CLOSED,STAYED,TYPE−C
U.S. District Court District of Columbia (Washington, DC) CIVIL DOCKET FOR CASE #: 1:18−cv−00152−JEB

STEWART et al v. HARGAN et al Assigned to: Judge James E. Boasberg Cases: 1:18−cv−01900−JEB
1:19−cv−00773−JEB 1:19−cv−03526−JEB 1:19−cv−02848−JEB Case in other court: USCA, 19−05095
USCA, 19−05097 Cause: 05:702 Administrative Procedure Act Plaintiff
RONNIE MAURICE STEWART

Date Filed: 01/24/2018 Date Terminated: 01/24/2020 Jury Demand: None Nature of Suit: 890 Other Statutory Actions Jurisdiction: U.S. Government Defendant
represented by Catherine A. McKee NATIONAL HEALTH LAW PROGRAM 200 N. Greensboro Street Suite D−13 Carrboro, NC 27510 (919) 968−6308 Email: mckee@healthlaw.org LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao JENNER & BLOCK LLP 1099 New York Avenue, NW Suite 900 Washington, DC 20001−4412 (202) 637−6390 Email: drao@jenner.com ATTORNEY TO BE NOTICED
Ian Heath Gershengorn JENNER & BLOCK LLP 1099 New York Avenue, NW Suite 900 Washington, DC 20001−4412 (202) 639−6869 Fax: (202) 514−8071 Email: igershengorn@jenner.com ATTORNEY TO BE NOTICED
Lauren J. Hartz JENNER & BLOCK LLP 1099 New York Avenue, NW Suite 900 Washington, DC 20001−4412 (202) 637−6363 Email: lhartz@jenner.com ATTORNEY TO BE NOTICED
Natacha Y. Lam JENNER & BLOCK LLP 1099 New York Avenue, NW Suite 900 Washington, DC 20001−4412 (202) 637−6350 Email: nlam@jenner.com ATTORNEY TO BE NOTICED

Plaintiff
GLASSIE MAE KASEY TERMINATED: 01/14/2019

Samuel Jacobson U.S. FEDERAL TRADE COMMISSION 600 Pennsylvania Ave NW Washington, DC 20580 (202) 326−3251 Fax: (202) 326−3768 Email: sjacobson@ftc.gov TERMINATED: 09/06/2018
Thomas J. Perrelli JENNER & BLOCK LLP 1099 New York Avenue, NW Suite 900 Washington, DC 20001 (202) 639−6000 Fax: (202) 661−4855 Email: tperrelli@jenner.com ATTORNEY TO BE NOTICED
Zachary Michael Spiegel Blau JENNER & BLOCK LLP 1099 New York Avenue, NW Suite 900 Washington, DC 20001−4412 (202) 639−6038 Fax: (202) 639−6066 Email: zblau@jenner.com ATTORNEY TO BE NOTICED
Jane Perkins NATIONAL HEALTH LAW PROGRAM 200 N. Greensboro Street Suite D−13 Carrboro, NC 27510 (919) 968−6308 Fax: 919−968−8855 Email: perkins@healthlaw.org ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address)

Plaintiff LAKIN BRANHAM TERMINATED: 01/14/2019
Plaintiff SHANNA BALLINGER TERMINATED: 01/14/2019

TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address)

Plaintiff DAVE KOBERSMITH TERMINATED: 01/14/2019
Plaintiff WILLIAM BENNETT TERMINATED: 01/14/2019

ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address)

Plaintiff SHAWNA NICOLE MCCOMAS
Plaintiff ALEXA HATCHER TERMINATED: 01/14/2019

ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address)

Plaintiff MICHAEL WOODS TERMINATED: 01/14/2019
Plaintiff KIMBERLY WITHERS TERMINATED: 01/14/2019

ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY

Plaintiff
KATELYN ALLEN TERMINATED: 01/14/2019

ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED

Plaintiff AMANDA SPEARS TERMINATED: 01/14/2019
Plaintiff DAVID ROODE

represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED

Plaintiff SHEILA MARLENE PENNEY
Plaintiff QUENTON RADFORD on behalf of themselves and all others similarly situated TERMINATED: 01/14/2019

Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED
Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Catherine A. McKee (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Devi M. Rao (See above for address) ATTORNEY TO BE NOTICED
Ian Heath Gershengorn (See above for address) ATTORNEY TO BE NOTICED
Lauren J. Hartz (See above for address) ATTORNEY TO BE NOTICED

Plaintiff HUNTER MALONE
Plaintiff SARAH MARTIN
Plaintiff ALTHEA HUMBER
Plaintiff MELISSA SPEARS−LOJEK
Plaintiff LINDA KEITH
Plaintiff

Natacha Y. Lam (See above for address) ATTORNEY TO BE NOTICED
Samuel Jacobson (See above for address) TERMINATED: 09/06/2018
Thomas J. Perrelli (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED

KIMBERLY KOBERSMITH Plaintiff DEBRA WITTIG
Plaintiff RANDALL YATES
Plaintiff RODNEY LEE
Plaintiff TERI BLANTON
Plaintiff ROBIN RITTER
Plaintiff DIIKA:NEHI SEGOVIA
V. Defendant

represented by Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED
represented by Zachary Michael Spiegel Blau (See above for address) ATTORNEY TO BE NOTICED
Jane Perkins (See above for address) ATTORNEY TO BE NOTICED

ERIC HARGAN in his official capacity as Acting Secretary of the United States Department of Health and Human Services TERMINATED: 06/14/2018
Defendant SEEMA VERMA in her official capacity as Administrator of the Centers for Medicare and Medicaid Services

represented by Matthew Charles Skurnik U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch 1100 L Street, NW Washington, DC 20005 (202) 616−8188 Email: matthew.skurnik@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Deepthy Kishore U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch P.O. Box 883 Washington, DC 20530 (202) 616−4448 Fax: (202) 616−8470 Email: deepthy.c.kishore@usdoj.gov TERMINATED: 07/11/2018
Ethan Price Davis U.S. DEPARTMENT OF JUSTICE 950 Pennsylvania Ave. NW Washington, DC 20530 (202) 616−4171 Email: Ethan.davis@usdoj.gov TERMINATED: 07/19/2018
Vinita B. Andrapalliyal U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch 1100 L Street NW Washington, DC 20005 (202) 305−0845 Fax: (202) 616−8470 Email: vinita.b.andrapalliyal@usdoj.gov ATTORNEY TO BE NOTICED
represented by James Mahoney Burnham U.S. DEPARTMENT OF JUSTICE Civil Division 950 Pennsylvania Avenue, NW Washington, DC 20530 (202) 353−5049 Email: james.burnham@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Charles Skurnik (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Deepthy Kishore (See above for address) TERMINATED: 07/11/2018
Ethan Price Davis (See above for address) TERMINATED: 07/19/2018
Vinita B. Andrapalliyal (See above for address)

Defendant DEMETRIOS L. KOUZOUKAS in his official capacity as Principal Deputy Administrator for the Centers for Medicare and Medicaid Services
Defendant BRIAN NEALE in his official capacity as Director of the Center for Medicaid and CHIP Services TERMINATED: 01/14/2019
Defendant UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES

ATTORNEY TO BE NOTICED
represented by James Mahoney Burnham (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Charles Skurnik (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Deepthy Kishore (See above for address) TERMINATED: 07/11/2018
Ethan Price Davis (See above for address) TERMINATED: 07/19/2018
Vinita B. Andrapalliyal (See above for address) ATTORNEY TO BE NOTICED
represented by Matthew Charles Skurnik (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Deepthy Kishore (See above for address) TERMINATED: 07/11/2018
Ethan Price Davis (See above for address) TERMINATED: 07/19/2018
Vinita B. Andrapalliyal (See above for address) ATTORNEY TO BE NOTICED
represented by James Mahoney Burnham (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Charles Skurnik (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Deepthy Kishore (See above for address) TERMINATED: 07/11/2018
Ethan Price Davis (See above for address) TERMINATED: 07/19/2018
Vinita B. Andrapalliyal

Defendant CENTERS FOR MEDICARE AND MEDICAID SERVICES
Defendant ALEX M. AZAR, II United States Secretary of Health and Human Services
Defendant PAUL MANGO in his official capacity as Chief Principal Deputy Administrator, The Centers for Medicare and Medicaid Services

(See above for address) ATTORNEY TO BE NOTICED
represented by James Mahoney Burnham (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Charles Skurnik (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Deepthy Kishore (See above for address) TERMINATED: 07/11/2018
Ethan Price Davis (See above for address) TERMINATED: 07/19/2018
Vinita B. Andrapalliyal (See above for address) ATTORNEY TO BE NOTICED
represented by James Mahoney Burnham (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Charles Skurnik (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Deepthy Kishore (See above for address) TERMINATED: 07/11/2018
Ethan Price Davis (See above for address) TERMINATED: 07/19/2018
Vinita B. Andrapalliyal (See above for address) ATTORNEY TO BE NOTICED
represented by James Mahoney Burnham (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Charles Skurnik (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Vinita B. Andrapalliyal (See above for address) LEAD ATTORNEY

V. Intervenor Defendant COMMONWEALTH OF KENTUCKY ex rel. Matthew G. Bevin, Governor
Movant AARP

ATTORNEY TO BE NOTICED
represented by Mark Stephen Pitt OFFICE OF THE GOVERNOR General Counsel 700 Capital Avenue Suite 101 Frankfort, KY 40601 (502) 564−2611 Email: Steve.Pitt@ky.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Franklin Kuhn OFFICE OF THE GOVERNOR OF KENTUCKY 700 Capital Avenue Suite 101 Frankfort, KY 40601 (502) 564−2611 Email: matt.kuhn@ky.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Stephen Chad Meredith OFFICE OF THE GOVERNOR General Counsel 700 Capital Avenue Suite 101 Frankfort, KY 40601 (502) 564−2611 Email: Chad.Meredith@ky.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Johann Frederick Herklotz COMMONWEALTH OF KENTUCKY Office of Legal Services 275 East Main Street 5W−B Frankfort, KY 40621 (502) 564−7042 Email: hans.herklotz@ky.gov ATTORNEY TO BE NOTICED
Matthew Harold Kleinert COMMONWEALTH OF KENTUKY Office of Legal Services 275 East Main Street 5W−B Frankfort, KY 40621 (502) 564−7905 Email: matthewh.kleinert@ky.gov ATTORNEY TO BE NOTICED
represented by Maame Gyamfi AARP FOUNDATION 601 E Street NW Suite B4−270

Movant AARP FOUNDATION
Movant JUSTICE IN AGING
Movant DISABILITY RIGHTS EDUCATION AND DEFENSE FUND
Movant NATIONAL ACADEMY OF ELDER LAW ATTORNEYS
Amicus DEANS, CHAIRS AND SCHOLARS

Washington, DC 20049 202−434−6291 Fax: 202−434−6424 Email: mgyamfi@aarp.org LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Maame Gyamfi (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Robert Stanton Jones ARNOLD & PORTER KAYE SCHOLER LLP 601 Massachusetts Ave, NW Washington, DC 20001 (202) 942−5563 Fax: (202) 942−5999 Email: stanton.jones@arnoldporter.com ATTORNEY TO BE NOTICED
represented by Maame Gyamfi (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Robert Stanton Jones (See above for address) ATTORNEY TO BE NOTICED
represented by Maame Gyamfi (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Robert Stanton Jones (See above for address) ATTORNEY TO BE NOTICED
represented by Maame Gyamfi (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Robert Stanton Jones (See above for address) ATTORNEY TO BE NOTICED
represented by Edward T. Waters FELDESMAN TUCKER LEIFER FIDELL LLP 1129 20th Street, NW Suite 400 Washington, DC 20036 (202) 466−8960 Fax: (202) 293−8103

Amicus AARP
Amicus AARP FOUNDATION
Amicus JUSTICE IN AGING
Amicus NATIONAL ACADEMY OF ELDER LAW ATTORNEYS

Email: ewaters@feldesmantucker.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Phillip A. Escoriaza FELDESMAN TUCKER LEIFER FIDELL LLP 1129 20th Street, NW Suite 400 Washington, DC 20036 202−466−8960 Fax: 202−293−8103 Email: pescoriaza@ftlf.com LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Maame Gyamfi (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Lisa Schiavo Blatt WILLIAMS & CONNOLLY LLP 725 12th St. NW Washington, DC 20005 (202) 434−5050 Email: lblatt@wc.com TERMINATED: 02/01/2019
represented by Maame Gyamfi (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Lisa Schiavo Blatt (See above for address) TERMINATED: 02/01/2019
Robert Stanton Jones (See above for address) ATTORNEY TO BE NOTICED
represented by Lisa Schiavo Blatt (See above for address) TERMINATED: 02/01/2019
Robert Stanton Jones (See above for address) ATTORNEY TO BE NOTICED
represented by Lisa Schiavo Blatt (See above for address) TERMINATED: 02/01/2019
Robert Stanton Jones (See above for address) ATTORNEY TO BE NOTICED

Amicus DISABILITY RIGHTS EDUCATION AND DEFENSE FUND
Amicus AMERICAN ACADEMY OF PEDIATRICS
Amicus AMERICAN COLLEGE OF PHYSICIANS
Amicus AMERICAN MEDICAL ASSOCIATION
Amicus AMERICAN PSYCHIATRIC ASSOCIATION
Amicus CATHOLIC HEALTH ASSOCIATION OF THE UNITED STATES
Amicus MARCH OF DIMES
Amicus NATIONAL ALLIANCE ON MENTAL ILLNESS
Amicus AARP Amicus

represented by Lisa Schiavo Blatt (See above for address) TERMINATED: 02/01/2019
Robert Stanton Jones (See above for address) ATTORNEY TO BE NOTICED
represented by Matthew J. Higgins HOGAN LOVELLS US LLP 555 Thirteenth Street, NW Washington, DC 20004 202−637−5889 Email: matthew.higgins@hoganlovells.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Matthew J. Higgins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Matthew J. Higgins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Matthew J. Higgins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Matthew J. Higgins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Matthew J. Higgins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Matthew J. Higgins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

AARP FOUNDATION
Amicus JUSTICE IN AGING
Amicus NATIONAL ACADEMY OF ELDER LAW ATTORNEYS
Amicus DISABILITY RIGHTS EDUCATION AND DEFENSE FUND

Date Filed 01/24/2018
01/24/2018 01/24/2018 01/25/2018
01/26/2018 02/09/2018 02/09/2018

# Docket Text
1 COMPLAINT against ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, THE CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA ( Filing fee $ 400 receipt number 0090−5300365) filed by KATELYN ALLEN, SHAWNA NICOLE MCCOMAS, GLASSIE MAE KASEY, RONNIE MAURICE STEWART, DAVID ROODE, WILLIAM BENNETT, LAKIN BRANHAM, MICHAEL WOODS, AMANDA SPEARS, SHEILA MARLENE PENNEY, QUENTON RADFORD, ALEXA HATCHER, SHANNA BALLINGER, KIMBERLY WITHERS, DAVE KOBERSMITH. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Summons, # 6 Summons, # 7 Summons, # 8 Summons, # 9 Summons, # 10 Civil Cover Sheet)(Perkins, Jane) (Entered: 01/24/2018)
2 REQUEST FOR SUMMONS TO ISSUE filed by KATELYN ALLEN, SHAWNA NICOLE MCCOMAS, GLASSIE MAE KASEY, RONNIE MAURICE STEWART, DAVID ROODE, WILLIAM BENNETT, LAKIN BRANHAM, MICHAEL WOODS, AMANDA SPEARS, SHEILA MARLENE PENNEY, QUENTON RADFORD, ALEXA HATCHER, SHANNA BALLINGER, KIMBERLY WITHERS, DAVE KOBERSMITH.(Perkins, Jane) (Entered: 01/24/2018)
Case Assigned to Judge James E. Boasberg. (zsth) (Entered: 01/24/2018)
3 REQUEST FOR SUMMONS TO ISSUE filed by KATELYN ALLEN, SHAWNA NICOLE MCCOMAS, GLASSIE MAE KASEY, RONNIE MAURICE STEWART, DAVID ROODE, WILLIAM BENNETT, LAKIN BRANHAM, MICHAEL WOODS, AMANDA SPEARS, SHEILA MARLENE PENNEY, QUENTON RADFORD, ALEXA HATCHER, SHANNA BALLINGER, KIMBERLY WITHERS, DAVE KOBERSMITH. (Attachments: # 1 Summons, # 2 Summons, # 3 Summons, # 4 Summons, # 5 Summons)(Perkins, Jane) (Entered: 01/25/2018)
4 SUMMONS (6) Issued Electronically as to ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, THE CENTERS FOR MEDICARE AND MEDICAID SERVICES, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Attachments: # 1 Notice and Consent)(znmw) (Entered: 01/26/2018)
5 REQUEST FOR SUMMONS TO ISSUE filed by KATELYN ALLEN, SHAWNA NICOLE MCCOMAS, GLASSIE MAE KASEY, RONNIE MAURICE STEWART, DAVID ROODE, WILLIAM BENNETT, LAKIN BRANHAM, MICHAEL WOODS, AMANDA SPEARS, SHEILA MARLENE PENNEY, QUENTON RADFORD, ALEXA HATCHER, SHANNA BALLINGER, KIMBERLY WITHERS, DAVE KOBERSMITH. (Attachments: # 1 Summons)(Perkins, Jane) (Entered: 02/09/2018)
6 MOTION to Transfer Case to the Eastern District of Kentucky, and Supporting Memorandum by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Text of Proposed Order)(Kishore, Deepthy) (Entered: 02/09/2018)

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03/01/2018 03/01/2018 03/01/2018

7 SUMMONS (2) Issued Electronically as to U.S. Attorney and U.S. Attorney General (znmw) (Entered: 02/12/2018)
8 NOTICE of Appearance by Thomas J. Perrelli on behalf of KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Perrelli, Thomas) (Entered: 02/19/2018)
9 NOTICE of Appearance by Lauren J. Hartz on behalf of KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Hartz, Lauren) (Entered: 02/19/2018)
10 NOTICE of Appearance by Devi M. Rao on behalf of KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Rao, Devi) (Entered: 02/20/2018)
11 NOTICE of Appearance by Samuel Jacobson on behalf of KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Jacobson, Samuel) (Entered: 02/20/2018)
12 NOTICE of Appearance by Natacha Y. Lam on behalf of KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Lam, Natacha) (Entered: 02/20/2018)
13 NOTICE of Appearance by Ian Heath Gershengorn on behalf of KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Gershengorn, Ian) (Entered: 02/20/2018)
14 NOTICE of Appearance by Catherine A. McKee on behalf of All Plaintiffs (McKee, Catherine) (Entered: 02/22/2018)
15 Memorandum in opposition to re 6 MOTION to Transfer Case to the Eastern District of Kentucky, and Supporting Memorandum filed by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS. (Attachments: # 1 Exhibit A, # 2 Proposed Order)(Perkins, Jane) (Entered: 02/23/2018)
16 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed as to the United States Attorney. Date of Service Upon United States Attorney on 2/14/2018. Answer due for ALL FEDERAL DEFENDANTS by 4/15/2018. (Rao, Devi) (Entered: 03/01/2018)
17 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed on United States Attorney General. Date of Service Upon United States Attorney General 02/14/2018. (Rao, Devi) (Entered: 03/01/2018)
18 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES served

03/01/2018 03/01/2018 03/01/2018 03/01/2018 03/01/2018 03/02/2018
03/02/2018 03/02/2018 03/05/2018
03/05/2018
03/08/2018
03/08/2018
03/08/2018

on 1/30/2018 (Rao, Devi) (Entered: 03/01/2018)
19 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. ERIC HARGAN served on 1/31/2018 (Rao, Devi) (Entered: 03/01/2018)
20 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. CENTERS FOR MEDICARE AND MEDICAID SERVICES served on 1/31/2018 (Rao, Devi) (Entered: 03/01/2018)
21 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. SEEMA VERMA served on 1/31/2018 (Rao, Devi) (Entered: 03/01/2018)
22 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. DEMETRIOS L. KOUZOUKAS served on 1/31/2018 (Rao, Devi) (Entered: 03/01/2018)
23 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. BRIAN NEALE served on 1/31/2018 (Rao, Devi) (Entered: 03/01/2018)
24 Consent MOTION for Extension of Time to File Reply in Support of Motion to Transfer by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Text of Proposed Order)(Kishore, Deepthy) (Entered: 03/02/2018)
MINUTE ORDER GRANTING 24 Motion for Extension of Time to File. The Court ORDERS that Defendants shall file their Reply in Support of their Motion to Transfer on or before March 5, 2018. So ORDERED by Judge James E. Boasberg on 3/2/2018. (lcjeb3) (Entered: 03/02/2018)
Set/Reset Deadlines: Reply in Support of Motion to Transfer due by 3/5/2018. (lsj) (Entered: 03/02/2018)
25 AMICUS BRIEF re 6 MOTION to Transfer Case to the Eastern District of Kentucky, and Supporting Memorandum filed by BRIAN NEALE, SEEMA VERMA, DEMETRIOS L. KOUZOUKAS, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES by COMMONWEALTH OF KENTUCKY. (Attachments: # 1 Exhibit January 12, 2018 Executive Order)(Kuhn, Matthew) Modified text to read "amicus brief" on 3/6/2018 (td). (Entered: 03/05/2018)
26 REPLY to opposition to motion re 6 MOTION to Transfer Case to the Eastern District of Kentucky, and Supporting Memorandum filed by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Kishore, Deepthy) (Entered: 03/05/2018)
27 Joint MOTION for Briefing Schedule by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Attachments: # 1 Proposed Order)(Perkins, Jane) (Entered: 03/08/2018)
28 NOTICE of Filing Certified List of the Contents of the Administrative Record by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Certified List of the Contents of the Administrative Record)(Kishore, Deepthy) (Entered: 03/08/2018)
MINUTE ORDER GRANTING Joint 27 Motion for Briefing Schedule. The Court ORDERS that: 1) Plaintiffs shall file their Motion for Preliminary Injunction and/or Summary Judgment on or before March 30, 2018; 2) Defendants shall file their Opposition and Motion to Dismiss and/or for Summary Judgment on or before April 25, 2018; 3) Plaintiffs shall file their Opposition and Reply on or before May 14, 2018; 4) Defendants shall reply on or before May 24, 2018. So ORDERED by Judge James

03/08/2018 03/28/2018
03/29/2018 03/29/2018 03/29/2018
03/30/2018 03/30/2018 03/30/2018
04/02/2018 04/04/2018 04/06/2018 04/06/2018

E. Boasberg on 3/8/2018. (lcjeb3) (Entered: 03/08/2018)
Set/Reset Deadlines: Summary Judgment/Preliminary Injunction motions due by 3/30/2018. Response to Motion for Summary Judgment/Preliminary Injunction due by 4/25/2018. Reply to Motion for Summary Judgment/Preliminary Injunction due by 5/14/2018. Replies to Motion for Summary Judgment/Preliminary Injunction due by 5/24/2018. (znbn) (Entered: 03/08/2018)
29 Unopposed MOTION for Leave to File Excess Pages Motion and Memorandum in Support of Summary Judgment by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Perkins, Jane) (Entered: 03/28/2018)
MINUTE ORDER: The Court ORDERS that Plaintiffs' 29 Motion is GRANTED IN PART and DENIED IN PART. They may file a brief not to exceed 50 pages. So ORDERED by Judge James E. Boasberg on 3/29/2018. (lcjeb3) (Entered: 03/29/2018)
30 Unopposed MOTION to Intervene by COMMONWEALTH OF KENTUCKY (Attachments: # 1 Memorandum in Support, # 2 Text of Proposed Order, # 3 Exhibit Proposed Answer)(Kuhn, Matthew) (Entered: 03/29/2018)
31 NOTICE of Filing Supplement to the Certified List of the Contents of the Administrative Record by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA re 28 Notice (Other), (Attachments: # 1 Certification of the Supplemental Administrative Record)(Kishore, Deepthy) (Entered: 03/29/2018)
MINUTE ORDER: The Court ORDERS that the Commonwealth's 30 Motion to Intervene is GRANTED, and it shall be bound to the same extent as the federal Defendants to any current or future scheduling Order. So ORDERED by Judge James E. Boasberg on 3/30/2018. (lcjeb3) (Entered: 03/30/2018)
32 ANSWER to Complaint by COMMONWEALTH OF KENTUCKY. (td) (Entered: 03/30/2018)
33 MOTION for Summary Judgment by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Attachments: # 1 Memorandum in Support, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Exhibit 5, # 7 Exhibit 6, # 8 Exhibit 7, # 9 Exhibit 8, # 10 Exhibit 9, # 11 Exhibit 10, # 12 Exhibit 11, # 13 Exhibit 12, # 14 Exhibit 13, # 15 Exhibit 14, # 16 Exhibit 15, # 17 Exhibit 16, # 18 Text of Proposed Order)(Perkins, Jane) (Entered: 03/30/2018)
46 LEAVE TO FILE DENIED− Movant Amy Mischler's Motion for Limited Leave to File Notice and Motion for Warning Order to the Defendants This document is unavailable as the Court denied its filing.. Signed by Judge James E. Boasberg on 4/2/18. (td) Modified date filed on 4/19/2018 (ztd). (Entered: 04/17/2018)
34 NOTICE Regarding Defendants' Motion to Transfer by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA re 6 MOTION to Transfer Case to the Eastern District of Kentucky, and Supporting Memorandum (Kishore, Deepthy) (Entered: 04/04/2018)
35 NOTICE of Appearance by Edward T. Waters on behalf of Scholars Amici (Waters, Edward) (Entered: 04/06/2018)
36 MOTION for Leave to File Amici Curiae Brief in Support of Plaintiffs' Motion for Summary Judgment by AARP, AARP FOUNDATION, Justice in Aging, National Academy of Elder Law Attorneys, Disability Rights Education and Defense Fund (Attachments: # 1 Proposed Brief of Amici Curiae, # 2 Text of Proposed Order)(Blatt,

04/06/2018
04/06/2018 04/06/2018
04/09/2018 04/09/2018 04/09/2018
04/09/2018 04/10/2018 04/10/2018 04/10/2018 04/10/2018 04/10/2018 04/13/2018 04/13/2018 04/16/2018 04/17/2018

Lisa) (Entered: 04/06/2018)
37 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− Phillip A. Escoriaza, :Firm− Feldesman Tucker Leifer Fidell LLP, :Address− 1129 20th Street NW, 4th Floor, Washington, DC 20036. Phone No. − 202−466−8960. Fax No. − 202−293−8103 Filing fee $ 100, receipt number 0090−5409592. Fee Status: Fee Paid. by Scholars Amici (Attachments: # 1 Declaration Phillip A. Escoriaza, # 2 Text of Proposed Order)(Waters, Edward) (Entered: 04/06/2018)
38 MOTION for Leave to File Brief for Amici Curiae by Scholars Amici (Attachments: # 1 Exhibit Proposed Amici Curiae Brief, # 2 Text of Proposed Order)(Waters, Edward) (Entered: 04/06/2018)
39 RESPONSE re: 34 to Defendant's Notice Regarding Their Motion to Transfer filed by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS. (Perkins, Jane) Modified to add linkage on 4/9/2018 (td). (Entered: 04/06/2018)
MINUTE ORDER: The Court ORDERS that Amici's 36 Motion is GRANTED and their brief is deemed FILED. So ORDERED by Judge James E. Boasberg on 4/9/2018. (lcjeb3) (Entered: 04/09/2018)
MINUTE ORDER granting 37 Motion Pro Hac Vice of PHILLIP A. ESCORIAZA. So ORDERED by Judge James E. Boasberg on 4/9/2018. (lcjeb3) (Entered: 04/09/2018)
MINUTE ORDER: The Court ORDERS that the Scholars Amici's 38 Motion is DENIED WITHOUT PREJUDICE for violating the Court's local rule concerning excessive footnotes. Should Amici wish to refile, their brief should contain no more than 10 footnotes containing no more than 50 aggregate lines of text. So ORDERED by Judge James E. Boasberg on 4/9/2018. (lcjeb3) (Entered: 04/09/2018)
40 AMICUS BRIEF by AARP, AARP FOUNDATION, JUSTICE IN AGING, NATIONAL ACADEMY OF ELDER LAW ATTORNEYS, DISABILITY RIGHTS EDUCATION AND DEFENSE FUND . (td) Modified to add filers on 4/12/2018 (td). (Entered: 04/09/2018)
41 ORDER DENYING Defendants' 6 Motion to Transfer Venue. Signed by Judge James E. Boasberg on 4/10/18. (lcjeb1) (Entered: 04/10/2018)
42 MEMORANDUM AND OPINION re 41 Order. Signed by Judge James E. Boasberg on 4/10/18. (lcjeb1) (Entered: 04/10/2018)
43 MOTION for Leave to File Brief by Scholars Amici (Attachments: # 1 Proposed Amici Curiae Brief by Scholars Amici)(Waters, Edward) (Entered: 04/10/2018)
MINUTE ORDER: The Court ORDERS that Amici's 43 Motion is GRANTED and their brief is deemed FILED. So ORDERED by Judge James E. Boasberg on 4/10/2018. (lcjeb3) (Entered: 04/10/2018)
44 AMICUS BRIEF by DEANS, CHAIRS AND SCHOLARS. (td) (Entered: 04/11/2018)
MINUTE ORDER: A conference call is hereby set for Tuesday, April 17, 2018, at 12:00 p.m. The Court ORDERS that the parties shall jointly call Chambers at (202) 354−3300 at this time. So ORDERED by Judge James E. Boasberg on 4/13/2018. (lcjeb3) (Entered: 04/13/2018)
Set/Reset Hearings: Telephone Conference set for 4/17/2018 at 12:00 PM in Chambers before Judge James E. Boasberg. (znbn) (Entered: 04/13/2018)
45 NOTICE of Appearance by Mark Stephen Pitt on behalf of COMMONWEALTH OF KENTUCKY (Pitt, Mark) (Entered: 04/16/2018)
47 NOTICE of Appearance by Stephen Chad Meredith on behalf of COMMONWEALTH OF KENTUCKY (Meredith, Stephen) (Entered: 04/17/2018)

04/17/2018 04/17/2018 04/24/2018 04/24/2018 04/25/2018 04/25/2018
04/25/2018
04/25/2018 04/26/2018 04/26/2018 04/26/2018 04/26/2018

MINUTE ORDER: As discussed in today's conference call, the Court ORDERS that: 1) All parties shall file by May 7, 2018, copies of any portion of the administrative record or extra−record material (e.g., articles, studies, or reports) upon which they rely; and 2) All parties shall appear for argument on the pending motions on June 13, 2018, at 10:30 a.m. So ORDERED by Judge James E. Boasberg on 4/17/2018. (lcjeb3) (Entered: 04/17/2018)
Set/Reset Deadlines/Hearings: Copies of any portion of the administrative record or extra−record material due by 5/7/2018. Motion Hearing set for 6/13/2018 at 10:30 AM in Courtroom 25 before Judge James E. Boasberg. (znbn) (Entered: 04/17/2018)
48 NOTICE of Appearance by Vinita B. Andrapalliyal on behalf of All Defendants (Andrapalliyal, Vinita) (Entered: 04/24/2018)
49 Consent MOTION for Leave to File Excess Pages by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Text of Proposed Order)(Andrapalliyal, Vinita) (Entered: 04/24/2018)
50 MOTION for Summary Judgment And Response to Plaintiffs' Motion for Summary Judgment by COMMONWEALTH OF KENTUCKY (Attachments: # 1 Memorandum in Support, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Text of Proposed Order)(Kuhn, Matthew) (Entered: 04/25/2018)
51 MOTION for Summary Judgment , MOTION to Dismiss by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Memorandum in Support of Federal Defendants' Motion to Dismiss or, In the Alternative, for Summary Judgment, # 2 Exhibit Exhibit List, # 3 Exhibit A, # 4 Exhibit B, # 5 Exhibit C, # 6 Exhibit D, # 7 Exhibit E, # 8 Exhibit F, # 9 Exhibit G, # 10 Exhibit H, # 11 Exhibit I, # 12 Exhibit J, # 13 Exhibit K, # 14 Exhibit L, # 15 Exhibit M, # 16 Exhibit N, # 17 Exhibit O, # 18 Exhibit P, # 19 Exhibit Q, # 20 Exhibit R, # 21 Text of Proposed Order)(Kishore, Deepthy) (Entered: 04/25/2018)
52 ENTERED IN ERROR. . . . .Memorandum in opposition to re 33 MOTION for Summary Judgment filed by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Attachments: # 1 Exhibit List, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Exhibit H, # 10 Exhibit I, # 11 Exhibit J, # 12 Exhibit K, # 13 Exhibit L, # 14 Exhibit M, # 15 Exhibit N, # 16 Exhibit O, # 17 Exhibit P, # 18 Exhibit Q, # 19 Exhibit R)(Kishore, Deepthy) Modified on 4/26/2018 (ztd). (Entered: 04/25/2018)
53 RESPONSE re 33 MOTION for Summary Judgment filed by COMMONWEALTH OF KENTUCKY. (See document no. 50 to view) (td) (Entered: 04/26/2018)
NOTICE OF ERROR re 50 Motion for Summary Judgment; emailed to matt.kuhn@ky.gov, cc'd 23 associated attorneys −− The PDF file you docketed contained errors: 1. Two−part docket entry, 2. Do not Refile. FYI to remember to docket all parts of your document(s), if you have multiple events and/or reliefs. (ztd, ) (Entered: 04/26/2018)
NOTICE OF ERROR re 52 Memorandum in Opposition; emailed to deepthy.c.kishore@usdoj.gov, cc'd 23 associated attorneys −− The PDF file you docketed contained errors: 1. Please refile document, 2. The attached document is duplicate of the Memorandum In Support of your Motion. (ztd, ) (Entered: 04/26/2018)
MINUTE ORDER GRANTING 49 Motion for Leave to File Excess Pages. The Court ORDERS that Federal Defendants shall file a brief not to exceed 50 pages. So ORDERED by Judge James E. Boasberg on 4/26/2018. (lcjeb3) (Entered: 04/26/2018)
54 Memorandum in opposition to re 33 MOTION for Summary Judgment filed by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES

05/07/2018 05/07/2018 05/07/2018 05/08/2018 05/08/2018 05/14/2018
05/15/2018 05/15/2018

DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Attachments: # 1 List of Exhibits Attached to Federal Defendants' Motion to Dismiss or, In the Alternative, for Summary Judgment)(Kishore, Deepthy) (Entered: 04/26/2018)
55 NOTICE of Filing of Administrative Record Excerpts by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Appendix of Excerpts from Administrative Record)(Andrapalliyal, Vinita) (Entered: 05/07/2018)
56 NOTICE OF FILING OF CITED SOURCES AND PORTIONS OF THE ADMINISTRATIVE RECORD by COMMONWEALTH OF KENTUCKY (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23, # 24 Exhibit 24, # 25 Exhibit 25, # 26 Exhibit 26, # 27 Exhibit 27, # 28 Exhibit 28)(Kuhn, Matthew) (Entered: 05/07/2018)
57 RESPONSE TO ORDER OF THE COURT re Order, / Plaintiff's Appendix filed by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS. (Attachments: # 1 Declaration of Jane Perkins, # 2 Appendix Part I, # 3 Appendix Part II, # 4 Appendix Part III, # 5 Appendix Part IV)(Perkins, Jane) (Entered: 05/07/2018)
58 Unopposed MOTION for Leave to File Single Consolidated Brief by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Attachments: # 1 Proposed Order)(Perkins, Jane) (Entered: 05/08/2018)
MINUTE ORDER: The Court ORDERS that Plaintiffs' 58 Motion is GRANTED IN PART and DENIED IN PART. They shall file a consolidated brief not exceeding 55 pages. So ORDERED by Judge James E. Boasberg on 5/8/2018. (lcjeb3) (Entered: 05/08/2018)
59 REPLY re 33 MOTION for Summary Judgment And Response to Plaintiffs' Motion for Summary Judgment − REPLY MEMORANDUM IN SUPPORT OF PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT AND PLAINTIFFS' UNIFIED RESPONSE IN OPPOSITION TO FEDERAL DEFENDANTS' MOTION TO DISMISS AND FEDERAL DEFENDANTS' AND COMMONWEALTH INTERVENORS' MOTIONS FOR SUMMARY JUDGMENT filed by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS. (Perkins, Jane) Modified link on 5/16/2018 (znmw). (Entered: 05/14/2018)
NOTICE OF ERROR re 59 Reply to Document; emailed to perkins@healthlaw.org, cc'd 23 associated attorneys −− The PDF file you docketed contained errors: 1. Two−part docket entry, 2. The second part of your, the Opposition, document needs to be filed. (ztd, ) (Entered: 05/15/2018)
60 RESPONSE re 51 MOTION for Summary Judgment MOTION to Dismiss , 50 MOTION for Summary Judgment And Response to Plaintiffs' Motion for Summary Judgment filed by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS. (Perkins,

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05/22/2018 05/23/2018 05/24/2018 05/24/2018 05/24/2018 05/25/2018
05/25/2018
06/07/2018 06/07/2018 06/11/2018

Jane) (Entered: 05/15/2018)
61 Consent MOTION to Continue Reschedule Argument by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Attachments: # 1 Attachment A, # 2 Attachment B, # 3 Proposed Order)(Perkins, Jane) Modified event title on 5/22/2018 (znmw). (Entered: 05/21/2018)
MINUTE ORDER GRANTING 61 Motion to Reschedule Argument. The Court ORDERS that the oral argument scheduled for June 13, 2018, is hereby VACATED and RESET for June 15, 2018, at 11 a.m. in Courtroom 25. So ORDERED by Judge James E. Boasberg on 5/22/2018. (lcjeb3) (Entered: 05/22/2018)
62 Consent MOTION for Leave to File Excess Pages by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Text of Proposed Order)(Kishore, Deepthy) (Entered: 05/23/2018)
MINUTE ORDER GRANTING 62 Motion for Leave to File Excess Pages. The Court ORDERS that Federal Defendants shall file a Reply not to exceed 35 pages. So ORDERED by Judge James E. Boasberg on 5/24/2018. (lcjeb3) (Entered: 05/24/2018)
63 REPLY to opposition to motion re 50 MOTION for Summary Judgment And Response to Plaintiffs' Motion for Summary Judgment filed by COMMONWEALTH OF KENTUCKY. (Kuhn, Matthew) (Entered: 05/24/2018)
64 REPLY to opposition to motion re 51 MOTION for Summary Judgment MOTION to Dismiss filed by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Kishore, Deepthy) (Entered: 05/24/2018)
65 NOTICE of Filing Corrected Reply Memorandum by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA re 51 MOTION for Summary Judgment MOTION to Dismiss , 64 Reply to opposition to Motion, (Attachments: # 1 Memorandum in Support −− Corrected Reply Memorandum in Support of Federal Defendants' Motion to Dismiss, or in the Alternative, for Summary Judgment)(Kishore, Deepthy) (Entered: 05/25/2018)
66 NOTICE of Filing of Supplemental Excerpts from the Administrative Record by CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Excerpt 1, # 2 Excerpt 2, # 3 Excerpt 3, # 4 Excerpt 4, # 5 Excerpt 5, # 6 Excerpt 6, # 7 Excerpt 7, # 8 Excerpt 8, # 9 Excerpt 9, # 10 Excerpt 10, # 11 Excerpt 11, # 12 Excerpt 12, # 13 Excerpt 13)(Andrapalliyal, Vinita) (Entered: 05/25/2018)
MINUTE ORDER: The Court ORDERS that Amici shall, by June 12, 2018, submit a table of contents in the same form as the parties' May 7, 2018, submissions. So ORDERED by Judge James E. Boasberg on 6/7/2018. (lcjeb3) (Entered: 06/07/2018)
Set/Reset Deadlines: Amici shall, by June 12, 2018, submit a table of contents in the same form as the parties' May 7, 2018, submissions. (znbn) (Entered: 06/07/2018)
67 RESPONSE TO ORDER OF THE COURT re Order that amici curiae AARP et al. submit a table of sources cited in amici's brief filed by AARP, AARP FOUNDATION, DISABILITY RIGHTS EDUCATION AND DEFENSE FUND, JUSTICE IN AGING, NATIONAL ACADEMY OF ELDER LAW ATTORNEYS. (Blatt, Lisa) (Entered: 06/11/2018)

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68 NOTICE of Filing a Table of Contents by DEANS, CHAIRS AND SCHOLARS (Waters, Edward) (Entered: 06/11/2018)
Set/Reset Hearings: Motion Hearing set for 6/15/2018 at 11:00 AM in Courtroom 25 before Judge James E. Boasberg. (znbn) (Entered: 06/11/2018)
69 NOTICE Regarding Initial Kentucky HEALTH Enrollment by COMMONWEALTH OF KENTUCKY (Attachments: # 1 Affidavit)(Kuhn, Matthew) (Entered: 06/13/2018)
70 NOTICE of Appearance by Ethan Price Davis on behalf of All Defendants (Davis, Ethan) (Entered: 06/14/2018)
Minute Entry for proceedings held before Judge James E. Boasberg: Motion Hearing held on 6/15/2018 re 50 MOTION for Summary Judgment And Response to Plaintiffs' Motion for Summary Judgment filed by COMMONWEALTH OF KENTUCKY, 33 MOTION for Summary Judgment filed by DAVE KOBERSMITH, AMANDA SPEARS, GLASSIE MAE KASEY, KATELYN ALLEN, LAKIN BRANHAM, WILLIAM BENNETT, MICHAEL WOODS, SHEILA MARLENE PENNEY, SHAWNA NICOLE MCCOMAS, ALEXA HATCHER, KIMBERLY WITHERS, RONNIE MAURICE STEWART, QUENTON RADFORD, SHANNA BALLINGER, DAVID ROODE, 51 MOTION for Summary Judgment MOTION to Dismiss filed by SEEMA VERMA, DEMETRIOS L. KOUZOUKAS, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, BRIAN NEALE, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN. Oral arguments heard and motions taken under advisement. (Court Reporter Jeff Hook) (nbn) (Entered: 06/15/2018)
71 TRANSCRIPT OF PROCEEDINGS before Judge James E. Boasberg held on June 15, 2018; Page Numbers: 1 − 75. Date of Issuance: June 15, 2018. Court Reporter: Jeff Hook. Contact Information: 202−354−3373 / jeff_hook@dcd.uscourts.gov. Transcripts may be ordered by submitting the Transcript Order Form
For the first 90 days after this filing date, the transcript may be viewed at the courthouse at a public terminal or purchased from the court reporter referenced above. After 90 days, the transcript may be accessed via PACER. Other transcript formats, (multi−page, condensed, CD or ASCII) may be purchased from the court reporter.
NOTICE RE REDACTION OF TRANSCRIPTS: The parties have twenty−one days to file with the court and the court reporter any request to redact personal identifiers from this transcript. If no such requests are filed, the transcript will be made available to the public via PACER without redaction after 90 days. The policy, which includes the five personal identifiers specifically covered, is located on our website at www.dcd.uscourts.gov.
Redaction Request due 7/6/2018. Redacted Transcript Deadline set for 7/16/2018. Release of Transcript Restriction set for 9/13/2018.(Hook, Jeff) (Entered: 06/15/2018)
72 NOTICE OF SUPPLEMENTAL AUTHORITY by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C)(Andrapalliyal, Vinita) (Entered: 06/19/2018)
73 ORDER: The Court ORDERS that: 1) Plaintiffs' 33 Motion for Summary Judgment is GRANTED; 2) Defendants' 50 , 51 Cross−Motions for Summary Judgment are DENIED; 3) The Secretary's approval of Kentucky HEALTH is VACATED and REMANDED to the agency; and 4) Judgment is ENTERED in favor of Plaintiffs. Signed by Judge James E. Boasberg on 6/29/2018. (lcjeb3) (Entered: 06/29/2018)
74 MEMORANDUM OPINION re 73 Order. Signed by Judge James E. Boasberg on 6/29/2018. (lcjeb3) (Entered: 06/29/2018)
75 NOTICE OF WITHDRAWAL OF APPEARANCE as to ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. Attorney Deepthy Kishore terminated. (Kishore, Deepthy) (Entered: 07/11/2018)

