despite being instructed not to maintain waiting lists, upon information and belief,

15 numerous waiver providers have recently begun to maintain lists of individuals who are seeking

16 admission to the waiver program and who they determine in telephone screens to be eligible for

17 waiver services. For example, since September 1, 2001, even though many referral sources know

18 that the program is essentially closed and have therefore stopped making referrals, the Area Agency

19 on Aging in Lansing has identified and had to turn away in excess of 450 people who are seeking

20 access to waiver services and who appear eligible for those services. See Appendix 2, Affidavit of

21 Marion Owen, Executive Director, Tri-County Office on Aging.

22

5. Funding for the Waiver Program and Reduction in Number of Clients

Approved for the Waiver Program effective October 1, 2001.

23

83. In authorizing the budget for the MDCH, the Michigan Legislature allocated in

24

excess of $1.2 billion for the provision of nursing home and personal care services and enabled the

25

Department to tap these funds to support the waiver program "in lieu of nursing home services for

26

individuals seeking long term care services." 2001 PA 60, §1681.

27

28

16

Case 5:02-cv-00044-DWM Doc #1 Filed 03/19/02 Page 17 of 23 Page ID#17

1

84. In FY 2001, upon information and belief, the Department expended $146 million on

2 the waiver program. These funds were distributed to waiver agents based on the number of waiver

3 clients they served and the costs waiver agents incurred in providing services to those clients.

4

85. In a letter to the Michigan House of Representatives dated July 23, 2001 regarding

5 FY 2002 appropriations to the Department of Community Mental Health ("MDCH"), Governor

6 Engler stated that he had "instructed the Department [of Community Health] to reduce the number of 7 participants in the [waiver} program..... " See Appendix 3.

8

86. In September, 2001, the Department announced it intended to reduce spending on the

9 program to $126 million and may in fact, expend even less than that in this fiscal year.

10

87. Along with the reduction in funding, MDCH announced a new funding formula

11 which eliminated the Department's prior practice of allocating a designated number of "slots" to

12 each waiver provider. Instead, waiver agents were offered a fixed amount and were instructed to use

13 these funds to support FY 2001 waiver clients who would continue to receive services in the new

14 fiscal year ("carry-over clients") and any new clients the waiver providers chose to admit to the

15 program.' However, upon information and belief, the funding offered to waiver providers

16 constituted a 20 to 30 percent decrease from the funding they received in FY 2001. Affidavit of

17 Marion Owen, Appendix 2.

18

19

Upon information and belief, the Department determined the amount of funding

20 allocated to each waiver agent this fiscal year by determining the number ofwaiver

clients being

21 served by each provider on a "snapshot date" in September, 2001 and multiplying that number by

22 270 (the number of days the Department determined

represented the average length of

23 stay in the waiver program) and by the average amount of money per day that waiver agents were

24 previously entitled to receive for providing services to waiver clients. Waiver agents were subsequently

25 informed that they will be eligible for a contract amendment to obtain slightly more funding for

26 individuals who 27 insufficient to 28

remain in the program more than 270 days, but this additional funding is enable waiver agents to admit new applicants into the program.
17

Case 5:02-cv-00044-DWM Doc #1 Filed 03/19/02 Page 18 of 23 Page ID#18

1

88. Most waiver providers have found the fixed payments to be insufficient to provide

2 services to current clients who are legally entitled to continue receiving services as long as they

3 remain medically and financially eligible for the program. As a result of the reduction in funding,

4 waiver agents have been forced to close the waiver program to all but a handful of all new

5 applicants, thus reducing the number of participants in the program in accordance with Defendant

6 Engler's specific directive. Affidavit of Marion Owen, Appendix 2.

7

V. Claims

8 Count I -- Title XIX of the Social Security Act: Failure to Implement the State Medicaid Plan

9

89. Plaintiffs restate and reallege paragraphs 1-88.

10

90. Individual clients are each eligible for and have applied for Medicaid funded Home

11 and Community Based Waiver Services.

12

91. Title XIX provides that the State must identify the number of unduplicated

13 beneficiaries to which it intends to provide Home and Community Based Waiver Services in each

14 year. 42 C.F.R. § 441.303(£)(6). This number is both a ceiling and a floor on the number of persons

15 to be served.

16

92. In Michigan's Home and Community Based Waiver proposal, which was approved

17 by CMS and under which MDCH continues to operate, MDCH committed to provide waiver

18 services to 15,000 persons each fiscal year since October 1, 1999.

19

93. Title XIX of the Social Security Act provides that Home and Community Based

20 Waiver Services approved by CMS are included as "medical assistance" under the state Medicaid

21 plan. 42 U.S.C. § 1396n(c)(1). Thus, waiver services approved for this state are part of the "medical

22 assistance" described in Michigan's state plan.

23

94. Title XIX also provided that the state plan must provide for making "medical

24 assistance" available to eligible individuals, including persons eligible for waiver services. See 42

25 U.S.C. § 1396a(10)(A)(ii)(VI).

26

95. However, instead of making the waiver program available to 15,000 persons each

27 year as set forth in the waiver application approved by CMS, the MDCH is administering and

28

18

Case 5:02-cv-00044-DWM Doc #1 Filed 03/19/02 Page 19 of 23 Page ID#19

1 funding the waiver program in such a manner that, upon information and belief, fewer than 11,000

2 people will actually be served in the waiver program during this fiscal year. Affidavit of Marion

3 Owen, Appendix 2.

4

96. MDCH has failed to implement the waiver and, therefore, has failed to provide

5 medical assistance under the State Medicaid plan in violation of Title XIX.

6 Count II -- Title XIX of the Social Security Act: Failure to Furnish Medical Assistance with Reasonable Promptness
7 97. Plaintiffs restate and reallege paragraphs 1-96.
8 98. Title XIX requires that the State plan provide "[medical] assistance shall be furnished
9 with reasonable promptness to all eligible individuals." 42 U.S.C. § 1396a(a)(8). This means, inter
10 alia, that MDCH must furnish medical assistance promptly without any delay caused by the
11
agency's administrative procedures. 42 C.P.R. § 435.930(a).
12 99. The services authorized by the home and community based waiver are "medical
13 assistance" services and MDCH has failed to furnish such services to Plaintiffs with reasonable
14 promptness in violation of Title XIX.
15 Count III -- Title XIX of the Social Security Act: Failure to Allow Applications
16 100. Plaintiffs restate and reallege paragraphs 1-99.
17 101. Title XIX requires that the state plan shall "provide that all individuals wishing to
18 make application for medical assistance under the plan shall have the opportunity to do so...." 42
19 U.S.C. § 1396a(a)(8); 42 C.F.R. § 435.906.
20 102. The services authorized by the home and community based waiver are "medical
21 assistance" services and MDCH has failed to provide the opportunity for some of the individual
22 Plaintiffs to apply for those services or to complete the application process, in violation of Title XIX.
23 Count IV-- Title XIX of the Social Security Act: Violation of Waiver Assurances
24 103. Plaintiffs restate and reallege Paragraphs 1-102.
25 104. Title XIX requires that a state must provide assurances that, inter alia, individuals
26 who may be eligible for home and community based services under the waiver program will be
27

28

19

Case 5:02-cv-00044-DWM Doc #1 Filed 03/19/02 Page 20 of 23 Page ID#20

1 advised of the availability of these services as an alternative to nursing home placement. 42 U.S.C.

2 §1396n(c)(2); 42 CFR §§ 441.302(c)-(d).

3

105. Defendants have violated Title XIX by failing to inform individuals eligible for

4 services under the waiver program of the availability of those services.

5

Count V --Violations of the Americans with Disabilities Act: Unnecessary Segregation

6

106. Plaintiffs restate and reallege Paragraphs 1 through 105.

7

107. The individual Plaintiffs are qualified individuals with disabilities because they have

8 physical and, in some cases, mental impairments that substantially limit one or more major life

9 activities and are qualified to receive long term care services funded by MDCH. 42 U.S.C. §

10 12102(2) and 12131(2); 29 U.S.C. §705(20)(B).

11

108. The individual Plaintiffs are protected by the Americans with Disabilities Act

12 ("ADA"), 42 U.S.C. 12132.

13

109. MDCH is a public entity subject to the ADA. 42 U.S.C. 12131(1).

14

110. The individual Plaintiffs can, with appropriate supports and services, live in

15 community-based programs. For these individuals, segregation and institutionalization in nursing

16 homes is unjustified and unnecessary.

17

111. Defendants violate Title II of the ADA by failing to provide services to Plaintiffs in

18 the most integrated setting appropriate to their needs. 42 U.S.C. 12132; 28 C.F.R. § 35.130(b).

19

112. Providing services to the individual Plaintiffs in the most integrated setting

20 appropriate to their needs rather than in a segregated institution would not result in a fundamental

21 alteration of the programs provided by MDCH.

22

113. Defendants have developed no plan to ensure that the individual Plaintiffs are

23 provided with services in the most integrated setting appropriate to their needs.

24 Count VI-- Violation of the Americans with Disabilities Act: Discriminatory Methods of Administration
25 114. Plaintiffs restate and reallege Paragraphs 1 through 113.
26 115. Defendants have administered long term care services funded by Title XIX in such a
27

28

20

Case 5:02-cv-00044-DWM Doc #1 Filed 03/19/02 Page 21 of 23 Page ID#21

1 manner as to force the individual Plaintiffs to be unnecessarily segregated or at risk of unnecessary

2 segregation.

3

116. Defendants are therefore violating Title II ofthe ADA by using methods of

4 administration that have the effect of subjecting individual Plaintiffs to discrimination on the basis of

5 disability. 42 U.S.C.§ 12132; 28 C.P.R. §35.130(b)(3).