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76 NOTICE OF WITHDRAWAL OF APPEARANCE as to ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. Attorney Ethan Price Davis terminated. (Davis, Ethan) (Entered: 07/19/2018)
77 Joint MOTION to Strike 73 Order on Motion for Summary Judgment, (Subsection (4) of Order), Joint MOTION to Vacate Entry of Final Judgment by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Text of Proposed Order)(Andrapalliyal, Vinita) (Entered: 08/10/2018)
MINUTE ORDER GRANTING 77 Motion to Strike. The Court ORDERS that subsection (4) in Order 73 is hereby VACATED and the case is REOPENED. So ORDERED by Judge James E. Boasberg on 8/14/18. (lcjeb1) (Entered: 08/14/2018)
MINUTE ORDER: As the case has been reopened, the Court ORDERS that the parties shall submit joint status reports on the 15th of each month until further Order of the Court. So ORDERED by Judge James E. Boasberg on 8/30/2018. (lcjeb3) (Entered: 08/30/2018)
78 NOTICE OF WITHDRAWAL OF APPEARANCE as to KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS. Attorney Samuel Jacobson terminated. (Jacobson, Samuel) (Entered: 09/06/2018)
79 Joint STATUS REPORT by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Andrapalliyal, Vinita) (Entered: 09/14/2018)
80 NOTICE of Appearance by Matthew Charles Skurnik on behalf of ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Skurnik, Matthew) (Entered: 10/10/2018)
81 Joint STATUS REPORT by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Skurnik, Matthew) (Entered: 10/15/2018)
82 Joint STATUS REPORT by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Andrapalliyal, Vinita) (Entered: 11/15/2018)
83 Joint MOTION for Briefing Schedule by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (McKee, Catherine) (Entered: 12/06/2018)
MINUTE ORDER GRANTING Joint 83 Motion for Briefing Schedule. The Court ORDERS that: 1) Defendants shall produce the administrative record by December 17, 2018; 2) Plaintiffs' shall file their first amended complaint and motion for summary judgment by January 14, 2019; 3) Defendants and Intervenors shall file their oppositions to Plaintiffs' motion and their motions to dismiss and/or motions for for summary judgment by January 28, 2019; 4) Plaintiffs shall file their opposition to Defendants' and Intervenors' motions and their reply in support of their motion by February 11, 2019; 5) Defendants and Intervenors shall file their replies in support of their motions by February 22, 2019; and 6) Defendants' obligation to answer the first

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amended complaint shall be stayed until resolution of these motions. So ORDERED by Judge James E. Boasberg on 12/6/2018. (lcjeb3) (Entered: 12/06/2018)
Set/Reset Deadlines: Administrative Record due by 12/17/2018. Amended Pleadings due by 1/14/2019. Summary Judgment motions due by 1/14/2019. Response to Motion for Summary Judgment due by 1/28/2019. Reply to Motion for Summary Judgment due by 2/11/2019. Replies due by 2/22/2019. (znbn) (Entered: 12/06/2018)
84 Joint STATUS REPORT by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Andrapalliyal, Vinita) (Entered: 12/14/2018)
MINUTE ORDER: Per the parties' 84 Joint Status Report, the Court ORDERS that no further joint status reports are required absent further Order of the Court. So ORDERED by Judge James E. Boasberg on 12/14/2018. (lcjeb3) (Entered: 12/14/2018)
85 NOTICE of Certified Index to Administrative Record by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Certified Index to Administrative Record)(Skurnik, Matthew) (Entered: 12/17/2018)
86 MOTION for Leave to File Excess Pages by KATELYN ALLEN, SHANNA BALLINGER, WILLIAM BENNETT, LAKIN BRANHAM, ALEXA HATCHER, GLASSIE MAE KASEY, DAVE KOBERSMITH, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, QUENTON RADFORD, DAVID ROODE, AMANDA SPEARS, RONNIE MAURICE STEWART, KIMBERLY WITHERS, MICHAEL WOODS (Perkins, Jane) (Entered: 01/07/2019)
MINUTE ORDER: The Court ORDERS that Plaintiffs' 86 Motion is GRANTED IN PART and DENIED IN PART, and they may file an opening brief not to exceed 55 pages. So ORDERED by Judge James E. Boasberg on 1/8/2019. (lcjeb3) (Entered: 01/08/2019)
87 NOTICE of Supplemental Certified Index to Administrative Record by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Supplemental Notice of Certified Index to Administrative Record)(Skurnik, Matthew) (Entered: 01/11/2019)
88 AMENDED COMPLAINT against ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA, PAUL MANGO filed by SHAWNA NICOLE MCCOMAS, RONNIE MAURICE STEWART, SHEILA MARLENE PENNEY, DAVID ROODE, HUNTER MALONE, SARAH MARTIN, ALTHEA HUMBER, MELISSA SPEARS−LOJEK, LINDA KEITH, KIMBERLY KOBERSMITH, DEBRA WITTIG, RANDALL YATES, RODNEY LEE, TERI BLANTON, ROBIN RITTER, DIIKA:NEHI SEGOVIA.(Perkins, Jane) (Entered: 01/14/2019)
89 STRICKEN PURSUANT TO MINUTE ORDER FILED ON 1/15/2019..... MOTION for Partial Summary Judgment by TERI BLANTON, ALTHEA HUMBER, LINDA KEITH, KIMBERLY KOBERSMITH, RODNEY LEE, HUNTER MALONE, SARAH MARTIN, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, ROBIN RITTER, DAVID ROODE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, RONNIE MAURICE STEWART, DEBRA WITTIG, RANDALL YATES (Attachments: # 1 Memorandum in Support, # 2 Exhibit A − Stewart Declaration, # 3 Exhibit B − Kobersmith Declaration, # 4 Exhibit C − McComas Declaration, # 5 Exhibit D − Spears Declaration, # 6 Exhibit E − Roode Declaration, # 7 Exhibit F − Penney Declaration, # 8 Exhibit G − Keith Declaration, # 9 Exhibit H − Wittig Declaration, # 10 Exhibit I − Malone Declaration, # 11 Exhibit J − Humber Declaration, # 12 Exhibit K − Yates Declaration, # 13 Exhibit L − Segovia Declaration, # 14 Exhibit M − Ritter Declaration, # 15 Exhibit N − Martin Declaration, # 16 Exhibit O − Blanton Declaration, # 17 Exhibit P − Lee Declaration, # 18 Text of

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Proposed Order)(Perkins, Jane) Modified on 1/17/2019 (znbn). (Entered: 01/14/2019)
MINUTE ORDER: The Court ORDERS that Plaintiffs' 89 Motion for Summary Judgment is STRICKEN for violating the Court's Local Rule on excessive footnotes. Plaintiffs may have until January 17, 2019, to file a brief containing no more than 15 footnotes with an aggregate 75 lines of text. So ORDERED by Judge James E. Boasberg on 1/15/2019. (lcjeb3) (Entered: 01/15/2019)
90 MOTION to Stay Case In Light of Lapse of Appropriations, MOTION for Extension of Time to Meet All Deadlines by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, PAUL MANGO, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Proposed Order)(Skurnik, Matthew) (Entered: 01/15/2019)
MINUTE ORDER: If any party opposes the Government's 90 Motion to Stay, the Court ORDERS that it shall file such opposition by January 17, 2019. So ORDERED by Judge James E. Boasberg on 1/15/2019. (lcjeb3) (Entered: 01/15/2019)
Set/Reset Deadlines: Responses due by 1/17/2019. (znbn) (Entered: 01/17/2019)
Set/Reset Deadlines: Brief due by 1/17/2019. (znbn) (Entered: 01/17/2019)
91 MOTION for Partial Summary Judgment by TERI BLANTON, ALTHEA HUMBER, LINDA KEITH, KIMBERLY KOBERSMITH, RODNEY LEE, HUNTER MALONE, SARAH MARTIN, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, ROBIN RITTER, DAVID ROODE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, RONNIE MAURICE STEWART, DEBRA WITTIG, RANDALL YATES (Attachments: # 1 Memorandum in Support, # 2 Exhibit A − Stewart Declaration, # 3 Exhibit B − Kobersmith Declaration, # 4 Exhibit C − McComas Declaration, # 5 Exhibit D − Spears Declaration, # 6 Exhibit E − Roode Declaration, # 7 Exhibit F − Penney Declaration, # 8 Exhibit G − Keith Declaration, # 9 Exhibit H − Wittig Declaration, # 10 Exhibit I − Malone Declaration, # 11 Exhibit J − Humber Declaration, # 12 Exhibit K − Yates Declaration, # 13 Exhibit L − Segovia Declaration, # 14 Exhibit M − Ritter Declaration, # 15 Exhibit N − Martin Declaration, # 16 Exhibit O − Blanton Declaration, # 17 Exhibit P − Lee Declaration, # 18 Proposed Order)(Perkins, Jane) (Entered: 01/17/2019)
92 Memorandum in opposition to re 90 MOTION to Stay Case In Light of Lapse of Appropriations MOTION for Extension of Time to Meet All Deadlines filed by TERI BLANTON, ALTHEA HUMBER, LINDA KEITH, KIMBERLY KOBERSMITH, RODNEY LEE, HUNTER MALONE, SARAH MARTIN, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, ROBIN RITTER, DAVID ROODE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, RONNIE MAURICE STEWART, DEBRA WITTIG, RANDALL YATES. (Perkins, Jane) (Entered: 01/17/2019)
93 RESPONSE re 90 MOTION to Stay Case In Light of Lapse of Appropriations MOTION for Extension of Time to Meet All Deadlines filed by COMMONWEALTH OF KENTUCKY. (Kuhn, Matthew) (Entered: 01/17/2019)
MINUTE ORDER: The Court is inclined to extend briefing deadlines by only a week unless Kentucky agrees to delay its implementation. If Defendants wish to be further heard on their 90 Motion to Stay, the Court ORDERS that they shall file a reply by January 18, 2019, at 4:00 p.m. So ORDERED by Judge James E. Boasberg on 1/17/2019. (lcjeb1) (Entered: 01/17/2019)
Set/Reset Deadlines: Reply due by 1/18/2019 4:00 PM. (znbn) (Entered: 01/18/2019)
94 NOTICE of Appearance by Christopher J. Frisina on behalf of DEANS, CHAIRS AND SCHOLARS (Frisina, Christopher) (Entered: 01/18/2019)
MINUTE ORDER: The Court ORDERS that Defendants' 90 Motion to Stay is GRANTED IN PART and DENIED IN PART. Briefing deadlines are extended one week from the schedule set out in the Minute Order of December 6, 2018. So ORDERED by Judge James E. Boasberg on 1/18/2019. (lcjeb3) (Entered: 01/18/2019)

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95 Unopposed MOTION for Leave to File Amici Curiae Brief in Support of Plaintiffs by DEANS, CHAIRS AND SCHOLARS (Attachments: # 1 Scholar's Brief)(Waters, Edward) (Entered: 01/18/2019)
MINUTE ORDER: The Court ORDERS that the Amici's 95 Motion is GRANTED, and their [95−1] Brief is deemed FILED. So ORDERED by Judge James E. Boasberg on 1/22/2019. (lcjeb3) (Entered: 01/22/2019)
96 AMICUS BRIEF by DEANS, CHAIRS AND SCHOLARS. (tth) (Entered: 01/22/2019)
97 NOTICE of Appearance by Matthew J. Higgins on behalf of AMERICAN ACADEMY OF PEDIATRICS, AMERICAN COLLEGE OF PHYSICIANS, AMERICAN MEDICAL ASSOCIATION, AMERICAN PSYCHIATRIC ASSOCIATION, CATHOLIC HEALTH ASSOCIATION OF THE UNITED STATES, March of Dimes, NATIONAL ALLIANCE ON MENTAL ILLNESS (Higgins, Matthew) (Entered: 01/22/2019)
98 Unopposed MOTION for Leave to File Brief of Amici Curiae by AMERICAN ACADEMY OF PEDIATRICS, AMERICAN COLLEGE OF PHYSICIANS, AMERICAN MEDICAL ASSOCIATION, AMERICAN PSYCHIATRIC ASSOCIATION, CATHOLIC HEALTH ASSOCIATION OF THE UNITED STATES, March of Dimes, NATIONAL ALLIANCE ON MENTAL ILLNESS (Attachments: # 1 Exhibit Proposed Brief of Amici Curiae, # 2 Text of Proposed Order)(Higgins, Matthew) (Entered: 01/22/2019)
MINUTE ORDER: The Court ORDERS that Amici's 98 Motion is GRANTED IN PART and DENIED IN PART. They may file a brief, but one that does not contain excessive footnotes in violation of the Court's Local Rules. They may, accordingly, file by January 24, 2019, a brief that contains no more than 10 footnotes with an aggregate 50 lines of text. So ORDERED by Judge James E. Boasberg on 1/22/2019. (lcjeb3) (Entered: 01/22/2019)
MINUTE ORDER: The Court ORDERS that all parties (including amici) shall file by February 11, 2019, copies of any portion of the administrative record or extra−record material (e.g., articles, studies, or reports) upon which they rely. So ORDERED by Judge James E. Boasberg on 1/22/2019. (lcjeb3) (Entered: 01/22/2019)
Set/Reset Deadlines: Administrative Record due by 2/11/2019. (znbn) (Entered: 01/24/2019)
99 AMICUS BRIEF by AMERICAN ACADEMY OF PEDIATRICS, AMERICAN COLLEGE OF PHYSICIANS, AMERICAN MEDICAL ASSOCIATION, AMERICAN PSYCHIATRIC ASSOCIATION, CATHOLIC HEALTH ASSOCIATION OF THE UNITED STATES, MARCH OF DIMES, NATIONAL ALLIANCE ON MENTAL ILLNESS. (Higgins, Matthew) Modified event title on 1/25/2019 (znmw). (Entered: 01/24/2019)
100 Unopposed MOTION for Leave to File Amici Curiae Brief in Support of Plaintiffs by AARP, AARP FOUNDATION, Justice in Aging, Disability Rights Education and Defense Fund, National Academy of Elder Law Attorneys (Attachments: # 1 Exhibit Amici Curiae Brief, # 2 Text of Proposed Order)(Gyamfi, Maame) (Entered: 01/24/2019)
101 NOTICE of Appearance by Maame Gyamfi on behalf of AARP, AARP FOUNDATION, Justice in Aging, Disability Rights Education and Defense Fund, National Academy of Elder Law Attorneys (Gyamfi, Maame) (Entered: 01/24/2019)
MINUTE ORDER: The Court ORDERS that Amici's 100 Motion is GRANTED and their brief is deemed FILED. So ORDERED by Judge James E. Boasberg on 1/25/2019. (lcjeb3) (Entered: 01/25/2019)
102 AMICUS BRIEF by AARP, AARP FOUNDATION, JUSTICE IN AGING, NATIONAL ACADEMY OF ELDER LAW ATTORNEYS, DISABILITY RIGHTS EDUCATION AND DEFENSE FUND. (tth) Modified to add filers on 1/30/2019 (znmw). (Entered: 01/25/2019)

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103 REQUEST FOR SUMMONS TO ISSUE re 88 Amended Complaint, filed by ALTHEA HUMBER, SHAWNA NICOLE MCCOMAS, RONNIE MAURICE STEWART, HUNTER MALONE, DIIKA:NEHI SEGOVIA, TERI BLANTON, SHEILA MARLENE PENNEY, SARAH MARTIN, RANDALL YATES, LINDA KEITH, DAVID ROODE, KIMBERLY KOBERSMITH, ROBIN RITTER, MELISSA SPEARS−LOJEK, RODNEY LEE, DEBRA WITTIG. Related document: 88 Amended Complaint, filed by RODNEY LEE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, SARAH MARTIN, SHEILA MARLENE PENNEY, KIMBERLY KOBERSMITH, RANDALL YATES, SHAWNA NICOLE MCCOMAS, LINDA KEITH, TERI BLANTON, RONNIE MAURICE STEWART, HUNTER MALONE, ALTHEA HUMBER, DEBRA WITTIG, DAVID ROODE, ROBIN RITTER.(Perkins, Jane) (Entered: 01/28/2019)
104 SUMMONS (1) Issued Electronically as to PAUL MANGO. (tth) (Entered: 01/29/2019)
105 NOTICE of Appearance by Robert Stanton Jones on behalf of AARP FOUNDATION, DISABILITY RIGHTS EDUCATION AND DEFENSE FUND, JUSTICE IN AGING, NATIONAL ACADEMY OF ELDER LAW ATTORNEYS (Jones, Robert) (Entered: 02/01/2019)
106 NOTICE OF WITHDRAWAL OF APPEARANCE as to AARP, AARP, AARP FOUNDATION, DISABILITY RIGHTS EDUCATION AND DEFENSE FUND, JUSTICE IN AGING, NATIONAL ACADEMY OF ELDER LAW ATTORNEYS. Attorney Lisa Schiavo Blatt terminated. (Blatt, Lisa) (Entered: 02/01/2019)
107 Memorandum in opposition to re 91 MOTION for Partial Summary Judgment filed by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Attachments: # 1 Exhibit A)(Andrapalliyal, Vinita) (Entered: 02/04/2019)
108 MOTION to Dismiss , MOTION for Summary Judgment by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, PAUL MANGO, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Memorandum in Support, # 2 Exhibit A, # 3 Text of Proposed Order)(Andrapalliyal, Vinita) (Entered: 02/04/2019)
109 MOTION for Leave to File Excess Pages for combined Motion for Summary Judgment and Response to Plaintiffs' Motion for Summary Judgment by COMMONWEALTH OF KENTUCKY (Pitt, Mark) (Entered: 02/04/2019)
110 MOTION for Summary Judgment and Response in Opposition to Plaintiffs' Motion for Summary Judgment by COMMONWEALTH OF KENTUCKY (Attachments: # 1 Memorandum in Support, # 2 Affidavit, # 3 Text of Proposed Order)(Pitt, Mark) (Entered: 02/04/2019)
111 Memorandum in opposition to re 91 MOTION for Partial Summary Judgment filed by COMMONWEALTH OF KENTUCKY. (See Docket Entry 110 to view document) (tth) (Entered: 02/05/2019)
MINUTE ORDER: The Court ORDERS that Defendant−Intervenor Commonwealth of Kentucky's 109 Motion for Leave to File Excess Pages is GRANTED and that it may file a memorandum in support of its motion for summary judgment of up to 55 pages in length. So ORDERED by Judge James E. Boasberg on 2/5/2019. (lcjeb3) (Entered: 02/05/2019)
112 LARGE ADDITIONAL ATTACHMENT(S) Administrative Record Excerpts and Extra−Record Material Cited in Amici Curiae Brief by AMERICAN ACADEMY OF PEDIATRICS, AMERICAN COLLEGE OF PHYSICIANS, AMERICAN MEDICAL ASSOCIATION, AMERICAN PSYCHIATRIC ASSOCIATION, CATHOLIC HEALTH ASSOCIATION OF THE UNITED STATES, MARCH OF DIMES, NATIONAL ALLIANCE ON MENTAL ILLNESS 99 Memorandum, filed by AMERICAN PSYCHIATRIC ASSOCIATION, AMERICAN MEDICAL ASSOCIATION, MARCH OF DIMES, NATIONAL ALLIANCE ON MENTAL ILLNESS, AMERICAN ACADEMY OF PEDIATRICS, CATHOLIC HEALTH ASSOCIATION OF THE UNITED STATES, AMERICAN COLLEGE OF

02/11/2019 02/11/2019 02/11/2019
02/11/2019 02/11/2019 02/14/2019 02/14/2019 02/15/2019

PHYSICIANS. (Attachments: # 1 AR Excerpts, # 2 Extra−Record Material (Part 1 of 2), # 3 Extra−Record Material (Part 2 of 2))(Higgins, Matthew) (Entered: 02/11/2019)
113 NOTICE of Filing of Administrative Record Excerpts and Extra−Record Materials by ALEX M. AZAR, II, DEMETRIOS L. KOUZOUKAS, PAUL MANGO, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA re Order, (Attachments: # 1 Excerpt 1, # 2 Excerpt 2, # 3 Excerpt 3, # 4 Excerpt 4, # 5 Excerpt 5, # 6 Excerpt 6, # 7 Excerpt 7, # 8 Excerpt 8, # 9 Excerpt 9, # 10 Excerpt 10, # 11 Excerpt 11, # 12 Excerpt 12, # 13 Excerpt 13, # 14 Excerpt 14, # 15 Excerpt 15, # 16 Excerpt 16, # 17 Excerpt 17, # 18 Excerpt 18, # 19 Excerpt 19, # 20 Excerpt 20, # 21 Excerpt 21, # 22 Excerpt 22, # 23 Excerpt 23, # 24 Excerpt 24, # 25 Excerpt 25, # 26 Excerpt 26)(Andrapalliyal, Vinita) (Entered: 02/11/2019)
114 NOTICE of Submission of Appendix by TERI BLANTON, ALTHEA HUMBER, LINDA KEITH, KIMBERLY KOBERSMITH, RODNEY LEE, HUNTER MALONE, SARAH MARTIN, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, ROBIN RITTER, DAVID ROODE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, RONNIE MAURICE STEWART, DEBRA WITTIG, RANDALL YATES (Attachments: # 1 Declaration of Jane Perkins, # 2 Appendix Part 1, # 3 Appendix Part 2, # 4 Appendix Part 3, # 5 Appendix Part 4)(Perkins, Jane) (Entered: 02/11/2019)
115 NOTICE of Filing of Administrative Record Excerpts and Extra−Record Materials Referenced in Memorandum in Support of Summary Judgment by COMMONWEALTH OF KENTUCKY (Attachments: # 1 Exhibit Exhibit 1, # 2 Exhibit Exhibit 2, # 3 Exhibit Exhibit 3, # 4 Exhibit Exhibit 4, # 5 Exhibit Exhibit 5, # 6 Exhibit Exhibit 6, # 7 Exhibit Exhibit 7, # 8 Exhibit Exhibit 8, # 9 Exhibit Exhibit 9, # 10 Exhibit Exhibit 10, # 11 Exhibit Exhibit 11, # 12 Exhibit Exhibit 12, # 13 Exhibit Exhibit 13, # 14 Exhibit Exhibit 14, # 15 Exhibit Exhibit 15, # 16 Exhibit Exhibit 16, # 17 Exhibit Exhibit 17, # 18 Exhibit Exhibit 18, # 19 Exhibit Exhibit 19 part 1, # 20 Exhibit Exhibit 19 part 2, # 21 Exhibit Exhibit 20, # 22 Exhibit Exhibit 21, # 23 Exhibit Exhibit 22, # 24 Exhibit Exhibit 23, # 25 Exhibit Exhibit 24, # 26 Exhibit Exhibit 25, # 27 Exhibit Exhibit 26, # 28 Exhibit Exhibit 27, # 29 Exhibit Exhibit 28, # 30 Exhibit Exhibit 29, # 31 Exhibit Exhibit 30, # 32 Exhibit Exhibit 31, # 33 Exhibit Exhibit 32, # 34 Exhibit Exhibit 33)(Pitt, Mark) (Entered: 02/11/2019)
116 NOTICE of Compliance with Court Order by DEANS, CHAIRS AND SCHOLARS re 96 Amicus Brief (Attachments: # 1 Table of Contents, # 2 Volume 1 of 9, # 3 Volume 2 of 9, # 4 Volume 3 of 9, # 5 Volume 4 of 9, # 6 Volume 5 of 9, # 7 Volume 6 of 9, # 8 Volume 7 of 9, # 9 Volume 8 of 9, # 10 Volume 9 of 9)(Waters, Edward) (Entered: 02/11/2019)
117 NOTICE of Compliance with Court Order by AARP, AARP FOUNDATION, JUSTICE IN AGING, NATIONAL ACADEMY OF ELDER LAW ATTORNEYS, DISABILITY RIGHTS EDUCATION AND DEFENSE FUND re 102 Amicus Brief (Attachments: # 1 Appendix Admin Record Excerpts, # 2 Appendix Extra Record Materials, # 3 Appendix Extra Record Materials, # 4 Appendix Extra Record Materials)(Gyamfi, Maame) (Entered: 02/11/2019)
118 MOTION for Leave to File Single Consolidated Brief by TERI BLANTON, ALTHEA HUMBER, LINDA KEITH, RODNEY LEE, HUNTER MALONE, SARAH MARTIN, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, ROBIN RITTER, DAVID ROODE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, RONNIE MAURICE STEWART, DEBRA WITTIG, RANDALL YATES (Attachments: # 1 Text of Proposed Order)(Perkins, Jane) (Entered: 02/14/2019)
MINUTE ORDER: The Court ORDERS that Plaintiffs' 118 Motion for Leave to File a Consolidated Brief is GRANTED and that they may file a single consolidated brief of not more than 55 pages in length. So ORDERED by Judge James E. Boasberg on 2/14/2019. (lcjeb3) (Entered: 02/14/2019)
MINUTE ORDER: The Court ORDERS that the parties shall appear for oral argument on the pending Motions on March 14, 2019, at 11:00 a.m. So ORDERED by Judge James E. Boasberg on 2/15/2019. (lcjeb1) (Entered: 02/15/2019)

02/15/2019 02/19/2019
02/19/2019
02/25/2019
03/01/2019
03/01/2019 03/06/2019
03/06/2019 03/13/2019 03/13/2019
03/13/2019 03/13/2019

Set/Reset Hearings: Motions Hearing set for 3/14/2019 at 11:00 AM in Courtroom 25A before Judge James E. Boasberg. (lsj) (Entered: 02/15/2019)
119 REPLY to opposition to motion re 91 MOTION for Partial Summary Judgment filed by TERI BLANTON, ALTHEA HUMBER, LINDA KEITH, KIMBERLY KOBERSMITH, RODNEY LEE, HUNTER MALONE, SARAH MARTIN, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, ROBIN RITTER, DAVID ROODE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, RONNIE MAURICE STEWART, DEBRA WITTIG, RANDALL YATES. (Perkins, Jane) (Entered: 02/19/2019)
120 RESPONSE re 108 MOTION to Dismiss MOTION for Summary Judgment , 110 MOTION for Summary Judgment and Response in Opposition to Plaintiffs' Motion for Summary Judgment filed by TERI BLANTON, ALTHEA HUMBER, LINDA KEITH, KIMBERLY KOBERSMITH, RODNEY LEE, HUNTER MALONE, SARAH MARTIN, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, ROBIN RITTER, DAVID ROODE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, RONNIE MAURICE STEWART, DEBRA WITTIG, RANDALL YATES. (Perkins, Jane) (Entered: 02/19/2019)
121 NOTICE of Submission of Supp. Appendix by TERI BLANTON, ALTHEA HUMBER, LINDA KEITH, KIMBERLY KOBERSMITH, RODNEY LEE, HUNTER MALONE, SARAH MARTIN, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, ROBIN RITTER, DAVID ROODE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, RONNIE MAURICE STEWART, DEBRA WITTIG, RANDALL YATES (Attachments: # 1 Declaration, # 2 Appendix)(Perkins, Jane) (Entered: 02/25/2019)
122 REPLY to opposition to motion re 108 MOTION to Dismiss MOTION for Summary Judgment filed by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, PAUL MANGO, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA. (Attachments: # 1 Exhibit A)(Skurnik, Matthew) (Entered: 03/01/2019)
123 REPLY to opposition to motion re 108 MOTION to Dismiss MOTION for Summary Judgment filed by COMMONWEALTH OF KENTUCKY. (Kuhn, Matthew) (Entered: 03/01/2019)
124 NOTICE of Filing of Supplemental Excerpts of the Administrative Record Relied Upon by the Federal Defendants by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, PAUL MANGO, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Excerpt 27, # 2 Excerpt 28, # 3 Excerpt 29)(Andrapalliyal, Vinita) (Entered: 03/06/2019)
125 NOTICE of Supplemental Filing of Cited Sources & Portions of the Administrative Record by COMMONWEALTH OF KENTUCKY (Attachments: # 1 Exhibit 34, # 2 Exhibit 35, # 3 Exhibit 36, # 4 Exhibit 37, # 5 Exhibit 38)(Kuhn, Matthew) (Entered: 03/06/2019)
126 NOTICE of Appearance by James Mahoney Burnham on behalf of All Defendants (Burnham, James) (Entered: 03/13/2019)
127 NOTICE of Appearance by Zachary Michael Spiegel Blau on behalf of TERI BLANTON, ALTHEA HUMBER, LINDA KEITH, RODNEY LEE, HUNTER MALONE, SARAH MARTIN, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, ROBIN RITTER, DAVID ROODE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, RONNIE MAURICE STEWART, DEBRA WITTIG, RANDALL YATES (Blau, Zachary) (Entered: 03/13/2019)
128 NOTICE of Appearance by Matthew Harold Kleinert on behalf of COMMONWEALTH OF KENTUCKY (Kleinert, Matthew) (Entered: 03/13/2019)
129 NOTICE of Appearance by Johann Frederick Herklotz on behalf of COMMONWEALTH OF KENTUCKY (Herklotz, Johann) (Entered: 03/13/2019)

03/14/2019
03/15/2019 03/27/2019 03/27/2019 03/28/2019 04/03/2019 04/04/2019
04/04/2019 04/10/2019
04/11/2019

Minute Entry for proceedings held before Judge James E. Boasberg: Motion Hearing held on 3/14/2019 re 91 MOTION for Partial Summary Judgment filed by RODNEY LEE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, SARAH MARTIN, SHEILA MARLENE PENNEY, KIMBERLY KOBERSMITH, RANDALL YATES, SHAWNA NICOLE MCCOMAS, LINDA KEITH, TERI BLANTON, RONNIE MAURICE STEWART, HUNTER MALONE, ALTHEA HUMBER, DEBRA WITTIG, DAVID ROODE, ROBIN RITTER, 110 MOTION for Summary Judgment and Response in Opposition to Plaintiffs' Motion for Summary Judgment filed by COMMONWEALTH OF KENTUCKY, 108 MOTION to Dismiss MOTION for Summary Judgment filed by DEMETRIOS L. KOUZOUKAS, BRIAN NEALE, PAUL MANGO, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, ALEX M. AZAR, II, SEEMA VERMA, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES. Oral arguments heard and motions taken under advisement. (Court Reporter Lisa Griffith) (znbn) (Entered: 03/14/2019)
130 NOTICE of Supplemental Filing by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEMETRIOS L. KOUZOUKAS, PAUL MANGO, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Andrapalliyal, Vinita) (Entered: 03/15/2019)
131 ORDER: The Court ORDERS that: 1) Plaintiffs' 91 Motion for Summary Judgment is GRANTED; 2) Defendants' 108 , 110 Cross−Motions for Summary Judgment are DENIED; 3) The Secretary's approval of Kentucky HEALTH is VACATED and REMANDED to the agency; and 4) The parties shall appear for a status hearing on April 10, 2019, at 10:30 a.m. Signed by Judge James E. Boasberg on 3/27/2019. (lcjeb1) (Entered: 03/27/2019)
132 MEMORANDUM OPINION re 131 Order. Signed by Judge James E. Boasberg on 3/27/2019. (lcjeb1) (Entered: 03/27/2019)
Set/Reset Hearings: Status Conference set for 4/10/2019 at 10:30 AM in Courtroom 25A before Judge James E. Boasberg. (lsj) (Entered: 03/28/2019)
133 Joint MOTION for Entry of Final Judgment by ALEX M. AZAR, II, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, DEMETRIOS L. KOUZOUKAS, PAUL MANGO, BRIAN NEALE, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SEEMA VERMA (Attachments: # 1 Text of Proposed Order)(Andrapalliyal, Vinita) (Entered: 04/03/2019)
134 ORDER GRANTING 133 Joint Motion for Entry of Final Judgment. The Court ORDERS that: 1) Judgment is ENTERED on Count VIII of Plaintiffs' First Amended Complaint; 2) The remainder of the case is STAYED, including any deadline for attorney fees, pending any appeal by Defendants of the Court's ruling on Count VIII; 3) The parties shall update the Court within 14 days of the appeal deadline if no appeal is filed or, if an appeal is filed, within 14 days of the mandate issuing from the appeal; and 4) The status hearing set for April 10, 2019, at 10:30 a.m. is VACATED. Signed by Judge James E. Boasberg on 4/4/2019. (lcjeb1) (Entered: 04/04/2019)
Case Stayed. (znbn) (Entered: 04/04/2019)
135 NOTICE OF APPEAL TO DC CIRCUIT COURT as to 134 Order on Motion for Entry of Final Judgment,, 132 Memorandum & Opinion, 131 Order on Motion for Partial Summary Judgment,, Order on Motion to Dismiss,, Order on Motion for Summary Judgment,,, by CENTERS FOR MEDICARE AND MEDICAID SERVICES, SEEMA VERMA, DEMETRIOS L. KOUZOUKAS, ERIC HARGAN, ALEX M. AZAR, II, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, PAUL MANGO, BRIAN NEALE. Fee Status: No Fee Paid. Parties have been notified. (Skurnik, Matthew) (Entered: 04/10/2019)
136 Transmission of the Notice of Appeal, Order Appealed (Memorandum Opinion), and Docket Sheet to US Court of Appeals. The Court of Appeals docketing fee was not paid because the appeal was filed by the government re 135 Notice of Appeal to DC Circuit Court. (tth) (Entered: 04/11/2019)

04/11/2019
04/11/2019 04/11/2019

137 NOTICE OF APPEAL TO DC CIRCUIT COURT as to 134 Order on Motion for Entry of Final Judgment,, 132 Memorandum & Opinion, 131 Order on Motion for Partial Summary Judgment,, Order on Motion to Dismiss,, Order on Motion for Summary Judgment,,, by COMMONWEALTH OF KENTUCKY. Filing fee $ 505, receipt number 0090−6053749. Fee Status: Fee Paid. Parties have been notified. (Kuhn, Matthew) (Entered: 04/11/2019)
138 Transmission of the Notice of Appeal, Order Appealed (Memorandum Opinion), and Docket Sheet to US Court of Appeals. The Court of Appeals fee was paid this date re 137 Notice of Appeal to DC Circuit Court. (zrdj) (Entered: 04/11/2019)
139 TRANSCRIPT OF PROCEEDINGS before Judge James E. Boasberg held on 3−14−19; Page Numbers: 1−58. Date of Issuance:4−11−19. Court Reporter/Transcriber Lisa Griffith, Telephone number (202) 354−3247, Transcripts may be ordered by submitting the Transcript Order Form

For the first 90 days after this filing date, the transcript may be viewed at the courthouse at a public terminal or purchased from the court reporter referenced above. After 90 days, the transcript may be accessed via PACER. Other transcript formats, (multi−page, condensed, CD or ASCII) may be purchased from the court reporter.

NOTICE RE REDACTION OF TRANSCRIPTS: The parties have twenty−one days to file with the court and the court reporter any request to redact personal identifiers from this transcript. If no such requests are filed, the transcript will be made available to the public via PACER without redaction after 90 days. The policy, which includes the five personal identifiers specifically covered, is located on our website at www.dcd.uscourts.gov.

04/11/2019 04/11/2019 01/08/2020
01/09/2020 01/09/2020 01/23/2020
01/24/2020

Redaction Request due 5/2/2019. Redacted Transcript Deadline set for 5/12/2019. Release of Transcript Restriction set for 7/10/2019.(Griffith, Lisa) (Entered: 04/11/2019)
USCA Case Number 19−5095 for 135 Notice of Appeal to DC Circuit Court,, filed by BRIAN NEALE, SEEMA VERMA, PAUL MANGO, DEMETRIOS L. KOUZOUKAS, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, ALEX M. AZAR, II, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES. (zrdj) (Entered: 04/11/2019)
USCA Case Number 19−5097 for 137 Notice of Appeal to DC Circuit Court, filed by COMMONWEALTH OF KENTUCKY. (zrdj) (Entered: 04/11/2019)
140 MANDATE of USCA as to 137 Notice of Appeal to DC Circuit Court, filed by COMMONWEALTH OF KENTUCKY, 135 Notice of Appeal to DC Circuit Court,, filed by BRIAN NEALE, SEEMA VERMA, PAUL MANGO, DEMETRIOS L. KOUZOUKAS, CENTERS FOR MEDICARE AND MEDICAID SERVICES, ERIC HARGAN, ALEX M. AZAR, II, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES ; USCA Case Number 19−5095 Consolidated with 19−5097. (Attachments: # 1 USCA Order)(zrdj) (Entered: 01/09/2020)
MIUTE ORDER: Given the dismissal of Defendants' appeal and the issuance of the Mandate, the Court ORDERS that by January 23, 2020, the parties shall submit a Joint Status Report indicating how they wish to proceed here. So ORDERED by Judge James E. Boasberg on 1/9/2020. (lcjeb3) (Entered: 01/09/2020)
Set/Reset Deadlines: Joint Status Report due by 1/23/2020. (nbn) (Entered: 01/10/2020)
141 Joint STATUS REPORT by TERI BLANTON, ALTHEA HUMBER, LINDA KEITH, KIMBERLY KOBERSMITH, RODNEY LEE, HUNTER MALONE, SARAH MARTIN, SHAWNA NICOLE MCCOMAS, SHEILA MARLENE PENNEY, ROBIN RITTER, DAVID ROODE, DIIKA:NEHI SEGOVIA, MELISSA SPEARS−LOJEK, RONNIE MAURICE STEWART, DEBRA WITTIG, RANDALL YATES. (Perkins, Jane) (Entered: 01/23/2020)
MINUTE ORDER: Per the parties' 141 Joint Status Report, the Court ORDERS that: 1) Counts II−VII are DISMISSED WITHOUT PREJUDICE as moot; 2) Counts I and IX are DISMISSED WITHOUT PREJUDICE with Plaintiffs' consent; 3) Judgment is

ENTERED in favor of Plaintiffs; and 4) Plaintiffs shall file any motion for attorney fees and costs by February 24, 2020. So ORDERED by Judge James E. Boasberg on 1/24/2020. (lcjeb3) (Entered: 01/24/2020)

 
 Case 1:18-cv-00152 Document 1 Filed 01/24/18 Page 1 of 79

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
Civil Action No. ____________

RONNIE MAURICE STEWART

)

1700 Jennifer Road, Apartment 25

)

Lexington, KY 40505

)

)

GLASSIE MAE KASEY

)

5414 Robinwood Road

)

Louisville, KY 40218

)

)

LAKIN BRANHAM

)

29 Tie Yard Drive

)

Dwale, KY 41621

)

)

SHANNA BALLINGER

)

1451 West Lincoln Trail Boulevard

)

Apartment 127

)

Radcliff, KY 40160

)

)

DAVE KOBERSMITH

)

105 Leslie Drive

)

Berea, KY 40403

)

)

WILLIAM BENNETT

)

425 Race Street

)

Lexington, KY 40508

)

)

SHAWNA NICOLE McCOMAS

)

1053 Winburn Drive, Apartment 23

)

Lexington, KY 40511

)

)

ALEXA HATCHER

)

1875 Bill Dedmon Road

)

Bowling Green, KY 42101

)

)

MICHAEL WOODS

)

SARA WOODS

)

11692 Main Street, Apartment 2

)

Martin, KY 41649

)

)

KIMBERLY WITHERS

)

2220 Devonport Drive, Apartment I38

)

Case 1:18-cv-00152 Document 1 Filed 01/24/18 Page 2 of 79

Lexington, KY 40504

)

)

KATELYN ALLEN

)

12 West Adams Lane, Lot 26

)

Salyersville, KY 41465

)

)

AMANDA SPEARS

)

1070 Jackson Road

)

Park Hill, KY 41011

)

)

DAVID ROODE

)

331 Montclair Avenue

)

Ludlow, KY 41016

)

)

SHEILA MARLENE PENNEY

)

5410 West Catherine Street

)

Apartment A

)

Louisville, KY 40203

)

)

QUENTON RADFORD

)

2501 Montgomery Avenue

)

Ashland, KY 41101

)

)

on behalf of themselves and all others simi- )

larly situated,

)

)

Plaintiffs,

)

)

v.

)

)

ERIC HARGAN

)

ACTING SECRETARY

)

UNITED STATES DEPARTMENT OF

)

HEALTH AND HUMAN SERVICES

)

in his official capacity

)

200 Independence Avenue, S.W.,

)

Washington, DC 20201

)

)

SEEMA VERMA

)

ADMINISTRATOR

)

CENTERS FOR MEDICARE AND MEDI- )

CAID SERVICES

)

in her official capacity

)

7500 Security Boulevard

)

Baltimore, MD 21244

)

)

Case 1:18-cv-00152 Document 1 Filed 01/24/18 Page 3 of 79

DEMETRIOS L. KOUZOUKAS

)

PRINCIPAL DEPUTY ADMINISTRATOR )

THE CENTERS FOR MEDICARE AND

)

MEDICAID SERVICES

)

in his official capacity

)

7500 Security Boulevard

)

Baltimore, MD 21244

)

)

BRIAN NEALE

)

DIRECTOR

)

CENTER FOR MEDICAID AND CHIP

)

SERVICES

)

in his official capacity,

)

7500 Security Boulevard

)

Baltimore, MD 21244

)

)

UNITED STATES DEPARTMENT OF

)

HEALTH AND HUMAN SERVICES

)

200 Independence Avenue, S.W.,

)

Washington, DC 20201

)

)

THE CENTERS FOR MEDICARE AND

)

MEDICAID SERVICES

)

7500 Security Boulevard

)

Baltimore, MD 21244

)

Defendants.

____________________________________________________________________

CLASS ACTION COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF ____________________________________________________________________ PRELIMINARY STATEMENT 1. This case challenges the efforts of the Executive Branch to bypass the legislative
process and act unilaterally to “comprehensively transform” Medicaid, the cornerstone of the social safety net. Purporting to invoke a narrow statutory waiver authority that allows experimental projects “likely to assist in promoting the objectives” of Medicaid, the Executive Branch has instead effectively rewritten the statute, bypassing congressional restrictions,

Case 1:18-cv-00152 Document 1 Filed 01/24/18 Page 4 of 79
overturning a half century of administrative practice, and threatening irreparable harm to the health and welfare of the poorest and most vulnerable in our country.
2. The Medicaid program provides health insurance to more than 75 million lowincome people in the United States. Medicaid enables states to provide a range of federallyspecified preventive, acute, and long-term health care services to individuals “whose income and resources are insufficient to meet the costs of necessary medical services.” As described in more detail below, the core populations covered by Medicaid include (among others) children; pregnant women; the aged, blind, or disabled; and adults with household income of less than 133% of the federal poverty level (currently $33,948 for a family of 4).
3. The program offers a deal for states. If a state chooses to participate in the program, the federal government will contribute the lion’s share of the cost of providing care. In return, the state agrees to pay the remaining portion of the costs of care and to follow all federal requirements, including those regarding the scope of coverage and eligibility for the program. States may not impose additional eligibility requirements other than those set forth in the Medicaid Act, and states cannot pick and choose among individuals within a covered population group.
4. The Social Security Act, of which Medicaid is a part, does permit experimental or pilot programs, but only in narrow circumstances, pursuant to a waiver by the Secretary of Health and Human Services, and only if such program is likely to promote the objectives of the Medicaid Act.
5. On August 24, 2016, Kentucky Governor Matt Bevin submitted an application to the Secretary requesting a waiver of various Medicaid Act requirements to implement the “Kentucky HEALTH” project. Kentucky was candid about its goal: it aimed “to comprehensively transform Medicaid.” True to its word, the Kentucky HEALTH program sought to radically alter
2

Case 1:18-cv-00152 Document 1 Filed 01/24/18 Page 5 of 79
Medicaid in Kentucky, including by requiring Medicaid enrollees to work in order to receive health insurance and by imposing new and substantial premiums and restrictions. By the State’s own estimate, Kentucky HEALTH would reduce Medicaid enrollment over a five-year period by over 95,000 adults and reduce payments for health care for low income Kentuckians by approximately $2.4 billion. The Kentucky HEALTH application was subject to state and federal public comment in 2016 and 2017, and the Center for Medicaid Services (“CMS”) received over 3,000 comments.
6. On January 11, 2018, after the comment period closed on the Kentucky HEALTH application, the Director of CMS announced a new approach to Medicaid waivers. Reversing decades of agency guidance, and consistent with the Director’s own expressed view of the need to “fundamentally transform Medicaid,” Defendants issued a letter to State Medicaid Directors announcing CMS’s intention to, for the first time, approve waiver applications containing work requirements and outlining “guidelines” for states to consider in submitting such applications.
7. The very next day—January 12, 2018—without seeking or permitting comments on the radical expansion of the Medicaid waiver authority, the Defendants granted the Kentucky HEALTH application, asserting that this grant and Kentucky’s imposition of work requirements are consistent with CMS’s newly-minted approach set out in its letter to State Medicaid Directors.
8. The Secretary’s issuance of the letter to State Medicaid Directors and approval of Kentucky’s request sharply deviate from the congressionally-established requirements of the Medicaid program and vastly exceed any lawful exercise of the Secretary’s limited waiver authority. This change will harm Kentuckians across the state—housekeepers and custodians, ministers and morticians, car repairmen, retired workers, students, church administrators, bank tellers, caregivers, and musicians—who need a range of health services, including check-ups, diabetes treatment, mental health services, blood pressure monitoring and treatment, and vision
3