6

Count VII --Violation of the Rehabilitation Act: Unnecessary Segregation

7

117. Plaintiffs restate and reallege Paragraphs 1 through 116.

8

118. The individual Plaintiffs are qualified individuals with disabilities because they have

9 physical and, in some cases, mental impairments that substantially limit one or more major life

10 activities and are qualified to receive long term care services funded by MDCH. 29 U.S.C.

11 §705(20)(B).

12

119. The individual Plaintiffs are protected by Section 504 of the Rehabilitation Act, 29

13 U.S.C. §794(a).

14

120. MDCH receives federal financial assistance through, inter alia, the Medicaid

15 Program and, is therefore subject to Section 504 of the Rehabilitation Act, 29 U.S.C. §§794(a) and

16 794(b)(1)(A).

17

121. The individual Plaintiffs can, with appropriate supports and services, live in

18 community-based programs. For these individuals, segregation and institutionalization in nursing

19 homes is unjustified and unnecessary.

20

122. Defendants violate Section 504 by failing to provide services to the individual

21 Plaintiffs in the most integrated setting appropriate to their needs. 29 U.S.C. §794(a); 28 C.P.R. §

22 41.51(d); 45 C.P.R. §84.4(b)(2).

23

123. Providing services to the individual Plaintiffs in the most integrated setting

24 appropriate to their needs rather than in a segregated institution would not result in a fundamental

25 alteration of the programs provided by MDCH.

26

27

28

21

Case 5:02-cv-00044-DWM Doc #1 Filed 03/19/02 Page 22 of 23 Page ID#22

1

Count VIII -- MDCH Violation of the Rehabilitation Act: Discriminatory Methods of

Administration

2

124. Plaintiffs restate Paragraphs 1 through 123.

3

125. Defendants have administered long term care services funded by Title XIX in such a

4

manner as to force the individual Plaintiffs to be unnecessarily segregated or at risk of unnecessary

5

segregation.

6

126. Defendants violate Section 504 of the Rehabilitation Act by using methods of

7

administration that have the effect of subjecting the individual Plaintiffs to discrimination on the

8

basis of disability. 29 U.S.C. §794(a); 28 C.F.R. §41.51(b); 45 C.F.R. §84.4(b)(4)(1).

9

RELIEF REQUESTED

10

WHEREFORE, Plaintiffs request that this Court:

11

A. Assume jurisdiction over this case;

12

B. Issue declaratory relief that Defendants have violated Plaintiffs' rights under the

13

Medicaid Act, Title II of the ADA, and Section 504 of the Rehabilitation Act;

14

C. Issue appropriate preliminary and permanent injunctive relief to enjoin defendants

15

from continuing to violate the Medicaid Act, Title II ofthe ADA, and Section 504 of

16

the Rehabilitation Act and to require defendants to implement the Home and

17

Community Based Waiver Program fully and immediately.

18

D. Order Defendants to immediately:

19

(1) Admit the individual Plaintiffs into the Home and Community Based Waiver

20

Program and to fund for them all medically necessary and appropriate services available under the

21

wmver;

22

(2) Notify all individuals who are currently eligible for or who apply for Medicaid-

23

funded long term care services ofthe existence ofthe Home and Community Based Waiver

24

Program.

25

(3) Immediately accept and process to completion applications for participation in the

26

Home and Community Based Waiver Program.

27

28

22

Case 5:02-cv-00044-DWM Doc #1 Filed 03/19/02 Page 23 of 23 Page ID#23

1

(4) For each eligible applicant for the Home and Community Based Waiver Program,

2 fund all medically necessary and appropriate services available under the waiver for no fewer than

3 15,000 individuals per year.

4

(5) Maintain waiting lists for all individuals who appear to be eligible for the waiver

5 program.

6

(6) Implement a plan to provide with reasonable promptness home and community

7 based waiver services or other comparable community-based services to individuals on the waiting

8 list to avoid unnecessary institutionalization or continued unnecessary segregation.

9

E. Issue such other injunctive relief as shall be necessary to enjoin defendants from

10 continuing to violate the individual Plaintiffs' rights to community-based services pursuant to the

11 Medicaid Act, the ADA, and § 504 ofthe Rehabilitation Act.

12

F. Award Plaintiffs any additional relief as may be just, proper, and equitable.

13

G. Award Plaintiffs reasonable litigation expenses, costs, and attorneys fees, pursuant to 29

14 U.S.C. §794a(b), 42 U.S.C. §1988, and 42 U.S.C.§ 12205.2

15

16

17

18

19

20

21

22

1 Hirschel (P57623)

23

Michigan Poverty Law Program

611 Church St., Suite 4A

24

Ann Arbor, MI 48104

(734) 998-6100

25

Attorneys for Plaintiffs

26

27

2 Michigan Poverty Law Program makes no claim for attorney fees in this action.

28

23

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From: To:

Linda K. Holcomb i:macllellz@match.org; i:macllellen@matctl.org; Ml Choice Waiver Group; waiver

executive directors

Date:

Wed. Dec 12, 2001 3:42 PM

Subject:

Nursing Home Transitions to Ml Choice Waiver Services

MEMORANDUM

TO:

Ml Choice Waiver Executive Directors

Ml Choice Waiver Program Managers

Elizabeth O'Hara and Ellen Weaver.

Michigan Association of Centers of Independent Uving

FROM:

Kathie Black

RE:

Nursing Home Transitions to Ml Choice Waiver Services

CC:

Brenda Fink, Michael Daeschlein, Eva Duckworth, Elizabeth Gallagher,

Vicky Jenks, Martha Misener, Jim Schwartz, Mary Gear, Deanna Mitchell,

Bill Prince

DATE:

December 12, 2001

This is to confirm the announcement made yesterday at the training meeting for Ml Choice Waiver Agents that MDCH will stop authorizing additional funds to waiver agents for individuals transitionlng out
of nursing facilities. This Is effectively immediately. We are hopeful that we will be able to continue additional resource support for individuals who can return to the community and need enrollment in the waiver in the event of nursing facility closures.

There are a number or referrals made prior to 12-12·01 in process. Planning for these Individuals will continue. Referrals made to MOCH prior to 12·12-01 will not be affected by this change.

We continue to appreciate your commitment to serving those Individuals already enrolled during this transition period. If you have questions about this matter, please feel free to contact your contract manager or me at 517-241·8026.

CC:

Black, Kathie; Oaeschleln. Michael: Duckworth, Eva; Fink, Brenda; Gallagher,

Elizabeth A.; Gear, Mary; JENKS, VICKI; Misener, Martha: Mitchell, Deanna L.; Prince, Bill;

Schwartz, Jim

Z:O"d

tL08 L88 Lt~

Case 5:02-cv-00044-DWM Doc #1-3 Filed 03/19/02 Page 1 of 2 Page ID#25
Affidavit of Marion Owen. Executive Director of the Tri-County Office on Aging
Marion Owen, being duly sworn, deposes and says:
1. I am the Executive Director of the Tri-County Office on Aging, an Area Agency on Aging located in Lansing, Michigan.
2. The Tri-County Office on Aging is a waiver provider in Michigan's Home and Community Based Waiver Program
3. Since 1992, I have served as the Director ofthe Waiver Program in the Tri-County Office on Aging.
4. Until October I, 200I, the Michigan Department of Community Health (MDCH) allotted a specific number of waiver "slots" to each waiver provider.
5. As a waiver provider, we were permitted to fill all the slots that had been allocated to us as long as the average daily aggregate cost of providing services to the waiver clients in those slots did not exceeq an amount determined by the state. Thus, we knew that our total budget for the waiver program, not including any additional funds the state agreed to provide for especially expensive cases, was the average daily amount set by the state multiplied by the number of days waiver clients in our slots remained in the program.
6. As of October 1, 2001, the beginning of the new State fiscal year, MDCH changed the funding formula for the waiver program. In FY 2002, MDCH offered the Tri-County Office on Aging a contract for $6,937,561, an amount that represented a 25 percent less than the $9,202,230 MDCH paid the agency for waiver services in FY 2001.
7. I understand from my contacts with staff at other Area Agencies on Aging that in FY 2002, they were also subject to substantial cuts, generally in excess of 20 percent, over the funding provided by MDCH for the waiver program in previous years.
8. As of September 30, 200I, the Tri-County Office on Aging was providing services to 583 individuals in the waiver program and was obligated to continue to serve these "carry-over clients" in the new fiscal year as long as the clients remained financially and medically eligible for the program.
9. Because of the reduction in funding for the waiver program for FY 2002, the TriCounty Office on Aging was not able to accept any new waiver clients into the program after October I, 2000.
I0. All the funding the Tri-County Office on Aging receives for the waiver program for this fiscal year will be needed to pay for services for existing clients. The agency fears that the
App. :2

Case 5:02-cv-00044-DWM Doc #1-3 Filed 03/19/02 Page 2 of 2 Page ID#26

funds may not be sufficient to meet current clients' needs and is, in fact, already spending more than its target aggregate daily average on waiver services.
II. I understand that since October I, 200 I, only a very small number of new clients have been admitted into the waiver program across the state. Moreover, I understand that fewer than II ,000 clients are being served statewide this fiscal year.
I2. Since the inception of the waiver program, waiver providers were specifically directed by the Michigan Department of Community Health not to maintain waiting lists for waiver applicants. However, since September I, 200I, the Tri-County Office on Aging has been contacted by more than 459 people who were seeking waiver services and who had to be turned away because the agency had insufficient funds to admit additional waiver clients.
13. Because many people knew that the Tri-County Office on Aging was unable to accept any new waiver clients this fiscal year, organizations including hospitals, health care providers and others that previously referred clients to the waiver program ceased doing so and the number of inquiries we received was far lower than I would have anticipated if we were able to provide services to new applicants.
I4. This declaration is based upon my personal knowledge, and if I am subpoenaed as a witness, I can testify competently to the facts contained herein.
I declare that the statements above are true and correct to the best of my knowledge, information and belief.