Case 1:18-cv-00152 Document 1 Filed 01/24/18 Page 6 of 79
and dental care. The letter and approval of Kentucky’s application are unauthorized attempts to re-write the Medicaid Act, and the use of the statute’s waiver authority to “transform” Medicaid is an abuse of that authority. The Defendants’ actions here thus violate both the Administrative Procedure Act and the Constitution, and they cannot survive.
JURISDICTION AND VENUE 9. This is a class action for declaratory and injunctive relief for violation of the Administrative Procedure Act, the Social Security Act, and the United States Constitution. 10. The Court has jurisdiction over Plaintiffs’ claims pursuant to 28 U.S.C. §§ 1331 and 1361 and 5 U.S.C. §§ 702-705. This action and the remedies it seeks are further authorized by 28 U.S.C. §§ 1651, 2201, and 2202, and Federal Rule of Civil Procedure 65. 11. Venue is proper under 28 U.S.C. § 1391(b)(2) and (e).
PARTIES 12. Plaintiff Ronnie Maurice Stewart is a 62-year-old man who lives in Lexington, Fayette County, Kentucky. Mr. Stewart is enrolled in the Kentucky Medicaid program. 13. Plaintiff Glassie Mae Kasey is a 56-year-old woman who lives in Louisville, Jefferson County, Kentucky. Ms. Kasey is enrolled in the Kentucky Medicaid program. 14. Plaintiff Lakin Branham is a 20-year-old woman who lives in Dwale, Floyd County, Kentucky with her grandparents. Ms. Branham is enrolled in the Kentucky Medicaid program. 15. Plaintiff Shanna Ballinger is a 27-year-old woman who lives in Radcliff, Hardin County, Kentucky with her husband and two sons. Mrs. Ballinger is enrolled in the Kentucky Medicaid program.
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16. Plaintiff Dave Kobersmith is a 57-year-old man who lives in Berea, Madison County, Kentucky, with his wife Kimberly and their two young sons. Mr. Kobersmith is enrolled in the Kentucky Medicaid program.
17. Plaintiff William Bennett is a 47-year-old man who lives in Lexington, Fayette County, Kentucky. Mr. Bennett is enrolled in the Kentucky Medicaid program.
18. Plaintiff Shawna Nicole McComas is a 34-year-old woman who lives in Lexington, Fayette County, Kentucky with her husband and four children. Mrs. McComas is enrolled in the Kentucky Medicaid program.
19. Plaintiff Alexa Hatcher is a 29-year-old woman who lives in Bowling Green, Warren County, Kentucky. Ms. Hatcher is enrolled in the Kentucky Medicaid Program.
20. Plaintiffs Michael “Popjaw” and Sara Woods, aged 52- and 40-years old, respectively, live in Martin, Floyd County, Kentucky. Mr. and Mrs. Woods are enrolled in the Kentucky Medicaid program.
21. Plaintiff Kimberly Withers is a 47-year-old woman who lives in Lexington, Fayette County, Kentucky with her husband and two adult children. Mrs. Withers is enrolled in the Kentucky Medicaid program.
22. Plaintiff Katelyn Allen is a 27-year-old woman who lives in Salyersville, Magoffin County, Kentucky with her husband and two children. Mrs. Allen and her family are currently enrolled in the Kentucky Medicaid program.
23. Plaintiff Amanda Spears is a 33-year-old woman who lives in Park Hill, Kenton County, Kentucky. Ms. Spears is enrolled in the Kentucky Medicaid program.
24. Plaintiff David Roode is a 39-year-old man who lives in Ludlow, Kenton County, Kentucky. Mr. Roode is enrolled in the Kentucky Medicaid program.
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25. Plaintiff Sheila Marlene Penney is a 54-year-old woman who lives in Louisville, Jefferson County, Kentucky. Ms. Penney is enrolled in the Kentucky Medicaid program.
26. Plaintiff Quenton Radford is a 20-year-old man who lives in Ashland, Boyd County, Kentucky. Mr. Radford is enrolled in the Kentucky Medicaid Program.
27. Defendant Eric Hargan is Acting Secretary of the United States Department of Health and Human Services (“HHS”) and is sued in his official capacity. Defendant Hargan (“the Secretary”) has overall responsibility for implementation of the Medicaid program, including responsibility for federal review and approval of state requests for waivers pursuant Section 1115 of the Social Security Act.
28. Defendant Seema Verma is Administrator of CMS and is sued in her official capacity. Defendant Verma is responsible for implementing the Medicaid program as required by federal law, including as amended by the Patient Protection and Affordable Care Act. Secretary Verma recused herself from consideration of the Kentucky HEALTH application because she was a paid consultant with the state of Kentucky and helped design the program. Nonetheless, the Governor of Kentucky reported that she personally informed him that the application was granted.
29. Defendant Demetrios L. Kouzoukas is Principal Deputy Administrator of CMS and is sued in his official capacity. Defendant Kouzoukas is responsible for disposition of all matters, including the Kentucky HEALTH waiver, from which Administrator Verma is recused.
30. Defendant Brian Neale is the CMS Deputy Administrator and Director for the Center for Medicaid and CHIP Services. Defendant Neale signed the January 11, 2018 letter to State Medicaid Directors that invited states to submit applications for waiver requests to impose work requirements on Medicaid populations.
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31. Defendant HHS is a federal agency with responsibility for, among other things, overseeing implementation of the Medicaid Act.
32. Defendant CMS is the agency within HHS with primary responsibility for overseeing federal and state implementation of the Medicaid Act.
CLASS ACTION ALLEGATIONS 33. Plaintiffs bring this suit both individually and on behalf of a statewide proposed class of persons similarly situated pursuant to Federal Rule of Civil Procedure 23(a) and (b)(2). The class consists of all residents of Kentucky who are enrolled in the Kentucky Medicaid program on or after January 12, 2018. 34. The prerequisites of Federal Rule of Civil Procedure 23(a) are met in that:
a. The class is so numerous that joining all members is impracticable. The State estimates that hundreds of thousands of adults will be enrolled in Kentucky HEALTH in each year of its demonstration. Commonwealth of Ky., Kentucky HEALTH: Helping to Engage and Achieve Long Term Health at Attachment A (2017) (“Application Modification”), attached as Exhibit A to this Complaint, at Attachment A. The class members are geographically dispersed throughout Kentucky, by definition have limited financial resources by virtue of their Medicaid eligibility and enrollment status, and are unlikely to institute individual actions;
b. There are questions of fact and law, particularly as to the legality of the Defendants’ policies and decisions with respect to issuance of the letter to State Medicaid Directors and approval of the Kentucky HEALTH waiver, that are common to all members of the class;
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c. The claims of the named plaintiffs are typical of the claims of the class; and d. The named plaintiffs and their counsel will fairly and adequately protect the
interests of the class. Each plaintiff is an adult resident of Kentucky who is enrolled in the Kentucky Medicaid program and will be subject to the requirements of the Kentucky HEALTH waiver. 35. The requirements of Federal Rule of Civil Procedure 23(b)(2) are met in that the Defendants have acted or refused to act on grounds that apply generally to the class, making final declaratory and injunctive relief appropriate with respect to the class as a whole. STATUTORY AND REGULATORY BACKGROUND A. The Medicaid Program 36. Title XIX of the Social Security Act establishes the cooperative federal-state medical assistance program known as Medicaid. See 42 U.S.C. §§ 1396 to 1396w-5. Medicaid’s stated purpose is to enable each state, as far as practicable, “to furnish [] medical assistance” to individuals “whose income and resources are insufficient to meet the costs of necessary medical services” and to provide “rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care.” Id. § 1396-1. 37. Although states do not have to participate in Medicaid, all states have chosen to do so. 38. Each participating state must maintain a comprehensive Medicaid plan for medical assistance that the Secretary has approved. Id. § 1396a. The statute defines “medical assistance” to include a range of health care services that participating states must cover or are permitted to cover at state option. Id. § 1396d(a).
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39. A state’s Medicaid plan must describe its program and affirm its commitment to comply with the requirements imposed by the Medicaid Act (listed at 42 U.S.C. § 1396a et seq.) and its associated regulations.
40. State and federal governments share responsibility for funding Medicaid. Section 1396b of the Medicaid Act requires the Secretary to pay each participating state the federal share (which is based on the state’s relative per capita income) of “the total amount expended . . . as medical assistance under the State plan.” Id. §§ 1396b(a)(1), 1396d(b).
B. Medicaid Eligibility and Coverage Requirements 41. Using household income and other specific criteria, the Medicaid Act delineates who is eligible to receive Medicaid coverage. Id. § 1396a(a)(10)(A), (C). The Act contains required coverage groups as well as options for states to extend Medicaid to additional population groups. Id. 42. States participating in Medicaid must provide medical assistance to individuals who meet the eligibility standards applicable to required coverage groups (so-called “mandatory populations”). Id. § 1396a(a)(10)(A)(i). 43. To be eligible for federal Medicaid funding, states must cover, and may not exclude from Medicaid, individuals who: (1) are part of a mandatory population group; (2) meet the minimum financial eligibility criteria applicable to that population group; (3) are residents of the state in which they apply; and (4) are U.S. citizens or certain qualified immigrants. Id. §§ 1396a(a)(10)(A), 1396a(b)(2), (3); 8 U.S.C. §§ 1611, 1641. 44. The mandatory Medicaid population groups include children; parents and certain other relatives (who are not elderly, blind, or disabled); pregnant women; the elderly, blind, or
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disabled; and individuals under age 26 who were in foster care until age 18 (“former foster care youth”). 42 U.S.C. § 1396a(a)(10)(A)(i).
45. In 2010, Congress passed, and the President signed, comprehensive health insurance reform legislation, the Patient Protection and Affordable Care Act (“ACA”). Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029. “The Act aims to increase the number of Americans covered by health insurance and decrease the cost of health care.” Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 538 (2012).
46. As part of its effort to ensure comprehensive health insurance coverage, Congress amended the Medicaid Act to add an additional mandatory population group. Effective January 1, 2014, the Medicaid Act requires states to cover adults who are under age 65, not eligible for Medicare, do not fall within another Medicaid eligibility category, and have household income below 133% of the federal poverty level (“FPL”). 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII), 1396a(e)(14). This group is often called the “expansion population,” and it includes adults in a variety of family circumstances: parents living with children (whose income exceeds the stateestablished limit for the mandatory parents/caretaker relatives population group); parents of older children who have left the home; and adults without children.
47. States receive enhanced federal reimbursement for medical assistance provided to the Medicaid expansion population: 94% federal dollars in 2019, and 90% for 2020 and each year thereafter. Id. § 1396d(y).
48. The Supreme Court’s decision in National Federation of Independent Business v. Sebelius barred HHS from terminating Medicaid funding to states that choose not to extend Medicaid coverage to the expansion population. 567 U.S. 519.
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49. States that choose to cover the expansion population submit state plan amendments electing to provide this coverage. To date, 31 states, including Kentucky, and the District of Columbia have approved state plans covering the expansion population.
50. Once a state elects to expand coverage to the expansion population, it becomes a mandatory coverage group.
51. As noted above, the Medicaid Act also allows states to extend Medicaid eligibility to certain optional population groups, including children and pregnant women with incomes between 133% and 185% of FPL, see 42 U.S.C. § 1396a(a)(10)(A)(ii)(IX), limited-income aged, blind, and/or disabled individuals receiving home and community-based services, id. § 1396a(a)(10)(A)(ii)(VI), and “medically needy” individuals who would fall within a mandatory population but for excess income, id. § 1396a(a)(10)(C).
52. The Medicaid Act requires a participating state to cover all members of a covered population group. In other words, the state may not cover subsets of a population group described in the Medicaid Act. See id. § 1396a(a)(10)(B). This requirement applies to optional and mandatory population groups: if a state elects to cover an optional group, it must cover all eligible individuals within that group. Id.
53. States cannot impose additional eligibility requirements that are not explicitly allowed by the Medicaid Act. See id. § 1315(a)(10)(A).
54. The Medicaid Act requires states to “provide such safeguards as may be necessary to assure that eligibility … and such care and services will be provided, in a manner consistent with simplicity of administration and the best interests of the recipients.” Id. § 1396a(a)(19).
55. In addition to addressing who is eligible for medical assistance, the Medicaid Act delineates how states must make and implement eligibility determinations to ensure that all eligible
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people who apply are served and get coverage. States must determine eligibility and provide medical assistance to all eligible individuals with “reasonable promptness.” Social Security Amendments of 1965, Pub. L. No. 89-97, § 1902(a)(8), 79 Stat. 286, 344 (codified at 42 U.S.C. § 1396a(a)(8)); 42 C.F.R. § 435.912(c)(3) (requiring states to determine eligibility within 90 days for individuals who apply on the basis of disability and 45 days for all other individuals).
56. In addition, the Medicaid Act requires states to provide retroactive coverage to individuals who have been determined eligible to ensure that low-income individuals can obtain timely care and avoid incurring medical debts. Social Security Amendments of 1965, Pub. L. No. 89-97, § 1905(a), 79 Stat. 286, 351 (codified at 42 U.S.C. §§ 1396a(a)(34), 1396d(a)). Specifically, states must provide medical assistance for care provided in or after the third month before the month of application, as long as the enrollee would have been eligible for Medicaid at the time the services were received. 42 U.S.C. §§ 1396a(a)(34), 1396d(a).
57. When re-determining the eligibility of current Medicaid enrollees, states must follow certain procedures to ensure continuity of coverage for eligible individuals. Among other requirements, states must complete the renewal process on the basis of information available to the agency (for example through state or federal data sources), without seeking additional information from the individual, if possible. Otherwise, the state must provide the enrollee with a pre-populated eligibility renewal form and at least 30 days to return the form. It then must timely reconsider (without a new application) the eligibility of an individual who was terminated for failure to submit the renewal form or necessary information, but who then submitted the form within 90 days after termination. See 42 C.F.R. § 435.916(a)(3).
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58. The Medicaid Act sets forth mandatory services that participating states must include in their Medicaid programs and optional services that participating states may include in their Medicaid programs. 42 U.S.C. §§ 1396a(a)(10)(A), 1396d(a).
59. States must ensure that Medicaid enrollees have necessary transportation, often referred to as non-emergency medical transportation (“NEMT”), to and from Medicaid services. See 42 U.S.C. § 1396a(a)(4); 42 C.F.R. § 431.53.
60. The Medicaid Act also establishes the states’ options for imposing premiums and cost sharing on enrollees. To ensure affordability, the Act permits states to impose premiums and cost sharing only in limited circumstances.
61. Congress amended the Medicaid Act in 1982 to remove the substantive premium and cost sharing provisions from 42 U.S.C. § 1396a, amend them, and place them in a new provision, Section 1396o. Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. No. 97-248, 96 Stat. 324, 367.
62. As a result of that amendment, Section 1396a, which generally lists the requirements that a state plan must satisfy, provides that “enrollment fees, premiums, or similar charges, and deductions, cost sharing, or similar charges” may be imposed “only as provided in section 1396o.” 42 U.S.C. § 1396a(a)(14).
63. With respect to premiums, Section 1396o of the Medicaid Act provides that “no enrollment fee, premium, or similar charge will be imposed under the plan (except for a premium imposed under subsection (c)).” Id. § 1396o(a)(1). Subsection (c), in turn, authorizes certain premiums, but generally prohibits a state from imposing any premiums on individuals whose income falls below 150% of the federal poverty line. Id. § 1396o(c)(1).
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64. Section 1396o-1, which Congress passed in 2006 to give states additional flexibility to impose premiums and cost sharing on enrollees, likewise prohibits a state from imposing any premiums on individuals with household income below 150% of FPL. Deficit Reduction Act of 2005, Pub. L. No. 109-171, 120 Stat. 4, 82 (codified at 42 U.S.C. § 1396o-1(b)(1)(A)).
65. Nothing in Section 1396o or 1396o-1 gives the Secretary authority to waive these limits on premiums.
66. The Medicaid Act permits states to impose cost sharing, defined as a “deduction, copayment, or similar charge,” on program beneficiaries only in limited circumstances. 42 U.S.C. § 1396o-1; see also id. § 1396o.
67. No deduction, copayment, or similar charge may be imposed except as provided under Sections 1396o and 1396o-1.
68. For non-emergency use of the emergency room, the Medicaid Act generally allows states to charge individuals with household income below 150% of FPL a deduction, copayment, or similar charge up to twice the “nominal” amount, as determined by the Secretary in regulations. Id. § 1396o-1(e). The regulations set this amount at $8, subject to increases for inflation. 42 C.F.R. § 447.54; see 42 U.S.C. § 1396o-1(e)(4)(A) (defining non-emergency services). To implement such cost sharing, a state must meet several conditions. First, any individual subject to the charge must have an alternate non-emergency services provider “actually available and accessible.” 42 U.S.C. §§ 1396o-1(e)(1)(A), 1396o(a)(3). Second, the hospital must conduct a screening (required under the Emergency Medical Treatment and Active Labor Act) to determine that the individual does not need emergency services. Third, before providing the non-emergency services and imposing the cost sharing, the hospital must inform the individual of the cost sharing obligation; provide the name and location of an “actually available and accessible” alternate non-
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emergency services provider who can provide the services without cost sharing; and provide a referral to coordinate scheduling with that alternate provider. Id. § 1396o-1(e)(1)(B).
69. The Secretary’s authority to waive the limits on deductions, cost sharing, or similar charges is tightly circumscribed and applies only to a project that:
(1) will test a unique and previously untested use of copayments, (2) is limited to a period of not more than two years, (3) will provide benefits to recipients of medical assistance which can reasonably be expected to be equivalent to the risks to the recipients, (4) is based on a reasonable hypothesis which the demonstration is designed to test in a methodologically sound manner, including the use of control groups of similar recipients of medical assistance in the area, and (5) is voluntary, or makes provision for assumption of liability for preventable damage to the health of recipients of medical assistance resulting from involuntary participation. Id. § 1396o(f)(1)-(5). C. The Secretary’s Section 1115 Waiver Authority 70. Section 1115 of the Social Security Act grants the Secretary authority to waive a state’s compliance with certain requirements of the Medicaid Act under certain conditions. Id. § 1315. 71. The Secretary may grant a Section 1115 Medicaid waiver only in the case of an “experimental, pilot, or demonstration project which . . . is likely to assist in promoting the objectives” of the Medicaid Act. Id. § 1315(a). 72. The Secretary may only waive the requirements of Section 1396a for Section 1115 waivers relating to Medicaid. Id. § 1315(a)(1). 73. The Secretary may not waive compliance with requirements that Congress has placed outside of Section 1396a. 74. The Secretary may grant a Section 1115 waiver only to the extent and for the period necessary to enable the state to carry out the experimental, pilot, or demonstration project. Id.
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75. The Secretary must follow certain procedural requirements before he may approve a Section 1115 project. Id. § 1315(d); 42 C.F.R. §§ 431.400-431.416. In particular, after receiving a complete application from a state (following a state-level public comment period), the Secretary must provide a 30-day public notice and comment period. 42 U.S.C. § 1315(d); 42 C.F.R. § 431.416.
76. The Secretary does not have the authority to waive compliance with other federal laws, such as the United States Constitution, the Americans with Disabilities Act, or other federal statutes.
77. For example, the Fair Labor Standards Act (“FLSA”) requires that all individuals, including individuals receiving public benefits, be compensated at least the minimum wage in exchange for hours worked. See 29 U.S.C. § 206(a)(1)(C); Dep’t of Labor, How Workplace Laws Apply to Welfare Recipients at 2 (1997), http://nclej.org/wp-content/uploads/2015/11/ LaborProtectionsAndWelfareReform.pdf. Notably, the Supplemental Nutrition Assistance Program (“SNAP”) and Temporary Assistance for Needy Families (“TANF”) statutes specifically refer to work requirements and further describe how the benefits interact with the FLSA minimum wage protections. See 7 U.S.C. § 2029(a)(1) (SNAP); 42 U.S.C. § 607 (TANF). In contrast, there is no such reference or description in the Medicaid Act. And, according to the Department of Labor, medical assistance, unlike SNAP and TANF cash benefits, may not be substituted for a wage. See How Workplace Laws Apply to Welfare Recipients at 4.
D. Medicaid in Kentucky 78. Kentucky, like all other states, has elected to participate in Medicaid. The Kentucky Cabinet for Health and Family Services, Department for Medicaid Services (“DMS”),
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administers the program at the state level. See Ky. Rev. Stat. Ann. §§ 205.510-205.50; 907 Ky. Admin. Regs. 1:005-23:020e.
79. Effective January 1, 2014, Kentucky amended its state Medicaid plan to include the Medicaid expansion group—i.e., adults who are not elderly, disabled, or pregnant; do not fit into another Medicaid (or Medicare) eligibility category; and have household income below 133% of FPL.
80. By the end of 2014, over 375,000 Kentuckians had enrolled in Medicaid through the expansion. See Deloitte Development LLC, Commonwealth of Ky., Medicaid Expansion Report 2014, at 10 (2015) (“Medicaid Expansion Report”), http://jointhehealthjourney.com/ images/uploads/channel-files/Kentucky_Medicaid_Expansion_One-Year_Study_FINAL.pdf. The proportion of low-income adults in Kentucky without insurance coverage plummeted over the course of the year, from 35% to under 11%. Joseph A. Benitez et al., Kentucky’s Medicaid Expansion Showing Early Promise on Coverage and Access to Care, 35 Health Affairs 528 (2016). Enrollment has continued to grow, albeit at a slower pace, with data as of April 2016 indicating that over 428,000 individuals had access to medical assistance as a result of Medicaid expansion. Commonwealth of Ky., Kentucky HEALTH: Helping to Engage and Achieve Long Term Health 4 (2016) (“Application”), https://www.medicaid.gov/Medicaid-CHIP-Program-Information/ByTopics/Waivers/1115/downloads/ky/ky-health-pa.pdf, attached as Exhibit B to this Complaint.
81. Large numbers of these individuals have made use of their Medicaid coverage, receiving critical preventive care and treatment. In 2014 alone, over 232,000 enrollees in the expansion population had a non-annual office visit, almost 160,000 received medication monitoring, over 89,000 had their cholesterol tested, over 80,000 received preventive dental services, and 13,000 sought treatment for a substance use disorder. Medicaid Expansion Report
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at 50, 68. Also, 26,000 women in the expansion population received breast cancer screenings, and 34,000 were screened for cervical cancer. Id. at 68. As a result of Medicaid expansion, hospitals’ uncompensated care costs were $1.15 billion lower in the first three quarters of 2014 than during the same time period in 2013. Id. at 35.
82. Medicaid expansion in Kentucky has been associated with a variety of positive health outcomes, including increased use of preventive services, decreased reliance on the emergency room, fewer skipped medications due to cost, lower out-of-pocket spending on medical services, and improved self-reported health. Benjamin D. Sommers et al., Changes in Utilization and Health Among Low-Income Adults After Medicaid Expansion or Expanded Private Insurance, 176 JAMA Internal Med. 1501, 1505-06 (2016).
83. Although initial estimates predicted that the Medicaid expansion would create about 7,300 jobs in health care and related fields, the expansion created more than 12,000 in the first year of implementation alone. Medicaid Expansion Report at 27-28.
E. The Kentucky HEALTH Program 84. After more than two years of implementation of the Medicaid expansion under the state Medicaid plan and without a waiver, on August 24, 2016, Kentucky Governor Matt Bevin submitted an application to the Secretary requesting a waiver of various Medicaid Act requirements, pursuant to Section 1115, to implement the Kentucky HEALTH project. The application presented Kentucky HEALTH as “the terms under which the Commonwealth will continue Medicaid expansion.” Ex. B, Application at 4. 85. The application declared that, in implementing Kentucky HEALTH, the State “seeks to comprehensively transform Medicaid.” Id. at 14.
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86. The State described Kentucky HEALTH as an initiative not just “to empower individuals to improve their health and gain employer sponsored coverage or other commercial health insurance coverage,” but also to ensure the financial stability of Kentucky’s Medicaid program. Id. at 4, 7.
87. The State estimated that Kentucky HEALTH would save it approximately $2.4 billion over a five-year period, with the savings resulting largely from a reduction in Medicaid enrollment. Ex. A, Application Modification.
88. The State anticipated that over the course of the Kentucky HEALTH project, more than 95,000 adults would lose Medicaid coverage altogether. Id.
89. CMS provided a public comment period on the Kentucky HEALTH application from September 8, 2016 through October 8, 2016. Over 1,800 comments were submitted through the CMS website. See Medicaid.gov, Kentucky HEALTH, https://public.medicaid.gov/connect.ti/ public.comments/view?objectId=1888067.
90. On July 3, 2017, Governor Bevin proposed modifications to the Kentucky HEALTH application. Ex. A, Application Modification. CMS held a public comment period on the proposed modifications from July 3, 2017 to August 2, 2017. Over 1,200 comments were submitted through the CMS website. See Medicaid.gov, Kentucky HEALTH – Proposed Modifications to Application, https://public.medicaid.gov/connect.ti/public.comments/view? objectId=1891139.
91. On January 12, 2018, the Secretary approved Kentucky HEALTH through September 30, 2023. Approval Letter and Special Terms and Conditions (“Approval STCs”), from Demetrios L. Kouzoukas, Principal Dep. Administrator, Ctrs. for Medicare & Medicaid Servs., Ctr. for Medicaid & CHIP Servs. to Adam Meier, Dep. Chief of Staff, Office of Governor Matthew
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Bevin (Jan. 12, 2018) (the “Approval”), attached as Exhibit C to this Complaint. The following population groups will be included in Kentucky HEALTH: the Medicaid expansion population; parents and caretaker relatives (who were covered prior to expansion); individuals receiving transitional medical assistance; pregnant women; and former foster care youth. Id. at 15.
92. The Secretary’s approval does not indicate what, if any, hypotheses the State will test.
93. The Secretary’s approval does not require Kentucky to obtain CMS approval of detailed operational protocols that will be needed to implement the waivers.
94. Kentucky plans to begin implementing the majority of the project on July 1, 2018. Id. at 7. The key features of Kentucky HEALTH are described below.
Rewards and Deductible Accounts 95. The State designed Kentucky HEALTH to resemble a high-deductible commercial health plan. Ex. B, Application at 9-10. 96. As such, all enrollees except for pregnant women will have a deductible account. At the beginning of every 12-month eligibility period, the account will have a $1,000 balance. When an enrollee uses non-preventive services, the cost of the services will be deducted from the initial balance. Individuals who have money remaining in their deductible account at the end of the 12-month eligibility period may transfer up to 50% of the balance to a My Rewards account. Enrollees will receive monthly account statements detailing the cost of services received and the account balance. Ex. C, Approval STCs at 23. 97. According to the State, the purpose of the deductible account is to “expose[] members to the cost of healthcare and encourage[] them to act as consumers of healthcare by evaluating cost and quality as they seek care.” Ex. B, Application at 28.
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98. The State’s fee-for-service payment schedules are already available to enrollees and the public, as are the per-member, per-month payment rates Kentucky Medicaid pays participating managed care organizations (“MCOs”). Thus, on information and belief, the monthly account statement will detail the payments that the MCOs make to each network provider for the nonpreventive services utilized by the enrollee the previous month.
99. In addition, all Kentucky HEALTH enrollees will have a My Rewards account to pay for care and services that Medicaid will no longer cover for these enrollees. Individuals accrue money in the rewards account by engaging in certain “healthy behaviors,” completing certain work-related activities (above those required to maintain Medicaid coverage), and not seeking care in the emergency room. Ex. C, Approval STCs at 24.
100. In its application, Kentucky listed how much money enrollees can earn for completing various activities. For example, enrollees can earn: $25 for completing a health risk assessment (one per year); $10 for receiving certain preventive services ($40 maximum per year); $50 for attending certain disease management courses; $25 for completing a job skills training course ($50 maximum per year); $10 per month for completing job search activities; $10 for participating in community service (maximum $50 per year); and $20 for avoiding inappropriate use of the emergency room (one per year). Ex. B, Application at 29.
101. Kentucky HEALTH will not cover certain services for individuals in the expansion population (who are not “medically frail”) that were previously covered, including vision services, dental services, and over-the-counter medications. Id. at 22-23. Individuals enrolled in Medicaid through the expansion will use the rewards account to pay for these services. In addition, Kentucky HEALTH enrollees may use the rewards account to pay for limited fitness-related services, such as a gym membership. Id. at 23.
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Work and Community Engagement Requirements 102. As noted above, the Medicaid Act requires a participating state to cover all members of covered population groups. In other words, the state may not cover only subsets of a population group described in the Medicaid Act. See 42 U.S.C. § 1396a(a)(10)(A)-(B). 103. This requirement applies to optional and mandatory population groups: if a state elects to cover an optional group, it must cover all eligible individuals within that group. Id. 104. States cannot impose additional eligibility requirements that are not explicitly allowed by the Medicaid Act. 105. Kentucky HEALTH adds a new, unprecedented condition of eligibility that is not permitted under the Act. 106. Kentucky HEALTH enrollees must engage in 80 hours per month of specified employment or community engagement activities and must document and report their participation each month, as a condition of eligibility. Ex. C, Approval STCs at 32. The requirement does not apply to pregnant women, former foster care youth, or “medically frail” individuals. Id. In addition, individuals who meet certain other criteria will be exempt from the requirements or deemed to have met them. Id. at 32-33. 107. The State described the work requirement as the “cornerstone” of Kentucky HEALTH. Ex. B, Application at 12. 108. Enrollees who are subject to the requirement for a particular month, do not meet it, and are unable to show that one of the narrow “good cause” exceptions applies, will have their eligibility and their health care coverage under Medicaid suspended. Id. at 33-34. However, individuals can avoid the suspension if, in the following month, they meet the requirement and:
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(1) make up the hours missed in the prior month; or (2) take a health or financial literacy course approved by the state. Id. at 34.
109. If the State suspends medical assistance, the penalty continues until: (1) the first day of the month after the enrollee completes 80 hours of work activities within a 30-day period; (2) the enrollee completes a health or financial literacy course approved by the State; or (3) the redetermination date, at which point the State will terminate eligibility. Id. at 33-34. Enrollees may take a health or financial literacy course to prevent or end a suspension only once in a 12month period. Id. at 34.
110. According to the State, the purpose of the work requirement is to increase workforce participation and reduce poverty among Kentucky HEALTH enrollees, ultimately leading to a reduction in Medicaid enrollment and lower state spending. Ex. B, Application at 13, 18.
Monthly Premium Payments and Penalties for Failure to Pay 111. As noted above, the Medicaid Act prohibits states from charging premiums to individuals with household income below 150% of FPL. 42 U.S.C. §§ 1396o(a)(1), (c)(1), 1396o1(b)(1). 112. The Medicaid Act requires states to provide medical assistance to all individuals who fall within a covered population group, id. § 1396a(a)(10)(A), and States must provide this assistance with reasonable promptness, id. § 1396a(a)(8). 113. The Kentucky HEALTH program requires enrollees at all income levels to pay a monthly premium. 114. MCOs that accept Kentucky HEALTH enrollees will bill for and collect the premiums. Ex. C, Approval STCs at 25.
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115. According to the State, the purpose of the premium requirement is to discourage “Medicaid dependency by preparing individuals for the costs associated with commercial or Marketplace coverage.” Id. at 32.
116. All enrollees must pay a premium unless they are pregnant, a former foster care youth, or “medically frail.” Id. at 25.
117. The Secretary has approved Kentucky to set the premium amounts up to 4% of household income. For example, a one-person household with income at 133% of FPL ($16,146) could have a $53 per month premium. Individuals with no or very low income will be required to pay a minimum premium of $1 per month. Id. at 28.
118. The Secretary has authorized the State to vary the amount of the premium (up or down) based on household income, length of time enrolled in Kentucky HEALTH, and/or other grounds “consistent with how premium requirements vary in the commercial insurance market in Kentucky.” Id. at 28.
119. In its application, Kentucky set the premium amount to vary as follows: $1 per month when the enrollee’s household income is 0-25% of FPL; $4 per month, when 25-50% of FPL; $8 per month, when 51-100% of FPL; and $15 per month, when 101-133% FPL during the first and second year of enrollment. Ex. B, Application at 31. For individuals with household income over 100% of FPL, Kentucky set the premium to increase to: $22.50 per month in year three, $30 per month in year four, and $37.50 per month in year five. Id. at 32. As noted, CMS’s approval letter authorizes Kentucky to further adjust premium amounts without obtaining additional CMS approval.
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120. If all household members who are subject to the premium requirement are enrolled in the same MCO, the premiums will be charged on a per-household basis. Ex. C, Approval STCs at 28.
121. If household members are enrolled in different MCOs, the premiums will be assessed on a per-person basis, meaning the total premium amount could be greater than 4% of household income. Id. However, the State will cap aggregate household premiums and cost sharing at 5% of household income for each quarter. If a household reaches that cap, the premium amount will drop to $1 per month and no cost sharing will be charged for the remainder of the quarter. Ex. B, Application at 33.
122. On information and belief, the Kentucky HEALTH premiums are the highest premiums ever permitted in the Medicaid program.
123. In general, Kentucky HEALTH enrollees subject to the premium requirement will not receive Medicaid coverage of needed health care until the first day of the month in which they pay the premium. Id. at 15-16.
124. Individuals with household incomes above 100% of FPL who do not pay the initial premium within 60 days after their eligibility determination will not be enrolled in Kentucky HEALTH. Ex. C, Approval STCs at 16. Once enrolled, individuals above 100% of FPL who do not pay their monthly premium within 60 days of the due date will be terminated from Medicaid and prohibited from re-enrolling for six months (the “lockout period”). Id. at 29. The State will also deduct money from their rewards accounts. Id.
125. Individuals below 100% of FPL who do not pay the initial premium within 60 days of their eligibility determination will be enrolled as of the first day of the month in which the 60day period ends. Id. at 16. However, as a penalty for not paying the premium, the State will deduct
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money from their rewards accounts. In addition, during the next six months, they will be subject to cost sharing (as detailed in the state plan) in lieu of premiums and will not have access to their rewards accounts. Id. at 16, 29-30. Individuals face the same consequences when they do not pay a subsequent premium. Id. at 29-30.
126. To end the lockout or penalty period early, enrollees must: (1) demonstrate that one of the narrow “good cause” exceptions applies; or (2) pay all past-due premiums owed, pay the premium for the month of re-enrollment, and complete a financial or health literacy course. Id. at 29, 31.
127. Although former foster care youth and “medically frail” individuals are exempt from the premium requirement, if they do not pay the premium, they will nonetheless be penalized by having their rewards accounts suspended for six months. Id. at 30. Unlike the population groups subject to the premium requirement, they do not need to pay all past-due premiums to end the penalty period early.
Cost Sharing for Non-Emergency Use of the Emergency Department 128. As explained above, the Medicaid Act allows but limits the ability of a state to impose cost sharing on Medicaid beneficiaries. For non-emergency use of the emergency room, the Medicaid Act generally allows states to charge individuals with household income below 150% of FPL up to twice the “nominal” amount, as determined by the Secretary in regulations. 42 U.S.C. § 1396o-1(e)(2)(A); see 42 C.F.R. § 447.54(b) (setting this amount at $8, subject to increases for inflation); 42 U.S.C. § 1396o-1(e)(4)(A) (defining non-emergency services). If a State wishes to impose a deduction, copay, or similar charge outside of the Medicaid Act limits, then it must persuade the Secretary that the charge will meet the five requirements of Section 1396o(f), such
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as testing a previously untested use of copayments, lasting no more than two years, and using a methodologically sound hypothesis, with control groups.
129. Under Kentucky HEALTH, the State will deduct $20 from an enrollee’s My Rewards account for an inappropriate emergency room visit, thus reducing funds in that account that are available to pay for the enrollee’s medically necessary vision and dental care and nonprescription drugs. The charge will increase to $50 for the second such visit and $75 for additional visits. Ex. B, Application at 30.
130. The Kentucky HEALTH assessment for inappropriate use of the emergency room is a deduction, copay, or similar charge under 42 U.S.C. §§ 1396o and 1396o-1.
131. According to the State, the goal of the policy is to discourage inappropriate emergency room use. Id.
132. The Kentucky HEALTH program does not meet any of the pre-conditions set out in 42 U.S.C. § 1396o(f).
133. The Defendants approved the Kentucky HEALTH policy without requiring the State to meet any of the requirements of 42 U.S.C. § 1396o(f).
Lockout Penalty for Not Meeting Administrative Requirements 134. Consistent with federal Medicaid law, the State will re-determine the Medicaid eligibility of Kentucky HEALTH enrollees every 12 months and will terminate those who do not complete the re-determination process by the end of their eligibility period. Also consistent with federal law, individuals who have been terminated will then have three months to re-enroll by submitting their re-determination forms; no new application is required. Ex. C, Approval STCs at 17.
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135. However, in a dramatic departure from federal law, Kentucky will impose a lockout penalty on individuals (other than those who are pregnant, former foster care youth, or “medically frail”) who have not re-enrolled by the end of the three months. Id. at 17-18. The State will prohibit them from re-enrolling in Medicaid for an additional six months.
136. The State will impose the same lockout penalty on individuals (other than pregnant women, former foster care youth, and “medically frail” individuals) who do not timely report changes in circumstances that affect their eligibility for Medicaid. Id. at 20.
137. State regulations already require Medicaid enrollees to report these changes within 10 days. 907 Ky. Admin. Regs. 20:010. With Kentucky HEALTH, however, the State is imposing an additional six-month lockout penalty on enrollees who do not meet the existing administrative requirement.
138. Individuals can re-enroll before the end of the lockout period only if they: (1) demonstrate that one of the narrow “good cause” exceptions applies; or (2) pay the premium for the first month of re-enrollment and complete a financial or health literacy course. Ex. C, Approval STCs at 17, 20.
139. The only stated purpose of the lockout penalty for failure to complete the redetermination process is to “help familiarize Kentucky HEALTH members with this commercial market policy.” Ex. B, Application at 20. Similarly, the State describes the lockout penalty for failure to timely report changes in circumstances as a “learning tool” that will help prepare enrollees for commercial insurance coverage. Ex. A, Application Modification at 6.
No Retroactive Eligibility 140. As noted above, the Medicaid Act requires that medical assistance be provided to enrollees retroactively. Specifically, states must provide that
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in the case of any individual who has been determined to be eligible for medical assistance . . . such assistance will be made available to him for care and services included under the plan and furnished in or after the third month before the month in which he made application . . . for such assistance if such individual was . . . eligible for such assistance at the time such care and services were furnished. 42 U.S.C. § 1396a(a)(34). To similar effect, Section 1396d(a) defines “medical assistance” to include coverage for services received by eligible individuals during the three-month period prior to the month of application. Id. § 1396d(a). 141. There is no authority for the Secretary to grant a waiver of Section 1396d(a). 142. However, under the Kentucky HEALTH project, enrollees (other than pregnant women and former foster care youth) will not receive the retroactive eligibility required by statute. Ex. C, Approval STCs at 17. Instead, as outlined above, the State will generally only pay for services received on or after the first day of the month in which enrollees pay their initial monthly premium. By eliminating retroactive eligibility, the State aims to “encourage[] individuals to obtain and maintain health insurance coverage, even when the individual is healthy.” Ex. B, Application at 19-20. Elimination of Non-Emergency Medical Transportation 143. States must ensure that Medicaid beneficiaries have necessary transportation, often referred to as non-emergency medical transportation (“NEMT”), to and from Medicaid services. See 42 U.S.C. § 1396a(a)(4); 42 C.F.R. § 431.53. 144. Between June 2014 and June 2015, individuals enrolled in Medicaid through the Kentucky expansion used 140,000 NEMT trips to get to and from medically necessary health services. Ex. B, Application at 45. 145. The Secretary approved Kentucky’s request, under the Kentucky HEALTH program, to no longer provide NEMT for the expansion population, with the exception of enrollees
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who are pregnant, former foster care youth, aged 19 or 20, or “medically frail” individuals. Ex. C, Approval STCs at 22.
146. According to the State, the purpose of eliminating NEMT is to offer Kentucky HEALTH enrollees “a commercial health insurance market experience.” Ex. B, Application at 5.
F. Action Taken by the Defendants to Allow Work Requirements and Approve the Kentucky HEALTH Program
147. Prior to 2017, CMS’s website stated that the purpose of Section 1115 waivers is to “demonstrate and evaluate policy approaches such as:
• Expanding eligibility to individuals who are not otherwise Medicaid or CHIP eligible; • Providing services not typically covered by Medicaid; or • Using innovative service delivery systems that improve care, increase efficiency, and
reduce costs.” Medicaid.gov, About Section 1115 Demonstrations, https://www.medicaid.gov/medicaid/section1115-demo/about-1115/index.html (last visited September 5, 2017). The “general criteria” for CMS to use when assessing waiver applications looked at whether the demonstration would:
1. increase and strengthen overall coverage of low-income individuals in the state; 2. increase access to, stabilize, and strengthen providers and provider networks available
to serve Medicaid and low-income populations in the state; 3. improve health outcomes for Medicaid and other low-income populations in the state;
or 4. increase the efficiency and quality of care for Medicaid and other low-income popula-
tions through initiatives to transform service delivery networks. Id.
148. Prior to 2017, CMS recognized that work requirements do “not support the objectives of the [Medicaid] program” and “could undermine access to care.” Letter from Andrew M. Slavitt, Acting Administrator, Ctrs. For Medicare & Medicaid Servs., HHS to Thomas Betlach,
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Dir. Az. Health Care Cost Containment System (Sept. 30, 2016); see Sec’y of Health & Human Services Sylvia Burwell, Hearing on The President’s Fiscal Year 2017 Budget, Responses to Additional Questions for the Record, U.S. House of Rep. Energy & Commerce Health Subcommittee at 13 (Feb. 24, 2016), http://docs.house.gov/meetings/IF/IF14/20160224/104521/ HHRG-114-IF14-Wstate-BurwellS-20160224-SD002.pdf.
149. The current HHS abruptly reversed course to revise its use of the Section 1115 waiver authority and to authorize work requirements in Medicaid as part of President Trump’s vow to “explode” the ACA and its Medicaid expansion. See Amy Goldstein & Juliet Eilperin, Affordable Care Act Remains “Law of the Land,” but Trump Vows to Explode It, Wash. Post, Mar. 24, 2017, https://www.washingtonpost.com/national/health-science/affordable-care-actremains-law-of-the-land-but-trump-vows-to-explode-it/2017/03/24/4b7a2530-10c3-11e7-ab0707d9f521f6b5_story.html.
150. As soon as he took office, President Trump signed an Executive Order calling on federal agencies to undo the ACA “to the maximum extent permitted by law.” Executive Order 13765, Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal, 82 Fed. Reg. 8351 (Jan. 20, 2017).
151. On March 14, 2017, Defendant Seema Verma was sworn in as the Administrator of CMS. Defendant Verma immediately issued a letter to state Governors announcing CMS’s disagreement with the purpose and objectives of the law, as established by the Affordable Care Act, stating that “[t]he expansion of Medicaid through the Affordable Care Act (“ACA”) to nondisabled, working-age adults without dependent children was a clear departure from the core, historical mission of the program.” See Sec’y of Health and Human Servs., Dear Governor Letter, https://www.hhs.gov/sites/default/files/sec-price-admin-verma-ltr.pdf.
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152. Since then, Defendant Verma has made repeated public statements criticizing the expansion of Medicaid to “able-bodied individual[s],” advocating for lower enrollment in Medicaid, and outlining plans to “reform” Medicaid through agency action. See https://www.statnews.com/2017/10/26/seema-verma-medicaid-plan/.
153. For instance, on June 27, 2017, Defendant Verma wrote an Opinion piece in the Washington Post observing that “U.S. policymakers have a rare opportunity, through a combination of congressional and administrative actions, to fundamentally transform Medicaid.” Seema Verma, Lawmakers have a rare chance to transform Medicaid. They should take it, Wash. Post, June 27, 2017, https://www.washingtonpost.com/opinions/lawmakers-have-a-rare-chanceto-transform-medicaid-they-should-take-it/2017/06/27/f8e5408a-5b49-11e7-9b7d-14576dc0f39d _story.html?utm_term=.11a4dfe727df.
154. On November 7, 2017, at a speech before the National Association of Medicaid Directors, Defendant Verma declared that the ACA’s decision to “move[] millions of workingage, non-disabled adults into” Medicaid “does not make sense,” and announced that CMS would resist that change by approving state waivers that contain work requirements. Speech: Remarks by Administrator Seema Verma at the National Association of Medicaid Directors (NAMD) 2017 Fall Conference, CMS.Gov (Nov. 7, 2017), https://www.cms.gov/Newsroom/MediaRelease Database/Fact-sheets/2017-Fact-Sheet-items/2017-11-07.html.
155. On November 10, 2017, Defendant Verma gave an interview in which she declared that one of the “major, fundamental flaws in the Affordable Care Act was putting in able bodied adults,” declaring that Medicaid was “not designed for an able bodied person,” and announcing that CMS is “trying” to “restructure the Medicaid program.” http://www.wsj.com/video/thefuture-of-health-care/D5B767E4-B2F2-4394-90BB-37935CCD410C.html.
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156. In or around early November 2017, CMS revised its website to invite states to submit Section 1115 waivers that would:
1. Improve access to high-quality, person-centered services that produce positive health outcomes for individuals;
2. Promote efficiencies that ensure Medicaid’s sustainability for beneficiaries over the long term;
3. Support coordinated strategies to address certain health determinants that promote upward mobility, greater independence, and improved quality of life among individuals;
4. Strengthen beneficiary engagement in their personal healthcare plan, including incentive structures that promote responsible decision-making;
5. Enhance alignment between Medicaid policies and commercial health insurance products to facilitate smoother beneficiary transition; and
6. Advance innovative delivery system and payment models to strengthen provider network capacity and drive greater value for Medicaid.
Medicaid.gov, About Section 1115 Demonstrations, https://www.medicaid.gov/medicaid/section1115-demo/about-1115/index.html.
157. On January 11, 2018, well after the federal comment periods for the Kentucky HEALTH application had closed, Defendant CMS issued a letter to State Medicaid Directors (“Dear State Medicaid Director Letter”), attached as Exhibit D to this Complaint, titled “Opportunities to Promote Work and Community Engagement Among Medicaid Beneficiaries,” which, for the first time, announces its intention to approve state waiver applications with punitive work requirements on Medicaid beneficiaries. See Ex. C, Approval at 3 (“CMS has not previously approved a community engagement requirement as a condition of eligibility.”). The Dear State Medicaid Director Letter also outlines the “guidelines” for states to consider in submitting applications containing work requirements.
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158. The nine-page document “announc[es] a new policy” to allow states to apply “work and community engagement” requirements to certain Medicaid recipients—specifically, “nonelderly, non-pregnant adult Medicaid beneficiaries who are eligible for Medicaid on a basis other than disability.” Ex. D, Dear State Medicaid Director Letter at 1.
159. The Dear State Medicaid Director Letter acknowledges that allowing states to implement work requirements “is a shift from prior agency policy.” Id. at 3.
160. The Dear State Medicaid Director Letter was not submitted for notice and comment, and was not published in the Federal Register.
161. The same day CMS issued the Dear State Medicaid Director Letter, it received several letters critical of this novel policy position, including from members of Congress and nonprofit organizations. The National Health Law Program (“NHeLP”) noted that by announcing the policy change after the Kentucky HEALTH comment period had closed, CMS had not given the public the ability to comment meaningfully on the pending Kentucky waiver requests in light of the policy change. NHeLP noted that the Dear State Medicaid Director letter “entirely ignore[d] the wealth of literature regarding the negative health consequences of work requirements, which was repeatedly cited by NHeLP and others in those state-specific comments.” Letter from Jane Perkins, Legal Director, Nat’l Health Law Program, to Brian Neale, Dir., Ctrs. For Medicare & Medicaid Servs. (Jan. 11, 2018), http://www.healthlaw.org/component/jsfsubmit/showAttachment ?tmpl=raw&id=00P0W00000ozROSUA2.
162. NHeLP requested that CMS re-open public comment on the Kentucky HEALTH project to allow the public a meaningful opportunity to comment.
163. Defendants ignored this request. On January 12, 2018, Defendant HHS approved the Kentucky HEALTH application.
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164. In granting the waiver, CMS imposed a variety of terms and conditions on Kentucky’s program. Ex. C, Approval STCs. Several of those terms and conditions require that Kentucky abide by the requirements set out in CMS’s Dear State Medicaid Director letter. See, e.g., id. ¶ 44 (exempting from work requirement beneficiaries diagnosed with an acute medical condition); id. ¶ 45 (requiring that participation in substance use disorder treatment is a qualifying activity, and that beneficiaries who meet or are exempt from SNAP/TANF employment initiatives “will be deemed to satisfy community engagement requirements”); id. ¶ 46(a)(i) (requiring reasonable modifications for beneficiaries with ADA-protected disabilities, including exemption from participation); id. ¶ 48(e) (promising that Kentucky will ensure access to sufficient work and community engagement activities for curing a failure to meet the eighty-hour requirement, at no cost to the beneficiary); id. ¶ 48(j) (promising that Kentucky will assess areas with fewer qualifying activities or higher barriers to participation to determine whether further exemptions or modifications are needed to the work requirement).
165. On or about January 18, 2018, CMS further emphasized that it disagrees with the legislative expansion of Medicaid under the Affordable Care Act and that it had announced a “new policy guidance” to support state implementation of work requirements intended to target that expansion population. CMS, Community Engagement Initiative Frequently Asked Questions, https://www.medicaid.gov/medicaid/section-1115-demo/community-engagement/index.html.
G. The Kentucky HEALTH Approval’s Effect on the Plaintiffs 166. By approving Kentucky HEALTH, the Secretary has enabled the State to impose unprecedented work and premium requirements and to punish Plaintiffs who are understandably unable to meet those and other administrative requirements by prohibiting them from obtaining Medicaid coverage.
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167. By approving Kentucky HEALTH, the Secretary has permitted Kentucky to eliminate critical Medicaid services for Plaintiffs enrolled in the program.
168. By approving Kentucky HEALTH, the Secretary has permitted Kentucky to exclude retroactive coverage for necessary health services received in the three months prior to the date of application. If a Plaintiff loses coverage and then reapplies, the Plaintiff will not have retroactive coverage for health services received during the gap in coverage.
169. By approving Kentucky HEALTH, the Secretary has permitted Kentucky to impose cost sharing on Plaintiffs if they need to seek care in an emergency department and their condition is determined not to require urgent medical attention. The cost sharing amount will increase with each subsequent visit.
170. Continuous and adequate health insurance coverage is fundamental for each Plaintiff’s ability to work.
171. The Secretary’s action approving Kentucky HEALTH will cause harm to Plaintiffs. Specifically:
172. Plaintiff Ronnie Maurice Stewart is a 62-year-old man who lives alone in Lexington, Fayette County, Kentucky. He has adult children who do not live with him.
173. Mr. Stewart is a college graduate who worked in mental health clinics in North Carolina for many years. He was laid off in his fifties and could not find work. Mr. Stewart moved to Kentucky in 2014 when he was offered a job in Bowling Green. After losing that job, Mr. Stewart was homeless for about six months, until he got a job as a medical assistant at the University of Kentucky Hospital.
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174. Mr. Stewart retired at age 62 because he could not be on his feet all day anymore. His sole income is his Social Security retirement benefits of $841 per month. His annual income is $10,092—83% of FPL for a single person ($12,410 for 2018).
175. Mr. Stewart estimates his expenses total approximately $1,035 each month, including rent, food, clothing, cable, and miscellaneous household expenses.
176. Mr. Stewart has been covered through Kentucky’s Medicaid program since March 2014. He enrolled with the in-person assistance of a kynector/assister. He has not attempted to enroll online or by phone.
177. Mr. Stewart could not afford to purchase insurance on his own, including through previous employment, before he became eligible for Medicaid.
178. Mr. Stewart suffers from diabetes, arthritis, and high blood pressure. Medicaid has allowed him to get treatment for these conditions. Medicaid paid for his cataract surgery, which kept him from going blind.
179. Mr. Stewart will be subject to work requirements under the Kentucky HEALTH waiver. Because of his age and health, he is no longer able to do heavy work that would require standing on his feet all day. He is concerned that he will lose his health coverage if he is unable to work because of his health or if he takes a job with varying work hours. In addition, Mr. Stewart will be at risk of being locked out of Medicaid coverage if he is unable to file or fails to file required reports, including reports within ten days about changes in his income that would affect eligibility. Mr. Stewart is worried he will end up with unpaid medical bills.
180. Under the Kentucky HEALTH waiver, Mr. Stewart is required to pay a monthly premium of up to 4% of his income for Medicaid coverage under the Kentucky HEALTH waiver. Premium payments are a significant concern for Mr. Stewart. He expects to be able to pay the
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premium, but it will mean that he cannot pay for other necessary expenses such as food and rent. If he is unable to pay premiums after 60 days, Mr. Stewart will be required to pay copayments for certain services, money will be taken from his My Rewards account, and his account will be suspended (meaning he will not be able to accrue funds to the account or use funds in the account, which are necessary to pay for dental care, vision care, and over-the-counter medications).
181. Plaintiff Glassie Mae Kasey is a 56-year-old woman who lives in Louisville, Jefferson County, Kentucky. Ms. Kasey is a high school graduate, who attended community college but was not able to finish her schooling because she needed to work to support herself.
182. Ms. Kasey has worked her whole adult life in various jobs, including as a disc jockey, a radio broadcaster, and as a caregiver or housekeeper in private homes and nursing homes.
183. Until mid-September 2017, Ms. Kasey worked at Sullivan University as a custodian cleaning offices, hallways, and bathrooms. She had to lift and carry heavy containers and ultimately hurt her shoulder. After she requested an accommodation, she lost her job.
184. Ms. Kasey is not currently employed. She has been trying to find a job, without luck. She cannot afford a car, so her options for searching for work are limited.
185. Ms. Kasey’s only income is unemployment insurance in the amount of $300 every two weeks, or $7,800 annually—64% of FPL for a single person ($12,140). To get unemployment insurance, Ms. Kasey must be looking for work.
186. Ms. Kasey estimates that she currently spends approximately $545 on various living expenses each month, including mortgage payments, utilities, food, bus fare, a prescription co-pay, and household supplies.
187. Ms. Kasey was first covered through Kentucky’s Medicaid program in June or July of 2014 and has remained enrolled in Medicaid since then. She originally enrolled in Medicaid at
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the family health center location in Louisville. She has subsequently renewed her coverage over the phone.
188. Ms. Kasey has a number of medical conditions for which she receives treatment covered through Medicaid. These include diabetes; calluses on and numbness in her feet, hands, and right arm; arthritis in her hands; chronic pain in her calf muscles and upper legs; high blood pressure; high cholesterol; urinary problems; chronic chest congestion; and leg, foot, and back pain. She had kidney stones twice in the last year.
189. With Medicaid coverage, Ms. Kasey is able to go to a primary care doctor for check-ups, as well as specialists, including a cardiologist, an oncologist, a hand doctor, and a podiatrist. She saw a surgeon for removal of kidney stones. She has received medications and medication management through these physicians. Without Medicaid, it will be difficult for Ms. Kasey to work.
190. Under the Kentucky HEALTH waiver, Ms. Kasey will be required to complete qualifying work or training equal to 80 hours per month. If she in unable to comply with the work requirements, she will be terminated from Medicaid.
191. Under the Kentucky HEALTH waiver, Ms. Kasey will be required to pay a monthly premium of up to 4% of her income. Premium payments are a significant concern for her. Any premium amount could be difficult or impossible to pay when it comes due during a given month. If she is unable to pay the premiums after 60 days, Ms. Kasey will be required to pay copayments for certain services, money will be taken from her My Rewards account, and the account will be suspended (meaning she will not be able to use funds in the account or accrue funds to the account). For the same reasons she may not be able to pay the premium amounts, she may also be unable to pay the cost sharing amounts.
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192. Ms. Kasey has been to the emergency room once in the past year for a severe headache.
193. Ms. Kasey has needed vision care, including eyeglasses, since childhood. Her visits with eye care professionals have previously been covered through Kentucky’s Medicaid program. These services will now be paid for out of her My Rewards account, but only if Ms. Kasey has earned rewards, and only if the account is not suspended.
194. Ms. Kasey has experienced dental problems, including the loss of seven teeth as a result of diabetes. These problems will require dental treatment, including dentures. These services will now be paid out of her My Rewards account, but only if Ms. Kasey has earned rewards, and only if the account is not suspended.
195. Because Ms. Kasey does not own or have access to a motor vehicle, she travels to her health care appointments by bus. This regularly takes about 35 minutes.
196. Plaintiff Lakin Branham is a 20-year-old woman who lives in Dwale, Floyd County, Kentucky with her grandparents.
197. Ms. Branham’s grandfather has terminal cancer, and she helps care for him. Ms. Branham also helps with housework (e.g., cleaning, cooking) and yardwork. Most days of the week, Ms. Branham’s grandfather, grandmother, great grandmother, or great aunt have a doctor’s appointment or need to go to the store to get household items. Ms. Branham’s grandmother drives them, and Ms. Branham goes along to help her relatives move from place to place. She babysits her five-year-old sister three days a week.
198. Ms. Branham is looking for a job outside the home, though without a license to drive and no public transportation available in Floyd County, the prospects are difficult.
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199. Ms. Branham is in a separate tax household with a current income of $0 per month. Her grandfather is fully disabled and receives Social Security Disability Insurance, as well as Social Security, and her grandmother receives Social Security income.
200. Ms. Branham has been covered through the Kentucky Medicaid expansion since 2015. She enrolled in Medicaid with the assistance of the state marketplace, kynect.
201. Ms. Branham has a number of medical conditions that require ongoing treatment, including mental health medications. She is primarily focused on her sobriety and is in recovery from addiction, primarily to methamphetamines. Ms. Branham attends substance abuse counseling and church as often as she can. Her entire substance abuse treatment has been covered through Kentucky’s Medicaid program.
202. Ms. Branham’s goal for the next year is to return to college, get her peer support certification, and start a degree in psychology. She hopes to become a substance abuse counselor and work for one of the ARC facilities. She also has goals to remain sober for five years, have her own family, and live in her own home.
203. Under the Kentucky HEALTH waiver, Ms. Branham will be subject to work requirements. She is required to complete qualifying work or training equal to 80 hours per month. She is currently caring for her ill grandfather and attending outpatient substance abuse disorder services, but it is likely that she will not meet these and other reporting requirements at least some of the time and will be locked out of Medicaid.
204. Ms. Branham will be required to pay a premium of $1 per month. Since she has no income, any premium will be difficult or impossible for Ms. Branham to pay when it comes due each month. If she is unable to pay the premium, Ms. Branham will be required to pay copayments
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for certain health services, her My Rewards account will be suspended, and money will be deducted from the My Rewards account.
205. Ms. Branham has experienced dental problems, and has ongoing dental problems that need to be addressed. These services would have to be paid for with money from her My Rewards account.
206. Plaintiff Shanna Ballinger is a 27-year-old woman who lives in Radcliff, Hardin County, Kentucky with her husband, Matt, and their two sons, aged three and two.
207. The Ballinger family is currently enrolled in the Kentucky Medicaid program. Mrs. Ballinger first enrolled in Medicaid in 2015 when she was pregnant. She was covered by Medicaid from January 2015 to October 2015. In June 2016, the whole family enrolled in Medicaid and has been covered since then. They enrolled in Medicaid online.
208. Mrs. Ballinger graduated from Western Kentucky University with a degree in English. She previously worked in the human resources command for the army at Fort Knox. In August 2017, she enrolled as a full-time law student at the Louis D. Brandeis School of Law at the University of Louisville. She just started her second semester of law school.
209. Mrs. Ballinger does not currently have any income. She took out a student loan to pay for childcare, books, and other school-related expenses.
210. As a full-time student and caregiver to her children, Mrs. Ballinger should be exempt from the Kentucky HEALTH work requirements. Her husband Matt works full time roughly 35 to 37 hours per week at a Hobby Lobby store in Elizabethtown, Kentucky. He is also a part-time student at Elizabethtown Community College. He makes roughly $2,517 per month, with an annual income of roughly $30,206. He always works at least 35 hours a week. During the holidays, his hours increase slightly, but never exceed 40 hours per week. The Ballingers will
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be required to report any fluctuation of income within ten days, which might be difficult since Mr. Ballinger’s hours vary every week. They would lose their Medicaid and be locked out of the program if they do not timely report an increase in income that would affect their eligibility.
211. Because Mrs. Ballinger does not currently have income, the Ballingers have a household income of roughly $2,517 per month and $30,206 per year—roughly 120% of FPL for a family of four ($25,100).
212. Mrs. Ballinger estimates that she and her family spend approximately $3,341 on various family living expenses each month, including rent, utilities, car payments, credit card payments, child care, food, school expenses, diapers, and other miscellaneous household items. This amount fluctuates from month to month.
213. Under the Kentucky HEALTH waiver, Mrs. Ballinger will be required to pay a monthly premium of up to 4% of household income for Medicaid coverage. The premiums are a significant concern. Her family’s household income, with the exception of Mrs. Ballinger’s student loan, derives solely from her husband’s employment. The costs detailed above, including child care and other necessities, sometimes exceed the family’s income. This is particularly true at the end of semesters (December and May), when the loan funds are depleted. The premium will be difficult to pay, particularly at those times. Mrs. Ballinger and her husband will be locked out of Medicaid coverage if they are unable to pay a premium or file income reports, and there will be no retroactive coverage under the waiver. Retroactive coverage was extremely helpful to them in the past when they got off Medicaid and then had medical crises and had to reapply.
214. Mrs. Ballinger has a number of medical conditions for which she receives treatment. She has postural orthostatic tachycardia syndrome (“POTS”), a condition that causes her heart rate to increase rapidly, sometimes leading her to pass out. She manages this condition
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with the help of physicians, including her cardiologist and her primary care physician. Medicaid covers her treatment.
215. Mrs. Ballinger also experiences depression and anxiety. She was hospitalized twice for post-partum depression. She manages these conditions through the use of medications and with the help of physicians, including a psychiatrist. She currently takes Prozac, Effexor, and Abilify. Medicaid covers her treatment.
216. Matt Ballinger had his spleen removed in June 2017 after it grew to about twice its normal size and was growing into his stomach. He gets sick more often now, since the spleen is part of the immune system. He was taking prerequisites to get into nursing school. Because of the risk of infection, he had to abandon that career plan and is now taking general classes at the community college.
217. The Ballingers’ younger son had difficulties after birth. He was in the intermediate nursery for four days and then had to be hospitalized a couple of months later. It was determined that he is allergic to milk and soy products, so his diet must be carefully regulated.
218. Mrs. Ballinger has been to the emergency room twice in the past year during bouts of POTS. Her husband went to the emergency room with pain from his spleen.
219. The only way that Kentucky HEALTH will pay for vision and dental services for the Ballingers is through their My Rewards account. Mrs. Ballinger and her husband both wear glasses. She is nearsighted and has irregular astigmatism. The My Rewards account is unlikely to be sufficient to meet their vision needs, especially if the account is reduced due to a non-emergency emergency room visit.
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220. Without Medicaid coverage, the cost of Mrs. Ballinger’s medications alone would exceed $1,200 per month. With all of the medical crises their family has had, Mrs. Ballinger believes that the family would be homeless if not for Medicaid.
221. Plaintiff Dave Kobersmith is a 57-year-old man who lives in Berea, Madison County, Kentucky with his wife, Kimberly, and their two sons, ages 13 and 11. Mr. and Mrs. Kobersmith both work part-time, so that they can jointly home school and care for their sons.
222. Mr. Kobersmith works as an administrator at the Union Church in Berea. He regularly works 20 hours each week managing church finances, property, and personnel and supports the pastors. In 2017, his income was $1,011 every two weeks, or $26,300 annually. In 2018, his pay has decreased to $866 every two weeks, or $22,539 for the year.
223. Mrs. Kobersmith is a freelance writer who has written articles for local newspapers and magazines. Currently, she works about 10 to 12 hours each week and makes roughly $375 to $450 per month, or $4,500 per year. Mrs. Kobersmith’s hours and income fluctuate substantially throughout the year.
224. In 2018, the Kobersmiths expect to have a household income of roughly $2,253 per month. However, their household income varies considerably from month to month based on Mrs. Kobersmith’s work. If the Kobersmiths consistently made $2,253 per month, they would have an annual household income of $27,039—108% of FPL for a family of four ($25,100).
225. The Kobersmiths spend approximately $2,200 on family expenses each month, including utilities, clothing, gas, food, taxes, insurance, savings, charity, and miscellaneous household needs. Because Mrs. Kobersmith is self-employed, she has to pay all employment taxes out of her monthly income.
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226. Mr. Kobersmith and his wife signed up for Medicaid in 2014. Before enrolling in Kentucky’s Medicaid program, Mr. Kobersmith paid for a high-deductible, catastrophic coverage health insurance plan. Since he essentially had to pay all health-related costs out-of-pocket under that plan, he regularly avoided seeking health care.
227. Their children were enrolled in KCHIP in 2011, but are now on Medicaid. 228. Medicaid has enabled the Kobersmith family to get preventive care services. Mr. and Mrs. Kobersmith both get an annual check-up and go to the dentist twice a year. Mr. Kobersmith sees a urologist several times a year and a chiropractor once a month for back issues. Mr. Kobersmith has two crowns and will need another tooth crowned. Mr. and Mrs. Kobersmith and their younger son all wear glasses. Their children get well-child check-ups and dental and vision check-ups. Having affordable health care through Medicaid has allowed Mr. and Mrs. Kobersmith to focus on home schooling and spending more quality time with their children. 229. Mr. Kobersmith will be subject to work requirements under the Kentucky HEALTH waiver. Currently, he works 20 hours a week steadily. If his income and working hours change, he could risk being locked out of Medicaid. The Kobersmiths are concerned that they could lose Medicaid coverage if they are unable to file required reports, including reports about changes in their total household income. 230. Under the Kentucky HEALTH waiver, the Kobersmiths will be required to pay a monthly premium of up to 4% of household income for Medicaid coverage. Because Mr. Kobersmith’s income has decreased to $22,539, paying the premium will be harder. If he is unable to pay a premium within 60 days, the Kobersmiths will be locked out of coverage. 231. The only way that Kentucky HEALTH will pay for vision and dental services for the Kobersmiths is through their My Rewards account. If the Kobersmiths lose money from their
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My Rewards account due to a non-emergency emergency room visit, they may be unable to obtain necessary vision and dental care.
232. Plaintiff William Bennett is a 47-year-old divorced man who lives in Lexington, Fayette County, Kentucky. He has a 21-year-old son, who splits his time between Mr. Bennett and his ex-wife. His son has ADHD and is unable to work. He also has two younger children, aged 13 and 14, who are in foster care. Mr. Bennett pays $250 each month in child support for all three children.
233. Mr. Bennett completed a one-year embalming school program at Mid-America College in Indiana. He also has a two-year degree in ministry from Liberty University in Lynchburg, Virginia.
234. Mr. Bennett has two part-time jobs. He is the director and mortician at HawkinsTaylor Funeral Home in Lexington, Kentucky. He is also a minister at West Bend Missionary Baptist Church in Clay City, Kentucky. His income varies widely from $100 to $1,000 per month, depending on the number of funerals. He volunteers five to eight hours per week at the New Life Day Center in Lexington.
235. Even if Mr. Bennett made an average of $500 per month, he would have an annual income of $6,000—49% of FPL for a family of one ($12,140).
236. Mr. Bennett estimates that his regular expenses are approximately $540 per month, including rent, food, student loans, and child support. In addition, he pays a $2 copayment for some of his medications.
237. Mr. Bennett has been covered through Kentucky’s Medicaid program for about two years. He was able to enroll in Kentucky’s Medicaid program with the help of an in-person assister. He is uncomfortable using a computer and prefers to work with someone face-to-face.
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238. Mr. Bennett has a number of medical problems, including diabetes, high blood pressure, high cholesterol, chronic obstructive pulmonary disease, and hemorrhoids. At times, the diabetes makes him feel bad in the morning. He can also have a hard time breathing and a lot of pain and bleeding from the hemorrhoids. In addition, he has serious eye problems—no vision in one eye due to injury earlier in life, cataracts in both eyes, and glaucoma. He is unable to drive due to his limited vision and is worried that he might go blind. His doctors have referred him to be evaluated for surgery. He hopes to be able to keep working for five more years.
239. Prior to Mr. Bennett’s enrollment in Medicaid, he had to go to the emergency room for treatment and to the health department to try to get prescriptions filled. Often, he would go without his medicine for long periods of time. Now, he goes to the Bluegrass Community Health Center for treatment and medications instead of to the emergency room. He finds that he is not looked down on as much by the medical staff since he got Medicaid. He feels reassured that he will be able to get his medications and can get the surgeries he needs.
240. Medicaid coverage is essential to Mr. Bennett’s ability to manage his health problems and to keep working.
241. Mr. Bennett will be subject to work requirements under the Kentucky HEALTH waiver. He is concerned that he will lose his health coverage if he is unable to work or volunteer at least 80 hours a month, which is likely due to his varying work schedule.
242. Mr. Bennett is at risk of being locked out of Medicaid coverage if he is unable to file required reports, including reports about changes in his income that could affect his eligibility. He is concerned that he will incur medical bills that he will not be able to pay.
243. Under the Kentucky HEALTH waiver, Mr. Bennett will be required to pay a monthly premium of up to 4% of his income for Medicaid coverage. Premium payments are a
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significant concern for him. He does not believe he can manage a premium set at 4% of his income ($20). If Mr. Bennett is unable to pay the premiums for 60 days, he will be required to pay copayments for certain services, his My Rewards account will be suspended, and money will be taken from the account.
244. Mr. Bennett has a wisdom tooth that needs to be extracted. His My Rewards account is unlikely to be able to fund the dental and vision care he needs.
245. Plaintiff Shawna Nicole McComas is a 34-year-old woman who lives in Lexington, Fayette County, Kentucky with her husband and four children, ages 16, 13, 9, and 4. Mrs. McComas is currently enrolled in the Kentucky Medicaid program.
246. Mrs. McComas generally works 40 or more hours per week in a housekeeping position at the University of Kentucky Hospital. She makes roughly $1,200 every two weeks, or $2,400 per month, though this amount varies depending on how many hours she works and whether she has worked overtime hours. Her work hours vary from week to week and month to month.
247. Mrs. McComas’s husband, Jeremiah, is unemployed. In September 2017, he secured a job at a restaurant, but he was only able to work one week. He suffers from posttraumatic stress disorder, which makes it difficult for him to keep a job.
248. Mrs. McComas estimates that her household income is roughly $2,400 per month, or an annual household income of $28,800, which is 85% of FPL for a family of six ($33,740).
249. Mrs. McComas estimates that her family currently spends roughly $1,200 on various living expenses each month, including rent. This amount fluctuates from month to month.
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250. Mrs. McComas has been covered through Kentucky’s Medicaid program since August 2017. She was previously on Medicaid, but her coverage was terminated when she moved and did not receive the notice about the need to re-determine her eligibility.
251. Mrs. McComas has a number of medical conditions for which she receives treatment. These include chronic hip pain, congenital hip dysplasia, osteoarthritis in her hips, chronic back pain, arthritis and a bunion on her right foot due to her hip problems, and sciatic nerve damage.
252. Mrs. McComas receives treatment and checkups for these conditions from a primary care physician as well as specialists, including an orthopedist, an orthopedic surgeon, and a podiatrist. Though an orthopedic surgeon recommended surgery over a year ago, Mrs. McComas did not have the procedure because she felt she could not afford to miss six weeks of work during the post-surgical recovery period. She has also received medications and medication management through these physicians. These treatments and medications are covered through Kentucky’s Medicaid program.
253. Mrs. McComas does not have a car. She takes buses to get to appointments with doctors. This takes roughly an hour and a half each way.
254. Under the Kentucky HEALTH waiver, Mrs. McComas and her husband will both be subject to work requirements. They will be required to complete 80 hours of qualifying work activities each month, although he might be exempt from the work requirement as caretaker for the children. Mrs. McComas is currently working more than 20 hours a week. However, she could be locked out of coverage if her hours decrease or if she does not report changes that would affect her eligibility within ten days. This reporting might be difficult for her because of her varying work schedule and changing overtime hours.
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255. Under the Kentucky HEALTH waiver, Mrs. McComas is required to pay a monthly premium of up to 4% of household income. Premium payments are a significant concern for her. Her household income can vary from week to week. Because of this, any premium amount could be difficult or impossible to pay when it comes due during a given month. She had difficulty paying a premium in the past when she had a subsidized plan, and as a result, she lost her coverage. Mrs. McComas anticipates that she might have to try to obtain additional overtime work to pay the premium.
256. If Mrs. McComas is unable to pay the required premium amount for a period of 60 days, she will face penalties. She will have to pay cost sharing amounts equal to those permitted under Kentucky’s Medicaid state plan. She will have money taken from her My Rewards account, and her account will be suspended (meaning she will not be able to accrue funds in the account or use any funds in the account to pay for services not otherwise covered, such as vision and dental).
257. Mrs. McComas has experienced dental issues, including gum disease, gingivitis, and pain and sensitivity near her teeth. She has had four or five teeth removed. She also wears prescription glasses. Any funds she may accrue in her My Rewards account are unlikely to cover her dental and vision needs.
258. Plaintiff Alexa Hatcher is a 29-year-old resident of Bowling Green, Warren County, Kentucky, where she is a full-time student in her final semester at Western Kentucky University.
259. Ms. Hatcher works a part-time job in a campus food pantry. This is her only source of income. Ms. Hatcher began working there for 15 to 20 hours per week in September 2017. This spring semester she is working 10 hours per week. Earning $7.50 per hour, she will earn $300 per month or about $3,600 per year—slightly above 25% of FPL for a single individual ($12,140).
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260. Ms. Hatcher does not earn enough to cover her basic living expenses of food, rent, insurance, utility bills, and gas. To meet her living expenses, Ms. Hatcher has taken out loans. She currently owes $50,000 in student loan debt. She cannot afford private health insurance.
261. Ms. Hatcher lives with endometriosis and takes medication for the condition, as well as for depression, anxiety, and severe allergies. Without the medications she needs to treat these conditions, Ms. Hatcher’s health and daily life would be severely impaired.
262. Ms. Hatcher is enrolled in Kentucky’s Medicaid program. 263. When Ms. Hatcher was not enrolled in Medicaid, she did not have any health coverage and did not go to the doctor or seek any type of medical treatment. 264. Ms. Hatcher had surgery for her endometriosis and uterine polyps in December 2017. Post-surgery, Ms. Hatcher must maintain a medication regimen to prevent a recurrence of these conditions. Without Medicaid she could not afford the surgery or medications, and treatment for her chronic conditions would end because she has no other means to pay for it. 265. Without these health services, Ms. Hatcher’s quality of life would be diminished. She would miss work, miss classes, and lose wages. It would be difficult for Ms. Hatcher to work and, thus, to afford her bills. 266. Because she is currently a full-time student, Ms. Hatcher should be exempt from work requirements. However, she is expected to graduate this semester and will then have to work 80 hours a month. Right now, Ms. Hatcher’s working hours and income fluctuate throughout the year. She is concerned that she will be locked out of Medicaid coverage if she does not file the required reports informing the State about these changes. Ms. Hatcher also is concerned she will be unable to timely re-enroll each year, will be kicked off of the program, and as a result, will not get needed care or will incur medical debts when she does seek care.
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267. Under the Kentucky HEALTH waiver, Ms. Hatcher will be charged a monthly premium of up to 4% of her income. Given her income and debts, it will be next to impossible for her to pay this amount. The premiums will be financially devastating to Ms. Hatcher, given that she must pay for food, rent, and other necessities. After she graduates, she will also have to make student loan payments. If she is unable to pay the premiums for 60 days, Ms. Hatcher will be required to pay copayments for certain health services, and she does not believe she will be able to afford these amounts. Money will be deducted from her My Rewards account, and the account will be suspended.
268. Plaintiff Michael “Popjaw” Woods and Plaintiff Sara Woods are 52 years old and 40 years old, respectively, and they live in Martin, Floyd County, Kentucky. Mr. and Mrs. Woods have three children, ages 15, 16 and 21, who do not live in the home. Their 21-year-old daughter, Beka, had a baby in December 2017. Mrs. Woods is providing childcare for her granddaughter as well as for a neighbor’s child.
269. Mr. Woods owns and operates Martin Service Center, a service station for car repairs. The business opened last year. Martin Service Center offers oil changes and basic car repairs, including brakes and tires. Mr. Woods’ income varies dramatically from week-to-week based on business, but averages around $1,400 per month, gross, and around $1,000 net.
270. Mrs. Woods is a cleaning specialist with clients including local home owners, a local pawn shop, and her husband’s service center. Currently, Mrs. Woods makes $10 per hour from cleaning and earns, on average, $400 gross per month from her recurring cleaning accounts. Mrs. Woods’s hours and income fluctuate substantially throughout the year.
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271. Mr. and Mrs. Woods have a gross household income of roughly $1,800 per month but, as noted above, their income varies considerably. Their best estimate of the household income would be around $20,000 annually, approximately 122% of FPL for a family of two ($16,410).
272. Both Mr. and Mrs. Woods signed up for Medicaid in 2014 with the help of an inperson assister. Neither of them was insured prior to the Medicaid expansion in Kentucky.
273. With Medicaid coverage, Mrs. Woods was able to get treatment for a substance use disorder. She has been able to stay sober for nearly three years with the help of suboxone, a prescription medication that is covered by Medicaid. Mrs. Woods believes she would have died from an overdose by now if she had not gotten on Medicaid. She also previously suffered from debilitating migraines and low blood sugar. Medicaid has helped her to get these conditions under control. She also takes Prozac, Maxalt, and medication as needed for the low blood sugar.
274. Medicaid has also enabled the Woodses to access preventive services. With Medicaid coverage, Mr. Woods takes blood pressure medication, treating a long untreated condition.
275. Mr. and Mrs. Woods will be subject to work requirements under the Kentucky HEALTH waiver. Because their working hours and income fluctuate substantially throughout the year, the Woodses are at risk of losing coverage. They will have to report any change of income within ten days, which will be difficult since their income changes every day. The Woodses have only a limited number of minutes on their cell phones and do not have access to a computer or internet other than through their cell phones. If a non-reported increase in income would make them ineligible, or if they fail to complete the redetermination process on time, they will be locked out of Medicaid.
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276. Under the Kentucky HEALTH waiver, Mr. and Mrs. Woods will be required to pay a monthly premium of up to 4% of their income for Medicaid coverage. If they do not pay their premiums within 60 days, they will lose their Medicaid for up to six months.
277. The Woodses will depend on their My Rewards account for vision and dental care. Both need glasses and dental care. Mrs. Woods has a number of dental problems.
278. Mr. Woods went to the emergency room in 2017 when a transmission fell on him at work.
279. Plaintiff Kimberly Withers is a 47-year-old woman who resides with her husband and two children, ages 18 and 20, in Lexington, Fayette County, Kentucky.
280. Mrs. Withers has worked various jobs all her life, including at gas stations, hotels, fast food restaurants, Wal-Mart, and as a custodian. Mrs. Withers has worked as a housekeeper for Crothall Healthcare for six years, the last year and a half at Cardinal Hill Rehabilitation Center in Lexington. She earns $2,626 per month or $31,520 per year. Her husband, Kevin, is currently unemployed. They do not have a car, and Mr. Withers has had difficulty finding a job that does not require him to drive to another county. Most recently, he worked for FedEx but could not afford the gas to commute to work. Mrs. Withers’ daughter, age 20, has a learning disability and has been unable to find a job. She is supposed to have a medical review for disability. Mrs. Withers’ son, who is 18 years old and still in high school, works part-time. Because he is still in high school, his income is excluded for purposes of Medicaid eligibility.
281. The Withers’ household income is $2,626 per month, or $31,520 per year, which is 127% of FPL for a family of four ($25,100).
282. The family’s expenses for rent, utilities, food, internet, cell phones, transportation, and other expenses are approximately $1,530 a month.
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283. Mrs. Withers has rheumatoid arthritis in her hands, shoulders, hips, and lower spine. She has been told that her disks are slowly shrinking. She is in constant pain when she is standing and has a lot of pain by the end of her work day. Mrs. Withers sees her doctor every two months and has had occupational therapy. She is supposed to be referred to pain management, but that has not happened yet. Mrs. Withers needs eyeglasses but cannot afford them. She and her husband both wear “cheaters.” Mrs. Withers has a broken tooth, and some of her teeth have fallen out. One tooth had to be pulled because of an abscess. Mr. Withers has consistent back pain and curvature of the spine and has to work through the pain.
284. Mrs. Withers and her family signed up for Medicaid in March 2014. She was helped by an in-person assister at the library. She can walk to the library. The welfare office is on the other side of Lexington, and it is difficult for her to get there without a car. When she has had to go there and could not make it, she has had her benefits cut off.
285. Mrs. Withers and her husband will be subject to the Kentucky HEALTH work requirements. Her husband will lose coverage unless he can get a job working 80 hours a month. They will also be subject to various reporting requirements under the Kentucky HEALTH waiver. Mrs. Withers could be locked out of coverage if she is unable to file the required reports, including reports about changes in income that could affect her eligibility for Medicaid.
286. Under the Kentucky HEALTH waiver, Mrs. Withers will be required to pay a monthly premium of up to 4% of household income for Medicaid coverage. It will be difficult for her to pay this every month. If she is not able to pay the premium, she will lose her Medicaid coverage for up to 6 months.
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287. Mrs. Withers and her husband both need eyeglasses. Mrs. Withers is losing teeth. The My Rewards account will likely be inadequate to pay for Mr. and Mrs. Withers’s vision and dental needs.
288. Plaintiff Katelyn Allen is a 27-year-old woman who lives in Salyersville, Magoffin County, Kentucky. She resides with her husband Gary and their eight- and six-year-old children. Her 18-year-old brother lives with them part-time.
289. Mrs. Allen recently started working at a teller at First Commonwealth Bank in Salyersville. She has previously worked for the State collecting samples for drug testing, in a rubber factory, at another drug lab, at a Dairy Queen, and at a hospital doing patient registration. She also breeds dogs once a year, which earns her about $150. Her gross income is approximately $1,668 per month. Mr. Allen works delivering pizza 20 hours a week and earns minimum wage plus tips. He also has worked in a drug testing lab. His gross income is $728 per month. At their current jobs, the Allens’ annual income is $28,752, which is 115% of FPL for a family of four ($25,100).
290. Mrs. Allen estimates that the family’s regular expenses are approximately $1,466 per month, including lot rent, utilities, internet, phones, car payment, car insurance, food, and miscellaneous household expenses. They receive SNAP benefits of $400 per month, but still have to pay an additional $200 to $250 per month on food.
291. Mrs. Allen has been covered through Kentucky’s Medicaid program since her first pregnancy in 2008. Both of her children have been covered by Medicaid since birth. Mr. Allen enrolled in the Medicaid expansion in 2014. Mrs. Allen renews her coverage through an in-office visit every 12 months.
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292. Prior to having Medicaid, Mrs. Allen went without medical care due to cost and accumulated debt from obtaining care when absolutely necessary. Because of her current coverage, Mrs. Allen was able to seek emergency care after a car accident in January 2017. She is able to get annual check-ups. Mrs. Allen is healthy and does not have any ongoing medical problems. Mr. Allen has a slipped disk and nerve damage resulting from the car accident. He takes Gabapentin for the pain.
293. Mrs. Allen credits Medicaid with making it possible to keep her children healthy and to take them to the doctor when they are sick. She would not be able to afford any doctor or dentist visits for them without the coverage. Mrs. Allen fears that without this coverage she would have to choose between caring for a sick child or paying essential bills.
294. The Allens will both be subject to the 80 hours per month work requirement under the waiver. While one parent could be exempted from this requirement as the children’s caretaker, the Allens could be locked out of Medicaid if at least one of them fails to work 80 hours a month. They could also be locked out of the program if they fail to report any changes in income that would affect their eligibility within 10 days or if they do not timely submit redetermination paperwork. The reporting requirement is a particular concern because Mr. Allen’s income varies every week.
295. Under the Kentucky HEALTH waiver, Mrs. Allen will be required to pay a Medicaid premium of up to 4% of household income. Premium payments are a significant concern for her, especially because the family lives paycheck to paycheck. If the Allens fail to pay the premium within 60 days, they will be locked out of Medicaid.
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296. Mrs. Allen will have a My Rewards account under the Kentucky HEALTH waiver. Earning money in the account will be the only way she will be able to pay for vision and dental care. Mr. and Mrs. Allen and two of their children need prescription eyeglasses.
297. Plaintiff Amanda Spears is a 33-year-old married woman with no children who lives in Park Hill, Kenton County, Kentucky. She is separated from her wife and is currently living with her parents.
298. Ms. Spears was previously approved for Social Security disability, but those benefits terminated when she tried to go back to work. She recently reapplied for these benefits. Ms. Spears has worked for the Internal Revenue Service, at an environmental research institute, as a sanitation department communications specialist, and for a financial investment company. She was forced to quit most of these jobs due to her health. Most recently, she and her wife had a company called KYSOC making t-shirts, cups, and other merchandise. Ms. Spears was unable to continue working there due to her health.
299. Ms. Spears is currently not working due to health problems. She has no income, and her parents are paying all of her expenses, including her medications, which cost $300-$400 per month. As a result, Ms. Spears has $0 income—0% of FPL for a single person ($12,140).
300. Ms. Spears obtained Medicaid coverage in 2015 when medical insurance was unavailable through her job because she was a temporary employee. She was able to enroll in Medicaid online. Previous lack of coverage and large medical debt forced Ms. Spears to file for bankruptcy two years ago.
301. Ms. Spears was born with hypokalemic periodic paralysis, a rare genetic disorder that manifests as attacks of muscle weakness and short term cognitive problems. She also suffers from postural orthostatic tachycardia syndrome and was born with spina bifida. She has had Lyme
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disease for 12 years. She has developed multiple chemical sensitivities. An allergy to many of the fillers in her prescriptions has led her to stop taking all prescription medications and to rely on naturopathic medications. The medications and supplements she is taking, including oregano oil, olive leaf, biotagen, vitamin C and vitamin D complex, are not covered by Medicaid.
302. Nevertheless, Medicaid is absolutely essential to Ms. Spears’ health, as she has a primary care doctor and sometimes ends up in the emergency room due to anaphylactic shocks, seizures, or tachycardia episodes.
303. Ms. Spears will be subject to work requirements under the Kentucky HEALTH waiver. She will lose her health coverage if she fails to work 80 hours per month. If she is able to work, she could be at risk of being locked out of Medicaid coverage if she is unable to file required reports, including reports about changes in her income that would affect her eligibility.
304. Under the Kentucky HEALTH waiver, Ms. Spears is required to pay a $1 monthly premium for Medicaid coverage. Since she has no income, paying any premium will be difficult. If she is unable to pay a premium, Ms. Spears will be required to pay copayments for certain services, her My Rewards account will be suspended, and money will be taken from the account.
305. Ms. Spears lives 45 minutes away from her doctor. She is not able to drive because she has seizures. Her mother drives her to the doctor. This interferes with her mother’s care for her nieces, as she often has to pick them up and take them places. Under the Kentucky HEALTH waiver, Ms. Spears is concerned that she will not be able to go to medical appointments because non-emergency medical transportation is not a covered benefit.
306. Plaintiff David Roode is a 39-year-old man who lives with his wife in Ludlow, Kenton County, Kentucky. They do not have any children.
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307. Mr. Roode is self-employed as a classical musician and plays with various symphony orchestras, usually on a contract basis.
308. Because he is a self-employed contractor, Mr. Roode’s income varies each month, and he often has to pay his own Medicare and Social Security taxes, in addition to income taxes. His average net income, after business expenses, is $1,000 to $1,200 per month. He generally works 20 to 30 hours per week, although this fluctuates. His wife is also self-employed. Her monthly adjusted gross income after business expenses is $500 or less per month. Mr. Roode’s adjusted gross income is about $1,600 per month, which annually amounts to approximately $19,200—117% of FPL for a family of two ($16,460).
309. Mr. Roode estimates that his regular household expenses (including rent, utilities, food, clothing, car payments, student loan payments, and piano payments) are approximately $1,850 per month.
310. Mr. Roode has been covered through Kentucky’s Medicaid program since the end of 2015 or early 2016. He was able to enroll online, but once had to go to the local Medicaid office when there was confusion over whether he should be on Medicaid or on subsidized insurance.
311. Mr. Roode is healthy and has no ongoing health conditions. 312. With Medicaid, Mr. Roode has been able to get preventive care—including an annual check-up and flu shot. Preventing illness is very important to him because of his busy schedule and contract status—it is very important not to miss performances. Medicaid coverage is essential to Mr. Roode’s ability to stay healthy and keep working as much as possible. Without Medicaid, he would be forced to give up his music career and try to find a job that offers health insurance.
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313. Mr. Roode will be subject to work requirements under the Kentucky HEALTH waiver. A significant concern is that he will be locked out of Medicaid coverage if his work hours fluctuate below 80 hours per month, which could happen anytime. Mr. Roode is also at risk of being locked out of Medicaid coverage if he is unable to file required reports, including reports about changes in his income that would affect his eligibility. His income changes every month, so reporting every change will be difficult.
314. Under the Kentucky HEALTH waiver, Mr. Roode will be required to pay a monthly premium of up to 4% of his income for Medicaid coverage. If he is unable to pay the premium, he will be locked out of Medicaid coverage for up to 6 months.
315. Mr. Roode wears prescription eyeglasses, and he will not have any vision coverage under the waiver unless there are funds in his My Rewards account to cover vision care.
316. Plaintiff Sheila Marlene Penney is a 54-year-old woman who lives alone in Louisville, Jefferson County, Kentucky. She has an adult son who lives elsewhere.
317. Ms. Penney was born in Fleming, Letcher County. Her father and grandfather were coal miners. The family moved to Louisville when Ms. Penney was an infant because coal jobs were drying up.
318. Ms. Penney has worked her whole adult life as much as possible. She has worked as a package handler, boat reservations manager, and as a kynector/assister for Medicaid enrollment. She has also worked with victims of domestic violence and in the Jefferson County Drug Court.
319. Ms. Penney currently does not have regular income. Her mother pays half of her rent and her cell phone bill. Her ex-boyfriend pays for her internet and incidentals. Her monthly income from her mother and ex-boyfriend is $550 per month. She receives SNAP benefits to help
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with groceries. She estimates she spends an additional $500 per month from her savings to cover monthly household expenses of approximately $1,050.
320. Ms. Penney’s total income is $550 per month, and she has an annual household income of $6,600—54% of FPL for a single person ($12,140).
321. Ms. Penney has been covered through Kentucky’s Medicaid program for about two years. She was able to enroll in Kentucky’s Medicaid program online and by phone.
322. Ms. Penney has not worked since March 2016 due to depression and anxiety. She has had these conditions for 30 years. She also has sleep apnea and allergies.
323. Prior to enrolling in Medicaid, Ms. Penney had trouble getting health care. She had to piece together treatment for her depression and anxiety through visits to a sliding fee scale family health clinic. Sometimes, she could get prescriptions filled through a free pharmaceutical plan. She was unable to pay out-of-pocket expenses for therapy and other needed treatment.
324. Having Medicaid has allowed Ms. Penney to obtain consistent treatment to keep these conditions under control. She is now able to look for work but, so far, has not found a job. Without Medicaid, Ms. Penney does not believe she would be able to work at all.
325. Ms. Penney will be subject to work requirements under the Kentucky HEALTH waiver. A significant concern is that she will lose her health coverage—and her mental health coverage in particular—if she is unable to work because of her health, if she is unable to find a job, or if she takes a job with inconsistent work hours. In addition, Ms. Penney will be locked out of Medicaid if her income increases and she fails to report a change that would affect her eligibility within ten days.
326. Under the Kentucky HEALTH waiver, Ms. Penney is required to pay a monthly premium of up to 4% of household income. Premium payments are a significant concern for her.
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This is especially true now, because she is unemployed and has to rely on others to pay some of her expenses. She expects to be able to pay the premium, but admits it will mean other bills may go unpaid or she will have to rely on others to help her. If Ms. Penney does not pay the premium for 60 days, she will have to pay copayments for certain services that could be more expensive than the premium, her My Rewards account will be suspended, and money will be taken from the account.
327. The My Rewards account is the only way Ms. Penney can afford to get vision and dental care. Ms. Penney wears glasses and has a broken tooth that needs to be removed.
328. Plaintiff Quenton Radford is a 20-year-old man who lives in Ashland, Boyd County, Kentucky, with his 16-year-old brother and his grandmother, who has multiple sclerosis. No other family members assist Mr. Radford in caring for his grandmother. Mr. Radford helps her in and out of bed, cooks, does laundry, and cleans the house. Mr. Radford spends about three hours each day caring for her. He also babysits his cousins for free, and volunteers at the church food pantry a few hours each month.
329. Mr. Radford does not have a regular job but does odd jobs for family members and occasional paid jobs at his church. He was last employed at age sixteen on a temporary basis at a sandwich shop. He occasionally housesits for family members.
330. Mr. Radford has been looking for work but without success. There are limited employment opportunities in the area where he lives. He does not have a car, so he walks or bikes where he needs to go.
331. Mr. Radford has lived with his grandmother since he was 12 years old. Prior to that, he lived alternately with his mother, then his father. His father has five children and works
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14 to 16 hours a day. Mr. Radford’s grandmother was granted permanent custody of both Mr. Radford and his 16-year-old brother.
332. Mr. Radford’s income (if any) varies from week to week, with a typical monthly income being $25. His grandmother receives $1,153 from Social Security Disability once a month and that payment is the main source of income for the household. His grandmother also receives $186 per month in K-TAP (transitional assistance) benefits for his brother. The family also gets $88 per month in SNAP benefits.
333. The monthly household income for the Radford family is $1,452 per month. Their annual household income is only $17,424—84% of FPL for a family of three ($20,420).
334. Mr. Radford and his family spend all of their income and benefits on various living expenses each month, including food, clothing, shelter, and other ongoing expenses. Mr. Radford is not able to save money and often relies on other forms of help to make ends meet, like food from the local food bank.
335. As an adult, Mr. Radford has been covered through Kentucky’s Medicaid program since 2015. He enrolled in Kentucky’s Medicaid program at the local family support office.
336. Having health insurance coverage through Medicaid is fundamental to Mr. Radford going to the doctor for check-ups and when he gets sick.
337. Mr. Radford may be subject to work requirements under the Kentucky HEALTH waiver. He might be able to satisfy this requirement because he takes care of his grandmother and does other volunteer work. Even when he is able to find employment, Mr. Radford’s working hours and income fluctuate substantially throughout the year. Thus, he is at risk of losing coverage as his employment status and income ebb and flow. Mr. Radford is also concerned that he will be
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locked out of Medicaid if he is unable to file required reports, including reports about changes in his total household income that would affect eligibility.
338. Under the Kentucky HEALTH waiver, Mr. Radford is required to pay a premium of up to 4% of his household income for Medicaid coverage. Given his very sporadic income, and the family’s limited income, his ability to pay the premium will vary, and Mr. Radford anticipates months when the premium will be difficult to pay. If he is unable to pay the premiums for 60 days, he will be required to pay copayments for certain services, his My Rewards account will be suspended, and money will be taken from the account.
COUNT ONE: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (DEAR STATE MEDICAID DIRECTOR LETTER)
339. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
340. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D).
341. In issuing the Dear State Medicaid Director Letter, the Defendants purported to act pursuant to Section 1115 of the Medicaid Act.
342. Authorization of work and community engagement requirements is categorically outside the scope of the Secretary’s Section 1115 waiver authority.
343. The Dear State Medicaid Director Letter was required to be, but was not, issued through notice and comment rulemaking.
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344. In the Dear State Medicaid Director Letter, the Defendants relied on factors which Congress has not intended them to consider, entirely failed to consider several important aspects of the problem, and offered an explanation for their decision that runs counter to the evidence.
345. The Defendants’ issuance of the Dear State Medicaid Director Letter exceeded the Secretary’s Section 1115 waiver authority; otherwise violated the Medicaid Act; was arbitrary and capricious and an abuse of discretion; and ran counter to the evidence in the record.
COUNT TWO: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (WORK REQUIREMENTS)
346. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
347. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D).
348. In approving the work and community engagement requirements of Kentucky HEALTH, the Secretary purported to waive 42 U.S.C. § 1396a(a)(8) and (a)(10) pursuant to Section 1115.
349. Authorization of work and community engagement requirements is categorically outside the scope of the Secretary’s Section 1115 waiver authority.
350. In addition, Kentucky HEALTH’s work and community engagement requirements are not an experimental, pilot, or demonstration project, nor are they likely to promote the objectives of the Medicaid Act.
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351. In approving the Kentucky HEALTH work and community engagement requirements, the Secretary relied on factors which Congress has not intended him to consider, entirely failed to consider several important aspects of the problem, and offered an explanation for his decision that runs counter to the evidence.
352. The Secretary’s decision to approve Kentucky HEALTH’s work and community engagement requirements exceeded his Section 1115 waiver authority; otherwise violated the Medicaid Act; was arbitrary and capricious and an abuse of discretion; and ran counter to the evidence in the record.
COUNT THREE: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (PREMIUM REQUIREMENTS)
353. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
354. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D).
355. In approving Kentucky HEALTH’s premium requirements and its associated delays in coverage, penalties, and lock-out provisions, the Secretary purported to waive 42 U.S.C. § 1396a(a)(10)(B), (a)(17), and (a)(14) (insofar as it incorporates Sections 1396o and 1396o-1) pursuant to Section 1115.
356. Authorization of premium requirements, or penalties for not satisfying such requirements, is categorically outside the scope of the Secretary’s Section 1115 waiver authority.
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357. In addition, Kentucky HEALTH’s premium requirements and associated penalties are not an experimental, pilot, or demonstration project, nor are they likely to promote the objectives of the Medicaid Act.
358. In approving the Kentucky HEALTH premium requirements, the Secretary relied on factors which Congress has not intended him to consider, entirely failed to consider several important aspects of the problem, and offered an explanation for his decision that runs counter to the evidence.
359. The Secretary’s decision to approve Kentucky HEALTH’s premium requirements and associated penalties exceeded his Section 1115 waiver authority; otherwise violated the Medicaid Act; was arbitrary and capricious and an abuse of discretion; and ran counter to the evidence in the record.
COUNT FOUR: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (COST-SHARING FOR NON-EMERGENCY USE OF EMERGENCY ROOM)
360. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
361. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D).
362. Authorization of heightened cost sharing for non-emergency use of the emergency room is categorically outside the scope of the Secretary’s Section 1115 waiver authority.
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363. Kentucky HEALTH’s imposition of heightened cost sharing for non-emergency use of the emergency room is not an experimental, pilot, or demonstration project, nor is it likely to promote the objectives of the Medicaid Act.
364. In approving the Kentucky HEALTH heightened cost sharing for non-emergency use of the emergency room, the Secretary relied on factors which Congress has not intended him to consider, entirely failed to consider several important aspects of the problem, and offered an explanation for his decision that runs counter to the evidence.
365. The Secretary’s decision to allow Kentucky HEALTH’s imposition of heightened cost-sharing for non-emergency use of the emergency room violated the Medicaid Act; was arbitrary and capricious and an abuse of discretion; and ran counter to the evidence in the record.
COUNT FIVE: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (LOCKOUT PENALTIES)
366. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
367. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D).
368. In approving Kentucky HEALTH’s imposition of lockout penalties, the Secretary purported to waive the requirements of 42 U.S.C. § 1396a(a)(8), (a)(10), and (a)(52), pursuant to Section 1115.
369. Kentucky HEALTH’s imposition of lockout penalties is not an experimental, pilot, or demonstration project, nor is it likely to promote the objectives of the Medicaid Act.
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370. In approving the Kentucky HEALTH lockout penalties, the Secretary relied on factors which Congress has not intended him to consider, entirely failed to consider several important aspects of the problem, and offered an explanation for his decision that runs counter to the evidence.
371. The Secretary’s decision to approve Kentucky HEALTH’s imposition of lockout penalties exceeded his Section 1115 waiver authority; otherwise violated the Medicaid Act; was arbitrary and capricious and an abuse of discretion; and ran counter to the evidence in the record.
COUNT SIX: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (RETROACTIVE COVERAGE)
372. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
373. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D).
374. In approving Kentucky HEALTH’s refusal to provide the retroactive coverage required by the Medicaid Act, the Secretary purported to waive 42 U.S.C. § 1396a(a)(34) pursuant to Section 1115.
375. Authorization of refusal to provide the retroactive coverage required by the Medicaid Act is categorically outside the scope of the Secretary’s Section 1115 waiver authority.
376. In addition, Kentucky HEALTH’s refusal to provide such retroactive coverage is not an experimental, pilot, or demonstration project, nor is it likely to promote the objectives of the Medicaid Act.
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377. In approving the Kentucky HEALTH refusal to provide the retroactive covered required by the Medicaid Act, the Secretary relied on factors which Congress has not intended him to consider, entirely failed to consider several important aspects of the problem, and offered an explanation for his decision that runs counter to the evidence.
378. The Secretary’s decision to approve Kentucky HEALTH’s refusal to provide the retroactive coverage required by the Medicaid Act exceeded his Section 1115 waiver authority; otherwise violated the Medicaid Act; was arbitrary and capricious and an abuse of discretion; and ran counter to the evidence in the record.
COUNT SEVEN: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (NON-EMERGENCY MEDICAL TRANSPORTATION)
379. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
380. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D).
381. In approving Kentucky HEALTH’s withdrawal of non-emergency medical transportation benefits from the expansion population (other than for “medically frail” individuals), the Secretary purported to waive 42 U.S.C. § 1396a(a)(4) insofar as it incorporates 42 C.F.R. § 431.53 pursuant to Section 1115.
382. Kentucky HEALTH’s withdrawal of non-emergency medical transportation benefits from the expansion population is not an experimental, pilot, or demonstration project, nor is it likely to promote the objectives of the Medicaid Act.
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383. In approving the Kentucky HEALTH withdrawal of non-emergency medical transportation benefits from the expansion population, the Secretary relied on factors which Congress has not intended him to consider, entirely failed to consider several important aspects of the problem, and offered an explanation for his decision that runs counter to the evidence.
384. The Secretary’s decision to approve Kentucky HEALTH’s withdrawal of nonemergency medical transportation benefits from the expansion population exceeded his Section 1115 waiver authority; otherwise violated the Medicaid Act; was arbitrary and capricious and an abuse of discretion; and ran counter to the evidence in the record.
COUNT EIGHT: VIOLATION OF ADMINISTRATIVE PROCEDURE ACT (KENTUCKY HEALTH PROGRAM AS A WHOLE)
385. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
386. The Administrative Procedure Act provides that a reviewing court may “hold unlawful and set aside” agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”; “contrary to constitutional right, power, privilege, or immunity”; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”; or “without observance of procedure required by law.” 5 U.S.C. § 706(2)(A)-(D).
387. In approving the Kentucky HEALTH program, the Secretary purported to waive various requirements of the Medicaid Act, pursuant to Section 1115.
388. The Kentucky HEALTH program is not an experimental, pilot, or demonstration project, nor is it likely to promote the objectives of the Medicaid Act.
389. In approving the Kentucky HEALTH program, the Secretary relied on factors which Congress has not intended him to consider, entirely failed to consider several important
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aspects of the problem, and offered an explanation for his decision that runs counter to the evidence.
390. The Secretary’s decision to approve the Kentucky HEALTH program exceeded his Section 1115 waiver authority; otherwise violated the Medicaid Act; was arbitrary and capricious and an abuse of discretion; and ran counter to the evidence in the record.
COUNT NINE: VIOLATION OF THE TAKE CARE CLAUSE, ARTICLE II, SECTION 3, CLAUSE 5
391. Plaintiffs repeat and incorporate herein by reference each and every allegation contained in the preceding paragraphs as if fully set forth herein.
392. Plaintiffs have a non-statutory right of action to enjoin and declare unlawful official action that is ultra vires.
393. The United States Constitution provides that “All legislative Powers herein granted shall be vested in a Congress of the United States.” U.S. Const., art. I, § 1. Congress is authorized to “make all laws which shall be necessary and proper for carrying into Execution” its general powers. Id. §§ 1, 8.
394. After a federal law is duly enacted, the President has a constitutional duty to “take Care that the Laws be faithfully executed.” Id. art. II, § 3.
395. The Take Care Clause is judicially enforceable against presidential action that undermines statutes enacted by Congress and signed into law. See, e.g., Angelus Milling Co. v. Comm’r, 325 U.S. 293, 296 (1945) (“Insofar as Congress has made explicit statutory requirements, they must be observed and are beyond the dispensing power of [the Executive Branch].”); Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 524, 612-13 (1838).
396. The Take Care Clause limits the President’s power and ensures that he will faithfully execute the laws that Congress has passed.
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397. Under the Constitution, the President lacks the authority to rewrite congressional statutes or to direct federal officers or agencies to effectively amend the statutes he is constitutionally required to execute.
398. In implementing Kentucky HEALTH, the State has sought to “comprehensively transform Medicaid.”
399. The Director of CMS has expressed the need to “fundamentally transform Medicaid.”
400. The power to “transform” a congressional program is a legislative power vested in Congress. An effort to “transform” a statute outside that legislative process is at odds with the President’s duty to take care that the laws be faithfully executed.
401. The Medicaid population targeted by the waiver here is the so-called Medicaid “expansion population.” That population was added by Congress in the Affordable Care Act. The Executive Branch has repeatedly expressed its hostility to the Affordable Care Act and its desire to undermine its operation. An effort to undermine the Affordable Care Act by undoing the extension of Medicaid to the expansion population is at odds with the President’s duty to take care that the laws be faithfully executed.
402. The President’s Executive Order set out herein direct agencies to take action contrary to the ACA, Medicaid, and other laws passed by Congress.
403. The Defendants’ actions, as described herein, followed that Executive Order. 404. The Defendants’ actions, as described herein, seek to redefine the purposes and objectives of the Medicaid Act, including through the granting of the Kentucky HEALTH waiver, and represent a fundamental alteration of Medicaid.
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405. The Defendants’ actions, as described herein, seek to undermine the ACA, including its optional expansion of Medicaid, and represents a fundamental alteration to those statutes.
406. Accordingly, the Defendants’ actions are in violation of the Take Care Clause and are ultra vires.
407. Plaintiffs will suffer irreparable injury if the Secretary’s actions following the President’s Executive Orders are not declared unlawful and unconstitutional because those actions have injured or will continue to harm Plaintiffs.
408. Plaintiffs are in danger of suffering irreparable harm and have no adequate remedy at law.
PRAYER FOR RELIEF WHEREFORE, Plaintiffs respectfully ask that this Court: 1. Certify this case as a class action pursuant to Federal Rule of Civil Procedure 23(a)
and (b)(2); 2. Declare that Defendants’ issuance of the Dear State Medicaid Director Letter
violates the Administrative Procedure Act, the Social Security Act, and the United States Constitution in the respects set forth above; 3. Declare that Defendants’ approval of the Kentucky HEALTH waiver application violates the Administrative Procedure Act, the Social Security Act, and the United States Constitution in the respects set forth above; 4. Preliminarily and permanently enjoin Defendants from implementing the practices purportedly authorized by Dear State Medicaid Director Letter and the approval of the Kentucky HEALTH waiver application;
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5. Award Plaintiffs their reasonable attorneys’ fees and costs pursuant to 28 U.S.C.

§ 2412; and

6. Grant such other and further relief as may be just and proper.

January 24, 2018

Thomas J. Perrelli (D.C. Bar No. 438929)
Ian Heath Gershengorn (D.C. Bar No. 448475)
Devi M. Rao* (D.C. Bar No. 1004146)
Samuel F. Jacobson* (D.C. Bar No. 1033373)
Natacha Y. Lam* (D.C. Bar No. 1030168)
Lauren J. Hartz* (D.C. Bar No. 1029864)
Jenner & Block LLP 1099 New York Avenue, N.W. Suite 900, Washington, DC 20001 Phone: 202 639 6004 TPerrelli@jenner.com IGershengorn@jenner.com DRao@jenner.com SJacobson@jenner.com NLam@jenner.com LHartz@jenner.com
Counsel to National Health Law Program
*Application for Admission to the District Court for District of Columbia Pending

Respectfully submitted,
By: /s/ Jane Perkins Jane Perkins Catherine McKee Sarah Somers National Health Law Program 200 N. Greensboro Street, Suite D-13 Carrboro, NC 27510 Phone: 919-968-6308 (x101) perkins@healthlaw.org mckee@healhtlaw.org
/s/ Anne Marie Regan Anne Marie Regan Cara Stewart Kentucky Equal Justice Center 222 South First Street, Suite 305 Louisville, KY 40202 502-468-9403 859-582-2285 amregan@kyequaljustice.org carastewart@kyequaljustice.org
/s/ Samuel Brooke Samuel Brooke Emily C.R. Early Neil K. Sawhney Southern Poverty Law Center 400 Washington Avenue Montgomery, Alabama 36104 Phone: 334-956-8200 samuel.brooke@splcenter.org emily.early@splcenter.org neil.sawhney@splcenter.org

Counsel for Plaintiffs

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 Case 1:18-cv-00152-JEB Document 42 Filed 04/10/18 Page 1 of 15

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

RONNIE MAURICE STEWART, et al., Plaintiffs, v.
ALEX M. AZAR II, et al., Defendants.

Civil Action No. 18-152 (JEB)

MEMORANDUM OPINION Plaintiffs are sixteen Kentucky Medicaid enrollees who brought this action under the Administrative Procedure Act, 5 U.S.C. §§ 701-706, challenging the federal government’s approval of a new Kentucky Medicaid program, Kentucky HEALTH. Defendants — the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, and four officials — now move to transfer the case to the Eastern District of Kentucky pursuant to 28 U.S.C. § 1404(a). Because the Court finds that convenience and the interests of justice warrant keeping the matter in the District of Columbia, it will deny the Motion. I. Background A. Medicaid Program Since 1965 the federal government and the states have worked together to provide medical care to certain vulnerable populations under Title XIX of the Social Security Act, colloquially known as Medicaid. See 42 U.S.C. § 1396-1. The Centers for Medicare and Medicaid Services (CMS), a federal agency within the Department of Health and Human Services (HHS), has primary responsibility for overseeing Medicaid programs. Under the
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cooperative federal-state arrangement, participating states submit their “plans for medical assistance” and receive federal funding to offset some of the costs if the plan is “approved by the Secretary [of HHS].” Id. Currently, all states have chosen to participate in the program.
The Medicaid Act sets out certain parameters for states to follow, but each state is free to administer its Medicaid program as it wishes within those strictures. See 42 U.S.C. § 1396a. One such provision requires state plans to “mak[e] medical assistance available” to certain lowincome individuals, including pregnant women, children, and their families; former foster children under the age of 26; the elderly; and people with certain disabilities. Id. § 1396a(a)(10)(A); see ECF No. 1 (Complaint), ¶ 44. In 2010, Congress enacted the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), “to increase the number of Americans covered by health insurance.” Id., ¶ 45 (quoting Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 538 (2012)). Under the ACA, states can choose to expand their Medicaid coverage to include low-income adults under 65 who would not otherwise qualify. See 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII). While generally a state must cover all qualified individuals to receive any Medicaid funding, id. § 1396a(a)(10)(B), it may choose not to cover this “expansion population.” Compl., ¶ 46; see NFIB, 567 U.S. at 587. If the state decides to cover the expansion group, however, those individuals become part of the state’s mandatory population.
Both before and after the ACA, a state that wishes to deviate from the Medicaid Act’s requirements must obtain a Section 1115 waiver from the Secretary of HHS. See 42 U.S.C. § 1315. These waivers allow the Secretary to approve “experimental, pilot, or demonstration project[s]” in state medical plans outside of the statutory parameters of the Medicaid Act, “which, in the judgment of the Secretary, [are] likely to assist in promoting the [Act’s]
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objectives.” Id. § 1315(a). The ultimate decision whether to grant a waiver rests with the Secretary, but his discretion is not boundless. Before HHS can act on a waiver application, the state “must provide at least a 30-day public notice and comment period regarding” the proposed program and hold at least two hearings at least 20 days before submitting the application. See 42 C.F.R. §§ 431.408(a)(1), (3). Once a state completes those prerequisites, it then sends an application to CMS. Id. § 431.412 (listing application requirements). After the agency notifies the state that it has received the waiver application, a federal 30-day public-notice period commences, and the agency must wait at least 45 days before rendering a final decision. Id. §§ 431.416(b), (e)(1). Under very limited circumstances — e.g., “natural disaster” or “public health emergency” — CMS or the Secretary may waive the federal or state public-comment period. Id. § 431.416(g).
On January 11, 2018, Brian Neale, Director of CMS, issued a letter to state Medicaid Directors “announcing a new policy designed to assist states in their efforts to improve Medicaid enrollee health and well-being through incentivizing work and community engagement among” certain adult mandatory Medicaid groups. See Compl., Exh. D at 1. The nine-page letter noted that work-requirement-based eligibility for Medicaid “is a shift from prior agency policy,” id. at 3, but that the agency was committed to “support state efforts to test incentives that make participation in work or other community engagement a requirement for continued Medicaid eligibility” and encouraged states to apply for Section 1115 waivers for this purpose. Id. at 1. It then “identified a number of issues for states to consider as they develop” work-requirement Medicaid programs. Id. at 4-9. To date, ten states have applied for such Medicaid waivers. See ECF No. 40 (Amicus Brief of AARP, et al.) at 2 n.1.
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B. Kentucky HEALTH Kentucky, like all other states and the District of Columbia, participates in Medicaid. After the ACA went into effect, the state broadened Medicaid to include the expansion population. See Compl., ¶ 79. On August 24, 2016, Governor Matt Bevin submitted an application to CMS requesting a Section 1115 waiver to implement an experimental project, Helping to Engage and Achieve Long Term Health, or Kentucky HEALTH. See Compl., Exh. B. The project as approved “transform[s]” the state’s Medicaid program to include “commercial market health insurance features,” id. at 7, including a deductible account, an incentive and savings account, and a requirement that enrollees pay premiums on a sliding scale. Id. at 9-10. It also predicates Medicaid eligibility for most of the expansion population on workforce participation or community service. Id. at 15-16. Prior to submitting the application, Kentucky’s Department for Medicaid Services held three public hearings and conducted two public-comment periods. See Compl., Exh. B. Throughout this process, the state and CMS were engaged in “continued negotiations” regarding the program’s terms. Id., Exh. A at 5 & Exh. C. CMS also opened a federal public-comment period on Kentucky HEALTH. Id., Exh. C at 7. On January 12, 2018, CMS notified the Governor’s office that the application had been approved. Id. at 1. Two weeks later, Plaintiffs brought this nine-count suit seeking declaratory and injunctive relief on behalf of themselves and a “statewide proposed class . . . of all residents of Kentucky who are enrolled in the Kentucky Medicaid program on or after January 12, 2018.” Compl., ¶ 33. The Complaint alleges that Defendants violated the Constitution and the Administrative Procedures Act by both sending the January 11 letter to state Medicaid directors and by approving Kentucky HEALTH. See Compl., ¶¶ 339-408. Soon thereafter, Defendants
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filed this Motion to Transfer, asking the Court to send the case to Kentucky, specifically the Frankfort Docket of the Central Division of the Eastern District of that state. See Mot. to Transfer at 2 n.2. On March 30, 2018, the Court granted Kentucky’s Motion for Intervention. See Minute Order. II. Legal Standard
Even if a plaintiff has brought its case in a proper venue, a district court may, “for the convenience of parties and witnesses, in the interests of justice . . . transfer [it] . . . to any other district or division where [the case] might have been brought.” 28 U.S.C. § 1404(a). The only textual limitation on the Court’s power to transfer a case under § 1404(a), then, is the requirement that the case “might have been brought” in the forum to which the defendant is seeking transfer. Van Dusen v. Barrack, 376 U.S. 612, 623 (1964). In other words, the transfer statute requires that venue be proper in the new forum.
Once that threshold condition is met, district courts have “discretion … to adjudicate motions for transfer according to an ‘individualized, case-by-case consideration of convenience and fairness.’” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen, 376 U.S. at 622); see also Pres. Soc’y of Charleston v. U.S. Army Corps of Eng’rs, 893 F. Supp. 2d 49, 53 (D.D.C. 2012). This analysis “calls on the district court to weigh in the balance a number of case-specific factors,” which typically relate to the private interests of the parties and the public interest of justice. See Stewart Org., 487 U.S. at 29-30.
In evaluating motions to transfer venue, courts in this circuit are instructed to guard against “the danger that a plaintiff might manufacture venue in the District of Columbia . . . [b]y naming high government officials as defendants . . . .” Cameron v. Thornburgh, 983 F.2d 253, 256 (D.C. Cir. 1993). Still, to prevail, the movant must show that “considerations of
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convenience and the interest of justice weigh in favor of transfer.” Sierra Club v. Flowers, 276 F. Supp. 2d 62, 65 (D.D.C. 2003); Trout Unlimited v. U.S. Dep’t of Agric., 944 F. Supp. 13, 16 (D.D.C. 1996) (movant bears burden to show that transfer is proper). III. Analysis
A. Propriety of New Venue Before assessing the “case-specific factors,” Stewart Org., 487 U.S. at 29, Defendants must show that this case might have been brought in the Eastern District of Kentucky. They easily clear this hurdle, as venue in a suit against the federal government will lie in any district in which a plaintiff resides. See 28 U.S.C. § 1391(e)(1)(C); Gardner v. Mabus, 49 F. Supp. 3d 44, 47 (D.D.C. 2014). Here, several Plaintiffs reside in the area served by the Frankfort Docket of the Eastern District of Kentucky. See Compl., ¶¶ 12, 14, 16-18, 20-24, 26; see also Mot. to Transfer at 9 n.3. Section 1404(a)’s threshold requirement is thus satisfied. B. Private- and Public-Interest Factors Defendants must next establish that the “particular circumstances” of the case “render [this] forum inappropriate.” Starnes v. McGuire, 512 F.2d 918, 925 (D.C. Cir. 1974). For this determination, the Court assesses a number of private- and public-interest factors. See Trout Unlimited, 944 F. Supp. at 16. The former factors include: (1) the plaintiff’s choice of forum; (2) the defendant’s choice of forum; (3) whether the claim arose elsewhere; (4) the convenience of the parties; (5) the convenience of the witnesses; and (6) the ease of access to sources of proof. Id. The public interests relevant to this inquiry are: (1) the transferee’s familiarity with the governing laws; (2) the relative congestion of the calendars of the transferor and transferee courts; and (3) the local interest in having local controversies decided at home. Id.
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1. Private–Interest Factors In this APA case, the six private-interest factors collapse into three inquiries: (1) deference to each parties’ forum choice; (2) the link between the relevant fora and the claims; and (3) overall convenience. The Court addresses each in turn.
a. Deference The Court first considers the parties’ choice of forum — namely, the amount of deference to afford each. “A plaintiff’s choice of forum is generally afforded ‘substantial deference,’ but that deference is not unyielding.” Gulf Restoration Net. v. Jewell, 87 F. Supp. 3d 303, 311 (D.D.C. 2015) (quoting Greater Yellowstone Coal. v. Bosworth, 180 F. Supp. 2d 124, 128 (D.D.C. 2001)). Defendants urge the Court to give “minimal deference” to Plaintiffs’ choice because the District is not the home forum for any of the class (including the named Plaintiffs) for whom certification is sought. See Mot. to Transfer at 15. While typically the named plaintiff’s choice of forum in a class action “is afforded little weight,” Eichenholtz v. Brennan, 677 F. Supp. 198, 202 (S.D.N.Y. 1988), the reasons for doing so are not applicable here. Courts that minimize such deference cite two rationales: (1) to guard against forum shopping, see In re Ferrero Litig., 768 F. Supp. 2d 1074, 1078 (S.D. Cal. 2011), and (2) when all class members do not hail from the same home forum, the one chosen by the named plaintiff may be inconvenient for others. See Blake Const. Co., Inc. v. Int’l Harvester Co., 521 F. Supp. 1268, 1272 (N.D. Ill. 1981); Jaramillo v. DineEquity, Inc., 664 F. Supp. 2d 908, 914 (N.D. Ill. 2009). Defendants do not allege that the Enrollees engaged in forum shopping in choosing this district, and, as discussed below, convenience to class members is largely irrelevant in this administrative case. The Court thus concludes that the potential of this case to become a class action does not affect the deference given to Plaintiffs’ choice of forum.
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Similarly, the Government’s reliance on the principle that “less deference is given where, as here, Defendants seek transfer to the plaintiffs’ resident forum,” Preservation Soc’y, 893 F. Supp. 2d at 54 (internal quotation marks and citation omitted), has little bearing because, as discussed in detail below, the case has a strong nexus to the District. See Wilderness Soc’y v. Babbitt, 104 F. Supp. 2d 10, 13 (D.D.C. 2000) (relevant inquiry is “the nexus between plaintiffs’ chosen forum — the District of Columbia — and the dispute”); see also Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir. 1987). The Court thus finds that, because of the significant ties to the District, Plaintiffs’ choice is accorded “some deference.” See Gulf Restoration, 87 F. Supp. 3d at 313 (emphasis omitted); see also Wilderness Soc’y, 104 F. Supp. 2d at 14-15 (finding that plaintiff’s choice of forum was “entitled to substantial deference” in part because of agency secretary’s “involvement in the [agency’s] review” of project and policymakers’ residence in District); Lax v. Toyota Motor Corp., 65 F. Supp. 3d 772, 779 (N.D. Cal. 2014) (holding that “[e]ven though this is a class action, the plaintiffs’ choice of forum weighs against transfer” because of “legitimate and significant connection to [the] forum”).
Such deference outweighs Defendants’ request to send this case to a particular court in Kentucky. Unlike the plaintiff, a defendant’s forum preference “is not ordinarily entitled to deference,” and to prevail, a defendant “must establish that the added convenience and justice of litigating in their chosen forum overcomes the . . . deference given to” the plaintiff’s. Tower Labs., Ltd. v. Lush Cosmetics Limited, 2018 WL 534323, at *4 (D.D.C. Jan. 24, 2018). “[C]oncerns about forum shopping” can also count against a defendant’s choice. Oceana v. Bureau of Ocean Energy Mgmt., 962 F. Supp. 2d 70, 78 (D.D.C. 2013).
As explained below, Defendants have not carried their burden to show how Kentucky is a more convenient place for this APA case, and the Enrollees further accuse the Government of
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“blatant . . . forum shopping,” Opp. at 1, by asking to transfer the case to a particular division. Kentucky has two federal districts, comprising ten different dockets, but the Government specifically asks this Court to transfer the case to Frankfort, which has only one judge. Defendants, understandably, balk at such a characterization and provide a legitimate reason for preferring the Frankfort Division: it is the state capitol and seat of government. See Reply at 910. Although the Court does find the Government’s request unduly restrictive, given that Plaintiffs are geographically dispersed throughout the state, see Compl., ¶¶ 12-26, and the underlying situs of the case expands beyond Frankfort County, it declines to assign such nefarious motives to the Government’s venue choice. This preference, however, does not overcome the requisite deference.
b. Connection of Claims to Fora Deference thus established, the Court next moves to the crux of this Motion: where the claims arose and their connection to D.C. In APA cases, “courts generally focus on where the decisionmaking process occurred to determine where the claims arose.” Nat’l Ass’n of Home Builders v. EPA, 675 F. Supp. 2d 173, 179 (D.D.C. 2009). “An administrative claim is said to arise in this district if it was drafted, signed, and published in this district, and if the controversy ‘stems from the formulation of national policy on an issue of national significance.’” Oceana, Inc. v. Pritzker, 58 F. Supp. 3d 2, 6 (D.D.C. 2013) (quoting Greater Yellowstone Coalition v. Kempthorne, Nos. 07-2111, 07-2112, 2008 WL 1862298, at *5 (D.D.C. 2008)). Plaintiffs’ suit clearly fits that bill. They challenge the Secretary’s decision to (1) encourage Section 1115 waivers with work-eligibility requirements and (2) approve Kentucky HEALTH. The “decisionmaking process” for both actions “occurred primarily within the District of Columbia and the decisionnmakers [a]re located” here. Home Builders, 675 F. Supp. 2d at 179. The
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Secretary’s “national policy” allowing states to condition Medicaid benefits on workforce participation is also “an issue of national significance.” Oceana, 58 F. Supp. 3d at 6; see AARP Amicus Brief at 2 n.1 (listing nine states that have requested similar waivers).
The Government’s attempt to sidestep these facts, insisting that this is a “fundamentally local controversy,” Mot. to Transfer at 9, construes Plaintiffs’ claims too narrowly. The Enrollees challenge the approval of Kentucky HEALTH, which has an obvious connection to that state. But it mischaracterizes their case to assert that their “sole interest in this matter arises solely from their residency in the Commonwealth and their enrollment in Kentucky’s State Medicaid program.” Id. at 13 (emphasis added). In addition to mentioning Kentucky HEALTH, Plaintiffs argue that CMS’s letter to all state Medicaid Directors supporting and encouraging Section 1115 waivers with a work-eligibility requirement violated the APA. This is not a case where the agency only rubber-stamped a proposal from its local office. On the contrary, D.C.based agency officials drafted, signed, and disseminated the letter to state Medicaid directors, and those same agencies worked with Kentucky to develop, and ultimately approve, Kentucky HEALTH.
Defendants’ selective citation only buttresses this point. The Government quotes Kafack v. Primerica Life Ins. Co., 934 F. Supp. 3 (D.D.C. 1996), arguing that “transfer is warranted because ‘material events that constitute the factual predicate for the plaintiff’s claims occurred’ in the Eastern District of Kentucky.” Mot. to Transfer at 10 (quoting Kafack, 934 F. Supp. at 6). But the court in that case found it significant that “all of the material events . . . occurred” in the proposed forum. Kafack, 934 F. Supp. at 6 (emphasis added). Here, the Government concedes that the Government’s decision “was a product of yearlong discussions and negotiations with state officials[,] . . . and CMS worked with the Commonwealth to develop the terms and
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conditions of the approval.” Mot. to Transfer at 11. Medicaid is a cooperative program between federal and state governments. A challenge to HHS’s decision to approve a state plan is thus almost always predicated on events that had their genesis in a state. To buy Defendants’ argument would mean that Medicaid challenges only belong in courts of the relevant state. That simply is not so.
Not only did the claims arise here, but they also have a strong nexus to D.C. Courts in this district have often found that federal-agency action that occurs here can provide “meaningful ties” to support retention of the case. See, e.g., Gulf Restoration, 87 F. Supp. 3d at 312 (D.C. had interest in District-based federal agencies’ decision to approve project in Alabama). “[T]he mere fact that a case concerns the application of a federal statute by a federal agency” is not, of course, enough to “provide a sufficient nexus to the District of Columbia to weigh against transfer.” Preservation Soc’y, 893 F. Supp. 2d at 55. But “ heavy,” “personal involvement” by District-based government officials, such as occurred here, provides a “link between this controversy and the District of Columbia,” even if the case “will have an impact on the residents” of another state. Wilderness Soc’y,104 F. Supp. 2d at 13-14.
c. Convenience The three private-interest factors that specifically address convenience — viz., the convenience of the parties, the convenience of the witnesses, and ease of access to sources of proof — are neutral or tip only slightly in favor of sending the case to Kentucky. The Government cannot reasonably claim to be inconvenienced by litigating in this district; after all, this is its home forum. Defendants nevertheless argue that this factor should lean towards transfer because Kentucky would be a more convenient forum to decide whether to certify a class. While this could be a relevant point, the class that Plaintiffs seek to certify is “all residents
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of Kentucky who are enrolled in the Kentucky Medicaid program on or after January 12, 2018.” Compl., ¶ 33. Defendants do not explain (and the Court does not see) how putative class members would need to be involved in the certifying of such a class in a way that might inconvenience them. In any event, at most this consideration tips only slightly towards transfer.
And, because this is an APA case, the convenience of witnesses and the ease of access to sources of proof are “not likely to be relevant here.” Oceana, 58 F. Supp. 3d at 5 (citation omitted); see also Reply at 14 (stating that administrative record will be available in electronic form). The Government concedes that “judicial review of the merits will be limited to the administrative record and there will be no discovery or trial,” but argues that “discovery into standing or class discovery” would take place in Kentucky. See Mot. to Transfer at 16-17. Again, the Court cannot foresee how the proposed class would require discovery, but, even if it did, this would only be a feather on the scale in favor of transfer. See Southern Utah Wilderness Alliance v. Norton (Southern Utah II), 315 F. Supp. 2d 82, 88 (D.D.C. 2004) (finding convenience of witnesses irrelevant where parties agreed case would be decided solely based on administrative record); Flowers, 276 F. Supp. 2d at 69 (“[T]he location of witnesses is not a significant factor” in judicial review of agency action.).
On balance, then, the private-interest factors tip in favor of keeping the case in D.C. 2. Public–Interest Factors a. Judicial Economy
Defendants agree that the first two public-interest factors — the transferee court’s familiarity with the governing law and the relative congestion of the courts’ calendars — are neutral with respect to transfer. See Mot. to Transfer at 17. Resolving this case will require statutory interpretation, a task any federal court is competent to undertake. See Flowers, 276 F.
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Supp. 2d at 70 n.6 (noting “the principle that the transferee federal court is competent to decide federal issues correctly”) (citation omitted). If anything, this Court has more experience with APA cases, which would weigh against transfer. See Tuttle v. Jewell, 952 F. Supp. 2d 203, 208 (D.D.C. 2013) (finding relevant that D.C. “receives more APA claims than its western colleagues”). The caseload disparity between the two courts, moreover, is not great enough to have an effect on the transfer analysis. See Mot. to Transfer at 22 n.9 (noting pending cases per judge is 382 in Kentucky versus 263 in the District). Absent a showing that either court’s docket is “substantially more congested” than the other, this factor weighs neither for nor against transfer. Nat’l Ass’n of Home Builders v. EPA, 675 F. Supp. 2d 173, 178 (D.D.C. 2009); see also Preservation Soc’y, 893 F. Supp. 2d at 57 (finding that when “relative congestion . . . appears comparable,” judicial-economy factor not substantial enough to warrant transfer).
b. Local Interest This brings the Court to the final and arguably “most important” of the public-interest factors: the local interest in having local controversies decided at home. Southern Utah Wilderness Alliance v. Norton, 845 F. Supp. 2d 231, 237 (D.D.C. 2002); Pres Soc’y, 893 F. Supp. 2d at 57. Because the Court finds that this a case of national, rather than local, significance, this factor tips sharply against transfer. Defendants first mention that their preferred forum is “experienced with the laws in the Commonwealth that may be relevant to the review of Plaintiffs’ claims,” Mot. to Transfer at 22, but a federal court need not wade into any particulars of state law to decide whether the Secretary can, under federal laws and regulations, permit certain state Medicaid proposals. See Wilderness Soc’y, 104 F. Supp. 2d at 16 (“no reason to transfer” case challenging agency decision to start oil and gas leasing because it would not involve state law).
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The Government’s stronger argument is that “Kentucky has a substantial interest in the resolution of the claims of this lawsuit” because it is “the citizens of Kentucky who will directly feel the effects of” Kentucky HEALTH. See Mot. to Transfer at 17. The central question, however, is not “whether the people of [Kentucky] have an interest — even a strong one — in the outcome of this case. Instead, the Court must determine whether this is a ‘question[] of national policy or national significance.’” Oceana, 58 F. Supp. 3d at 9 (quoting Oceana v. Bureau of Ocean Energy Mgmt., 962 F. Supp. 2d 70, 77 (D.D.C. Aug. 23, 2013)) (emphasis added). While this suit has an undeniable connection to Kentucky and may affect the lives of many people there, it also carries national consequences, particularly in light of CMS’s invitation to other states to use Section 1115 waivers in a similar way. Indeed, Plaintiffs ask the Court to enjoin not only Kentucky HEALTH but also all “practices purportedly authorized by” the letter to state Medicaid Directors. See Compl. at 76. In other words, the Enrollees’ challenge to the Secretary’s use of Section 1115 waivers has “potential impacts” that will likely be felt “locally” in Kentucky, but also broadly across the nation. See Mot. to Transfer at 20; see also Preservation Soc’y, 893 F. Supp. 2d at 55 (noting that “a facial attack on the statutes and regulations at issue . . . might have the kind of national impact that would weigh against transfer” but declining to reach issue because plaintiffs only challenged decision made by local agency office) (emphasis omitted). Those effects are already spilling out past Kentucky, as several other states have similar waiver applications pending, and the Secretary recently approved Indiana’s workeligibility Medicaid requirements. See Opp. at 13.
Defendants’ reliance on cases where a local federal-agency office made a decision involving local resources that are located entirely in a proposed transferee district does not change the outcome. See Mot. to Transfer at 20-21 (citing cases); Preservation Soc’y, 893 F.
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Supp. 2d at 57 (finding challenge was local controversy because “a clear majority of the events took place within the District of South Carolina,” and “challenged action was taken by Charleston District of the [U.S. Army] Corps”) (internal quotation marks and citation omitted); Airport Working Grp. of Orange Cty., Inc. v. Dep’t of Defense, 226 F. Supp. 2d 228, 232 (D.D.C. 2002) (granting motion to transfer case challenging “administrative decision that involves land situated only in Orange County and affects only the local citizenry there” when decision was prepared by agency staff “located in Orange Country [sic]”); Sierra Club, 276 F. Supp. 2d at 67, 71 (challenge to Everglades permitting was “controversy local to Florida” when federal officials in Washington did not play “active or significant role” in decision); Trout Unlimited, 944 F. Supp. at 19 (transferring case challenging “decision made by a Forest Service official located in Colorado, which directly affects” water in that state). Here, the federal decisionmaking happened in the District by D.C.-based officials, and the waiver program affects all states. This factor thus tips in Plaintiffs’ favor. IV. Conclusion
In the end, both the private- and public-interest factors weigh against transfer. The Court will thus deny the Government’s Motion to Transfer the case to Kentucky. An Order consistent with this Opinion will issue this day.
/s/ James E. Boasberg JAMES E. BOASBERG United States District Judge
Date: April 10, 2018
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 Case 1:18-cv-00152-JEB Document 74 Filed 06/29/18 Page 1 of 60

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

RONNIE MAURICE STEWART, et al., Plaintiffs, v.
ALEX M. AZAR II, et al., Defendants.