Marion Owen, Executive Director,

Tri-County Office on Aging

~ '0!~,\ this~ Subscribed and sworn to before me

day of

2001~1(

My Commission expires on:

, ,,. ...,_ f

'1• •" .. - ....

I

e..-~~·,ftU"\~O•••O'fc--· "<f'~f'ttr•:

.... •

.

• •

'.

Case 5:02-cv-00044-DWM Doc #1-4 Filed 03/19/02 Page 1 of 3 Page ID#27

.JOHN CN(;I.CR GOVFRNOH

S·rA1'11: 01·· Mu:uu.;AN
OFF'ICt 01' ,.lit C:OVI:I'INOI't
I.ANSJNC;
July 2:-l, 2001

Michigan House of Reprt-.slmt.ntivcs State Capitol Building Lansi11g, ~1ichigan 48900
I.~u.dics und Gcmt1cmcn:
Today I have f)igncd gnrollecl House Bill 4254, tho Fiscal Year 2002 Department of Community Health appropriHt.ion. However, I am rchu·ning it to you becauso (')fitoms of which I disapprove, pursuant to Article V, Section 19, of the Michigan Constitution. The specific items vd.ot!d nre eontaiut:Jd within the RttRcb~d copy of the bill that has bean filed wit.h tho Secretary nf Stnte.
rl'hi& bill apprnpriAt.~s over $8.6 billion, on amount that l·oprc:scnts a
significant co1nmitmcmt io the hc~rilth ofMichignn':; cit.ir.cn~. Highlights of the bill include:
• '!'he appropriation of over $5.6 billion io ~uppmt the Medicaid pro~nm1, which provides health car£! for 1. l million low i11come residents of Michigan. I commend you foJ' pl·otccting this P.S$ent.lal progrnm from budgetary reductions. even in thiR r.onslraiuocl or.onomy.
• 'Jlhc provision of nearly $2 billion to support ment.nl health and suhstnncc obusr. services. The continuanr.e ofthis generous level of funding to
Community Mental IleaJth Service !J1·ograms will support quality enrc for
those must in m~ccl.
• The Department of Communjt.y Health was eivcm tmpl·eccdttntP.d nl~xibility t.o develop a plrm to curtail f'l'C!:~cripiion drug cost increa!;(!5. My eon} is to design ph:irmacy options that nnr.onrago "baat prad:it:c" drug utili?:ation and ~till obtain the saviugs ttssumcd in this bil1.
• A rate increase for thr: Children's Waiver Proeram t.hAt will bring it~ rat.tlS into alignment. with thm;n pnid to otlw:r MurHc<iid pruvidc!z·s.

"4 !P '

•

4

;

; pj

. ;

J'F. <

.. ., , ., :. : l,ot I

'-·~

f ) Case 5:02-cv-00044-DWM Doc #1-4 Filed 03/19/02 Page 2 of 3 Page ID#28

(

Micl1isan House ofRepresenbttivus P~tge 2 July 23, 2001
• The apprnpriution ufnenrly $000 milliou for oth~r public henJth nnd Elgjn!{ prognnns.

Severol upproprhttiuns and policies included in this bill are iucon:;istent with my rccomrnendnt.ionF.I ann I hAve directed the Dep~rLmt!nt. of Community Health tu address them in the following mnnnr.r:
• Summer li'ood Servieo Program - I am instructing Uu~ lJcpnrtmont to delay implen1cntntion of this federal progr·Hm until it c::m bo dotermincJ that the fP.deral eovcrnmcnt will provide sufficient funding to supJJm·t the administrative co~ts of the progrrnn.
• Homt" ~:tnd Community Based Wnivcr Services- 'flus bill includm;
htnguage, Section 1689, which will incren~=:e per J·ecipicnt costs, but it foil$ to provide additional funding to finAnce these costs. 1 urge the
l ..op,is1aturo to rescind tlus policy. In tho int.crim, J have instructed the~
Dcpurbncnt to reduce the numhe1· ofparticipunt.l:i in the program to insure~ thAt spending does not exceod thr. $]26 miJlion appropriation.
As members of the l.egisJAture are ttware, the State ofMir.hignn is now ~xpcricncing n period of constrained revenue. More than ov~r. we l1E!Cd to LH cortain f;hat wu focus AvailabJe fundill&: 011 high priority progrnms that efficiently and effectively utilize taxpayar resources. Whiln mAny of the IWW initiativc!S you included in this bill have morit, Jam unwilling to begin new initiatives in this difficult economic pel"iod. Accordinrrly, I have found it neccssnry to voto tl1e itt~m~ discussed helow.
I havo vetoed the following nppt·opriatinnR beer-mE.'~ the-y inappropriHt.ely restrid~ funding t.o saleet.ed pt·ovideJ·s OJ" ~pc:dfir. oreRs of the stat«:~: Section 906. Sf:ction 1021, Sc.,ction 1023, Sectiou 1121. Section l 1.27, nnd Section 220~l
I am vetoing the foHowing AppropriBticms becrm~r. t.hPy devintc Ull:iCcept.c,IJI:v· from my recommendation and divert funding from higher priority initiativ~s: thL~ Senior Olympics line item, Section 419, Section 1008, Section 1115, Sectirm l 125, the J~arly Childhood Collaborative Secondary Pnwention lin~ it.t":!lll (nnd nssociat.ctl. boilcrpl ntc in Scdion 112G), nncl s~ctiuu Jn88.

Case 5:02-cv-00044-DWM Doc #1-4 Filed 03/19/02 Page 3 of 3 Page ID#29
Michigrm House of Rcprescutftt.ivr.s Pagc3 July 23, 2001
I have vetoed Sccl.inn 1686, which allow~i nursing homes t.o reduce }jcenr-.~d bods anrl mHintnin eliminated spacn ~ts an nlJownb1c Medicaid co~t.. hF:c:uus" it is
unlikely thnt this policy will qualify for federal mat.ching funds. However, 1 am instructing the Depurtment. to convene n worJtgroup with the indu~try to formulata a policy that. addres.ses the industJ·.v's bed sur-J>lus pruhlnm r-tnd eompli~s with federal regulations.
I bavtl vetoed funding for rofurbishirJg Uu: Beaver Island m~dkKI clinir. thRt is inc1udcd in this bill in Section 1644. Fiscal constraints ruquire thnt wo focu:; our limited resourcft& on the Mackinac h:lnnd upgrade, a facility with u much g.reat.m· patient load. I will, however, consicier supporting funding for the Beaver !~lund
clinic in the l<'iscal Yccu· 2003 budgl:i.
Finally, I f.tm vetoing t:lu:s fullowing !nnp,unee sections because they
inappropriatoly plnec rc$tl·ictions ou rt:vcnucs not yet received Ly Uw sbJt.c!: Scc:tion
224 and Section 1124..
While I have found it necessary tn mak~ numerous modific:ations t.o the~ hilJ you sent me, I hnve cont'!urred with the vust. mnjorit.y of your approprilltion acbnns. JappJ·cciat.e the Legislature's coopc~rution in tlH~ devHlopmcnt of the Depa.r·t.mont of Community Hci:tlth's appropriation bill.
Sir •r . e r d y ,
ec: MichigAn StRte Senate The HoilOrable Canrlicr~ Miller

 
 Case 5:02-cv-00044-DWM Doc #30 Filed 12/15/03 Page 1 of 10 Page ID#95

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MICHIGAN

ROBERT EAGER; DORA OATS, through her next friend, Crystal Oats, TERRELL KING; GEORGETTE KRAFT through her husband and next friend, Roy Kraft; DENNIS LOWE, through his guardian, Etta Dahlen; EVELYN G. WRIGHT through her son and next friend, Paul Mayzes; MICHIGAN DISABILITY RIGHTS COALITION; MICHIGAN ASSOCIATION OF CENTERS FOR INDEPENDENT LIVING; MICHIGAN CAMPAIGN FOR QUALITY CARE; and GRAND RAPIDS CENTER FOR INDEPENDENT LIVING,

CASEN0f02~
HON. DAVID W. MCKEAGUE

Plaintiffs, v.

JENNIFER GRANHOLM, in her official capacity as Governor of the State of Michigan, and JANET OLSZEWSKI in her official capacity as Director of the Michigan Department of Community Health,1

Defendants.

Mark A. Cody (P42695) Michigan Protection & Advocacy Service, Inc. 4095 Legacy Parkway, Suite 500 Lansing, MI 48911 (517) 487-1755 Attorney for Plaintiffs
Alison E. Hirschel (P57623) Michigan Poverty Law Program 611 Church Street, Suite 4A Ann Arbor, MI 481 04 (734) 998-6100 Attorney for Plaintiffs

Erica Weiss Marsden (P25911) Michigan Department of Attorney General Social Services Division P.O. Box 30037 Lansing, MI 48909 (517) 373-7700 Attorney for Defendants

1

Pursuant to F.R.Civ. P. 25(d)(l), upon assuming the duties of Governor on January 1, 2003, Governor

Granholm was automatically substituted for former defendant Governor Engler. Upon assuming office as the Director

of the Michigan Department of Community Health, Janet Olszewski was automatically substituted for former defendant

James K. Haveman.

Case 5:02-cv-00044-DWM Doc #30 Filed 12/15/03 Page 2 of 10 Page ID#96
Abraham Singer (P23601) Pepper Hamilton, LLP 100 Renaissance Ctr, Floor 36 Detroit, MI 48243 (313) 393-7382 Attorney for Plaintiffs

STIPULATION FOR SETTLEMENT Now come the parties, by and through their respective attorneys, and hereby stipulate as follows:
I. Introduction 1. The individual named plaintiffs, Robert Eager; Dora Oats, through her next friend Crystal Oats; Terrell King; Georgette Kraft, through her husband and next friend Roy Kraft; Dennis Lowe, through his guardian, Etta Dahlen;2 and Evelyn Wright, through her son and next friend, Paul Mayzes3, and the organizational plaintiffs, Michigan Disability Rights Coalition, Michigan Association of Centers for Independent Living, Michigan Campaign for Quality Care, and Grand Rapids Center for Independent Living4 and Defendants Jennifer Granholm, in her official capacity as Governor of the State ofMichigan,5 and Janet Olszewski,6 in her official capacity as Director of the Michigan Department of Community Health, enter into this Stipulation for Settlement (hereinafter "this Stipulation"). The parties will present this Stipulation to the Court for its approval and entry of an order incorporating the terms of the Stipulation.