Civil Action No. 18-152 (JEB)

MEMORANDUM OPINION In 2010, Congress enacted the Patient Protection and Affordable Care Act — popularly known as Obamacare — which is “a comprehensive national plan to provide universal health insurance coverage” across the nation. See Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 583 (2012). One central component of that statute was an expansion of Medicaid, allowing states to provide “health care to all citizens whose income falls below a certain threshold.” Id. at 531. This “expansion,” the Supreme Court has held, represented “a shift in kind, not merely degree.” Id. at 583. While the “original program was designed to cover medical services for four particular categories of the needy: the disabled, the blind, the elderly, and needy families with dependent children,” the Affordable Care Act “transformed” Medicaid “into a program to meet the health care needs of the entire nonelderly population with income below 133 percent of the poverty level.” Id. Defendants in this case have sought to roll back those reforms. Upon assuming office in March 2017, Defendant Seema Verma, the Administrator for the Centers for Medicare & Medicaid Services — along with then-Secretary of the Department of Health and Human Services Tom Price — immediately circulated a letter to the Governors of all states to share her
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belief that the ACA’s Medicaid expansion “was a clear departure from the core, historical mission of the program.” Sec’y of Health & Human Servs., Dear Governor Letter (Mar. 14, 2017), https://www.hhs.gov/sites/default/files/sec-price-admin-verma-ltr.pdf. The letter encouraged states to apply for “waiver[s]” of some of the program’s coverage requirements — especially for the expansion group — promising to “fast-track” approval of such petitions. Id.
Kentucky is one state to board that train. After the ACA went into effect, it elected to broaden Medicaid to include the expansion population, and by April 2016, more than 428,000 new residents had thereby received medical assistance. In July 2017, however, the state submitted an experimental plan to CMS called “KY HEALTH,” which is made up of several components, most significantly Kentucky HEALTH. That latter program promised to “comprehensively transform” its Medicaid program. Under that plan, the state would impose “community-engagement” requirements for the expansion population, along with some of the traditional population as well. This new mandate would require that those recipients work (or participate in other qualifying activities) for at least 80 hours each month as a condition of receiving health coverage. The project also called for, among other things, increased premiums and more stringent reporting requirements. Consistent with CMS’s earlier invitation, the Secretary approved Kentucky’s application on January 12, 2018, waiving several core Medicaid requirements in the process.
Plaintiffs in this case are fifteen Kentucky residents, each of whom is currently enrolled in the state’s Medicaid program. Together, they fear that Kentucky HEALTH will relegate them to second-class status within Medicaid, putting them and others “in danger of losing” their health insurance altogether. They have thus brought this action to challenge the Secretary’s approval of Kentucky HEALTH.
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Although the Secretary is afforded significant deference in his approval of pilot projects

like Kentucky’s, his discretion does not insulate him entirely from judicial review. Such review

reveals that the Secretary never adequately considered whether Kentucky HEALTH would in

fact help the state furnish medical assistance to its citizens, a central objective of Medicaid. This

signal omission renders his determination arbitrary and capricious. The Court, consequently,

will vacate the approval of Kentucky’s project and remand the matter to HHS for further review.

I.

BACKGROUND

The Court begins with an overview of the statutes governing Medicaid and its

experimental projects. It then turns more specifically to Kentucky’s challenged plan, before

concluding with a brief procedural history of the current suit.

A. Statutory Background

1. Medicaid Program

Since 1965, the federal government and the states have worked together to provide

medical assistance to certain vulnerable populations under Title XIX of the Social Security Act,

colloquially known as Medicaid. See 42 U.S.C. § 1396-1. The Centers for Medicare and

Medicaid Services (CMS), a federal agency within the Department of Health and Human

Services, has primary responsibility for overseeing Medicaid programs. Under the cooperative

federal-state arrangement, participating states submit their “plans for medical assistance” to the

Secretary of HHS. Id. To receive federal funding, those plans — along with any material

changes to them — must be “approved by the Secretary.” Id.; see also 42 C.F.R. § 430.12(c).

Currently, all states have chosen to participate in the program.

Before the Secretary can approve a state plan, the Medicaid Act sets out certain minimum

parameters that all states must follow. See 42 U.S.C. § 1396a (listing 83 separate requirements).

One such provision requires state plans to “mak[e] medical assistance available” to certain low-

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income individuals. Id. § 1396a(a)(10)(A). Until recently, that group included pregnant women, children, and their families; some foster children; the elderly; and people with certain disabilities. Id. In 2010, however, Congress enacted the Affordable Care Act “to increase the number of Americans covered by health insurance.” NFIB, 567 U.S. at 538. Under that statute, states can choose to expand their Medicaid coverage to include additional low-income adults under 65 who would not otherwise qualify. See 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII). It also allowed states to cover certain former foster children under the age of 26. Id. § 1396a(a)(10)(A)(i)(IX).
Generally, a state must cover all qualified individuals or forfeit its federal Medicaid funding. Id. § 1396a(a)(10)(B). Although it may choose not to cover this ACA expansion population, see NFIB, 567 U.S. at 587, if the state decides to provide coverage, those individuals become part of its mandatory population. In that instance, the state must afford the expansion group “full benefits” — i.e., it must provide “medical assistance for all services covered under the State plan” that are substantially equivalent “in amount, duration, or scope . . . to the medical assistance available for [other] individual[s]” covered under the Act. See 42 U.S.C. § 1396d(y)(2)(B); 42 C.F.R. § 433.204(a)(2); see also Jones v. T.H., 425 U.S. 986 (1976).
The Medicaid Act also ensures that enrolled individuals receive a minimum level of coverage. Under section 1396a, states must cover certain basic medical services, see 42 U.S.C. §§ 1396a(a)(10)(A), 1396d(a), and the statute limits the amount and type of premiums, deductions, or other cost-sharing charges that a state can impose on such care. Id. § 1396a(a)(14); see also id. § 1396o. Other provisions require states to provide up to three months of retroactive coverage once a beneficiary enrolls, see id. § 1396a(a)(34), and to ensure that recipients receive all “necessary transportation . . . to and from providers.” 42 C.F.R. § 431.53. Finally, states must “provide such safeguards as may be necessary to assure” that
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eligibility and services “will be provided, in a manner consistent with simplicity of administration and the best interests of the recipients.” 42 U.S.C. § 1396a(a)(19).
2. Section 1115 of Social Security Act Both before and after the passage of the ACA, a state wishing to deviate from the Medicaid Act’s requirements must obtain a waiver from the Secretary of HHS. See 42 U.S.C. § 1315. In enacting the Social Security Act (and, later, the Medicaid program within the same title), Congress recognized that statutory requirements “often stand in the way of experimental projects designed to test out new ideas and ways of dealing with the problems of public welfare recipients.” S. Rep. No. 1589, 87th Cong., 2d Sess. 19, reprinted in 1962 U.S.C.C.A.N. 1943, 1961-62. To that end, Section 1115 of the Social Security Act allows the Secretary to approve “experimental, pilot, or demonstration project[s]” in state medical plans that would otherwise fall outside Medicaid’s parameters. The Secretary can approve only those projects that “in [his] judgment . . . [are] likely to assist in promoting the [Act’s] objectives.” 42 U.S.C. § 1315(a). Once the Secretary has greenlighted such a project, he can then waive compliance with the requirements of Section 1396a “to the extent and for the period . . . necessary to enable [the] State . . . to carry out such project.” Id. § 1315(a)(1). While the ultimate decision whether to grant approval rests with the Secretary, his discretion is not boundless. Before HHS can act on a waiver application, the state “must provide at least a 30-day public notice[-]and[-]comment period” regarding the proposed program and hold at least two hearings at least 20 days before submitting the application. See 42 C.F.R. §§ 431.408(a)(1), (3). Once a state completes those prerequisites, it then sends an application to CMS. Id. § 431.412 (listing application requirements). After the agency notifies the state that it
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has received the waiver application, a federal 30-day public-notice period commences, and the agency must wait at least 45 days before rendering a final decision. Id. §§ 431.416(b), (e)(1).
B. Factual Background 1. CMS’s Actions
It is no secret that the current administration hopes to “prompt[ly] repeal[] the Patient Protection and Affordable Care Act.” Exec. Order No. 13765, Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal, 82 Fed. Reg. 8351 (Jan. 20, 2017). “In the meantime,” it has promised to “take all actions consistent with law to minimize” the Act’s impact, including on states. Id. To that end, the new CMS Administrator circulated a letter on March 14, 2017, alerting states of the agency’s “intent to use existing Section 1115 demonstration authority” to help revamp Medicaid. See Dear Governor Letter at 2. In that letter, Defendant Verma and then-Secretary Price lamented “[t]he expansion of Medicaid through the Affordable Care Act” as “a clear departure from the core, historical mission of the program.” Id. at 1. Together they promised to find “a solution that best uses taxpayer dollars to serve” those individuals they deemed “truly vulnerable.” Id.
On January 11, 2018, Brian Neale, Director of CMS, issued a follow-up letter to all state Medicaid Directors, fleshing out that “new policy.” See AR 90-99. The agency, he said, would “assist states in their efforts to improve Medicaid enrollee health and well-being through incentivizing work and community engagement among” certain adult mandatory Medicaid groups. Id. This was “a shift from prior agency policy.” AR 92. While other welfare programs — such as Temporary Assistance for Needy Families (TANF) and Supplemental Nutritional Assistance Program (SNAP) — condition benefits on working, see 42 U.S.C. § 607; 7 U.S.C. § 2029(a)(1), there is no equivalent for the Medicaid program. Indeed, during the 50-plus years
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of Medicaid, CMS has not previously approved a community-engagement or work requirement as a condition of Medicaid eligibility. See AR 4. Instead, the agency has consistently denied these requests, finding that work requirements “could undermine access to care” and were thus inconsistent with the purposes of Medicaid. See, e.g., Letter from Andrew M. Slavitt, Acting Administrator, Ctrs. For Medicare & Medicaid Servs., HHS to Thomas Betlach, Director, Az. Health Care Cost Containment Sys. at 2-3 (Sept. 30, 2016), at https://www.azahcccs.gov/Resources/Downloads/1115Waiver/LetterToState09302016.pdf
In the 2018 State Medical Director (SMD) letter, however, the agency espoused a new commitment to “support[ing] state efforts to test incentives that make participation in work or other community engagement a requirement for continued Medicaid eligibility” and encouraged states to apply for Section 1115 waivers for this purpose. See AR 90. It then “identified a number of issues for states to consider as they develop[ed]” a community-engagement requirement for the Medicaid program. Id. at 93-98. To date, at least ten states have applied for such Medicaid waivers. See ECF No. 40 (Amicus Brief of AARP, et al.) at 2 n.1.
2. KY HEALTH One of those states is the Commonwealth of Kentucky. On August 24, 2016, Governor Matt Bevin submitted an application to CMS requesting a Section 1115 waiver to implement an experimental project, Helping to Engage and Achieve Long Term Health, or KY HEALTH. See AR 5432-33, 5447. He followed up with an amended (though similar) KY HEALTH application on July 3, 2017. That application had two key programs relevant here (as well as some others not challenged): (1) Kentucky HEALTH — not to be confused with the umbrella KY HEALTH — a “program” that applies only to “adult beneficiaries who do not qualify for Medicaid on the
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basis of a disability”; and (2) Substance Use Disorder (SUD) Treatment, which would be
available for all Medicaid beneficiaries. See AR 2-3. The Court outlines each in turn.
a. Kentucky HEALTH Kentucky HEALTH is a program primarily (though not exclusively) targeting the
expansion group of adults covered under the ACA. See AR 2-3, AR 5442. The Commonwealth
believed that this project would “transform” the state’s Medicaid program by, among other
things, predicating Medicaid eligibility for most of the expansion population on workforce
participation or community service. See AR 2, 15-16.
On January 12, 2018 (just one day after issuing the SMD letter), the Secretary approved
Kentucky HEALTH, granting waivers to implement the following features:
1) Community-engagement requirement, which requires beneficiaries to spend at least 80 hours per month on qualifying activities (including employment, job-skills training, education, community service, and participation in SUD treatment) or lose their Medicaid coverage;
2) Limits on retroactive eligibility, which excuse the state from “provid[ing] three months of retroactive eligibility for beneficiaries receiving coverage through the Kentucky HEALTH program; except for pregnant women and former foster care youth”;
3) Monthly premiums, including premiums varied based on income and/or length of time enrolled in Medicaid;
4) Limits on non-emergency medical transportation, which “relieve Kentucky of the requirement to assure non-emergency medical transportation to and from providers for the new adult group” — i.e., adults without disabilities, except for those who are medically frail, former foster-care youth, or pregnant;
5) Reporting requirements, which mandate that individuals provide information for an annual redetermination and report changes in
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income or circumstances that affect Medicaid eligibility within 10 days; and 6) Lockouts, which allow the state to deny Medicaid coverage for up to six months for any beneficiary who (a) has an income above 100% of the FPL and (b) failed to meet her premium or reporting requirements. AR 2, 13-15. Kentucky HEALTH also included “commercial market health insurance” features, see AR 6, such as a deductible account, an incentive and savings account called My Rewards. Id. at 6-7. The Secretary approved each of those mechanisms as part of Kentucky HEALTH and, in doing so, agreed to “fund[]” those programs “through the Section 1115(a)(2) expenditure authority.” CMS Br. at 42. As part of that approval, the Secretary allowed Kentucky to penalize recipients who used the emergency room for “non-emergent” purposes, by deducting $75 from their new My Rewards health account (an account where Kentucky provides virtual funds for healthy behaviors). See AR 33-35, 5463. With those programs in place, the Commonwealth expected to save roughly $331 million dollars, see AR 5513 (Estimated Fiscal Projections), primarily by reducing its Medicaid population by an estimated 95,000 persons. Compare AR 5421, with AR 5422.
b. SUD Program In the same KY HEALTH application, Kentucky also sought approval for an SUD Program. Traditionally, Medicaid bars states from receiving any “payments with respect to care or services for any individual who has not attained 65 years of age and who is a patient in an institution for mental diseases [IMD].” 42 U.S.C. § 1396d(a)(29); see also 42 U.S.C. § 1396d(a)(14) and (16)(A) (separately allowing payments for individuals under age 21). An IMD is a “hospital, nursing facility, or other institution . . . that is primarily engaged in providing
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diagnosis, treatment, or care of persons with mental diseases.” Id. § 1396d(i). In other words, the statute prohibits the federal government from reimbursing any treatment in mental-health facilities (at least for beneficiaries between 21 and 64).
Increasingly, this provision has posed problems for states. An estimated 21% of Medicaid-eligible adults suffer from a substance-use disorder, and Kentucky’s citizens are no exception. See AR 5468. The state estimates that nearly “90,000 newly enrolled Kentuckians may have a SUD requiring treatment.” Id. In 2014, the state expanded its coverage of mental health and SUD treatment options, “allowing Medicaid recipients to receive coverage for the full spectrum of inpatient and outpatient SUD services.” Id. As the state put it, however, “coverage of benefits mean[s] little without access to providers.” Id. Although there were 26 qualified mental-health facilities within Kentucky, none could provide care (or, at least, none could receive federal funding for such care) because of the “IMD exclusion.” Id.
The Secretary recognized as much and circulated a State Medical Director letter in 2015, informing states of “a new opportunity for demonstration projects approved under section 1115 . . . to ensure that a continuum of care is available to individuals with SUD.” Letter No. 15-003 at 1 (July 27, 2015), https://www.medicaid.gov/federal-policy-guidance/downloads/ smd15003.pdf. It encouraged states to propose “demonstration projects” under Section 1115 for treating SUDs. Id. If the Secretary approved any such project, Section 1115 would then require that the project costs (including patient-treatment costs) be “regarded as expenditures under the State [Medicaid] plan,” meaning that they would be treated as reimbursable under Medicaid. See 42 U.S.C. § 1315(a)(2)(A). So long as states treated their SUD programs as part of a “demonstration” project, the federal government could thus help pick up the tab.
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In 2017, the current administration confirmed its commitment to “work[ing] with states on section 1115(a) demonstrations . . . to combat the ongoing opioid crisis.” Letter No. 17-003 at 1 (Nov. 1, 2017), https://www.medicaid.gov/federal-policy-guidance/downloads/ smd17003.pdf. In a new SMD Letter, the Secretary reaffirmed that through the “section 1115 initiative, states will have an opportunity to receive federal financial participation (FFP) for the continuum of services to treat addiction to opioids or other substances, including services provided to Medicaid enrollees residing in residential treatment facilities.” Id. at 2. In total, twelve states (including Kentucky) have received approval on SUD demonstration projects. See MaryBeth Musumeci, Key Questions about Medicaid Payment for Services in “Institutions for Mental Disease”, Henry J. Kaiser Family Foundation (June 18, 2018). Another thirteen have applications pending. Id.
As part of KY HEALTH, the Secretary approved an “[SUD] program available to all Kentucky Medicaid beneficiaries.” AR 3. The “SUD program [allows] beneficiaries with SUD to access benefits that include SUD residential treatment, crisis stabilization and withdrawal management services provided in IMDs, which would otherwise be excluded from federal reimbursement.” AR 85. Relatedly, the Secretary waived the requirement that Kentucky cover the non-emergency use of medical transportation (NEMT) “to and from methadone treatment, which requires daily dosing, for all Medicaid populations.” AR 85. The plaintiffs have not challenged the SUD program (or any other component of KY HEALTH besides Kentucky HEALTH).
C. Procedural History Before submitting its Section 1115 application to CMS, Kentucky’s Department for Medicaid Services held three public hearings and conducted two public-comment periods. See
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AR 5509, 5410. Throughout this process, the state and CMS were engaged in “continued negotiations” regarding the program’s terms. See AR 5413, 5410. CMS also opened a federal public-comment period on Kentucky HEALTH. See AR 7-8. On January 12, 2018, CMS notified the Governor’s office that the application had been approved. See AR 2-9.
Two weeks later, Plaintiffs brought this nine-count suit seeking declaratory and injunctive relief on behalf of themselves and a “statewide proposed class . . . of all residents of Kentucky who are enrolled in the Kentucky Medicaid program on or after January 12, 2018.” Compl., ¶ 33. Most named Plaintiffs have an income below 133% of the federal poverty line; many have serious medical conditions. See ECF Nos. 33-2-17 (Declarations). Almost all either already have part-time jobs or are actively seeking work, yet each fears that she may not be able to comply with the new “community-engagement” requirement. Id. Together, they worry that such a requirement — along with Kentucky HEALTH’s other measures — places them in danger of losing Medicaid completely. Id. Their Complaint alleges principally that by approving Kentucky HEALTH, Defendants violated the Constitution and the Administrative Procedure Act. See Compl., ¶¶ 339-408.
On March 30, 2018, the Court granted Kentucky’s Motion for Intervention. See Minute Order. Defendants then moved to transfer, asking the Court to send the case to the Bluegrass State, specifically the Frankfort Docket of the Central Division of the Eastern District of that state. See ECF No. 6 at 2 n.2. The Court denied that request on April 10, 2018, finding that this case was of “national, rather than local, significance” and would be properly adjudicated within the District of Columbia. See Stewart v. Azar, 2018 WL 1730304, at * 6 (D.D.C. Apr. 10, 2018). In the meantime, the parties have filed competing Motions for Summary Judgment. The
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Court heard oral argument on June 15, 2018, and because Kentucky HEALTH will take effect on July 1, 2018, has issued this Opinion on an expedited basis. II. LEGAL STANDARD
The parties have cross-moved for summary judgment on the administrative record. The summary-judgment standard set forth in Federal Rule of Civil Procedure 56(c), therefore, “does not apply because of the limited role of a court in reviewing the administrative record.” Sierra Club v. Mainella, 459 F. Supp. 2d 76, 89 (D.D.C. 2006); see also Bloch v. Powell, 227 F. Supp. 2d 25, 30 (D.D.C. 2002), aff’d, 348 F.3d 1060 (D.C. Cir. 2003). “[T]he function of the district court is to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did.” Sierra Club, 459 F. Supp. 2d. at 90 (quotation marks and citation omitted). “Summary judgment is the proper mechanism for deciding, as a matter of law, whether an agency action is supported by the administrative record and consistent with the [Administrative Procedure Act] standard of review.” Loma Linda Univ. Med. Ctr. v. Sebelius, 684 F. Supp. 2d 42, 52 (D.D.C. 2010) (citation omitted), aff’d, 408 Fed. App’x 383 (D.C. Cir. 2010).
The Administrative Procedure Act “sets forth the full extent of judicial authority to review executive agency action for procedural correctness.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 513 (2009). It requires courts to “hold unlawful and set aside agency action, findings, and conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2). Agency action is arbitrary and capricious if, for example, the agency “entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency
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expertise.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
In other words, an agency is required to “examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.” Id. at 43 (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)) (internal quotation marks omitted). Courts, accordingly, “do not defer to the agency’s conclusory or unsupported suppositions,” United Techs. Corp. v. Dep’t of Def., 601 F.3d 557, 562 (D.C. Cir. 2010) (quoting McDonnell Douglas Corp. v. Dep’t of the Air Force, 375 F.3d 1182, 1187 (D.C. Cir. 2004)), and “agency ‘litigating positions’ are not entitled to deference when they are merely [agency] counsel’s ‘post hoc rationalizations’ for agency action, advanced for the first time in the reviewing court.” Martin v. Occupational Safety & Health Review Comm’n, 499 U.S. 144, 156 (1991) (citation omitted). Although a reviewing court “may not supply a reasoned basis for the agency’s action that the agency itself has not given,” a decision that is not fully explained may, nevertheless, be upheld “if the agency’s path may reasonably be discerned.” Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285-86 (1974) (citation omitted). III. ANALYSIS
In this case, Plaintiffs accuse HHS of “tak[ing] by regulatory fiat what it could not accomplish in Congress.” Pl. MSJ at 3. The Secretary and Kentucky, they say, sought to do little more than “knock people off Medicaid and undermine the Medicaid expansion enacted by Congress.” Id. at 17. With that view in mind, their nine-count Complaint — which relies almost exclusively on the APA — challenges nearly every component of Kentucky HEALTH.
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First, they attack the project as a whole, claiming the Secretary erred by finding that it was likely to promote the objectives of Medicaid. See Compl, Count VIII. Second, in Counts IIVII, they challenge each individual component of that program — i.e., the communityengagement requirement, the premiums, the reporting requirements, the lockouts, the limits on NEMT and retroactive eligibility, and the penalties for non-emergency use of the emergency room. For the latter counts, Plaintiffs principally maintain that each of those features is unlikely to promote the Act’s objectives. In Counts III and IV, Plaintiffs further allege that the Secretary could not permit certain premium or cost sharing (such as penalties on non-emergency use of the emergency room) through his Section 1115 authority. Beyond that, Plaintiffs challenge the Secretary’s issuance of the SMD Letter (Count I), as well as allege violations under the Take Care Clause (Count IX).
For reasons discussed in more detail below, the Court need adjudicate only one count of Plaintiffs’ Complaint to grant them full relief: Count VIII, which challenges the Secretary’s approval of Kentucky HEALTH as a whole. Before the Court can reach that dispute, however, it must first address several threshold issues.
A. Threshold Issues Whether his approval was lawful or not, the Secretary argues that this Court has no power to review it either because (1) Plaintiffs cannot establish standing for their challenge, or (2) the decision is “committed to agency discretion by law,” 5 U.S.C. § 701(a)(2), thus barring any judicial oversight under the APA.
1. Standing Article III of the Constitution limits the jurisdiction of federal courts to actual “Cases” and “Controversies.” U.S. Const., art. III, § 2. But not just any dispute will do. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 559-61 (1992). A plaintiff must demonstrate that she suffers: 1)
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an injury-in-fact that is 2) caused by the conduct complained of and 3) “likely” to be “redressed by a favorable decision.” Id. at 560-61 (quotations omitted). Because it considers only Count VIII, the Court limits its standing analysis to that claim.
a. Injury/Causation In a suit for injunctive relief, “past harm is not sufficient to establish an injury in fact.” Nat’l Whistleblower Ctr. v. HHS, 839 F. Supp. 2d 40, 45-46 (D.D.C. 2012). The plaintiff, rather, must show “a real and immediate — as opposed to merely conjectural or hypothetical — threat of future injury.” Nat. Res. Def. Council v. Pena, 147 F.3d 1012, 1022 (D.C. Cir. 1998) (citation omitted). “[I]n assessing plaintiffs’ standing, [the Court] must assume they will prevail on the merits of their . . . claims.” LaRoque v. Holder, 650 F.3d 777, 785 (D.C. Cir. 2011). Here, Plaintiffs cite a litany of injuries stemming from the Secretary’s approval of Kentucky HEALTH. Without that approval, Kentucky could not enact any feature of the program that required waivers of Section 1396a, such as (1) conditioning coverage on a community-engagement requirement; (2) increasing premiums, (3) limiting retroactivity eligibility, (4) limiting NEMT, (5) issuing reporting requirements; and (6) imposing lockouts. See AR 2-3. As part of his approval, the Secretary also authorized all waivers and expenditures needed from the “My Rewards Account incentives,” including deductions for non-emergency use of emergency rooms. Id., AR 34 (allowing penalties “for each non-emergent visit to the emergency department”). Considering all of its aspects, Plaintiffs say Kentucky HEALTH might strip them of Medicaid coverage altogether. Generally, “an eligible recipient . . . ha[s] a concrete interest in Medicaid benefits.” Banks v. Sec’y of Indiana Family & Soc. Servs. Admin., 997 F.2d 231, 238 (7th Cir. 1993). The D.C. Circuit had “no doubt,” for example, that agency actions that
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“threaten[ed] an individual’s ability to obtain Medicaid coverage . . . satisf[ied] the injury element of constitutional standing.” NB ex rel. Peacock v. Dist. of Columbia, 682 F.3d 77, 83 (D.C. Cir. 2012). The Secretary, however, claims such protestations are premature. Although Kentucky estimates 95,000 people will lose coverage, he says none of the Plaintiffs here has shown such a likelihood. ECF No. 71 (Oral Argument Transcript) at 40:18-41:11.
The Court need not resolve this dispute because, even were Plaintiffs to keep their Medicaid coverage, Kentucky HEALTH will increase their monthly premium payments. Ordinarily, states can charge their Medicaid beneficiaries only “nominal” premiums. See 42 U.S.C. § 1396o. Effective July 1, 2018, however, Kentucky would require enrollees to pay monthly premiums of up to 5% of household income (with punishment for non-payment, including termination of coverage and a six-month lockout penalty). See AR 87. This sort of financial loss falls in the heartland of Article III standing. See Carpenters Indus. Cncl v. Zinke, 854 F.3d 1, 5-6 (D.C. Cir. 2017) (“Economic harm . . . clearly constitutes an injury-in-fact.”). For such economic harm, “amount is irrelevant.” Id. “A dollar of economic harm is still an injury-in-fact for standing purposes.” Id.; see also Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973, 983 (2017) (“For standing purposes, a loss of even a small amount of money is ordinarily an ‘injury.’”).
The Secretary does not dispute that any Plaintiffs subject to higher premiums would suffer a cognizable injury. Instead, he suggests that each named Plaintiff might be exempt from this requirement. Kentucky HEALTH, however, excepts only the following groups from premium payments: (1) former foster-care youth; (2) pregnant women; and (3) medically frail individuals. Although Kentucky has not yet defined medically frail, several Plaintiffs aver that they are “healthy and do not have any ongoing medical problems.” See, e.g., ECF Nos. 33-13
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(Affidavit of Katelyn Allen), ¶ 6; 33-15 (Affidavit of David Roode), ¶ 6; 33-17 (Affidavit of Quenton Radford), ¶ 8. CMS concedes that David Roode is “substantially likely not to be found exempt on the basis of medical frailty,” CMS Br. at 30, and Kentucky has also submitted a supplemental declaration noting that Plaintiff Glassie Kasey, among others, had not been identified as “medically frail by an MCO.” ECF No. 69 (Notice).
CMS suggests that these Plaintiffs might nevertheless meet one of the other two exemptions, see CMS Br. at 30, but the Court cannot agree. Quite obviously, Roode, a 39-yearold man, is not a pregnant woman. Medical advances notwithstanding, Kasey, a 56-year-old woman, is also unlikely to meet that criterion. See ECF No. 33-3 (Affidavit of Glassie Kasey), ¶ 2. Plaintiffs also represent in their briefing that they will not “be exempted as former foster care youth.” Reply at 5. Although they could have made this point more clearly in their affidavits, the Court sees no reason to think they might fall within that exemption (and the odds would certainly suggest otherwise). The Court therefore finds it likely that at least those two Plaintiffs would be required to pay increased premiums and thus would suffer a concrete injury from Kentucky HEALTH. This is all that is needed to challenge the program. See Animal Legal Def. Fund, Inc. v. Glickman, 154 F.3d 426, 429 (D.C. Cir. 1998) (holding that in a suit brought by multiple plaintiffs, only a single plaintiff must possess standing for a case to proceed).
b. Redressability Having established an injury, Plaintiffs must also show “a likelihood that the requested relief will redress the alleged [harm].” Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 103 (1998) (emphasis added). Generally, courts will find “standing exists where the challenged government action authorized conduct that would otherwise have been illegal.”
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Renal Physicians Ass’n v. HHS, 489 F.3d 1267, 1275 (D.C. Cir. 2007). “In such cases, if the authorization is removed, the conduct will become illegal and therefore very likely cease.” Id.
Here, the challenged government conduct — viz., the Secretary’s approval — provided the necessary authorization for Kentucky HEALTH. Because that program would otherwise run afoul of Section 1396a’s coverage requirements, the state needs the Secretary’s approval and waiver authority before it can enact it. See 42 U.S.C. § 1315; see also 42 C.F.R. § 430.12(c). Should this Court decide that CMS unlawfully approved Kentucky HEALTH, the program (including each component challenged by Plaintiffs) therefore could not take effect. In that event, Plaintiffs’ Medicaid coverage would, at least temporarily, remain undisturbed. That is all they need for redressability purposes. See Renal Physicians, 489 F.3d at 1275 (holding “[c]ausation and redressability . . . are satisfied in this category of cases, because the intervening choices of third parties” — i.e., Kentucky — “are not truly independent of government policy”) (internal quotation marks omitted).
Kentucky tries to muddy the waters, arguing that Plaintiffs cannot satisfy the redressability prong because “if [they] prevail in this action, the Commonwealth will not continue participating in expanded Medicaid.” KY MSJ at 4. While the Governor has indeed issued an Executive Order directing the Commonwealth to “unexpand” Medicaid if any aspect of Kentucky HEALTH is invalidated, see ECF 25-1, that Order has no bearing on the standing analysis here. The Executive Order calls for the Commonwealth’s Medicaid agency “to take the necessary actions to terminate Kentucky’s Medicaid expansion program” only after a final court judgment. Id. at 3. The EO thus cannot take effect before this Court’s decision. Even if Kentucky were able to “unexpand” Medicaid (far from a foregone conclusion), Plaintiffs would have, at minimum, momentary relief.
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Generally, “those adversely affected by a discretionary agency decision . . . have standing to complain that the agency based its decision upon an improper legal ground.” FEC v. Akins, 524 U.S. 11, 25 (1998). A court “can ‘redress’ [a plaintiff’s] ‘injury in fact’” in such cases “even though the agency” — or, in this case, a third party — “might later . . . reach the same result for a different reason.” Id. In other words, it matters little whether Kentucky might later moot the Court’s decision; the important point is that, as the record stands today, the Court can grant meaningful relief.
While not necessary to its decision, the Court also notes that relief here would likely be more than fleeting. Even if Kentucky decides to discontinue benefits pursuant to the EO, the state will not do so until “all appeals of the judgment have been exhausted or waived.” ECF No. 25-1 at 3. That is not typically a lightning process. After the litigation resolves, furthermore, the state would still need to submit any amendments to CMS. See 42 C.F.R. § 430.12(c); see also Tr. at 52:18-19. The Secretary will then need to decide “whether the plan continues to meet the requirements for approval.” Id. § 430.12(c)(2)(i). That approval, in turn, would once again be subject to judicial review. And in the interim, Plaintiffs would retain their full Medicaid benefits without paying higher premiums. That is more than enough for standing purposes.
c. Standing for the Relief Sought Finally, the Secretary argues that even if Plaintiffs’ have standing to challenge the premiums, “they could not leverage that standing to challenge the project as a whole, or the other components of KY HEALTH that do not injure them (like the community-engagement initiative).” CMS Reply at 5 n.2. In other words, “[i]f a plaintiff is only injured by one component of that act,” he posits, “that’s the only component that the plaintiff has standing to challenge.” Tr. at 33:10-12.
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It is true that “a plaintiff must demonstrate standing separately for each form of relief sought,” Friends of the Earth, Inc. v. Laidlaw Environ. Servs., Inc., 528 U.S. 167, 185 (2000), and “for each claim he seeks to press.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006). The Supreme Court has held, for instance, that a plaintiff must have standing to pursue both damages and injunctive relief. See City of Los Angeles v. Lyons, 461 U.S. 95, 109 (1983). The relevant “claim” pressed here, however, is Count VIII. The “relief sought” in that count is not invalidation of particular elements of Kentucky HEALTH; rather, Plaintiffs seek vacatur of the Secretary’s approval of the entire program.
That relief is tethered to the claim. Unlike individual sections of a statute, see, e.g., Davis v. FEC, 554 U.S. 724, 734 (2008), or provisions in a regulation, see, e.g., Lewis v. Casey, 518 U.S. 343, 357–58 & n.6 (1996), the Court cannot parse the Secretary’s approval of a program. See, e.g., Nat. Res. Def. Cncl., Inc. v. Dep’t of Navy, 2002 WL 32095131, at *8 (C.D. Cal. Sept. 17, 2002); Vt. Pub. Interest Research Grp. v. U.S. Fish & Wildlife Serv., 247 F. Supp. 2d 495, 513-14 (D. Vt. 2002) (holding plaintiffs may challenge NEPA analysis and implementation of program as whole even though they only established injury as to one area). As CMS itself maintains, it considered Kentucky HEALTH as a whole before deciding whether to approve it, rather than analyzing separately each challenged component. See CMS Br. at 26. The Court, accordingly, examines the approval of the project as a whole as well. See State Farm, 463 U.S. at 50, (“[A]n agency’s action must be upheld, if at all, on the basis articulated by the agency itself.”). Were the Secretary arbitrary and capricious in approving Kentucky HEALTH, the Court would strike down that approval in toto.
It therefore need ask only whether Plaintiffs “have an interest in some portion” of the benefits affected by that program. See Nat. Res. Def. Cncl., Inc., 2002 WL 32095131, at *8.
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The premiums are the most concrete interest here (though by no means the only one). For the reasons explained above, vacating Kentucky HEALTH would sufficiently redress that injury, and Plaintiffs therefore have standing for Count VIII.
2. Justiciability The Secretary next maintains that even if Plaintiffs have standing, this Court has no power to review his authority under Section 1115. Rather, he says, his actions are “committed to agency discretion by law” and are thus barred from review under Section 701(a)(2) of the APA. See CMS Br. at 11. The APA embodies a “basic presumption of judicial review.” Lincoln v. Vigil, 508 U.S. 182, 190 (1993) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 140 (1967)), and the exception under Section 701(a)(2) is “a very narrow” one. See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 410 (1971), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99, 105 (1977). Absent an express statutory bar, courts may review agency action except “in those rare instances where statutes are drawn in such broad terms that in a given case there is no law to apply,” Webster v. Doe, 486 U.S. 592, 599 (1988) (internal quotation marks omitted), and “a court would have no meaningful standard against which to judge the agency’s exercise of discretion.” Heckler v. Chaney, 470 U.S. 821, 830 (1985). Here, Section 1115 provides, inter alia: (a) In the case of any experimental, pilot, or demonstration project which,
in the judgment of the Secretary, is likely to assist in promoting the objectives of [the Medicaid statute,]
(1) the Secretary may waive compliance with any of the requirements of section . . . 1396a of this title, as the case may be, to the extent and for the period he finds necessary to enable such State or States to carry out such project, and
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(2) (A) costs of such project . . . shall, to the extent and for the period prescribed by the Secretary be regarded as expenditures under the State plan or plans.
42 U.S.C. § 1315(a)(1)-(2)(A). In other words, the Secretary must adopt a two-fold inquiry, asking (1) whether he can approve the project pursuant to Section 1115(a); and then (2) what waivers or expenditures are necessary for that project pursuant to Sections 1115(a)(1) and (a)(2). The Court will evaluate the justiciability of each step in turn.
a. Section 1115(a) In this case, Count VIII challenges the Secretary’s approval of Kentucky HEALTH under Section 1115. The statute required that the Secretary examine two criteria before doing so: First, whether the project is an “experimental, pilot or demonstration project”; and second, whether the project is “likely to assist in promoting the objectives” of the Act. Id.; see also Newton–Nations v. Betlach, 660 F.3d 370, 379-80 (9th Cir. 2011) (noting that court could review whether “Secretary [made] some judgment that the project has a research or a demonstration value”) (citation omitted). The Court can readily apply both standards, which are a far cry from those traditionally deemed unreviewable. In Webster, for instance, the Supreme Court considered a statute allowing the CIA Director to terminate “an Agency employee whenever [she] ‘shall deem such termination necessary or advisable in the interest of the United States.’” 486 U.S. at 600 (citation and emphasis omitted). Looking to both the statute’s discretionary language and its overall structure, the Court found no real “law to apply.” Id. The CIA Director’s personnel decisions affected national security, and the Court reasoned that it was for the executive branch, rather than the courts, to determine what was “in the interest of the United States.” Id.
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The Supreme Court later stressed that Webster dealt with “an area of executive action ‘in which courts have long been hesitant to intrude.’” Lincoln, 508 U.S. at 192 (quoting Franklin v. Massachusetts, 505 U.S. 788, 819 (1992) (Stevens, J., concurring)). The D.C. Circuit, too, has interpreted that decision narrowly. See Dickson v. Sec’y of Def., 68 F.3d 1396, 1403 (D.C. Cir. 1995). In Dickson, for example, the Circuit held reviewable the Army Board for Correction of Military Records’ authority to waive certain statutory requirements “it found [to be] in the interest of justice” — a standard far closer to Webster than that at issue here. Id. at 1403. The Court of Appeals there found “no sufficient reason why the determination, on a case-by-case basis, of what is ‘in the interest of justice’” should “lie[] within the exclusive expertise of the Board,” rather than the courts. Id. Likewise, in Marshall Cty. Health Auth. v. Shalala, 988 F.2d 1221 (D.C. Cir. 1993), the D.C. Circuit held it could review the Secretary’s decision to modify regulations under the Medicare Act, even though the statute allowed him to do so “as [he] deem[ed] appropriate.” Id. at 1223 (quoting 42 U.S.C. § 1395ww(d)(5)(C)(iii)). Distinguishing Webster, it reasoned that “the Medicare statute” does not typically include the same degree of “congressional deference to the executive.” Id. at 1224.
The same is naturally true of the Medicaid statute. That Act “contains numerous, detailed, specific requirements with which states must comply in order to receive federal funding.” Beno v. Shalala, 30 F.3d 1057, 1068 (9th Cir. 1994). The Secretary is responsible for ensuring that state programs comply with these regulations and must “take certain specific steps, culminating with the loss of funding, when state plans fail to comply.” Id.; see also 42 C.F.R. § 430.35. While Section 1115 allows the Secretary to relax those minimum requirements in some circumstances, the Court “doubt[s] that Congress would enact such comprehensive regulations, frame them in mandatory language, require the Secretary to enforce them, and then
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enact a statute allowing states to evade these requirements with little or no federal agency review.” Beno, 30 F.3d at 1068-69.
Were it otherwise, the Secretary could singlehandedly rewrite the Medicaid Act. Imagine, for instance, that he approved a demonstration project targeting the blind. He could then waive Section 1396a’s requirement that a state (or all states) cover blind people. The Secretary promised at oral argument that he would not do so, see Tr. at 31:5-13, but what’s to stop him? The statute’s caveat that any such project must be “likely to assist in promoting” the statute’s objectives. See 42 U.S.C. § 1315(a). Congress thereby limited the Secretary’s authority and, in doing so, assured that the judicial branch would police the statute’s boundaries. See Bowen v. Mich. Acad. of Family Phys., 476 U.S. 667, 681 (1986) (“We ordinarily presume that Congress intends the executive to obey its statutory commands and, accordingly, that it expects the courts to grant relief when an executive agency violates such a command.”).
Indeed, “[e]very court which has considered the issue has concluded that” the Secretary’s Section 1115 authority is “subject to APA review.” Beno, 30 F.3d at 1067 & n.24 (collecting cases); see also C.K. v. N.J. Dep’t of Health and Human Servs., 92 F.3d 171, 181-82 (3d Cir. 1996) (reviewing Secretary’s approval pursuant to Section 1115); Aguayo v. Richardson, 473 F.2d 1090, 1105 (2d Cir. 1973) (same); Crane v. Mathews, 417 F. Supp. 532, 539 (N.D. Ga. 1976). Some of those courts have upheld the Secretary’s judgment, see, e.g., C.K., 92 F.3d at 1181-89, Aguayo, 473 F.2d at 1106, while others have struck down his approval. See, e.g., Beno, 30 F.3d at 1076; Newton–Nations, 660 F.3d at 381-82. None of those courts, however, struggled to find some “law to apply.”
The Secretary resists this consensus, stressing that the statute turns on “[his] judgment” as to whether a project is likely to further the Act’s objectives. See 42 U.S.C. § 1315(a). To be
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sure, he “has considerable discretion to decide which projects meet these criteria.” Beno, 30 F.3d at 1069. And, as discussed below, the Court will afford him considerable deference on his “judgment” that these waivers fit the bill. “[T]he mere fact that a statute contains discretionary language,” however, “does not make agency action unreviewable.” Id. at 1066. Rather, as noted above, the D.C. Circuit has consistently found justiciable statutes with “broad delegation[s] of discretion.” Marshall Cty., 988, F.2d at 1124; see also Dickson, 68 F.3d at 1402-03 (rejecting such a position as a mere “linguistic argument”). Ultimately, the Court may properly review an agency action as long as there is some “law to apply.” There is more than enough here.
b. Sections 1115(a)(1) and (2)(A) Once the Secretary has approved a demonstration protect, he must then consider “the extent and . . . period” of waivers “necessary” to carry it out. See 42 U.S.C. § 1315(a)(1). He may also treat any associated costs as “expenditures” (and thus reimbursable by the federal Government) to the extent and for the period he deems appropriate. Id. § 1315(a)(2)(A). The Secretary suggests that these provisions lack “any meaningful judicial standard of review.” CMS Br. at 11 (quoting Webster, 486 U.S. at 600). In this case, however, the Court has no occasion to substantively review the Secretary’s individual waivers and or expenditures, so it need not linger of the justiciability of sections 1115(a)(1) or (2)(A). It suffices to note that it can at least review whether the Secretary made a finding that any given waiver was necessary “to carry out [a demonstration] project.” 42 U.S.C. § 1315(a)(1). The Act requires him to at least check that box, even were the Court to hold that the underlying finding of necessity was unreviewable. It could also review whether, as Plaintiffs have alleged in Count III, the Secretary has purported to waive requirements beyond the 83 outlined in section 1396a. Id. (limiting the Secretary to “waiv[ing] compliance with any of the requirements of section . . . 1396a of this
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title”) (emphasis added). Regardless of whether those provisions are otherwise justiciable, they have no bearing on the Secretary’s approval of Kentucky HEALTH in the first place and thus are not relevant to Count VIII. The Court proceeds to that count now.
B. Merits Appetizers now dispatched, the Court may cut into the main course. Plaintiffs’ central position here is plain: Kentucky HEALTH would “fundamentally” and impermissibly “transform Medicaid.” Pl. MSJ at 3. They thus attack nearly every component of the program. At bottom, however, most of their challenges boil down to a simple argument: the program is “not likely to assist in promoting” Medicaid’s objectives.” See 42 U.S.C. § 1315(a). The parties debate the appropriate standard of review: Defendants deny review is even possible, see Section III.A.2, supra, while Plaintiffs maintain that the Secretary acted outside his statutory authority and should thus receive no deference on that question. At minimum, however, both sides agree that the Secretary’s approval (if reviewable) must not be “arbitrary, capricious . . . , or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). The Court, like others before it, will thus view the Secretary’s approval through that lens. See, e.g., Beno, 30 F.3d at 1067-68; see also C.K., 92 F.3d at 183-84; Aguayo, 473 F.2d at 1105-07. Before doing so, however, it pauses to outline the scope of the challenge before it.
1. Scope The Secretary maintains that he must ask only whether a project, considered as a whole, is “likely to assist in promoting the objectives of” the Medicaid Act. See 42 U.S.C. § 1315(a). Plaintiffs, meanwhile, lob multiple challenges at individual components of that project (such as the community-engagement requirement or the increased premiums). To the extent Plaintiffs mean to argue that none of those features is independently likely to further the Act’s objectives, such focus would be misplaced. As they now seem to concede, see Reply Br. at 24, Section
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1115(a) asks whether a “project” would promote the Act’s objectives, not whether each component, “viewed in isolation,” would. See Wood v. Betlach, 922 F. Supp. 2d 836, 843 (D. Ariz. 2013) (emphasis). While it may be relevant to the Secretary’s determination whether any given component is consistent with the Act’s objectives, he must ultimately determine whether, on balance, the project as a whole passes muster.
The Court thus limits its analysis to Count VIII, which alleges that the Kentucky HEALTH program, “as a whole,” was neither “an experimental, pilot or demonstration project[] nor . . . likely to promote the objectives of the Medicaid Act.” Compl. at Count VIII & ¶ 388 (emphasis added and capitalization altered). Defendants concede that such a challenge (if reviewable) is proper, but mistakenly construe Count VIII as a challenge to KY HEALTH writ large. See CMS Br. at 17-18. During oral argument, however, Plaintiffs made clear that they target only the Secretary’s approval of Kentucky HEALTH, leaving aside any challenge to other components of KY HEALTH, such as the SUD program. See Tr. at 57:18-21 (“I just want to be clear [that] [w]hat we have . . . challenged is something called Kentucky HEALTH, spelled out.”).
This distinction does not affect the Court’s arbitrary-and-capricious review, as it would hold the Secretary’s approval of either KY HEALTH or Kentucky HEALTH fell short of that standard. See Section III.B.2, infra. The difference matters enormously, however, for the appropriate remedy. Were the Court to treat this as a challenge to KY HEALTH, a decision in Plaintiffs’ favor would invalidate not only Kentucky HEALTH but also Kentucky’s recently implemented SUD program. None of the parties has an appetite for such a result. See Tr. at 45:7-16 (CMS); id. at 54:8-16 (Kentucky); id. at 58:9-17 (Plaintiffs). Fortunately for all, the Court can properly limit its review to Kentucky HEALTH.
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Although packaged inside the same application, Kentucky HEALTH was wholly distinct from other pieces of KY HEALTH, including, inter alia, the SUD program. As a refresher, the latter is available for all Medicaid beneficiaries, while the former applies only to adults without disabilities. See AR 2-3. The programs also have different start dates: SUD treatment became effective January 12, 2018, but Kentucky HEALTH does not take effect until July 1, 2018. See AR 2. And, of course, they have different purposes: one was meant to “ensure that a broad continuum of care” was available to those with substance-abuse disorders. See AR 83. The other proposes to add “commercial market health insurance” features to Medicaid. See AR 7.
It comes as no surprise, then, that the Secretary has solicited and regularly approved stand-alone SUD demonstrations in other states, without packaging in elements similar to Kentucky HEALTH. See, e.g., Letter from Seema Verma, Adm’r, CMS, to Jen Steele, Medicaid Dir., La. Dep’t of Health & Hospitals (Feb 1, 2018), https://www.medicaid.gov/Medicaid-CHIPProgram-Information/By Topics/Waivers/1115/ downloads/la/la-healthy-oud-sud-demo-ca.pdf; Letter from Seema Verma to Cynthia Beane, Comm’r, W. Va. Bureau for Med. Servs. (Oct. 6, 2017), https://www.medicaid.gov/medicaid-chip-program-information/bytopics/waivers/ 1115/downloads/wv/wv-creating-continuum-care-medicaid-enrollees-substance-ca.pdf.
Here, too, the Secretary effectively treated the SUD program and Kentucky HEALTH as two separate demonstration projects. Although he nominally referred to the latter as a program within the KY HEALTH demonstration, that label did not control. Instead, he evaluated independently whether Kentucky HEALTH would promote various objectives of the Act, including by “improv[ing] health outcomes, promot[ing] increased upward mobility and improved quality of life, increas[ing] individual engagement in health care decisions, and prepar[ing] individuals who transition to commercial health insurance coverage to be successful
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in this transition.” AR 7. He then separately stated (1) which waivers were necessary “for the Kentucky HEALTH program” and (2) which were necessary for “the KY HEALTH demonstration as a whole.” AR 3; see also AR 13-15. Similarly, he distinguished between the “expenditure authorities” needed to “implement the Kentucky HEALTH program” and those necessary “to implement the KY HEALTH section 1115 demonstration.” AR 11.
This makes sense. When the Secretary concluded that the SUD program “was likely to promote the objectives” of the Act, he could not then piggyback other unrelated waivers onto that approval. Why not? Because he can issue only those waivers “necessary” to support the project. See 42 U.S.C. § 1315(a)(1). In this case, the Secretary determined that hardly any waivers were needed to make the SUD program run. Simply by approving the SUD project, he ensured that all SUD costs were treated as reimbursable under Medicaid. Id. § 1315(a)(2)(A). He then identified only one waiver needed to implement the program: he waived Section 1396a(a)(4) to “the extent necessary to relieve Kentucky of the requirements to assure nonemergency medical transportation to and from providers for all Medicaid beneficiaries” when such transportation was “for methadone treatment services.” AR 85.
At the same time, the Secretary never considered whether (nor explained why) any of the Kentucky HEALTH components — including (1) retroactive eligibility, (2) premiums, (3) the community-engagement requirement, (4) lockouts, (5) reporting requirements, and (6) NEMT — were “necessary” to carry out the SUD program (or any other component of KY HEALTH as a whole). See AR 3 (distinguishing “additional waiver[s] and expenditure[s]” that were necessary for “the KY HEALTH demonstration as a whole”). He did not, for instance, conclude that those waivers provided necessary cost savings to make SUD practicable.
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Instead, the Secretary identified each component as an “additional waiver[] [or] expenditure[]” that was necessary for the Kentucky HEALTH program. See AR 14-15; see also AR 2-3. That program, then, was the relevant “experimental, pilot, or demonstration project.” 42 U.S.C. § 1315(a). And it is thus that project “which, in the judgment of the Secretary,” needed to be “likely to assist in promoting the objectives of [the Medicaid statute].” Id. Otherwise, none of those waivers would be “necessary . . . to carry out such [a] project.” Id. § 1315(a)(1). This Court will thus treat, as the Secretary did, Kentucky HEALTH as a standalone demonstration project.
2. Arbitrary & Capricious Review The scope of the challenge defined, the Court finally arrives at the crux of the parties’ argument: whether the Secretary acted arbitrarily or capriciously in concluding that Kentucky HEALTH was “likely to assist in promoting the objectives” of the Medicaid Act. See 42 U.S.C. § 1315(a). Under that deferential standard, the Court “is not empowered to substitute its judgment for that of the agency.” Overton Park, 401 U.S. at 416. Nor can it “presume even to comment upon the wisdom of [Kentucky’s] effort at Medicaid reform.” C.K., 92 F.3d at 181. Still, it is a fundamental principle of administrative law that “agencies are required to engage in reasoned decisionmaking.” Michigan v. EPA, 135 S. Ct. 2699, 2706 (2015) (internal quotation marks omitted); see also Public Citizen, Inc. v. FAA, 988 F.2d 186, 197 (D.C. Cir. 1993) (“The requirement that agency action not be arbitrary or capricious includes a requirement that the agency adequately explain its result[.]”). This means that an agency must “examine all relevant factors and record evidence.” Am. Wild Horse Pres. Campaign v. Perdue, 873 F.3d 914, 923 (D.C. Cir. 2017); see also Humane
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Soc’y of United States v. Zinke, 865 F.3d 585, 606 (D.C. Cir. 2017) (“failure to address” a “salient factor” in a statute renders the agency’s approval arbitrary and capricious). At minimum, the agency “cannot entirely fail[] to consider an important aspect of the problem.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). Rather, he must “adequately analyze . . . the consequences” of his actions. See Am. Wild Horse, 873 F.3d at 932. In doing so, “[s]tating that a factor was considered . . . is not a substitute for considering it.” Getty v. Fed. Savs. & Loan Ins. Corp., 805 F.2d 1050, 1055 (D.C. Cir. 1986). The agency must instead provide more than “conclusory statements” to prove he “consider[ed] [the relevant] priorities.” Id. at 1057.
With that framework in mind, Plaintiffs’ position is simple: “[T]he purpose of the [Medicaid Act] is to provide coverage and care to the most vulnerable” and, more precisely, “to provide that care generally free of charge.” Oral Arg. Tr. at 17:19-24. The Secretary, they believe, “failed to consider adequately” the impact of Kentucky HEALTH on Medicaid coverage. See Am. Wild Horse, 873 F.3d at 923. Indeed, he “entirely failed to consider” Kentucky’s estimate that 95,000 persons would leave its Medicaid rolls during the 5-year project. See State Farm, 463 U.S. at 43. Those failures, they urge, make his decision arbitrary and capricious.
Plaintiffs are correct. To explain why, the Court begins with the basic “objectives” of Medicaid before turning to the Secretary’s approval in this case. It then considers — and rejects — each of Defendants’ counterarguments.
a. The Objectives of Medicaid Before the Secretary can approve an “experimental, pilot, or demonstration” project, he must first identify the objectives of the Medicaid program. After all, he could hardly hold that
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Kentucky HEALTH was “likely to assist in promoting the objectives” of the Act without identifying any objectives in the first place. See 42 U.S.C. § 1315(a). The Court assumes, as the Secretary maintains, that he should receive deference in interpreting the Act’s “objectives” under this section. Id. Ordinarily, courts review an agency’s statutory interpretations using the familiar two-step Chevron framework. That inquiry calls for examining whether “Congress has directly spoken to the precise question at issue,” and, if not, whether “the agency’s answer is based on a permissible construction of the statute.” Chevron U.S.A. Inc. v. Nat’l Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984).
While the “objectives” of Section 1115 may be ambiguous, courts have traditionally looked to 42 U.SC. § 1396-1, which provides standing appropriation authority for federal support of “State plans for medical assistance,” to discern those objectives. See Pharm. Research & Mfrs. of Am. v. Concannon, 249 F.3d 66, 75 (1st Cir. 2001); Jonathan R. Bolton, The Case of the Disappearing Statute: A Legal & Policy Critique of the Use of Section 1115 Waivers to Restructure the Medicaid Program, 37 Colum. J.L. & Soc. Probs. 91, 132 & n.235 (2003). The parties, too, agree that Section 1396-1 provides at least the starting point to ascertain the “objectives” of Medicaid. See CMS Br. at 20; Ky. Br. at 15-18; Pl. Reply at 14-18. That provision explains that Congress appropriated Medicaid funds
[f]or the purpose of enabling each State, as far as practicable under the conditions in such State, to furnish (1) medical assistance . . . [to] individuals[] whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care. By its terms, the statute thus identifies two related objectives: allowing states, “as far as practicable,” to “furnish (1) medical assistance” and (2) “rehabilitation and other services” designed to “help individuals retain a capacity for independence.” Id.
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So what does “furnish[ing] . . . medical assistance” mean? The Medicaid statute “defines ‘medical assistance’ as ‘payment of part or all of the cost’ of medical ‘care and services’ for a defined set of individuals.” Adena Reg’l Med. Ctr. v. Leavitt, 527 F.3d 176, 180 (D.C. Cir. 2008) (citing 42 U.S.C. § 1396d(a)). Plugging that definition into the statute, Congress evinced a clear interest in “enabling each State, as far as practicable,” to provide “payment of part or all of the cost of medical care and services.” In other words, “[t]he Medicaid program was created . . . for the purpose of providing federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons.” Harris v. McRae, 448 U.S. 298, 301 (1980); see also Alexander v. Choate, 469 U.S. 287, 289 n.1 (1985) (noting Congress designed Medicaid to “subsidize[]” states in “funding . . . medical services for the needy”); W. Va. Univ. Hosps. Inc. v. Casey, 885 F.2d 11, 20 (3d Cir. 1989) (“[T]he primary purpose of [M]edicaid is to achieve the praiseworthy social objective of granting health care coverage to those who cannot afford it.”).
In 2010, Congress expanded the Medicaid program to provide medical assistance for a new population: low-income adults under 65 who would not otherwise qualify. See 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII). As the name implies, the Affordable Care Act was designed to provide “quality, affordable health care for all Americans,” including by expanding the “role of public programs” — like Medicaid — in achieving that goal. See Pub. L. No. 111-148, 124 Stat. 119, 130, 271 (2010) (capitalization altered); see also Almendarez–Torres v. United States, 523 U.S. 224, 234 (1998) (“[T]he title of a statute and the heading of a section are tools available for the resolution of a doubt about the meaning of a statute.”) (internal quotation marks omitted). Under the ACA, states can choose to expand their Medicaid coverage to include this new, lowincome group. See 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII); see also NFIB, 567 U.S. at 587. Should a state choose to do so, those individuals become part of its mandatory population.
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Through the ACA, Congress made Medicaid an “element of a comprehensive national
plan to provide universal health insurance coverage.” NFIB, 567 U.S. at 583. As amended, one
objective of Medicaid thus became “furnishing . . . medical assistance” for this new group of
low-income individuals. Id. at 634.
b. The Secretary’s Consideration of Medicaid’s Objectives The Secretary agrees that Section 1396-1 identifies at least “one purpose of Medicaid.”
CMS Reply at 2 (emphasis omitted). As the agency put it during oral argument, that provision
“makes clear that a purpose of Medicaid is to provide medical assistance to certain specified
populations as far as practicable under the conditions in those states.” Tr. at 35:13-16. He also
agrees that it is “obviously . . . a purpose to provide medical assistance to the expansion
population” as well. Id. at 36:15-17 (emphasis added). That objective should therefore be a
“salient factor” in his analysis. See Humane Soc’y, 865 F.3d at 606.
The fundamental failure here, however, is that he ignored that objective in evaluating Kentucky HEALTH. Instead, by his own description, the Secretary examined only the following
factors in his consideration of KY HEALTH generally:
(1) “whether the demonstration was likely to assist in improving health outcomes”; (2) “whether it would address behavioral and social factors that influence health outcomes”; (3) “whether it would incentivize beneficiaries to engage in their own health care and achieve better health outcomes”; and (4) “whether it would familiarize beneficiaries with a benefit design that is typical of what they may encounter in the commercial market and thereby facilitate smoother beneficiary transition to commercial coverage.”
AR 4.
When it came to Kentucky HEALTH specifically, the Secretary maintained the same
focus, deciding that the project “would improve health outcomes, promote increased upward
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mobility and improved quality of life, increase individual engagements in health decisions, and prepare individuals who transition to commercial health insurance coverage to be successful in this transition.” AR 7; see also AR 6 (Kentucky HEALTH would “improve[] health outcomes” and “also meet several additional goals, including encouraging responsible utilization of services” and “improving program integrity”). Kentucky, too, cited the same goals in proposing the project. See AR 5447 (stating “Kentucky HEALTH seeks to . . . accomplish the following goals:” (1) “Improve members’ health”; (2) “Prepare[] [individuals] to use commercial health insurance”; (3) “Empower people to seek employment and transition to commercial health coverage”; (4) “Implement delivery system reforms”; (5) “Ensure long-term fiscal sustainability”).
While those may all be worthy goals, there was a notable omission from the list: whether Kentucky HEALTH (or, indeed, KY HEALTH) would help provide health coverage for Medicaid beneficiaries. That is, would Kentucky HEALTH help or hurt states in “funding . . . medical services for the needy”? Alexander, 469 U.S. at 289 n.1. By his own description, the Secretary “entirely failed to consider” that question. See State Farm, 463 U.S. at 43.
At minimum, the Secretary failed to “adequately analyze” coverage. See Am. Wild Horse, 873 F.3d at 932. There are two basic elements to that problem: First, whether the project would cause recipients to lose coverage. Second, whether the project would help promote coverage. The Secretary, however, neglected both.
i. Risk to coverage The Secretary never provided a bottom-line estimate of how many people would lose Medicaid with Kentucky HEALTH in place. This oversight is glaring, especially given that the risk of lost coverage was “factually substantiated in the record.” Humane Soc’y, 865 F.3d at
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606. In its application, Kentucky estimated that the project would cause more than 95,000 people to leave its Medicaid rolls by the fifth year. Compare AR 5421 (listing eligible member months for Demonstration Year 5 without waiver) with AR 5422 (listing eligible member months for Demonstration Year 5 with waiver); see also Tr. 40:18-21. Amici maintain that such number is conservative and peg the real figure as between 175,000 and 297,500. See ECF No. 44 (Amicus Br. of Deans Chairs & Scholars) at 18.
Commenters, too, put the Secretary on notice that the Act might well reduce health coverage for low-income individuals. As required, HHS provided a 30-day public notice-and comment period regarding the proposed program. The vast majority of those comments voiced concerns that Kentucky HEALTH would “significantly reduce low-income people’s participation in health coverage programs.” AR 3835 (Comment of American Congress of Obstetricians and Gynecologists, et al.). Citing extensive research, including from past Medicaid demonstrations, commenters explained how each provision of Kentucky HEALTH — namely, the (1) community-engagement requirement, see AR 3311, 3833-34, 3890, (2) increased premiums, see AR 3740, 3796-97, 3775, 3831, 3864, 3880, 3846-47, 3891, (3) cost sharing for non-emergency use of emergency rooms, see AR 3692, 3849, 3917, (4) suspension of retroactive eligibility, see Section III.B.2.b.ii, infra, (5) reporting requirements, see AR 3314, 3322-23, and (6) lockouts, see AR 3797, 3815, 3891— would likely reduce healthcare access and utilization. See Appendix A (reproducing comments). To top it off, numerous comments also suggested that these new administrative requirements would increase “clerical and tracking errors and delays,” which in turn would “cause inadvertent terminations.” See, e.g., AR 3486, 3643, 3652, 3661, 3791, 3931.
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While the Secretary was not required to address each comment in writing, see CMS Br. at 7, he concedes that he needed to at least “consider[]” those objections. See Tr. at 43:22-44:2. Yet in the face of those warnings, “the record contains a rather stunning lack” of discussion about the effect of Kentucky HEALTH on health coverage. See Beno, 30 F.3d at 1074. For starters, the Secretary never once mentions the estimated 95,000 people who would lose coverage, which gives the Court little reason to think that he seriously grappled with the bottomline impact on healthcare. Nor did he “request . . . additional information related to the project’s impact on recipients” or offer “any information refuting plaintiffs’ substantial documentary evidence” that the action would reduce healthcare coverage. Id. at 1074.
Instead, the Secretary noted commenters’ concerns that the work requirement “would create significant barriers to access for vulnerable individuals who are not able to work or otherwise meet the requirements.” AR 8. To address their objections, the Secretary cited Kentucky HEALTH’s “important protections for vulnerable individuals,” such as exempting those who cannot work “due to a disability” or are “medically frail” from the communityengagement requirement. Id. He also notes that the state had added flexible “on-ramps,” allowing those who lose coverage to regain it after meeting certain conditions. See CMS Br. at 35-36. During the litigation, too, he stresses that these “guardrails” show that the Secretary considered coverage concerns “in substance.” Tr. 44:3-15.
That response, however, is no answer at all. In its original application, Kentucky already exempted “vulnerable individuals,” such as those deemed medically frail, pregnant women, and children, from many of its project’s requirements. See, e.g., AR 5467 (explaining that pregnant women and children would be exempt from co-payments and premiums, while premiums would be “optional” for the medically frail). Likewise, the state included the same “on ramps” in its
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initial waiver application. See AR 5466-67 (allowing early re-entry for persons who (1) pay past debt; (2) pay a premium for reinstatement month; and (3) participate in financial or health literacy); see also AR 5488-89 (comparing initial and amended application). Even with those reforms baked in, Kentucky estimated that 95,000 people would lose coverage. The commenters, too, expressed their concerns about coverage losses with those features in mind. See, e.g., AR 3694-95, 3937 (noting problems with on ramp).
Although Kentucky’s initial project may have thus included adequate protections for “vulnerable” individuals, this was not enough for the Secretary to rubber-stamp it. Rather, as the Secretary admits, it is “obviously . . . a purpose to provide medical assistance to the expansion population” as well, see Tr. at 36:15-17, a group broader than the vulnerable classes identified in Kentucky HEALTH. As explained in more detail below, the Secretary therefore cannot limit his review to only “vulnerable individuals,” such as persons with disabilities and the medically frail. He must consider coverage to all groups enrolled in the project. Here, that included grappling with the fact that 95,000 people would lose Medicaid coverage, even with those “guardrails” in place.
Beyond those features, the Secretary cites only one other “guardrail” against coverage loss: a “good cause” exemption. In an early exchange between him and Kentucky, the state agreed to “provide good cause exceptions to the lockout for failure to pay premiums that would allow beneficiaries to re-enroll under certain conditions without completion of early re-entry requirements or waiting.” AR 1540. The Secretary’s final Special Terms and Conditions exempted from lockouts persons who were hospitalized, incapacitated, or disabled or whose immediate family members had died or become disabled. See AR 7, 28-29. There were also exceptions for people who were evicted or became homeless, were victims of natural disasters,
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had gained and lost private insurance, or were victims of domestic violence. Id. Those narrow changes, however, do not establish that the Secretary “adequately analyzed” coverage loss. See Am. Wild Horse, 873 F.3d at 932. He never revised Kentucky’s estimate on coverage loss with these reforms in mind. Rather, he granted the waivers with no idea of how many people might lose Medicaid coverage and thus “failed to consider an important aspect of the problem.” State Farm, 463 U.S. at 43.
Left with little else, the Secretary now argues that perhaps the 95,000 individuals would not lose coverage after all; instead, maybe they will simply transition to “employer-sponsored and commercial coverage.” CMS Br. at 11 (quoting AR 4, 7). It made no such finding below, however. While the agency spoke generally of “creating incentives for individuals to obtain and maintain coverage through private, employer-sponsored insurance,” AR 5, it cited no research or evidence that this would happen, nor did it make concrete estimates of how many beneficiaries might make that transition. And, of course, it is not obvious that the community-engagement requirement alone would help a person shift to private insurance. As the Secretary stresses, this is not a work requirement; individuals can meet it, for example, by volunteering in the community. While those unpaid activities may have long-term benefits, he never discussed how they will promote a “transition from Medicaid to commercial coverage.” AR 6.
The Court thus cannot credit the Secretary’s speculations now. “[T]he mere fact that there is some rational basis within the knowledge and experience” of the agency, “under which [it] might have” justified its conclusion, “will not suffice to validate agency decisionmaking.” Bowen v. American Hosp. Ass’n, 476 U.S. 610, 627 (1986) (internal quotation marks and citations omitted). Although it may “uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned,” State Farm, 463 U.S. at 43 (quoting Bowman Transp., Inc. v.
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Arkansas-Best Freight System, 419 U.S. 281, 296 (1974)), it cannot infer an agency’s reasoning from mere silence or where the agency failed to address significant objections and alternative proposals. Id. at 43-44. Rather, “an agency’s action must be upheld, if at all, on the basis articulated by the agency itself.” Id. at 50. There was no discussion of coverage loss here.
ii. Promote coverage At the same time, the Secretary identified only one element of Kentucky HEALTH that might promote health coverage. In a single sentence, he noted that “[t]he approval of the waiver of retroactive eligibility encourages beneficiaries to obtain and maintain health coverage, even when healthy.” AR 6. This sort of “conclusory” reference cannot suffice, “especially when viewed in light of” an obvious counterargument. See Getty, 805 F.2d at 1057. As is documented in the comments, restricting retroactive eligibility will, by definition, reduce coverage for those not currently on Medicaid rolls. See, e.g., AR 3811 (Comment of National Women’s Law Center) (“Kentucky’s request to waive retroactive eligibility for newly eligible low-income adults does not provide any demonstrative value other than to delay coverage – putting newly eligible beneficiaries at risk of medical debt and providers at risk for bad debt.”); AR 3702 (Comment of Human Arc) (“The gap in coverage that will be created by the elimination of retroactive coverage could be devastating to those newly enrolled Kentucky HEALTH recipients who received services prior to their start date.”). When asked at oral argument how Kentucky HEALTH would otherwise furnish medical assistance, the Secretary cited one last feature: the SUD program. See Tr. 38:1-10. True, that program would cover all Medicaid beneficiaries’ access to “residential treatment, crisis stabilization and withdrawal management services.” AR 85. As explained above, however, it could operate regardless of Kentucky HEALTH, so the Secretary cannot cite it as a justification
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for approving the latter project. In any event, even had the Secretary considered KY HEALTH as a whole, he would have still needed to ask whether that project “promote[d] the objectives of Medicaid assistance” “on balance.” CMS Br. at 21 (quoting CWRO, 348 F. Supp. at 497). Yet the Secretary made no such finding here. He did not, for instance, suggest that providing SUD treatment might justify (much less require) the loss of Medicaid coverage for up to 95,000 individuals; those people, of course, will not be able to take advantage of SUD treatment. Nor did he grapple with the fact that, by the state’s estimate, roughly 80% of the expansion population did not suffer from a substance-use disorder. For those persons, the SUD program does nothing to “furnish . . . medical assistance.” Against that backdrop, the Court cannot hold he made a reasoned decision “that on balance the objectives considered together were likely to be advanced.” Id.
* * * At bottom, the record shows that 95,000 people would lose Medicaid coverage, and yet the Secretary paid no attention to that deprivation. Nor did he address how Kentucky HEALTH would otherwise help “furnish . . . medical assistance.” In other words, he glossed over “the impact of the state’s project” on the individuals whom Medicaid “was enacted to protect.” Beno, 30 F.3d at 1070. By doing so, he “failed to consider adequately” a salient purpose of Medicaid and, thus, an important aspect of the problem. See Am. Wild Horse, 873 F.3d at 923; cf. Public Citizen v. Federal Motor Carrier Safety Admin., 374 F.3d 1209 , 1216 (D.C. Cir. 2004) (“A statutorily mandated factor, by definition, is an important aspect of any issue before an administrative agency, as it is for Congress in the first instance to define the appropriate scope of an agency’s mission.”). The Court, consequently, cannot validate his approval of Kentucky HEALTH.
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c. Defendants’ Counterarguments If the Secretary did not consider the impact of Kentucky HEALTH on health coverage, what did he consider instead? Principally, three things: (1) “health and well-being”; (2) cost considerations, including “focus[ing]” the state’s resources on “traditional” populations; and (3) “self-sufficiency” and “lessen[ing] dependence on government assistance.” CMS Br. at 21-22, 24 (citing AR 7). The Secretary argues that he could properly focus on those three alternative criteria in approving the Act. Id. None of those factors, however, can justify ignoring whether the project would “furnish. . . medical assistance.” To explain why, the Court discusses each in turn.
i. Health and Public Well-Being In defending his approval, the Secretary first tries to move the target: “the objective of the Medicaid Act in the end,” he says, is really “to promote the health of Medicaid beneficiaries.” Tr. at 40:3-5. In such a case, the agency would not need to consider whether Kentucky HEALTH helped furnish medical assistance, so long as it made beneficiaries healthier on the whole. To that end, the Secretary spent much time claiming that Kentucky HEALTH would “improve health and wellness” for low-income individuals. See AR 3; see also AR 7 (“Overall, CMS believes that Kentucky HEALTH has been designed to empower individuals to improve their health and well-being.”). He noted, for example, that the community-engagement requirement will “promote Medicaid’s objective of improving beneficiary health.” AR 5; see also AR 4 (finding meaningful work was “essential to the economic self-sufficiency, self-esteem, well-being, and improved health of people with disabilities”). Likewise, he justified the
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premium requirements, deductibles, and limited enrollment windows as necessary “to ensure continuity of care, which is important for improving health outcomes.” AR 6.
The Secretary’s SMD letter evinced the same belief that “work [would] promote health and well-being.” AR 92. It encouraged states “to test the hypothesis that requiring work or community engagement as a condition of eligibility . . . will result in more beneficiaries being employed or engaging in other productive community engagement, thus producing improved health and well-being.” AR 92. In its application, Kentucky, too, cited the “cornerstone” of its project as “employment initiative[s] aimed at increasing workforce participation rates in Kentucky,” which it promised was “critical to improving the health status of Kentuckians.” AR 5445 & n.24 (citing K. Hergenrather, et al., Employment as a Social Determinant of Health: A Systematic Review of Longitudinal Studies Exploring the Relationship Between Employment Status and Physical Health, Rehabilitation Research, Policy, and Education (2015)).
While Plaintiffs and their amici assert that these proclaimed health benefits are unsupported by substantial evidence, see Pl. MSJ at 38; Deans Br. at 8-17; see also AR 3917, 3701, 3684, 3464, 3643, the Court need not enter that thicket. The Secretary’s analysis, instead, fails for a more basic reason: it is little more than a sleight of hand. At each step, the Secretary impermissibly conflated “improv[ing] health and wellness,” AR 3, with the Medicaid Act’s more specific stated purpose of “furnish[ing] . . . medical assistance” and “rehabilitative and other services.” 42 U.S.C. § 1396-1. Put another way, this focus on health is no substitute for considering Medicaid’s central concern: covering health costs. While improving public health and health outcomes might be one consequence of “furnishing . . . medical assistance,” the Secretary cannot choose his own means to that end. See Waterkeeper Alliance v. EPA, 853 F.3d 527, 535 (D.C. Cir. 2017) (“Agencies are . . . bound not only by the ultimate purposes Congress
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has selected, but by the means it has deemed appropriate, and prescribed, for the pursuit of those purposes.”) (internal quotation marks omitted). To the extent Congress sought to “promote health” and “well-being” here, it chose a specific method: covering the costs of medical services.
More fundamentally, promoting health is not the only reason Congress wanted to provide health insurance to needy populations. It also had an interest in making healthcare more affordable for such people. See Pl. Reply at 18. Had Congress maintained a singular focus on promoting health, it easily could have said as much, but the text and structure of Medicaid shows its desire to provide health coverage to those groups. After all, the Act does not convert states into hospitals, forcing them to provide direct medical services to its citizens. Rather, Medicaid provides federal funding so that the state can “pay[] . . . [for] part or all of the cost’ of medical ‘care and services’ for a defined set of individuals.” Adena, 527 F.3d at 180 (quoting 42 U.S.C. § 1396d(a)) (emphasis added).
To be more concrete, imagine two Kentuckians, Joe and Dan. Both are diagnosed with Hodgkin’s Lymphoma. Joe has health insurance and is able to receive treatment for a co-pay of $100. Dan has no health insurance. He, too, is able to receive treatment, but he must pay out of pocket for the treatment costing tens of thousands of dollars. To do this, he and his wife must sell the family ranch, which had been in Dan’s family for over four generations. After 18 months, both Joe and Dan are cancer free; in other words, they are equally healthy. But Dan, unlike Joe, is in financial ruin.
Dan’s story, as it happens, is not so hypothetical. Instead, in its hearings leading up to the passage of the ACA, the Senate heard similar testimony about Dan DeLong, a rancher from Montana who lost his farm to pay medical bills. See U.S. Senate Committee on Health, Education, Labor & Pensions, Full Committee Hearing (June 11, 2009) (Statement of Dennis
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Rivera). During the same committee hearing, Senator and Committee Chairman Chris Dodd spoke about one of his constituents, “a cancer survivor,” who paid “as much for her healthcare as she does for the mortgage on her home.” Id. (Statement of Sen. Dodd). More generally, witnesses testified that “[o]ver 60 percent of bankruptcies filed in 2007 were largely attributable to medical expenses,” id. (Rivera Statement), and that over 7% of cancer patients needed to take a second mortgage to finance their care. Id. (attaching David, U., Himmelstein et al., Medical Bankruptcy in the United States, 2007: Results of a National Study); see also H.R. REP. 111443, 987, 2010 U.S.C.C.A.N. 474, 509 (citing story of entrepreneur who was quoted $12,800 per month to cover herself, her husband, her business partner, and business partner’s family, forcing her out of business).
Although the Court “need not rely on legislative history given the text’s clarity,” that “history only supports” what the Act’s text and structure already made clear: the Senate was concerned with more than making America healthier when it expanded Medicaid; it also sought to reduce the costs of healthcare for American families. See Mohamad v. Palestinian Auth., 566 U.S. 449, 459 (2012); see also Warger v. Shauers, 135 S. Ct. 521, 527 (2014) (“For those who consider legislative history relevant, here it confirms that this choice of language was no accident.”).
To hold otherwise would have bizarre results. To borrow from the Supreme Court’s “broccoli horrible” example, see NFIB, 567 U.S. at 615 (Ginsburg, J., dissenting), imagine that the Secretary could exercise his waiver authority solely to promote health, rather than cover healthcare costs. Nothing could stop him from conditioning Medicaid coverage on consuming more broccoli (at least on an experimental basis). Or, as Plaintiffs suggest, he might force all recipients to enroll in pilates classes or take certain nutritional supplements. See Tr. 19:16-22.
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The penalty for non-compliance? No more Medicaid. Either of those conditions could promote “health” or “well-being” (perhaps in a more straightforward way than “community engagement” would), but both are far afield of the basic purpose of Medicaid: “reimburs[ing] certain costs of medical treatment for needy persons.” Harris v. McRae, 448 U.S. 297, 301 (1980).
Finally, the Secretary fell back during oral argument on Chevron deference. See Tr. 4013-17. To the extent he means to offer his own alternative interpretation of “medical assistance,” as defined in Section 1396-1, Chevron deference cannot save him. That doctrine “‘come[s] into play’ only when [a court] must resolve statutory ambiguity.” U.S. Ass’n of Reptile Keepers v. Zinke, 852 F.3d 1131, 1138 (D.C. Cir. 2017) (quoting S. Cal. Edison Co. v. FERC, 195 F.3d 17, 23, 27 (D.C. Cir. 1999)). The Secretary’s interpretation here runs counter to the statute’s plain text, its structure, and its legislative history, and would thus fail at Chevron step 1.
To the extent the Secretary means that he should receive deference in interpreting the “objectives” of Medicaid under Section 1115 more generally, the Court assumes he is correct. While that term may be ambiguous, the Secretary’s interpretation of it cannot “fall[] outside the bounds of reasonableness” at Chevron’s second step. See Goldstein v. SEC, 451 F.3d 873, 881 (D.C. Cir. 2006). Remember, the Secretary agrees that Section 1396-1 outlines at least some of the Act’s objectives. In light of that provision’s clear emphasis on promoting “medical . . . assistance,” the Secretary could not reasonably focus on “health” and “well-being” instead. The agency needed to at least consider the project’s effect on healthcare coverage.
ii. Cost considerations At times, the Secretary did make conclusory assurances that Kentucky HEALTH “endeavor[s] to maintain coverage,” AR 4, or “ensures that resources are preserved for individuals who meet eligibility requirements.” AR 7. Of course, such fleeting references mean
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little in the face of Kentucky’s estimates that 95,000 people would lose coverage. How did the Secretary nevertheless “endeavor[] to maintain coverage”? See AR 4. His limited analysis is difficult to parse, but the Court assumes he might have meant either that (1) Kentucky could prioritize “its finite resources on the traditional populations,” as opposed to the low-income group added by the ACA, see Reply at 13 (emphasis added); or (2) Kentucky HEALTH was needed “to maintain access for [all] currently enrolled populations.” AR 5. Neither appeal to cost considerations, however, can excuse his failure to consider coverage losses here.
(a) Traditional Populations The Secretary at times suggests that he prioritized coverage for “traditional” Medicaid populations. Even accepting that argument on its own terms, however, it would hardly justify his actions here. While Kentucky HEALTH largely affects the expansion group, it would impact some “traditional” recipients as well. See AR 5422; see also Tr. at 56:8-11 (noting that 20% of enrollees in Kentucky HEALTH would be part of the non-expansion group). All told, Kentucky estimated that nearly 19,765 adults from the “non-expansion” group would also leave its Medicaid rolls. Compare AR 5421 (without waiver population) with AR 5422 (with waiver population). In any event, the Secretary’s focus on “traditional” Medicaid populations was misplaced. Whatever the “traditional” purpose of Medicaid, the program was amended by the Affordable Care Act. As the Supreme Court held, the “Medicaid expansion” under that Act was “a shift in kind, not merely degree.” NFIB, 567 U.S. at 583. While “the original program was designed to cover medical services for four particular categories of the needy: the disabled, the blind, the elderly, and needy families with dependent children,” the ACA “transformed” Medicaid “into a program to meet the health care needs of the entire nonelderly population with income below
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133 percent of the poverty level.” Id. It did so as part “of a comprehensive national plan to provide health insurance coverage.” Id.
The Secretary cannot ignore that overarching purpose or turn a blind eye to Congress’s efforts to “furnish[] . . . medical assistance” to this group. In suggesting otherwise, he highlights that Section 1396-1 speaks specifically to furnishing “medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals.” That, he believes, allows him to limit his focus to (or at least give preference to) those “traditional” groups. See Reply at 14-15; see also Ky. Br. at 15. The upshot of this interpretation is that Congress has no interest at all in furnishing medical assistance “to the expansion population.” Ky. Br. at 16.
At oral argument, the Secretary wisely backtracked from that position, conceding that it is “obviously . . . a purpose [of Medicaid] to provide medical assistance to the expansion population.” Tr. 36:15-16. For good reason. While at first blush, Section 1396-1 might indeed seem to limit the Act’s purposes to the listed categories, the “meaning — or ambiguity — of certain words or phrases may only become evident when placed in context.” Brown & Williamson, 529 U.S. at 132. A court, accordingly, must always read statutory language “in [its] context and with a view to [its] place in the overall statutory scheme.” Id. at 133 (internal quotation marks omitted). Its duty, after all, is “to construe statutes, not isolated provisions.” Graham County Soil and Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280, 290 (2010) (internal quotation marks omitted).
Here, the Medicaid statute — taken as a whole — confirms that Congress intended to provide medical assistance to the expansion population. The ACA amended Section 1396a(a)(10)’s mandatory population to include all individuals whose income fell below prescribed levels. In so doing, it placed this group on equal footing with other “vulnerable”
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populations, requiring that states afford them “full benefits.” See 42 U.S.C. § 1396d. Under this regime, states must provide “medical assistance for all services covered under the State plan under this subchapter that is not less in amount, duration, or scope, or is determined by the Secretary to be substantially equivalent, to the medical assistance available for [other individuals]” covered under the Act. Id. Regardless of whether the Secretary can ultimately waive that requirement, he must start with the presumption that the expansion group is on par with other protected populations.
To be sure, Congress might have made its objectives all the more express by amending Section 1396-1 directly. See Def. MSJ at 23. The Supreme Court has not hesitated to highlight, however, that “[t]he Affordable Care Act contains more than a few examples of inartful drafting.” King v. Burwell, 135 S. Ct. 2480, 2492 (2015). This Court must nevertheless “do [its] best, bearing in mind the fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” Id. (quoting Utility Air Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2441 (2014)) (internal quotation marks omitted).
And this omission, while perhaps ill-guided, is not particularly glaring. Over time, Congress has amended Section 1396a(a)(10)(A)(i) to expand medical assistance to low-income pregnant women, emancipated children, and former foster youth. See Medicare Catastrophic Coverage Act of 1988, Pub. L. No. 100-360, § 302, 102 Stat. 683, 750-51; Omnibus Budget Reconciliation Act of 1989, Pub. L. No. 101-239, § 6401, 103 Stat. 2106, 2258; Omnibus Budget Reconciliation Act of 1990, Pub. L. No. 101-508, § 4601, 104 Stat. 1388, 1388-166; Patient Protection and Affordable Care Act, Pub. L. No. 111-148, § 10201, 124 Stat. at 917-18. None of those groups is mentioned in Section 1396-1, yet it is inconceivable that Congress intended to
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establish separate Medicaid programs, with differing purposes, for each. Indeed, in his approval letter, the Secretary specifically sought to preserve health coverage for “vulnerable individuals like people with disabilities and pregnant women,” even though pregnant women are not among those groups mentioned expressly by Section 1396-1. See AR 7.
As explained above, the Court will afford the Secretary deference in interpreting the “objectives” of Medicaid. See 42 U.S.C. § 1315. His interpretation, however, cannot fall “outside the bounds of reasonableness.” Goldstein, 451 F.3d at 881. To the extent he concluded that the Act’s objectives do not include “furnish[ing] . . . medical assistance” to the expansion group, his interpretation would be “utterly unreasonable” in light of Medicaid’s text, structure, and legislative history. Id. He must thus evaluate the effect of Kentucky HEALTH on all Medicaid recipients, including low-income individuals, and he must do so without prioritizing certain groups over others. Here, that means the Secretary had an obligation to at least consider the 95,000 people who would lose Medicaid coverage, even if those people were largely members of the expansion group.
(b) Financial Collapse Alternatively, the Secretary’s reference to “preserving” resources might mean that the Commonwealth “would be unable to maintain access for currently enrolled populations.” AR 5. In such a case, Kentucky HEALTH’s cost-saving reforms would be necessary to keep Kentucky’s entire Medicaid program afloat and thus preserve coverage for all recipients. It is an open question whether the Secretary could approve an “experimental, demonstration, or pilot project” on that basis. See Beno, 30 F.3d at 1069. The Ninth Circuit, for instance, has held that “[a] simple benefits cut, which might save money, but has no research or experimental goal, would not satisfy” Section 1115’s requirements. Id. (emphasis added) (noting any project must
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be “likely to yield useful information or demonstrate a novel approach to program administration”).
Indeed, the Secretary disclaimed any such intent during oral argument, instead framing the cost savings as a “happy side effect” of the project. See Tr. at 42:25-43:2. He could hardly argue otherwise, as the record lacks substantial evidence that Kentucky’s Medicaid program was in danger of collapse. First, the record shows that CMS, or at least Kentucky, may have misunderstood the projected cost savings. Both Defendants repeatedly highlight that the program could save $2.2 billion. During argument, Kentucky’s counsel represented that the state would save that amount even after federal reimbursement. See Tr. at 47:22-24. He is mistaken. The Commonwealth’s own records show that while the total savings (state plus federal) would reach that figure, the state’s actual savings would be $331 million — not a trivial number, to be sure, but still significantly below that cited by the parties. See AR 5513.
Second, Defendants made no effort to contextualize those savings. The Court is sympathetic to “the unique challenges the Commonwealth is facing,” AR 4, including that “[a]lmost twenty percent of [its] residents live in poverty”; “nearly one-third of Kentuckians are on Medicaid”; its “workforce participation is . . . less than 60 percent”; and it “ranks third in the nation for drug related fatalities.” AR 5432. But basic questions remain to assess whether the state’s Medicaid program is actually at risk: What are Kentucky’s current state revenues? What is its budget generally? Is the state running a deficit?
Nor did Defendants explain why cuts to the expansion population would be the best remedy for any budget woes. “While Congress pays 50 to 83 percent of the costs of covering individuals [traditionally] enrolled in Medicaid, § 1396d(b),” the federal Government currently pays 94% of costs for the expansion group. See NFIB, 567 U.S. at 584; see also 42 U.S.C.
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§ 1396d(y)(1)(C). Even “once the expansion is fully implemented [in 2020,] Congress will pay 90 percent of the costs for newly eligible persons.” Id. (citing 42 U.S.C. § 1396d(y)(1)(E)). Such numbers raise the question: why target only the group receiving the most federal aid if the goal is simply to cut the budget? Without data on those points, the Secretary could not make a reasoned decision that Kentucky would truly be “unable to maintain access for currently enrolled populations.” AR 5. Although the cost savings may have been a “happy side effect,” they thus cannot excuse the Secretary’s failure to consider “furnish[ing] . . . medical assistance.” 42 U.S.C. § 1396-1.
iii. Self-sufficiency Finally, the Secretary flagged an interest in promoting “greater independence” and “reduc[ing] reliance on public assistance.” AR 4, 5. The Court has doubts whether such an objective is proper. The Secretary primarily cites Section 1396-1 in defense of that purpose, which appropriates money so that states can “furnish . . . rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care.” From there, he excises the language about “independence or self-care,” treating those as stand-alone objectives of the Act. The text, however, quite clearly limits its objectives to helping States furnish rehabilitation and other services that might promote self-care and independence. It does not follow that limiting access to medical assistance would further the same end. In any event, even accepting that argument, the Secretary never maintained that “selfsufficiency” is a substitute for considering healthcare (or even health). Instead, he suggests that even if the latter objective “would suffer by reason of the project’s operation,” he could properly approve Kentucky HEALTH so long as he concluded “that on balance the objectives considered together were likely to be advanced.” CMS Br. at 21 (quoting Cal. Welfare Rights Org. v.
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Richardson, 348 F. Supp. 491, 497 (N.D. Cal. 1972)). Whether the Secretary can make such tradeoffs, he must, at least, “balance” that objective with the statute’s others. See MSJ at 21; see also Reply at 2 (acknowledging the appropriations statute “identifies one purpose of Medicaid”). Yet, as discussed above, the Secretary simply neglected the project’s effect on medical coverage. Given that oversight, the Court cannot hold he made a reasoned decision that the Act’s objectives “considered together were likely to be advanced.” CWRO, 348 F. Supp. at 497.
* * * At the end of the day, even if the Secretary could properly consider other factors — such as health, cost, or self-sufficiency — his “failure to address” a “salient factor” in the Act — i.e., furnishing medical assistance — renders his approval arbitrary and capricious. See Humane Soc’y, 865 F.3d at 607. That is not to say, of course, that the Secretary can never approve demonstration projects that might adversely affect Medicaid enrollment or reduce healthcare coverage. After all, the point of the waivers is to give states flexibility in running their Medicaid programs, and experimental projects may (at least inadvertently) adversely affect healthcare access. While there may be limits to how much loss is too much, see Tr. at 23:3-12, the Court need not answer that question now. Rather, it holds today only that the Secretary must adequately consider the effect of any demonstration project on the State’s ability to help provide medical coverage. He never did so here.
3. Remedy Such failure infected his entire approval. As previously explained, he evaluated whether Kentucky HEALTH, as a whole, was likely to promote the objectives of the Act, but he did so while neglecting the primary objective of the Medicaid program. When an agency exercises discretion using the wrong legal standard, its action cannot survive. See SEC v. Chenery Corp.,
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318 U.S. 80, 94 (1943) (“[A]n [agency] order may not stand if the agency has misconceived the law.”); see also Fox, 556 U.S. at 562 (“The agency’s failure to discuss . . . two ‘important aspect[s] of the problem’ means that the resulting decision is ‘arbitrary, capricious, an abuse of discretion’ requiring us to remand the matter to the agency”) (citation omitted). The Court must therefore hold the approval of Kentucky HEALTH invalid in toto.
In doing so, it grants Plaintiffs full relief. See Tr. 16:21-17:1. The Secretary’s approval of Kentucky HEALTH was necessary for the state to implement each of their challenged components: the community-engagement requirement, the premiums, the reporting requirements, the lockouts, the limits on NEMT and retroactive eligibility, and the penalties for non-emergency use of the emergency room. Because the Court invalidates that approval, it need not tackle Plaintiffs’ alternative bases for vacating some or all of the components — e.g., that the Secretary lacked statutory authority to issue certain waivers; that his findings were not supported by substantial evidence; that the SMD letter was invalid; and that his approval violated the Take Care Clause. Nor does it need to consider Plaintiffs’ request for class certification. While those questions may resurface on remand, they will not trouble the Court now.
That leaves the question of remedy. When a court concludes that agency action is unlawful, “the practice of the court is ordinarily to vacate the rule.” Ill. Pub. Telecomms. Ass’n v. FCC, 123 F.3d 693, 693 (D.C. Cir. 1997); Reed v. Salazar, 744 F. Supp. 2d 98, 119 (D.D.C. 2010) (“[T]he default remedy is to set aside Defendants’ action.”); Sierra Club v. Van Antwerp, 719 F. Supp. 2d 77, 78 (D.D.C. 2010) (“[B]oth the Supreme Court and the D.C. Circuit Court have held that remand, along with vacatur, is the presumptively appropriate remedy for a violation of the APA.”). “[A]lthough vacatur is the normal remedy, [courts] sometimes decline to vacate an agency’s action.” Allina Health Servs. v. Sebelius, 746 F.3d 1102, 1110 (D.C. Cir.
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2014). That decision depends on the “seriousness of the order’s deficiencies (and thus the extent of doubt whether the agency chose correctly) and the disruptive consequences of an interim change.” Allied-Signal, Inc. v. U.S. Nuclear Regulatory Comm’n, 988 F.2d 146, 150-51 (D.C. Cir. 1993) (citation omitted); see also Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, 2017 WL 4564714, at *8 (D.D.C. Oct. 11, 2017) (declining to vacate when agency “largely complied” with statute and could likely substantiate prior conclusions on remand).
Neither factor favors the Government. The D.C. Circuit recently affirmed that the “fail[ure] to address” an important aspect of the problem is a “major shortcoming[].” Humane Soc’y, 865 F.3d at 614. It has thus repeatedly vacated agency actions with that flaw. See, e.g., id. at 615; SecurityPoint Holdings, Inc. v. TSA, 867 F.3d 180, 185 (D.C. Cir. 2017) (“[T]he court must vacate a decision that ‘entirely failed to consider an important aspect of the problem.’”) (quoting State Farm, 463 U.S. at 43); Wedgewood Village Pharmacy v. DEA, 509 F.3d 541, 552-53 (D.C. Cir. 2007) (vacating after failure to consider an important aspect of the problem). Here, that failure went “to the heart” of the Secretary’s decision to approve Kentucky HEALTH. See Humane Soc’y, 865 F.3d at 614. Given that he neglected to consider one of Medicaid’s central objectives, the Court harbors “substantial ‘doubt whether [he] chose correctly’” in his approval. Id. (quoting Sugar Cane Growers Co-op of Fla. v. Veneman, 289 F.3d 89, 98 (D.C. Cir. 2002)). That makes vacatur appropriate. Id. at 615; Fox Television Stations, Inc. v. FCC, 280 F.3d 1027, 1052-1053 (D.C. Cir. 2002).
Nor would vacatur be particularly disruptive. This is not a case in which “[t]he egg has been scrambled and there is no apparent way to restore the status quo ante.” Sugar Cane Growers, 289 F.3d at 97. Rather, Kentucky HEALTH has yet to take effect. Allowing it to do so during remand, on the other hand, could be exceptionally disruptive for Plaintiffs. Many of
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them suffer from various chronic conditions, such as diabetes, hypertension, and mental-health conditions; they thus fear even a temporary implementation of Kentucky HEALTH could cause serious harm. See, e.g., Pl. MSJ, Exh. 1 (Declaration of Ronnie Stewart), ¶¶ 6, 8; Kasey Decl., ¶¶ 8, 10; Exh. 3 (Declaration of Lakin Branham), ¶¶ 7, 12; Exh. 4 (Declaration of Shanna Ballinger), ¶¶ 9, 11. Amici report that those problems are common among the expansion population as a whole. See AARP Br. at 6-9. The Court therefore believes that preserving the status quo — including Plaintiffs’ continuity of coverage — is appropriate.
Defendants’ “best” argument against vacatur is that the Court should preserve “the substance abuse component of the waiver.” Tr. at 45:7-16. That program, they say, “is critically important to ensuring treatment to the people of Kentucky who are suffering from substance abuse.” Id.; see also id. at 54:8-16 (noting that the SUD treatment program was “critical” and its vacatur would be “disastrous”). Defendants’ fears are unfounded. The Secretary’s decision to approve Kentucky HEALTH is severable from his approval of KY HEALTH as a whole. As explained above, the Secretary separately considered the former program and issued waivers that were “necessary” only in its service. At the same, CMS has repeatedly affirmed its commitment to approving stand-alone SUD programs and has regularly done so for other states. The Court therefore has no “substantial doubt” that the Secretary would have approved the SUD project without Kentucky HEALTH. See North Carolina v. FERC, 730 F.3d 790, 795-96 (D.C. Cir. 1984). It will therefore leave that program — along with the rest of KY HEALTH — intact.
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Case 1:18-cv-00152-JEB Document 74 Filed 06/29/18 Page 58 of 60 IV. CONCLUSION
For the foregoing reasons, the Court will deny Defendants’ Motions for Summary Judgment. It will also grant Plaintiffs’ Motion for Summary Judgment via Count VIII, vacate the Secretary’s approval of Kentucky HEALTH, and remand to the agency. A contemporaneous Order to that effect will issue this day.
/s/ James E. Boasberg JAMES E. BOASBERG United States District Judge Date: June 29, 2018
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Appendix A