2

On June 18, 2003, Etta Dahlen, sister of plaintiff Dennis Lowe, was appointed to succeed John Munger as

Mr. Lowe's guardian by the Oakland County Probate Court.

3

Howard Hugger, one of the original individual plaintiffs in this litigation, died on August I, 2002.

4

Great Lakes Center for Independent Living, one of the original organizational plaintiffs in this litigation,

closed and dissolved on April II, 2003.

5

See note I, supra.

6.

See note I, supra.

2

Case 5:02-cv-00044-DWM Doc #30 Filed 12/15/03 Page 3 of 10 Page ID#97
II. Admission of the Named Plaintiffs to the MI Choice Program 2. As of the date of the signing of this Stipulation, each ofthe named Plaintiffs has been assessed by a local waiver provider and found eligible for services under the MI Choice program or is being assessed. For some named Plaintiffs, plans of care have already been developed and implemented. For other named Plaintiffs, the parties anticipate plans of care will be developed and implemented. In signing this Stipulation, Plaintiffs do not waive any rights or remedies that would otherwise be available to them with respect to their eligibility for services under the MI Choice program or their receipt of services in the program.
III. Definitions As used herein, the following terms are to be given the meanings set forth below: 3. "Centers for Medicare and Medicaid Services (CMS)" is the branch of the United States Department of Health and Human Services charged with the responsibility of the oversight and administration of Medicaid programs, including home and community based waiver programs. 4. "Transition Services" are one-time, set-up expenses that may be paid for by the State and which are incurred to assist an individual in moving from a nursing facility to a home or apartment in the community. Examples of transition services that the Department could choose to provide as authorized waiver services include, but are not limited to: a. Security deposits that are required to obtain a lease on an apartment or home; b. Essential furnishings and moving expenses required to occupy and use a
community domicile; c. Set-up fees or deposits for utility or service access (e.g., telephone, electricity,
heating); d. Health and safety assurances, such as pest eradication, allergen control or one-
3

Case 5:02-cv-00044-DWM Doc #30 Filed 12/15/03 Page 4 of 10 Page ID#98

time cleaning prior to occupancy;

e. Purchase of durable medical equipment.

f.

Case management for coordination and planning of transition services.

5. "Department" means the Michigan Department of Community Health (MDCH) or its

successor agency. The Medical Services Administration within MDCH has been designated as

the single state agency responsible for administering the Michigan Medicaid Program, pursuant

to 42 U.S.C. § 1396a.

6.

"MI Choice Program" means those home and community based services for the elderly

and disabled as well as the administrative and programmatic activities of the state and its waiver

agents which are provided by the State, under the authority of 42 U.S.C. § 1396n and M.C.L.

400.109c, or which may be required ofthe State pursuant to federal regulation, the terms and

conditions of its waiver application, or other authority. As used in this Stipulation, reference to

"MI Choice" also includes any amended or new waiver program for home and community based

services for the elderly or disabled.

7. A "nursing facility" is the type of institution referred to in 42 U.S.C. § 1396r(a) and its

implementing regulations.

8. "Waiver agents" are any and all entities approved by the Department to accept

applications for MI Choice program services, assess applicants for MI Choice program services,

and provide and/or arrange for MI Choice program services.

9.

"Waiver slots" refers to the unduplicated number of individuals that may be served by

Defendants through the MI Choice waiver program in a waiver contract year, in accordance with

the authority granted to the Michigan Department of Community Health by the Centers for

Medicare and Medicaid Services.

4

Case 5:02-cv-00044-DWM Doc #30 Filed 12/15/03 Page 5 of 10 Page ID#99
IV. Waiver Slots for FY03 10. Pursuant to agreement of the parties, MDCH opened MI Choice enrollment to approximately 1745 new participants during FY 03. The division of Waiver slots among Waiver Agents, reimbursement for Waiver services, and other details pertaining to the operation of the program was substantially similar to the manner in which the program operated prior to such agreement and in conformity with the State's representations in the waiver application recently approved by CMS.
V. Waiver Funding for FY04 11. Defendants shall allocate to waiver agents not less than $1 00 million for the MI Choice waiver for FY 2003-2004. MDCH shall in good faith seek legislative approval and approval from CMS to convert certain expenditures to personal care expenditures. In the event that the necessary approvals are obtained, Defendants shall allocate to waiver agents for the MI Choice waiver for FY 2003-2004 not less than $100 million plus the additional funds generated by this conversion. Such conversion is anticipated to make an additional $25 million available for the MI Choice program. Defendants shall also make a good faith effort to increase the MI Choice waiver budget by an additional $25 million through reallocation of funds from other long term care (LTC) services. Nothing in this Stipulation shall prohibit or discourage Defendants from allocating funds in excess of $150 million for the MI Choice program in FY04.
VI. Public Information, Training, and Education 12. a. Within six months, MDCH shall develop and distribute public information and educational materials about long term care options to consumers, families, providers, and other interested parties. These materials will include information about long-term care services including, in particular, the MI Choice program, eligibility requirements, and application
5

Case 5:02-cv-00044-DWM Doc #30 Filed 12/15/03 Page 6 of 10 Page ID#100
processes. In addition, they will include contact information for a variety of provider and advocacy groups (e.g., the Long Term Care Ombudsman, centers for independent living, area agencies on aging, etc.).
These materials will be distributed widely with a one-time mailing to current Medicaid funded LTC consumers and to all Medicaid-enrolled providers. Thereafter, these materials or similar materials as updated will be mailed or provided to consumers upon completion of an application to the Family Independence Agency for Medicaid funded long term- care. In addition, materials will be available on an on-going basis as with other MDCH publications. In addition, the content will be posted and available on the MDCH Long Term Care website and MiSeniors.net.
b. Within nine months, MDCH will develop and implement a process to ensure informed choice for beneficiaries who meet nursing facility level of care. This process will be promulgated as policy and incorporated into the program requirements for nursing facility and MI Choice waiver providers. The process will require providers to educate consumers about long term care options, including distribution of MDCH developed educational materials. A specific MDCH form will be developed that will require an attestation by the hospital discharge planner, provider or other professional assisting the applicant and an acknowledgment by the applicant or his/her representative that long term care options were fully described and discussed, including the MI Choice program.
c. Implementation of an informed choice process will include training for hospital discharge planners, long term care ombudsman staff, long term care providers, and other interested parties regarding informed consent and long term care options including, in particular, the MI Choice program. The initial training shall take place within nine months after the Court's
6

Case 5:02-cv-00044-DWM Doc #30 Filed 12/15/03 Page 7 of 10 Page ID#101
approval of this Stipulation. Follow-up training will be provided annually. d. Defendants shall provide to counsel for plaintiffs draft copies of all documents,
materials, forms, etc. required to implement the provisions of this paragraph and afford counsel reasonable opportunity to comment.
VII. Uniform Medical/Functional Eligibility Criteria 13. MDCH will utilize the identical functional/medical eligibility criteria for both applicants to the MI Choice Waiver program and applicants for Medicaid-funded nursing facility care, both under the current waiver and under any new or amended waiver submitted to CMS in accordance with this Stipulation. Within 9 months ofthe date of this Agreement, MDCH intends to submit to CMS its application for a new and/or amended home and community based waiver for the elderly and disabled. Through this application and a concurrent proposed state plan amendment, MDCH intends to request approval to alter the current eligibility criteria for long term care, including home and community based waiver services and nursing facility care. MDCH will publish the proposed eligibility criteria as a Medicaid Proposed Policy concurrent with the submission of the application to CMS and seek public input before implementation. Concurrent with implementation of its new or amended waiver program, MDCH shall implement a checklist that will be used by waiver agents and nursing facility providers to document the basis for each medical eligibility or ineligibility determination. The completed checklist for each client shall be maintained by the respective provider. If a client is determined to be medically ineligible for admission into either the waiver program or the nursing facility, the client shall be sent a written notice informing the client of his or her available appeal rights. The development of new eligibility criteria for Medicaid-funded long term care is not required by this Stipulation, nor are Plaintiffs requesting that MDCH take this action.
7

Case 5:02-cv-00044-DWM Doc #30 Filed 12/15/03 Page 8 of 10 Page ID#102
VIII. Contact Logs and Waiting Lists 14. Within one month of approval by the Court of this Stipulation, and until a waiting list procedure is approved by CMS, DCH shall instruct waiver agents to maintain a log of individuals who request to participate in the waiver program. The log may be used to provide information to those who have indicated an interest in participating in the program as well as to provide information to waiver agents and DCH about the numbers and/or characteristics of those who have expressed an interest in the program. Within 9 months of the date of the Court's approval of this Stipulation, MDCH shall develop, and submit to CMS for approval, procedures for creating and utilizing waiting lists and shall implement such procedures upon approval by CMS.
IX. Transition Services 15. DCH shall make a good faith effort to seek and use funding focused on helping individuals transition from nursing facilities into available community-based settings. Subject to the availability of funds, DCH shall consider requesting an amendment to the MI Choice waiver to include transition services as a covered service.
X. Medicaid Long Term Care Task Force 16. Within two months of approval by the Court ofthis Stipulation, the Governor shall create a Medicaid Long Term Care Task Force to assist the State of Michigan in developing options for expanding the availability ofhome and community-based long-term care services and for improving long term care services. The task force shall include representatives of state agencies, providers, legislators or their representatives, advocates and consumers. The charge of the task force shall include, but not be limited to, promoting a full array of community based care options for Michigan citizens in need of long term care, identifying barriers to the creation of and access
8

Case 5:02-cv-00044-DWM Doc #30 Filed 12/15/03 Page 9 of 10 Page ID#103
to an efficient and effective system of community based care, and to make recommendations to the Governor and the Legislature. The task force shall consist of21 members: seven each from consumers and consumer advocacy groups, provider groups, and governmental/legislative entities. The Task Force may create subcommittees as needed and appoint additional individuals to serve on such subcommittees if deemed appropriate by the Task Force. The Task Force shall deliver an interim report to the Governor and to the Chairs of the House and Senate Subcommittees on Appropriations for the Michigan Department of Community Health within six months of the formation of the Task Force, and a final report within a year of the formation of the Task Force unless the Governor chooses to extend the deadlines, duties and/or period of service of the Task Force.
XI. Miscellaneous 17. This Stipulation is the entire agreement among the parties with respect to the subject matter hereof and supersedes any and all prior oral and written discussions and all agreements. Each party represents that it has not relied upon any statement of the other party except those statements set forth in this Stipulation. 18. By mutual agreement, the parties may change the terms ofthis Stipulation, including, but not limited to, the timetables for taking specific actions, provided that such mutual agreement be memorialized in writing and signed by the parties and approved by the Court. In the event that one party disagrees as to the appropriateness of any change proposed by the other party, the parties shall meet to attempt to resolve such dispute. Should the parties fail to reach agreement, either party may file appropriate motions with the Court. 19. Plaintiffs agree that they will notify Defendants in writing of any alleged non-compliance with the Stipulation and request a meeting for the purpose of attempting to resolve the problem
9

Case 5:02-cv-00044-DWM Doc #30 Filed 12/15/03 Page 10 of 10 Page ID#104

or problems identified by the Plaintiffs regarding the alleged non-compliance.

20. Should the parties fail to resolve the problems identified by the Plaintiffs, or should there

be dispute as to any item contemplated by this Stipulation or the failure of Defendants to comply

with the provisions of Stipulation, Plaintiffs may file a motion with the court seeking a judicial

determination that Defendants are in substantial non-compliance.

22. By entering into and complying with this Stipulation, no party makes any concession as

to the merits of the opposing party's claims or defenses.

23. The Court shall retain continuing jurisdiction of this case for the purpose of enforcing the

terms of this Stipulation.

The parties shall bear their own costs and attorneys fee.

~il~w~

Mark A. Co y (P42695) Michigan Protection & Advocacy Servi 4095 Legacy Parkway, Suite 500 Lansing, MI 48911 Attorney for Plaintiffs

Erica Weiss Marsden (P25911) Michigan Department of Attorney General Social Services Division P.O. Box 30037

-I

~~'i.J-\~~
1\. tson E. H1rschel (P57623) Michigan Poverty Law Program 611 Church Street, Suite 4A Ann Arbor, MI 48104 Attorney for Plaintiffs

/Janet Olszewski, Direc or
1 j I Michigan Department of Community Health
G'

~~r~UU;)\, s~~~;~
Abraham Singer (P23601) Pepper Hamilton, LLP 100 Renaissance Ctr, Floor 36 Detroit, MI 48243 Attorney for Plaintiffs

10

 
 Case 5:02-cv-00044-DWM Doc #32 Filed 02/02/04 Page 1 of 3 Page ID#108

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MICHIGAN

ROBERT EAGER; DORA OATS,

through her next friend, Crystal Oats; TERRELL

CASE NO. 5:02-CV-44

KING; GEORGETTE KRAFT through her husband

and next friend, Roy Kraft; DENNIS LOWE, through

HON.

his guardian Etta Dahlen; EVELYN G. WRIGHT through DAVID W. MCKEAGUE

her son and next friend, Paul Mayzes; MICHIGAN

DISABILITY RIGHTS COALITION; MICHIGAN

ASSOCIATION OF CENTERS FOR INDEPENDENT

LIVING; MICHIGAN CAMPAIGN FOR QUALITY CARE;

GREATLAKESCENTERFORINDEPENDENT

LIVING; and GRAND RAPIDS CENTER

FOR INDEPENDENT LIVING,

Plaintiffs, v.

JENNIFER GRANHOLM, in her official capacity as Governor of the State of Michigan, and JANET OLSZEWSKI, in her official capacity as Director of the Michigan Department of Community Health/

Defendants.

Mark A. Cody (P42695) Michigan Protection & Advocacy Service, Inc. 4095 Legacy Parkway, Suite 500 Lansing, MI 48911 (517)487-1755 Attorney for Plaintiffs
Alison E. Hirschel (P57623) Michigan Poverty Law Program 611 Church Street, Suite 4A Ann Arbor, MI 48104 (734) 998-6100 Attorney for Plaintiffs

Erica Weiss Marsden (P25911) Michigan Department of Attorney General Social Services Division P.O. Box 30037 Lansing, MI 48909 (517) 373-7700 Attorney for Defendants

1 Pursuant to F.R.Civ.P. 25(d)(l), upon assuming the duties of Governor on January 1, 2003, Governor Granholm was automatically substituted for former Governor Engler. Upon assuming office as the Director of the Michigan Department of Community Health, Janet Olszewski was automatically substituted for former defendant James. K. Haveman.

Case 5:02-cv-00044-DWM Doc #32 Filed 02/02/04 Page 2 of 3 Page ID#109

Abraham Singer (P23601) Pepper Hamilton, LLP 100 Renaissance Ctr., Floor 36 Detroit, MI 48243 (313) 393-7382 Attorney for Plaintiffs

ORDER On December 15, 2003, the parties presented to this Court a Stipulation for Settlement. The Court, being fully advised, finds that the same should now be approved. IT IS THEREFORE ORDERED that the Stipulation for Settlement presented to this Court is hereby approved. This shall constitute a final adjudication of this matter. However, the Court retains jurisdiction to enforce the terms of the Stipulation.

Date: February 2, 2004

/s/ David W. McKeague
HON. DAVID W. MCKEAGUE U.S. DISTRICT COURT JUDGE

2

Case 5:02-cv-00044-DWM Doc #32 Filed 02/02/04 Page 3 of 3 Page ID#110

Approved as to form:
Mark A Coy Michigan Protection & Advoca y Service, Inc. 4095 Legacy Parkway, Suite 50 Lansing, MI 48911
7 " (517) 487-1755
=laffitiffs
~ ?_ ~il/~"L Alison E. Hirschel Michigan Poverty Law Program 611 Church St., Suite 4A Ann Arbor, MI 48104 (734) 998-6100 Attorney for Plaintiffs

~L~P"- {k~ TICaWeiss Marsden Michigan Department of Attorney General Social Services Division P.O. Box 30037 Lansing, MI 48909 (517) 373-7700 Attorney for Defendants

raham Singer (P2 Pepper Hamilton, LL 100 Renaissance Ctr., Floor 36 Detroit, MI 48243 (313) 393-7382 Attorney for Plaintiffs

3

 
 Case number 5:02-cv-44 Docket as of 02/18/2011 11:24 PM EST Page 1 of 5

United States District Court Western District of Michigan (Southern Division (5)) CIVIL DOCKET FOR CASE #: 5:02−cv−00044−DWM

CLOSED

Eager et al v. Engler et al Assigned to: Judge David W. McKeague Cause: 42:1396 − Tort Negligence
plaintiff Robert Eager
plaintiff Dora Oats through her next friend Crystal Oats
plaintiff Howard Hugger through his guardian Sharon Cook
plaintiff Terrell King
plaintiff Georgette Kraft through her husband and next friend, Roy Kraft
plaintiff Dennis Lowe through his guardian John Munger
plaintiff Evelyn G. Wright through her son and next friend, Paul Mayzes
plaintiff

Date Filed: 03/19/2002 Date Terminated: 02/02/2004 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: Federal Question
represented by Mark A. Cody Michigan Protection &Advocacy Service, Inc. (Lansing) 4095 Legacy Pkwy., Ste. 500 Lansing, MI 48911 (517) 487−1755 Email: mcody@mpas.org LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Mark A. Cody (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Mark A. Cody (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Mark A. Cody (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Mark A. Cody (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Mark A. Cody (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Mark A. Cody (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case number 5:02-cv-44 Docket as of 02/18/2011 11:24 PM EST Page 2 of 5

Michigan Campaign for Quality Care

represented by Mark A. Cody (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

plaintiff
Great Lakes Center for Independent Living

represented by Mark A. Cody (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

plaintiff
Grand Rapids Center for Independent Living

represented by Mark A. Cody (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

plaintiff
Michigan Association of Centers For Independent Living

represented by Mark A. Cody (See above for address) ATTORNEY TO BE NOTICED

plaintiff Michigan Disability Rights Coalition

represented by Mark A. Cody (See above for address) ATTORNEY TO BE NOTICED

V. defendant John Engler in his official capacity as Governor of the State of Michigan
defendant James K. Haveman, Jr. in his official capacity as Director of the Michigan Dept of Community Health

represented by Erica Weiss Marsden MI Dept Attorney General (Education/Social Services) Education &Social Services Division P.O. Box 30758 Lansing, MI 48909 (517) 373−7700 Email: marsdene@michigan.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Erica Weiss Marsden (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Date Filed 03/19/2002
03/19/2002 03/19/2002

# Docket Text
1 COMPLAINT against all defendants; filed by Robert Eager, Grand Rapids Center for Independent Living, Great Lakes Center for Independent Living, Howard Hugger, Terrell King, Georgette Kraft, Dennis Lowe, Michigan Association of Centers For Independent Living, Michigan Campaign for Quality Care, Michigan Disability Rights Coalition, Dora Oats, Evelyn G. Wright (Attachments:, # 1, # 2, # 3)(ldm, ) (Entered: 03/19/2002)
Summons Issued as to John Engler (ldm, ) (Entered: 03/19/2002)
Summons Issued as to James K. Haveman Jr. (ldm, ) (Entered: 03/19/2002)

Case number 5:02-cv-44 Docket as of 02/18/2011 11:24 PM EST Page 3 of 5

03/19/2002 04/04/2002 04/04/2002 04/08/2002 04/08/2002 04/09/2002
04/10/2002 04/11/2002 05/01/2002 05/06/2002 05/06/2002 05/17/2002 05/24/2002 05/24/2002 06/13/2002 06/19/2002 06/19/2002 08/07/2002
08/14/2002 08/14/2002

RECEIPT in the amount of $150.00, receipt number 105733 for filing fee (ldm) (Entered: 03/19/2002)
2 SUMMONS Returned Executed; John Engler served on 3/19/2002, answer due 4/8/2002 (lkd, ) (Entered: 04/04/2002)
3 SUMMONS Returned Executed; James K. Haveman Jr. served on 3/19/2002, answer due 4/8/2002 (lkd, ) (Entered: 04/04/2002)
4 ANSWER to Complaint ; Affirmative Defenses by John Engler, James K. Haveman Jr. (pjl, ) (Entered: 04/09/2002)
5 PROOF OF SERVICE by John Engler, James K. Haveman Jr. re 4 Answer to Complaint and Affirmative Defenses (pjl, ) (Entered: 04/09/2002)
6 ORDER Setting Rule 16 Scheduling Conference before Judge David W. McKeague: Rule 16 scheduling conference set for 5/6/2002 at 11:00 AM at Lansing, MI; status report due by 5/1/2002; signed by Judge David W. McKeague (Judge David W. McKeague, bsd) (Entered: 04/09/2002)
Copies of Order Setting Rule 16 Scheduling Conference #6 sent via U.S. Mail to Attorneys Mark A. Cody and Erica Marsden (ldm) (Entered: 04/10/2002)
7 CHANGE OF ADDRESS by Mark A. Cody (copy of address change forwarded to atty maint clerk) (pjl) (Entered: 04/11/2002)
8 JOINT STATUS REPORT submitted for filing (lkd) Modified on 5/3/2002 (lkd). (Entered: 05/03/2002)
9 Notice of Rule 16 scheduling conference re−set for 5/17/2002 at 11:00 AM at Lansing, MI;before Judge David W. McKeague (Judge David W. McKeague, bsd) (Entered: 05/06/2002)
Copies of 9 Notice of Hearing sent via U.S. Mail to attys Cody and Marsden (pjl) (Entered: 05/06/2002)
11 Minute Entry: Scheduling Conference held before David W. McKeague (Judge David W. McKeague, bsd) (Entered: 05/24/2002)
10 CASE MANAGEMENT ORDER: telephone status conference set for 6/13/2002 at 04:30 PM at Lansing, MI;; signed by Judge David W. McKeague (Judge David W. McKeague, bsd) (Entered: 05/24/2002)
Copies of #10 sent via U.S. Mail to attys Cody and Marsden (lkd) (Entered: 05/28/2002)
12 Minute Entry: Telephone Status Conference held before David W. McKeague (Judge David W. McKeague, bsd) (Entered: 06/17/2002)
13 SECOND CASE MANAGEMENT ORDER: telephone status conference set for 11/4/2002 at 02:30 PM at Lansing, MI;; signed by Judge David W. McKeague (Judge David W. McKeague, bsd) (Entered: 06/19/2002)
Copies of #13 sent via U.S. Mail to attys Cody and Marsden (lkd) (Entered: 06/19/2002)
14 STIPULATION re 13 to Modify Second Case Management Order filed by John Engler and by Robert Eager, Grand Rapids Center for Independent Living, Great Lakes Center for Independent Living, Howard Hugger, Terrell King, Georgette Kraft, Dennis Lowe, Michigan Association of Centers For Independent Living, Michigan Campaign for Quality Care, Michigan Disability Rights Coalition, Dora Oats, Evelyn G. Wright (pjl, ) (Entered: 08/07/2002)
15 ORDER MODIFYING SECOND CASE MANAGEMENT ORDER re 14 ; signed by Judge David W. McKeague (Judge David W. McKeague, pjr) (Entered: 08/14/2002)
Copies of 15 Order sent via U.S. Mail to Mark Cody and Erica Marsden (pjl) (Entered: 08/14/2002)

Case number 5:02-cv-44 Docket as of 02/18/2011 11:24 PM EST Page 4 of 5

10/16/2002 12/16/2002 12/20/2002 12/20/2002 03/03/2003 03/03/2003 03/03/2003 05/16/2003 05/16/2003 06/26/2003 06/27/2003 07/07/2003
07/07/2003 07/08/2003 07/14/2003 07/14/2003 08/12/2003 08/12/2003 09/04/2003 09/05/2003

16 NOTICE REGARDING PUBLIC ACCESS directed to Mark Cody and Erica Marsden (pjl) (Entered: 10/16/2002)
17 Minute Entry: Status Conference held before David W. McKeague; to be rescheduled for March, 2003, at which time defendant shall report position of new administration; (Judge David W. McKeague, bsd) (Entered: 12/20/2002)
18 NOTICE of telephone status conference set for 3/3/2003 at 11:45 AMbefore Judge David W. McKeague (Judge David W. McKeague, bsd) (Entered: 12/20/2002)
Copies of 18 Notice of Hearing sent via U.S. Mail to Mark Cody and Erica Marsden (pjl) (Entered: 12/20/2002)
19 Minutes of telephone status conference held before Judge David W. McKeague (Judge David W. McKeague, bsd) (Entered: 03/03/2003)
20 NOTICE of telephone status conference set for 5/12/2003 at 08:30 AM at Lansing, MI before Judge David W. McKeague; (Judge David W. McKeague, bsd) (Entered: 03/03/2003)
Copy of Notice of Hearing 20 sent via U.S. Mail to Mark Cody and Erica Marsden (pjl) (Entered: 03/03/2003)
21 NOTICE of telephone status conference re−set for 7/7/2003 at 02:30 PM at Lansing, MI before Judge David W. McKeague; (Judge David W. McKeague, bsd) (Entered: 05/16/2003)
Copy of Notice of Hearing 21 sent via U.S. Mail to Mark Cody and Erica Marsden (pjl) (Entered: 05/19/2003)
22 NOTICE of TIME CHANGE for status conference on 7/7/2003 to 10:30 AM at Lansing, MI before Judge David W. McKeague; (Judge David W. McKeague, bsd) (Entered: 06/26/2003)
Copy of Notice of Time Change 22 sent via U.S. Mail to Mark Cody and Erica Marsden (pjl, ) (Entered: 06/27/2003)
23 Minutes of status conference held before Judge David W. McKeague. Parties agree to continue settlement discussions for an additional 60 days. In−person status conference to be held after that time, if no settlement is achieved. Seven days prior to conference, parties shall file joint statement of outstanding points of disagreement. (Judge David W. McKeague, bsd) (Entered: 07/07/2003)
24 NOTICE of status conference set for 9/8/2003 at 08:00 AM at Lansing, MI before Judge David W. McKeague; status report due by 9/1/2003 (Judge David W. McKeague, bsd) (Entered: 07/07/2003)
Copy of Notice of Hearing 24 sent via U.S. Mail to attys Cody and Marsden (lkd) (Entered: 07/08/2003)
25 NOTICE of status conference re−set to 9/9/2003 at 08:00 AM at Lansing, MI before Judge David W. McKeague; (Judge David W. McKeague, bsd) (Entered: 07/14/2003)
Copy of Re−Notice of Status Conference 25 sent via U.S. Mail to Mark Cody and Erica Marsden (pjl, ) (Entered: 07/14/2003)
26 NOTICE of status conference re−set for 9/15/2003 at 08:00 AM at Lansing, MI before Judge David W. McKeague; status report due by 9/8/2003 (Judge David W. McKeague, bsd) (Entered: 08/12/2003)
Copy of Notice of Hearing 26 sent via U.S. Mail to attys Cody and Marsden (lkd) (Entered: 08/12/2003)
27 NOTICE of status conference set for 10/20/2003 at 01:30 PM at Lansing, MI before Judge David W. McKeague; status report due by 10/14/2003 (Judge David W. McKeague, bsd) (Entered: 09/04/2003)
Copy of Notice of Hearing 27 sent via U.S. Mail to Attys Mark Cody and Erica Marsden (ldm, ) (Entered: 09/05/2003)

Case number 5:02-cv-44 Docket as of 02/18/2011 11:24 PM EST Page 5 of 5

10/14/2003
10/20/2003 12/15/2003
01/20/2004
02/02/2004 02/02/2004

28 JOINT STATUS REPORT submitted for filing by plaintiffs Robert Eager, Grand Rapids Center for Independent Living, Great Lakes Center for Independent Living, Howard Hugger, Terrell King, Georgette Kraft, Dennis Lowe, Michigan Association of Centers For Independent Living, Michigan Campaign for Quality Care, Michigan Disability Rights Coalition, Dora Oats, Evelyn G. Wright, defendants John Engler, James K. Haveman Jr. (ldm, ) (Entered: 10/14/2003)
29 MINUTES of status conference held before Judge David W. McKeague; final closing documents to be submitted to court for signature no later than December 15, 2003 (Judge David W. McKeague, bsd) (Entered: 10/21/2003)
30 STIPULATION OF SETTLEMENT by plaintiffs Robert Eager, Grand Rapids Center for Independent Living, Great Lakes Center for Independent Living, Howard Hugger, Terrell King, Georgette Kraft, Dennis Lowe, Michigan Association of Centers For Independent Living, Michigan Campaign for Quality Care, Michigan Disability Rights Coalition, Dora Oats, Evelyn G. Wright, defendants John Engler, James K. Haveman Jr. (pjl, ) (Entered: 12/17/2003)
31 PROPOSED STIPULATION and ORDER re: Settlement by plaintiffs Robert Eager, Grand Rapids Center for Independent Living, Great Lakes Center for Independent Living, Howard Hugger, Terrell King, Georgette Kraft, Dennis Lowe, Michigan Association of Centers For Independent Living, Michigan Campaign for Quality Care, Michigan Disability Rights Coalition, Dora Oats, Evelyn G. Wright, defendants John Engler, James K. Haveman Jr. (pjl, ) (Entered: 01/21/2004)
32 ORDER granting STIPULATION re 31 stipulation for settlement is approved and constitutes a final adjudication of this matter ; signed by Judge David W. McKeague (Judge David W. McKeague, pjr) (Entered: 02/02/2004)
Copy of Order on Stipulation and Proposed Order 32 sent via U.S. Mail to attys Marsden and Cody (lkd) (Entered: 02/02/2004)

 
 The MiChoice Program and Eager, et al. v. Engler, et al.: Using Olmstead to Expand Home and Community Based Care in Michigan
Presentation to the Governor’s Task Force on Medicaid Long Term Care

I. Introduction

Mark Cody, Michigan Protection and Advocacy Service, Inc. Alison Hirschel, Michigan Poverty Law Program
September 13, 2004

Thank you for inviting us to speak about two important civil rights cases: the 1999 United States Supreme Court case, Olmstead v. L.C., and the litigation we were privileged to pursue, Eager, et al. v. Engler, et al. The Eager case, filed in 2002, sought to reopen and expand participation in MiChoice, Michigan’s home and community based waiver program, which was virtually closed to new admissions in the fall of 2001. The settlement order in this case was entered in February of this year. As you know, one element of the settlement was a requirement that the Governor create this very task force. Thus, we are especially pleased to be presenting here today.
We know RoAnne invited us to speak because she thought it was important that everyone on the task force understand the legal framework for the state’s efforts to rebalance the long term care system. Some of you already have a sophisticated understanding of this. But there are two crucial points we need to ensure everyone understands:
1. First, providing services and supports to people with disabilities in the most integrated setting possible is not just a nice idea or one that is responsive to consumer
demand. It’s required by federal law and that law has been upheld by the United States Supreme Court. Michigan, like all other states, has significant legal obligations pursuant to that law, and it has been far slower to meet those obligations than many other states.
2. Second, while the Eager case resulted in the creation of the Task Force, the reopening of the MiChoice program to new applicants, and a number of other important steps toward rebalancing the long term care system, it is only a baby step toward a coordinated system of long term care that allows consumers real choice, quality, and dignity. Lawsuits have to be narrowly focussed and settlements are by their very nature compromises, so the settlement of this lawsuit merely starts the ball rolling.
It will be largely up to this Task Force, working hand in hand with the Administration and the legislature, to ensure that true reform is achieved.
II. The Olmstead Decision
When it enacted the Americans with Disabilities Act (ADA) in 1990, Congress found that the history of individuals with disabilities in this country was one of isolation and segregation and that, despite some improvements, this reality was a continuing, serious, and pervasive form of discrimination. 42 USC §12101(2)(5). In Olmstead v. L.C., 527 U.S. 581 (1999), the United States Supreme Court considered the remedies the ADA provided for people with disabilities who were isolated and segregated in an institution and declared that unjustified isolation of individuals with disabilities is a form of discrimination. In so doing, the Court made what is arguably its most important civil rights decisions in decades.
The case began in 1995 when two women with mental retardation and psychiatric conditions -- L.C. and E.W. -- contacted the Atlanta Legal Aid Society to ask for help leaving the state institution in which they were confined. The treating professionals at the facility agreed that the two women could live successfully in the community if they had the necessary supports,

and that Georgia offered community programs that could meet their needs. Unfortunately, the women continued to languish in a state facility simply because the community programs had no available slots.
The plaintiffs argued that by failing to place them in a community program, the State of Georgia was violating “the integration mandate,” a regulation adopted by the United States Department of Justice to enforce the ADA. This regulation states:
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).
Plaintiffs alleged that the state, as public entity, was providing services, programs, and activities such as habilitation services, medical treatment, therapy, etc. that could be offered in the community, a more integrated and appropriate setting. The District Court found for the plaintiffs and the decision was affirmed by the Eleventh Circuit Court of Appeals. The State then appealed to the U.S. Supreme Court.
In affirming the ruling of the lower courts that unjustified isolation of persons with disabilities in institutions is a form of discrimination, the Court took note of two factors. First, unjustified isolation perpetuates the notion that those affected are unworthy or incapable of participating in community life. Second, confinement in an institution diminishes everyday life activities such as family relations, social contacts, work options, economic independence, educational advancement and cultural enrichment. To obtain the supports they needed, people with disabilities were required to sacrifice the essential elements of a complete life.
By declaring the unjustified isolation of people with disabilities to be a form of discrimination and thus a violation of the ADA, the Supreme Court gave every person with a disability -- young and old alike -- a potential claim against a state that requires them to remain in a facility or to enter a facility to receive services which could be provided in the community. The decision was not a complete victory for advocates, however, because the Court noted that states could prevail if they demonstrated that moving a large number of individuals out of institutions and into the community would fundamentally alter the nature of the state’s programs. Unfortunately, the Supreme Court gave little guidance as to what would constitute a successful “fundamental alteration” defense. A plurality of the Court suggested that a state could establish a defense if it demonstrated that it had a comprehensive, effectively working plan for moving individuals into the community and a waiting list for community based services that was moving at a reasonable pace and not controlled by the state’s desires to keep its facilities fully populated.
An excellent source of additional information about the Olmstead decision can be found at www.bazelon.org.
III. The Response to Olmstead
In response to the Olmstead decision, an Executive Order was issued by the President in

early 2001. This Executive Order directed all federal agencies to swiftly implement the Olmstead decision. It also created the New Freedom Initiative and required all federal agencies to examine their programs, policies and services to determine how those activities could be improved to promote the integration of people with disabilities into community life. Those reports have been compiled and are available at: www.hhs.gov/newfreedom/final/.
Of particular interest to this Task Force is the report of the U.S. Department of Health and Human Services, found at: http://www.hhs.gov/newfreedom/final/hhs.html. That report attributes much of the overuse of institutions to the bias in the Medicaid system that favors institutional placement. The report details a number of measures that states could take to rebalance their Medicaid systems in ways that would promote community integration. HHS has issued, through its Center for Medicare and Medicaid Services, a number of letters to state Medicaid directors informing them of options and opportunities for rebalancing.
Beyond studies and reports, the federal government has also been active in enforcing the Olmstead decision. Just last month, the U.S. Department of Justice issued a findings letter in which it detailed its determination that the State of California is violating the civil rights of nursing home residents in a particular facility by impeding the right of those individuals to receive services in the most integrated setting possible. Specifically, the state was cited for contributing to unnecessary isolation by: (1)failing to ensure that residents are adequately and timely assessed for placement in non-institutional settings upon admission and regularly thereafter; (2)failing to adequately inform residents of home and community based options and alternatives; and (3)failing to provide sufficient meaningful community options to reasonably accommodate residents who need placements, along with the supports and services they need to live in those settings. The complete findings letter is located at: http://www.usdoj.gov/crt/split/documents/laguna_honda_findlet_aug3.pdf
To assess the progress states are making to implement the Olmstead decision, the National Conference of State Legislatures has twice surveyed the states and issued a report on efforts and innovative practices. Unfortunately, Michigan has not fared well in either report. For example, in the report issued in February 2004 for calendar year 2003, 29 states were identified as having an Olmstead plan or report. Michigan was not among them.
IV. The MiChoice Program
The Home and Community Based Waiver for the Elderly and Disabled is a nationwide program which has been administered by the Centers for Medicare and Medicaid Services (formerly HCFA) since the early 1980s. In 1992, when Michigan initiated the MiChoice pilot project in 11 counties, it was one of the last states in the country to take advantage of this federal initiative. The program gradually expanded until it became available statewide in 1998. In 2001, MIChoice served almost 15,000 individuals.
Under the program, individuals who qualify for Medicaid funded nursing home care may receive more than a dozen long term care services at home including personal care, homemaking, respite care, home delivered meals, chore services, and other assistance. The state enters into contracts with waiver agents, including all the state’s Area Agencies on Aging and a

number of other nonprofit providers, to administer the program in 16 regions of the state. Waiver agents are responsible for screening and assessment of applicants, care planning, orchestrating the provision of services, data collection, and financial management of their programs. Although there was virtually no publicity about MiChoice, demand for the program consistently outstripped the supply of waiver slots and the program was full long before the end of each fiscal year.
On October, 1, 2001, then Governor Engler restricted funding to the waiver program, thus resulting in the closure of the program to virtually all new applicants and, ultimately, in a devastating reduction in the number of waiver clients served. Currently, we have fewer than two thirds the number of waiver participants we had in 2001. And that means in virtually all parts of the state, including where most of you live, if your neighbors or family member or friends seek waiver services to get out of or stay out of a nursing home, they will likely face long waiting lists.
V. Eager v. Engler
A. Background
In March, 2002, seven individual plaintiffs and five organizational plaintiffs filed Eager, et al. v. Engler, et al. to challenge the virtual closure of the MiChoice Program to new applicants. The claims in that case arose under the Medical Assistance Act, the Americans with Disabilities Act, and Section 504 of the Rehabilitation Act of 1973. We were privileged to represent the plaintiffs in that case.
The lawsuit alleged several violations of the Medicaid law and that the State was unlawfully and unnecessarily segregating people with disabilities in nursing homes rather than serving them in the most integrated setting appropriate to their needs -- their own homes. Plaintiffs requested declaratory and injunctive relief including an Order requiring the admission of the individual plaintiffs to the waiver program, reopening of the program, the creation of waiting lists for MiChoice, and the provision of information to the public about the MiChoice program.
B. The Individual Plaintiffs
The individual plaintiffs in the lawsuit represent the vast variety of Michigan citizens who need long term care. They ranged in age from 29 to 100, were African American and white, resided in nursing homes or were just barely surviving in the community, and lived in both urban and rural settings across the state. When we talk about long term care reform, in all its complexity, we sometimes forget the power and the poignancy of the lives of individual long term care consumers and the reason -- along with the state’s budgetary constraints and the requirements of the law -- that it is so important that we create long term care options where people want to receive them -- in their own homes and communities. Thus, we want to take a minute to share with you the stories of some of our plaintiffs:
 Robert Eager is a divorced, middle aged Traverse City resident with three children who

was diagnosed with Multiple Sclerosis that has progressed very rapidly. A former

factory

supervisor, Mr. Eager, is now challenged and exhausted by virtually every

activity of daily living. Despite his very significant and progressive disability, Mr. Eager

feared and dreaded nursing home placement because it would take him away from his

children. Though normally a genial and optimistic person, Mr. Eager repeatedly stated that

he would refuse food and water if forced to enter a nursing home. Because of the settlement

of this lawsuit, Mr. Eager now receives a moderate number of waiver services which

enable him to remain home with his children. Through sheer determination, courage,

and the kindness of friends, Mr. Eager managed to remain in the community during the

pendency of the lawsuit. When we told him the case had settled and he would finally get

the waiver services he needed, he cried with joy and so did we.

 Terrell King is a 31 year old Detroit resident who resided in Madonna nursing home for many years. He was paralyzed from the neck down as the result of a football injury in 1992 and entered the nursing home after his mother was no longer able to care for him at home. Mr. King was desperate to leave the nursing home so that he could enjoy a social life and lifestyle more appropriate to his age and so that he could pursue an education.
As a result of the settlement, Mr. King left the nursing home and regained his freedom.

 Georgette Kraft is an elderly woman who suffers from Alzheimers Disease. Her devoted husband of many years took care of her until his own declining health forced him to place her in a nursing home. Both Mr. and Mrs. Kraft wanted only to spend their last days together in their own home. Because of the settlement of the lawsuit, they will be able to do so.

 Howard Hugger was 100 years old when we filed the lawsuit. After living independently with waiver services, he had several falls and was ultimately forced to enter a nursing home. During his stay, he lost a substantial amount of weight, was dissatisfied with his care, became sluggish and depressed, and constantly asked his niece, a 61 year old woman with significant disabilities, to take him home with her. Mr. Hugger’s niece did take him home where Mr. Hugger appeared content, congenial and active. Although Mr. Hugger’s niece lived in a small, unassuming home, Mr. Hugger declared it his castle and stated repeatedly he wanted to spend the rest of his life there. However, because of his niece’s own disabilities and the absence of waiver or other limited and inexpensive support services to help her bathe and care for Mr. Hugger, she was ultimately forced to take Mr. Hugger back to the nursing home not long after the suit was filed. He died there shortly thereafter. Mr. Hugger didn’t have a happy ending to his long life, but if waiver services had been available to him in his niece’s house, he would have.

C. The Settlement We engaged in wide-ranging, detailed, thoughtful, and ultimately successful settlement negotiations with the Granholm Administration over a period of many months last year. The final Stipulation of Settlement was signed by Judge David McKeague of federal district court on February 2, 2004. The court will retain jurisdiction of the case during the implementation of the settlement.

The terms of the settlement provide both short term and longer term relief and serve as a stepping stone for future reform. Among the provisions of the settlement are:

 All surviving individual name plaintiffs have been admitted to the MiChoice program.

 During FY ‘03, approximately 1745 new participants were admitted to the MiChoice program.

 For FY ‘04, the state was required to allocate no less than $100 million to the MiChoice

program. However, with that limited allocation, the number of participants in the

program will continue and has continued to decline. Therefore, the state also agreed to

seek approval from the Centers for Medicare and Medicaid Services to convert certain

state only expenditures to Medicaid benefits, thus drawing down federal matching funds

in the amount of approximately $25 million. We were very greatly disappointed to learn

after the settlement of the case, however, that the state had discovered a technical

obstacle

to obtaining this money and that it will not now be forthcoming. Finally, the state

agreed to make good faith efforts to obtain an additional $25 million for the MiChoice program

through reallocation of other long term care funding, but they have been unable to

produce that funding. Thus, while we are pleased that limited admissions to the program

have occurred as the result of the settlement, because funding for the program this year

has remained stalled at $100 million, far less than was spent on the program several years

ago, we are still going backwards, instead of forwards, in providing home and

community based services.

 DCH will make a number of efforts to ensure greater public understanding of long term

care options, including the MiChoice program, by developing, distributing and posting

public information and educational materials to consumers, families, providers, and other

interested parties. These materials will be mailed to all current Medicaid recipients

receiving long term care and all Medicaid enrolled providers. Thereafter, the materials

will be provided to all applicants to FIA for Medicaid-funded long term care. In

addition, long term care providers will be required to distribute materials to consumers

applying for nursing facility or waiver services and both providers and consumers will be

required

to sign a form that the information was provided. Finally, DCH must organize an

annual training for interested parties such as long term care ombudsman staff and hospital

discharge planners to educate them about long term care options including the

MiChoice program. These efforts will both increase public understanding of the limited

home and community based options currently available and educate consumers and

providers that nursing homes need not be the only stop on the long term care continuum.

We are pleased to report that DCH staff are working diligently and energetically to meet

these obligations and are working closely with us to ensure the consumer information is

clear and effective.

 DCH will utilize identical functional/medical criteria for both applicants for the MiChoice program and applicants to nursing facilities. Applicants found ineligible for Medicaid funded long term care services will be given written notice of the

determination and an opportunity to appeal. The creation of identical functional and medical criteria for admission to the waiver program and nursing facilities will correct the historical practice that only a doctor’s signature was required to be admitted to a nursing home -- making it easy to gain admission to the most expensive long term care option -but a full screen was required before applicants were admitted to the waiver program, making it more difficult to be approved for waiver services. DCH has already circulated its draft screening criteria and sought public comment. We understand the state intends to begin using this new tool in the next few months.
 Waiver agents are also now required to maintain “contact logs” to document the number of applicants who request waiver services but for whom no services are currently available. Previously, waiver agents were instructed not to maintain such lists, making it much harder to track consumer demand for the program. The state is also seeking approval from CMS to require waiting lists and has published for public comment a proposed policy regarding how waiting lists are to be maintained and utilized. Under the proposal, waiver agents must give priority to certain categories of applicants, notify the state monthly of the number of people on the waiting list, and notify applicants monthly of their progress up the waiting list.
 DCH is also required to make a good faith effort to seek and use funding to help individuals transition from nursing facilities into available community-based settings. In the same proposed policy in which it described the waiting list requirements, DCH has included information about how requests for transition funding will be handled, and that policy is awaiting final promulgation.
 The final requirement in the settlement is the creation of this Task Force and the submission of an interim and final report by the Task Force. Although the Task Force began its work later than was anticipated in the settlement, we very much appreciate the significant effort members are making to ensure it fulfills its obligations.
VI. Conclusion and Recommendations
As we noted, these settlement elements, though significant, remain only a first step on the very long road to ensuring all long term care consumers receive high quality and adequate services and supports in the setting of their choice. It is a road many other states embarked upon long before we did. We think, however, that there are three important next steps that we urge the Task Force to consider and which are essential to continue the progress begun in Eager:
1. The elastic expansion of the capacity of the MiChoice program to meet consumer demand and eliminate waiting lists. We understand the federal government will approve the State’s request for additional waiver slots and no rebalancing of the system is possible if these slots do not exist. The waiver agents’ waiting lists, combined with analysis of demographic data and other resources, can help us determine with relative accuracy how many waiver slots are required to meet demand. Slot availability must be adjusted at least annually to respond to consumers’ needs.

2. Eliminate artificial funding caps for waiver services. Currently, waiver agents are limited to an aggregate cap of $42/day per client--less than half the cost of nursing home care -despite the fact that federal law stipulates only that waiver services cannot, on average, exceed the cost of nursing home care. This artificial limitation prevents the waiver program from being a true alternative to nursing home care for many eligible consumers and, according to AARP’s expert, Dann Milne, may be the lowest limit in the United States.
3. Invest substantially in transition services for individuals who wish to leave the nursing home. The long term care system cannot be rebalanced as long as beds are filled with people who do not need or want to be there. Advocates have documented that the average nursing home transition costs approximately $3000 including such expenses as security deposits, transportation, purchase of household goods, home modifications, etc.-- less than the average cost of a month’s nursing home stay. Some of the individuals who are able to relocate to the community then require only minimal services or services that cost far less than institutionalization. While the Department is proposing limited funding for transition costs, a much more substantial effort must be made to identify individuals who want to transition out of facilities and to develop and implement transition plans to help them do so. If we are truly committed to increasing community based services, we must pay the limited cost of permitting institutionalized consumers to access those services. Moreover, many of these transitions will reap long term savings for the state.
In closing, we want to acknowledge the determined efforts of the multitude of stakeholders and advocates who supported us during the litigation and continue to push for reforms. We also particularly appreciate the dedication of staff from the Michigan Department of Community Health who have worked hard to reach and implement the settlement. Instead of being adversarial during our negotiations and subsequent conversations, they have been consistently thoughtful, professional, compassionate, open and collegial. We are especially grateful to Paul Reinhart, Mary Gear, Deanna Mitchell, Steve Bachleda, Jan Christensen and Sharon Gire. In addition, we are delighted with RoAnne Chaney’s and Susan Steinke’s superb leadership on this Task Force and with the enormous commitment of the members of the Task Force. We look forward to working with all of you.