Kentucky HEALTH Component
CommunityEngagement Requirement
Premiums
Non-emergency use of emergency rooms

Comments
AR 3311 (Center for Law and Social Policy) (“Expecting current enrollees who transition to Kentucky HEALTH to meet the work requirements in the first month of Kentucky HEALTH does not support work, but only serves to immediately disenroll people from Medicaid.”); AR 3833-34 (American Congress of Obstetricians and Gynecologists, et al.) (“[T]he experience of the Temporary Assistance for Needy Families (TANF) program demonstrates that imposing a work requirement on Medicaid would lead to the loss of health coverage for substantial numbers of people who are unable to work or face major barriers to finding and retaining employment.”); AR 3890 (Nat’l Alliance on Mental Illness) (“Work requirements . . . create a barrier to coverage that is likely to delay or disrupt prevention.”). AR 3740 (Families USA) (“In Indiana, November 2015 through January 2016, the state dis-enrolled 1,680 individuals from its Medicaid expansion HIP 2.0 program for failure to pay premiums.”); AR 3775 (Save Ky. Healthcare) (“There is evidence that premiums are a barrier to coverage and enrollment for low-income individuals.”); AR 3796 (Community Catalyst) (“A rich collection of evidence verifies that premiums in Medicaid discourage enrollment and result in people losing coverage. For instance, when Oregon increased premiums for enrollees below poverty in 2003 from $6 to $20, nearly half of the state’s Medicaid beneficiaries lost coverage, mostly due to affordability issues.”); AR 3831 (United Automobile, Aerospace, and Agricultural Implement Workers of America) (“Studies have shown that premiums are a hardship on the poor and lead to reduced enrollment and dropped coverage.”); AR 3864 (National Health Law Program) (“[P]remiums for low-income enrollees, has been repeatedly tested and consistently shown to depress enrollment.”); AR 3846-47 (American Diabetes Ass’n) (citing study that “a premium increase of $10 per month is associated with a decrease in public coverage”); AR 3880 (Kentucky Center for Economic Policy) (“All five states that have instituted premiums for their expansion populations have seen either an increase in collectable debt among enrollees, a decrease in enrollment or at the very least an increase in churn in and out of the Medicaid program.”); AR 3891 (NAMI) (“Research has consistently demonstrated that premiums deter enrollment.”); AR 3835 (ACOG) (“Extensive research (including research from Medicaid demonstration projects conducted prior to health reform) shows that premiums significantly reduce lowincome people’s participation in health coverage programs.”). AR 3692 (American Cancer Society Cancer Action Network) (“Studies have shown that imposing cost-sharing on low-income individuals is likely to deter enrollment in the Medicaid program.”);

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Retroactive Eligibility Reporting Requirements
Lockouts

AR 3962 (American Diabetes Association) (“[T]he cost-sharing requirements in Kentucky HEALTH are likely to deter individuals from obtaining Medicaid coverage.”); AR 3849 (Advocacy Action Network) (“More than forty years of research, beginning with the Rand Corporation studies in the 1970’s, plus experience from many other states, have demonstrated that cost-sharing requirements will reduce the number of individuals who will have and maintain coverage.). See Section III.B.2.b.ii, supra.
See, e.g., AR 3322-23 (Families USA) (explaining how a beneficiary might easily fail to report small fluctuations in jobs, thereby resulting in lockouts of six months from coverage); AR 3314 (CLASP) (same). See, e.g., AR 3797 (Community Catalyst) (noting that in Indiana’s similar program, “six percent of individuals with incomes above the poverty line were locked out of coverage for falling behind on their premiums”); AR 3815 (National Women’s Law Center) (“Evaluations of the Children’s Health Insurance Program (CHIP) show that lockout periods reduce retention in the program and are associated with increases in disenrollment as well as decreases in reenrollment after the lockout period.”); AR 3891 (NAMI) (“A six-month lock-out period would result in gaps in coverage, treatment and care, especially for people with mental illness.”).

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 Case 1:18-cv-00152-JEB Document 132 Filed 03/27/19 Page 1 of 48

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

RONNIE MAURICE STEWART, et al., Plaintiffs, v.
ALEX M. AZAR II, et al., Defendants.

Civil Action No. 18-152 (JEB)

MEMORANDUM OPINION This Court again takes up a challenge to the federal approval of Kentucky HEALTH, an experimental project proposed by the Commonwealth of Kentucky intended to “comprehensively transform” its Medicaid program. The Secretary of Health and Human Services has authority to approve such experimental proposals — or “demonstration projects” — as long as they promote the objectives of the Medicaid Act. Kentucky HEALTH, which the Secretary initially approved on January 12, 2018, would condition Medicaid eligibility for a large portion of its beneficiaries on work or community-engagement requirements and impose several additional obligations intended to make Medicaid more like commercial insurance. Plaintiffs, Kentucky residents currently enrolled in the Commonwealth’s Medicaid program, believed HHS’s approval unlawful. In a ruling last summer, this Court agreed. Finding that the “Secretary never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens” and thus promote a central objective of the Medicaid Act, the Court concluded that this “signal omission render[ed] his determination arbitrary and capricious.” Stewart v. Azar, 313 F. Supp. 3d 237, 243 (D.D.C. 2018). In
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particular, it found that the Secretary had not grappled with Kentucky’s estimate that a substantial number of people were likely to lose coverage under Kentucky HEALTH. Id. at 260. The Court, consequently, vacated the approval and remanded to HHS for further review.
The bell now rings for round two. Following the Court’s remand and an additional notice-and-comment period, the Secretary reapproved the program last November, this time relying on somewhat different reasoning. Plaintiffs now challenge the reapproval, contending principally that the Secretary has not remedied the defects that rendered his prior action unlawful. Specifically, they maintain that he has still not adequately considered Kentucky HEALTH’s likelihood to cause significant coverage loss. The Secretary, by contrast, believes that this time around he has cured any critical omission. Defendants now rely primarily on a new argument to that effect — namely that, although Kentucky HEALTH may cause nearly 100,000 people to lose coverage, that number will be dwarfed by the approximately 450,000 people who would suffer that fate if Kentucky ends its coverage entirely of those who have joined the Medicaid rolls via the Affordable Care Act, as it has threatened to do if this project is not approved.
The Supreme Court, in holding that Congress could not require states to adopt that Medicaid expansion by conditioning all their Medicaid funding on a decision to do so, explained that the states could not be compelled to engage in a program they had not bargained for with “a gun to the head.” Nat’l Fed. of Indep. Business v. Sebelius, 567 U.S. 519, 581 (2012). Kentucky, it seems, has now picked up that gun by threatening to de-expand Medicaid. Defendants urge the Court to adopt the proposition that the Secretary need not grapple with the coverage-loss implications of a state’s proposed project as long as it is accompanied by a threat that the state will de-expand — or, indeed, discontinue all of Medicaid. By definition, so this
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argument goes, any number of people covered by an experimental Medicaid program would be

greater than the number if there were no Medicaid at all; as a result, any demonstration project

that leaves any individual on a state’s Medicaid rolls promotes coverage. The Court cannot

concur that the Medicaid Act leaves the Secretary so unconstrained, nor that the states are so

armed to refashion the program Congress designed in any way they choose. As a consequence,

once again finding the reapproval was both contrary to the Act and arbitrary and capricious, the

Court will vacate it and remand to HHS for further review.

I.

BACKGROUND

The details of the statutory scheme and the facts of the dispute will be familiar to readers

of the Court’s prior Opinion. See Stewart I, 313 F. Supp. 3d 237. The Court nevertheless offers

a brief refresher on both before setting out the Secretary’s actions on remand.

A. Statutory Scheme

Medicaid is a cooperative federal-state scheme that aims to provide medical assistance to

certain vulnerable populations. See 42 U.S.C. § 1396-1. Specifically, Congress implemented the

program “[f]or the purpose of enabling each state, as far as practicable . . . to furnish (1) medical

assistance . . . [to] individuals[] whose income and resources are insufficient to meet the costs of

necessary medical services, and (2) rehabilitation and other services to help such families and

individuals attain or retain capability for independence and self-care.” Id. The Centers for

Medicare and Medicaid Services (CMS), a federal agency within HHS, has primary

responsibility for overseeing the Medicaid program. To receive federal funding, states must

submit their “plans for medical assistance” for the HHS Secretary’s approval. Id. Currently, all

states have chosen to participate in the program.

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The Medicaid Act sets out certain minimum requirements to which all state plans must conform. See 42 U.S.C. § 1396a. Those provisions ensure that individuals receive a minimum level of coverage and stipulate that state plans “mak[e] medical assistance available” to certain sets of low-income individuals. See 42 U.S.C. § 1396a(a)(10)(A). Originally, that group included only pregnant women, children, and their families; some foster children; the elderly; and people with certain disabilities. Id. In 2010, the passage of the Affordable Care Act, colloquially known as Obamacare, gave states a choice to expand their Medicaid coverage to include additional low-income adults under the age of 65 who would not otherwise qualify — a group now commonly referred to as the “expansion population.” 42 U.S.C. § 1396a(10)(A)(i)(VIII).
The Act also allows states wishing to deviate from either the original or the additional requirements of Medicaid to obtain a waiver from the Secretary of HHS. See 42 U.S.C. § 1315. Section 1115 of the Social Security Act, accordingly, permits the Secretary to approve “experimental, pilot, or demonstration project[s]” in state plans that would otherwise fall outside the Medicaid Act’s parameters. The Secretary, however, can approve only those projects that “in [her] judgment . . . [are] likely to assist in promoting the [Act’s] objectives.” 42 U.S.C. § 1315(a). If a project, in the Secretary’s judgment, passes muster, she can then waive compliance with the terms of § 1396a “to the extent and for the period . . . necessary to enable [the] State . . . to carry out such project.” 42 U.S.C. § 1315(a)(1).
B. Factual Background 1. Kentucky HEALTH
In 2018, CMS released a State Medical Director (SMD) letter that indicated its new commitment to “support[ing] state efforts to test incentives that make participation in work or
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other community engagement a requirement for continued Medicaid eligibility” and that encouraged states to apply for § 1115 waivers for this purpose. See AR 90. The Commonwealth of Kentucky submitted one such waiver application. As the Court has previously detailed, its application has multiple components. See Stewart I, 313 F. Supp. 3d at 246. Relevant here is its Kentucky HEALTH program, which “applies only to adult beneficiaries who do not qualify for Medicaid on the basis of a disability.” Id. (internal quotation marks and citation omitted). That is, it targets primarily — though not exclusively — the ACA expansion population. Id. Kentucky “believed that this project would ‘transform’ the state’s Medicaid program by, among other things, predicating Medicaid eligibility for most of the expansion population on workforce participation or community service.” Id. (quoting AR 2, 15–16).
Just one day after releasing the SMD letter, the Secretary approved Kentucky HEALTH, granting the Commonwealth waivers to implement the following six features: first, a community-engagement requirement mandating that beneficiaries spend at least 80 hours per month on qualifying activities (including employment, job-skills training, education, community service, and participation in Substance Use Disorder (SUD) treatment) or lose Medicaid coverage; second, elimination — except for pregnant women and former foster-care youth — of the three-month period of retroactive eligibility for benefits; third, monthly premiums based on income and/or length of time enrolled in Medicaid; fourth, elimination — except for former foster-care youth, pregnant women, or the medically frail — of the Commonwealth’s obligation to assure non-emergency medical transportation to and from providers; fifth, reporting requirements; and sixth, lockouts allowing the Commonwealth to deny coverage for up to six months to any beneficiary who failed to meet her premium or reporting requirements and has an income above 100% of the federal poverty line. Id. at 246–47. The Kentucky HEALTH
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program also includes features similar to health-insurance plans on the commercial market, including “an incentive and savings account called My Rewards.” Id. at 247 (citations omitted).
2. Stewart I Two weeks after the Secretary’s approval of Kentucky HEALTH, fifteen Kentuckians headed to Court, filing a nine-count suit seeking declaratory and injunctive relief on behalf of themselves and a “statewide proposed class . . . of all residents of Kentucky who are enrolled in the Kentucky Medicaid program on or after January 12, 2018.” ECF No. 1 (Complaint), ¶ 33. The Court granted Kentucky’s Motion to Intervene, see Minute Order of March 30, 2018, and the parties subsequently filed competing Motions for Summary Judgment. See ECF Nos. 33, 50, 51. Because Kentucky HEALTH was slated to take effect on July 1, 2018, the Court operated on an expedited schedule and issued its Opinion on June 29, 2018. It found the Secretary’s approval, considered as a whole, arbitrary and capricious because he “never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid.” Stewart I, 313 F. Supp. 3d at 243. Specifically, he not only “failed to consider adequately the impact of Kentucky HEALTH on Medicaid coverage,” but “he entirely failed to consider Kentucky’s estimate that 95,000 persons would leave its Medicaid rolls during the 5-year [demonstration] project.” Id. at 260 (internal quotation marks and citations omitted). The Court rejected the Secretary’s contention that “he could properly focus on . . . three alternative criteria” — health and well-being, cost considerations, and beneficiary self-sufficiency — in approving the demonstration project. Id. at 265–66. In light of the Medicaid Act’s “clear emphasis on promoting medical assistance,” the Court found that “the Secretary could not reasonably focus on health and well-being instead.” Id. at 268 (internal quotations omitted). It held similarly that while cost savings may be one
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result of the demonstration project, they “cannot excuse the Secretary’s failure” to consider coverage. Id. at 271. The Court reasoned similarly regarding self-sufficiency after expressing “doubts whether such an objective is proper.” Id. at 271. It consequently “den[ied] Defendants’ Motions for Summary Judgment,” “grant[ed] Plaintiffs’ Motion for Summary Judgment . . .[,] vacate[d] the Secretary’s approval of Kentucky HEALTH, and remand[ed] to the agency.” Id. at 274.
3. Action on Remand Following the decision in Stewart I, the Secretary returned to the drawing board and reopened the public-comment period for Kentucky HEALTH. See AR 25,499. On November 20, 2018, he reapproved Kentucky HEALTH effective on April 1, 2019, for five years. See AR 6718–19. The program has essentially the same features as it did before — namely, a community-engagement requirement; premium payments; a six-month lockout for failure to complete the redetermination process or timely report changes to household circumstances; elimination of retroactive eligibility for most enrollees; elimination of non-emergency medical transport for most enrollees; heightened cost-sharing for non-emergency use of the emergency room; and usage of the My Rewards account for various benefits. See AR 6756–60; 6762; 6764– 65; 6769; 6770–72; 6773–80. Indeed, the new approval letter acknowledges as much, naming only four changes: first, waiving an additional statutory provision of the Act “in an abundance of caution” to ensure the program limits retroactive eligibility as contemplated; second, “[r]evision of the premium requirement for beneficiaries who are eligible for transitional medical assistance”; third, “[u]pdated monitoring and evaluation [provisions]”; and fourth, a “requirement for Kentucky to submit a demonstration implementation plan and . . . monitoring protocol.” AR 6723. Defendants have confirmed that those four changes, plus the “add[ition]
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[of] certain exemptions for survivors of domestic violence,” are the only “substantive changes to the project.” See ECF No. 130 (Supplemental Filing) at 1–2.
In addition to those modest changes in the plan, the Secretary also altered his rationale for approval. In the November 20 approval letter, he acknowledged that he “may approve a demonstration project under section 1115 . . . if, in his judgment, the project is likely to assist in promoting the objectives of [the Act].” AR 6719. He explained that, while the Act “makes clear that an important objective of the Medicaid program is to furnish medical assistance and other services to vulnerable populations,” “there is little intrinsic value in paying for services if those services are not advancing the health and wellness of the individual receiving them, or otherwise helping the individual attain independence.” Id. The Secretary concluded that his “demonstration authority . . . allow[ed]” him to approve states’ experimenting “with different ways of improving health outcomes and strengthening the financial independence of beneficiaries,” while “at the same time, allow[ing] states to maintain the long-term fiscal sustainability of their Medicaid programs and to provide more medical services to more Medicaid beneficiaries.” AR 6720. He elaborated on the ways in which Kentucky HEALTH would promote beneficiary health and financial independence and improve the sustainability of the safety net. See AR 6723–28. Regarding the “signal omission” the Court identified as the Secretary’s failure to “adequately consider[] whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens,” Stewart I, 313 F. Supp. 3d at 243, he reasoned this time around that commenters did not understand the nature of the coverage loss, that the program has exemptions and guardrails in place to minimize coverage loss, that Kentucky is not required to cover the expansion population in any event, and that the 95,000 individuals who may lose coverage are “likely dwarfed by the 454,000 newly eligible adults who stand to lose
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coverage” if the state makes good on its threat to terminate its participation in the ACA expansion in the absence of the demonstration project. See AR 6730–32.
The question here, of course, is whether this second effort gets the Secretary over the line. Plaintiffs, not surprisingly, think not. They have returned to this Court seeking review of the Secretary’s reapproval of Kentucky HEALTH. See ECF No. 91 (Plaintiffs’ MSJ) at 1. Contending that “the Secretary has failed to remedy the shortcomings identified” in Stewart I, Plaintiffs seek summary judgment on their APA claims and vacatur of the Kentucky HEALTH waiver (and, separately, the SMD Letter). Id. at 1–2. Defendants — federal and state — have cross-moved for summary judgment, maintaining that the reapproval was lawful. See ECF Nos. 108 (HHS MSJ) at 1–5; 110 (Kentucky MSJ) at 1–2. The Court heard oral argument on March 14, 2019, and because Kentucky HEALTH will take effect on April 1, has issued this Opinion on an accelerated basis. II. LEGAL STANDARD
The parties have cross-moved for summary judgment on the administrative record. The summary-judgment standard set forth in Federal Rule of Civil Procedure 56(c), therefore, “does not apply because of the limited role of a court in reviewing the administrative record.” Sierra Club v. Mainella, 459 F. Supp. 2d 76, 89 (D.D.C. 2006); see also Bloch v. Powell, 227 F. Supp. 2d 25, 30 (D.D.C. 2002), aff’d, 348 F.3d 1060 (D.C. Cir. 2003). “[T]he function of the district court is to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did.” Sierra Club, 459 F. Supp. 2d at 90 (quotation marks and citation omitted). “Summary judgment is the proper mechanism for deciding, as a matter of law, whether an agency action is supported by the administrative record and consistent
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with the [Administrative Procedure Act] standard of review.” Loma Linda Univ. Med. Ctr. v. Sebelius, 684 F. Supp. 2d 42, 52 (D.D.C. 2010) (citation omitted).
The Administrative Procedure Act “sets forth the full extent of judicial authority to review executive agency action for procedural correctness.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 513 (2009). It requires courts to “hold unlawful and set aside agency action, findings, and conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2). Agency action is arbitrary and capricious if, for example, the agency “entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
In other words, an agency is required to “examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.” Id. at 43 (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)) (internal quotation marks omitted). Courts, accordingly, “do not defer to the agency’s conclusory or unsupported suppositions,” United Techs. Corp. v. Dep’t of Def., 601 F.3d 557, 562 (D.C. Cir. 2010) (quoting McDonnell Douglas Corp. v. Dep’t of the Air Force, 375 F.3d 1182, 1187 (D.C. Cir. 2004)), and “agency ‘litigating positions’ are not entitled to deference when they are merely [agency] counsel’s ‘post hoc rationalizations’ for agency action, advanced for the first time in the reviewing court.” Martin v. Occupational Safety & Health Review Comm’n, 499 U.S. 144, 156 (1991) (citation omitted). Although a reviewing court “may not supply a reasoned basis for the agency’s action that the agency itself has not given,” a decision
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that is not fully explained may, nevertheless, be upheld “if the agency’s path may reasonably be discerned.” Bowman Transp., Inc. v. Arkansas–Best Freight System, Inc., 419 U.S. 281, 285–86 (1974) (citation omitted). III. ANALYSIS
Plaintiffs’ challenge, fortunately, does not require the Court to start from square one; indeed, this round of litigation resembles in many respects the one concluded in Stewart I. Plaintiffs again essentially contend that the Secretary has sought to “rewrite the Medicaid Act in a way that is contrary to the program’s purpose.” Pl. MSJ at 1. They elaborate that he has violated the APA because he “failed to remedy the shortcomings identified” in Stewart I in again “ignor[ing]” record evidence that “Kentucky HEALTH’s requirements and benefits cuts are antithetical to Medicaid’s core purpose”: “furnishing medical assistance to those who are unable to afford the costs of medically necessary care and services.” Id.
Plaintiffs advance those arguments in challenging both the reapproval as a whole, see ECF No. 88 (Amended Complaint) at 83 (Count VIII under APA), and the individual components of the program. Id. at 77–83 (Counts II through VII). Because, as the Court explained previously, the Secretary must determine under § 1115 “whether a project would promote the Act’s objectives, not whether each component, viewed in isolation, would,” it will again limit its analysis to Count VIII. See Stewart I, 313 F. Supp. 3d at 257 (internal quotation marks and citation omitted). As they did last time, Plaintiffs also assert several additional causes of action, including that the Secretary acted in excess of statutory authority, that the SMD Letter ought to be vacated as an improperly promulgated substantive rule, and that Defendants violated the Take Care Clause. See Pl. MSJ at 34, 43; ECF No. 88 (Amended Complaint) at 83. These claims will again remain in limbo, as the Court sidesteps resolving them.
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Before moving to the substance of the dispute, the Court will address two jurisdictional objections — one concerning standing and one on justiciability.
A. Jurisdiction Having addressed these issues in depth previously, see Stewart I, 313 F. Supp. 3d at 250– 57, no more than a limited treatment is required here. The Court takes standing first. Article III restricts the jurisdiction of federal courts to actual “Cases” and “Controversies.” U.S. Const., art. III, § 2. Not every dispute clears that hurdle. Specifically, a plaintiff must demonstrate that she suffers: 1) an injury-in-fact that is 2) caused by the conduct complained of and is 3) “likely” to be “redressed by a favorable decision.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992). Defendants here offer no more than a brief objection. They assert, in a handful of paragraphs, that Plaintiffs lack standing to level specific challenges at particular components of the Kentucky HEALTH program, including the waiver of retroactive eligibility, the lockouts, the waiver of non-emergency medical transportation, and deductions from the MyRewards account. See HHS MSJ at 35, 37, 38, 39. Specifically, they argue that Plaintiffs’ injuries-in-fact are too speculative to establish standing as to those particular components of Kentucky HEALTH. Id. Because the Court will examine whether the reapproval as a whole — rather than its individual components — violates the APA, it will again consider only whether Plaintiffs have standing to bring that global challenge. See Davis v. Fed. Election Comm’n, 554 U.S. 724, 734 (2008) (“‘[A] plaintiff must demonstrate standing for each claim he seeks to press’ and ‘for each form of relief’ that is sought.”) (quoting Daimler Chrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006)). Defendants do not dispute that they do. Although they do cite a case for the proposition that standing “is not dispensed in gross,” HHS MSJ at 35 (citing Davis, 554 U.S. at 734), it is
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inapposite here. That case held only that a plaintiff’s standing to challenge one statutory provision does not necessarily establish her standing to challenge another.
Of course, Defendants’ lack of objections to standing does not end the inquiry, since the Court has an independent obligation to assure itself of its own jurisdiction. See Floyd v. District of Columbia, 129 F.3d 152, 155 (D.C. Cir. 1997). It has no trouble here concluding, as it did previously, that Plaintiffs have established standing to challenge the reapproval of Kentucky HEALTH as a whole. See Stewart I, 313 F. Supp. 3d at 250–57. Specifically, it found there that they had established an economic injury stemming from the rise in their premium payments the program would entail. Id. at 251–52. While granting the Government’s contention that some of the named Plaintiffs may be exempt from the premium requirement, the Court found that at least some of them would indisputably be required to pay. Id. That is all that is necessary. See Animal Legal Def. Fund, Inc. v. Glickman, 154 F.3d 426, 429 (D.C. Cir. 1998) (holding that in suit brought by multiple plaintiffs, only single plaintiff must possess standing for case to proceed). Vacating the approval, moreover, would afford Plaintiffs complete relief. See Stewart I, 313 F. Supp. 3d at 252–53. The Court therefore finds no reason to depart now from its earlier conclusion that Plaintiffs have established the three elements necessary for standing.
That leaves justiciability. The Court previously analyzed at length the justiciability of Plaintiffs’ challenges to the program’s approval in response to Defendants’ arguments that the Secretary’s § 1115 decisions are “committed to agency discretion by law.” Id. at 254–57. Following every other court to consider this issue, this Court concluded that it could review those decisions because “there is some ‘law to apply.’” Id. at 254–55. The Secretary, nevertheless, appears to renew in a single sentence the Government’s position that the language of § 1115 “commits these determinations to the Secretary’s discretion as a matter of law.” HHS MSJ at 14.
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There is no further analysis, however, much less a proffered reason that the Court should revisit its prior thorough treatment of this issue. As a result, it has little trouble concluding once again that the approval is judicially reviewable.
B. Merits Having cleared the ground, the Court can now move to Plaintiffs’ main beef: the Secretary’s reapproval of Kentucky HEALTH is, they contend, arbitrary and capricious primarily because he did not adequately consider whether his § 1115 waiver promotes the objectives of the Medicaid Act. The Court agrees. The Secretary can only approve demonstration projects that are “likely to assist in promoting the objectives” of the Medicaid Act. See 42 U.S.C. § 1315(a). He must, consequently, first identify those objectives. Courts reviewing an agency’s statutory interpretation employ the two-step Chevron framework. That is, they first ask whether “Congress has directly spoken to the precise question at issue,” and, if not, whether “the agency’s answer is based on a permissible construction of the statute.” Chevron U.S.A., Inc. v. Nat’l Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984). The Court need not reach Plaintiffs’ contention that this case is an exceptional one in which Chevron should not apply at all. See ECF No. 119 (Plaintiffs’ Reply) at 2–4. That is because, even according the Secretary appropriate deference, his action cannot stand. As the Court concluded in Stewart I, a central objective of the Act is “furnish[ing] medical assistance” to needy populations. See 313 F. Supp. 3d at 243. Rather than adequately addressing Kentucky HEALTH’s potential to cause loss of medical coverage, the Secretary continues to press his contention that the program promotes his alternative proposed objectives of beneficiary health, financial independence, and the fiscal sustainability of Medicaid. The
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Court finds that the first two of those three goals are not objectives of the Act in their own right, and, regardless, the Secretary’s failure once again to adequately consider the effects of Kentucky HEALTH on coverage is alone — as it was in Stewart I — fatal to the approval. To explain why, the Court will begin with an account of the role of coverage as one of the Act’s objectives before setting out the Secretary’s analysis and counterarguments.
1. Coverage as Objective of the Medicaid Act In Stewart I, the Court acknowledged that the “objectives” in Section 1115 may be ambiguous. See 313 F. Supp. 3d at 260. To discern them, it followed other courts that have considered this issue in beginning with 42 U.S.C. § 1396-1. Id. (citing Pharm. Research & Mfrs. of Am. v. Concannon, 249 F.3d 66, 75 (1st Cir. 2001); Jonathan R. Bolton, The Case of the Disappearing Statute: A Legal & Policy Critique of the Use of Section 1115 Waivers to Restructure the Medicaid Program, 37 Colum. J.L. & Soc. Probs. 91, 132 & n.235 (2003)). Section 1396-1 provides that Congress appropriated Medicaid funds “[f]or the purpose of enabling each State, as far as practicable under the conditions in such State, to furnish (1) medical assistance . . . [to] individuals[] whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care.” Medical assistance, in turn, is defined in the statute as “‘payment of part or all of the cost’ of medical ‘care and services’ for a defined set of individuals.” Adena Reg’l Med. Ctr. v. Leavitt, 527 F.3d 176, 180 (D.C. Cir. 2008) (citing 42 U.S.C. § 1396d(a)); see also Harris v. McRae, 448 U.S. 297, 301 (1980) (“The Medicaid program was created . . . for the purpose of providing federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons.”); W. Va. Univ. Hosps. Inc. v. Casey, 885 F.2d 11, 20 (3d Cir. 1989) (“[T]he
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primary purpose of [M]edicaid is to achieve the praiseworthy social objective of granting health care coverage to those who cannot afford it.”).
Indeed, the Secretary agrees — as he did in the last round of litigation, see Stewart I, 313 F. Supp. 3d at 260 — that § 1396-1 is “include[d]” in the “purposes of Medicaid” and “makes clear that an important objective of the Medicaid program is to furnish medical assistance and other services to vulnerable populations.” AR 6719 (citing 42 U.S.C. § 1396-1). At oral argument, the federal government again agreed that it is an objective of Medicaid, including for the expansion population. See Oral Argument Transcript at 6; see also Tr. at 10 (acknowledging that “the central objective of Medicaid under the Court’s analysis in Stewart I is the provision of medical assistance” and that therefore “what the Court has to figure out is whether the Secretary approved the project that is reasonably approximated toward enhancing the provision of medical assistance”).
Particularly given the federal government’s position, the Court finds unpersuasive Kentucky’s assertion that “[i]t stands to reason that the ‘objectives’ of Medicaid” for the expansion population are different from those for the original Medicaid population. See Kentucky MSJ at 5. As it explained after thorough consideration of this issue in Stewart I, “[T]he Medicaid statute — taken as a whole — confirms that Congress intended to provide medical assistance to the expansion population.” 313 F. Supp. 3d at 269. Observing that when Congress passed the ACA, it placed the expansion population “on equal footing with other ‘vulnerable’ populations, requiring that states afford them ‘full benefits,’” id., the Court held that the Secretary “must . . . evaluate the effect of Kentucky HEALTH on all Medicaid recipients, including low-income individuals, and he must do so without prioritizing certain groups over others.” Id. at 270.
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The Court concludes, therefore, as it did previously, that § 1396-1 provides a central objective of the Medicaid Act: to furnish medical assistance to the populations covered by the Act. Under § 1115, the Secretary must therefore “adequately analyze” any demonstration project’s implications for such assistance or coverage. Id. at 262 (citing Am. Wild Horse Pres. Campaign v. Perdue, 837 F.3d 914, 932 (D.C. Cir. 2017)).
2. Secretary’s Consideration of Medicaid’s Objectives Defendants contend that coverage is not the sole objective of Medicaid; indeed, in his approval letter, the Secretary discusses the program’s promotion of what are, in his view, four objectives of the Act. Specifically, he explains that one “important objective of the Medicaid program is to furnish medical assistance and other services to vulnerable populations,” but because “there is little intrinsic value in paying for [those] services if [they] are not advancing the health and wellness of the individual receiving them, or otherwise helping the individual attain independence,” another “objective of the Medicaid program . . . is to advance the health and wellness needs of its beneficiaries.” AR 6719 (emphasis added). He also concludes that “reforms that go beyond just routine medical care and . . . evidence-based interventions . . . may increase beneficiaries’ financial independence.” Id. (emphasis added). Finally, he observes that “demonstration projects also provide an opportunity for states to test policies that ensure the fiscal sustainability of the Medicaid program.” Id. (emphasis added). In citing these four purported objectives, the Secretary contends that he has adequately explained in the new approval letter how Kentucky HEALTH would promote the objectives of the Medicaid Act, “amply address[ing]” defects identified in Stewart I. See AR 6718–37; HHS MSJ 14–21. The Court will review his analysis of those four objectives — furnishing medical assistance, health, financial independence, and fiscal sustainability — in turn. As before, it finds
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his consideration of the program’s effects on medical assistance inadequate. His examination of the other three aims, two of which the Court finds are not stand-alone objectives of the statute in the first instance, cannot make up for that failure. This is especially true where the Secretary made no attempt to weigh any of those three aims against the coverage-loss consequences of the program. Although the Court takes up fiscal sustainability last, the reader should be aware that this is the principal new position Defendants press in this round of litigation and the one requiring the most analysis.
a. Furnishing Medical Assistance In Stewart I, the Court found that the Secretary had “ignored” the Act’s objective to furnish medical assistance. See 313 F. Supp. 3d at 261. As the Court explained then, “There are two basic elements to that problem” — namely, “whether the project would cause recipients to lose coverage” and “whether the project would help promote coverage.” Id. at 262. Although he has no longer entirely “ignored” this objective of the Act, his reapproval was nevertheless legally inadequate because he “failed to ‘adequately analyze’ coverage.” Id. (quoting Am. Wild Horse, 873 F.3d at 932). To explain why, the Court separately examines his more recent consideration of coverage loss and of coverage promotion.
i. Coverage Loss In the original approval, the Secretary “never provided a bottom-line estimate of how many people would lose Medicaid with Kentucky HEALTH in place,” an “oversight” that was especially “glaring” since, “[i]n its application, Kentucky estimated that the project would cause” a substantial number of people to leave its Medicaid rolls — the equivalent of 95,000 people losing coverage for a year. Id. As the Court noted before, “Amici maintain that such number is conservative and peg the real figure as between 175,000 and 297,500” people losing coverage in
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the first year of the program. Id. (citing ECF No. 44 (Amicus Brief of Deans, Chairs, and Scholars) at 18). Whatever the precise calculation, the number is undoubtedly substantial. While the Secretary has now nominally acknowledged that estimate, none of his responses evinces the kind of “reasoned decisionmaking” that arbitrary-and-capricious review requires. See Michigan v. EPA, 135 S. Ct. 2699, 2706 (2015).
The most significant point that the Secretary now makes about coverage is one he couches as a fiscal-sustainability consideration — namely, that because Kentucky is facing budget woes and has as a result threatened to terminate the entire Medicaid expansion if this demonstration project is not approved, any coverage loss from the project should be viewed against the Commonwealth’s unbridled prerogative to scrap the entire population. See AR 6726, 6731; HHS MSJ at 3–4, 22. The Court will, accordingly, address this point in its discussion of fiscal sustainability. See Section B.2.d, infra. For now, it will note only that the argument is inconsistent with and relies on an unreasonable reading of the Secretary’s § 1115 authority. It cannot, as a result, satisfy his obligation to analyze coverage loss.
Defendants next make two arguments questioning the extent of his obligation to consider coverage losses. The Secretary first contends that § 1115 contemplates that demonstrations may result in an impact on eligibility, meaning coverage loss does not necessarily render a project unlawful. See AR 6726, 6729–30. That is certainly true: the Act expressly provides for a “demonstration project . . . that would result in an impact on eligibility.” 42 U.S.C. § 1315(d). That acknowledgment does not, however, sanction a demonstration that would result in significant coverage loss, nor does it relieve the Secretary of his obligation to consider the magnitude of coverage loss here. Indeed, the limitation remains that demonstration projects can only be approved it they “promote the objectives” of the Act. Here, the coverage loss is
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sufficiently significant — even at the low end of the estimated range — that it cannot be waved off by the rejoinder that some amount of coverage loss is legally permissible.
Second, the Secretary protests that he has no obligation to provide an exact estimate of the number of people who will lose coverage, particularly because demonstration projects are experiments intended to gather data and “predictive calculations are a murky science in the best of circumstances.” See AR 6730; HHS MSJ at 22–23 (citing Cablevision Sys. Corp. v. FCC, 597 F.3d 1306, 1314 (D.C. Cir. 2010)). As an initial matter, the experimental nature of the project cannot relieve the Secretary of the obligation to do the analysis that § 1115 itself demands — viz., whether a demonstration project promotes the objectives of the Act.
Of course, the exact number of people who will lose coverage under Kentucky HEALTH is admittedly subject to some uncertainty. As the D.C. Circuit acknowledged when a petitioner challenged the potential imprecision of an agency’s numbers, even “in the best of circumstances,” the agency “has no access to infallible data.” Cablevision, 597 F.3d at 1314. Nevertheless, Kentucky itself provided an estimate equivalent to 95,000, while amici suggest “Medicaid losses will be much higher and faster than the Commonwealth predicted.” Am. Br. of Deans, Chairs, and Scholars at 18; see Stewart I, 313 F. Supp. 3d at 262; see also, e.g., AR 13175, 14665. The central point is that no one questions that the loss will be substantial; as a result, it requires attention in any approval of the program. See Am. Wild Horse, 873 F.3d at 923 (explaining that agency must “examine all relevant factors and record evidence”); see also Humane Soc’y of United States v. Zinke, 865 F.3d 585, 606–07 (D.C. Cir. 2017) (“failure to address . . . salient factor” in statute renders agency’s approval arbitrary and capricious).
Regardless of the precise loss number, the Secretary next maintains that his consideration was adequate because he has now “expressly stated that he considered Kentucky’s estimated
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coverage effects and Plaintiffs’ interpretation of those figures, and he has explained why approval of the project is nonetheless warranted.” HHS MSJ at 23–24 (citing AR 6730–31). He offers two broad sets of arguments. The first quibbles with the nature of the estimate. The second concerns safeguards in Kentucky HEALTH meant to assist beneficiaries in avoiding coverage loss.
The Secretary first explains that the 95,000 number is misleading. It represents the number of member months Kentucky projected will be reduced by Kentucky HEALTH, divided by twelve to reach a figure representing one year’s worth of coverage for a given individual. He argues that, rather than commenting on the number of member months, “Plaintiffs incorrectly assume, with no foundation for doing so, that every member month of coverage lost under the demonstration is part of a full year of coverage for a person who never regains coverage.” HHS MSJ at 24. In addition, the Secretary elaborates, the people who do leave Medicaid permanently may have lost their eligibility for a variety of reasons, including transitioning to commercial coverage. See AR 6730–31; see also Kentucky MSJ at 19–20.
This argument is unpersuasive and is, ultimately, legerdemain intended to undercut the significance of the number. 95,000 is one way to represent the annualized number of member months of lost coverage under Kentucky HEALTH, as commenters plainly understood. See, e.g., AR 16707–08. There are, as the Secretary acknowledges, multiple ways to slice the number of lost months: 95,000 people may lose coverage for a year; a larger number may lose coverage for shorter periods of time; or fewer people may be deprived of coverage for lengthier periods. Regardless of how the number of lost member months is distributed among Medicaid beneficiaries, it indisputably reflects that a substantial number of people will lose coverage. As such, the Secretary cannot avoid addressing that number. This is especially so where
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commenters detailed the widespread predicted nature of coverage loss and its devastating effects, see AR 13175, 15482, 19489, including the destructive effects of coverage gaps. See AR 12918, 12967, 15486, 19388–89, 19985–86; see also ECF No. 99 (Amicus Brief of American Academy of Pediatrics) at 10–15, 19–20. In other words, understanding of the loss estimate was baked into their analysis of the magnitude of coverage loss, and the Secretary is not relieved of his obligation to consider the significance of the number — whether it represents primarily permanent losses of coverage or a high incidence of gaps.
He makes no effort, moreover, to cite evidence or otherwise provide a reasoned basis for the assertion that some number of people will transition to commercial coverage and, if so, how many he might expect. Once again, “[w]hile the agency spoke generally of ‘creating incentives for individuals to obtain and maintain coverage through private, employer-sponsored insurance,’ it cited no research or evidence that this would happen, nor did it make concrete estimates of how many beneficiaries might make that transition.” Stewart I, 313 F. Supp. 3d at 264. In addition, he made no effort to explain how — given that Kentucky HEALTH contains community-engagement rather than work requirements — beneficiaries could reasonably expect to get commercial insurance from “education, job skills training, job search activities, and community service.” AR 6730; see also AR 12823–24, 12858, 12973–75, 14044–45, 16716–18 (explaining beneficiaries unlikely to get coverage on labor market).
Second, the Secretary emphasizes that the coverage-loss “projections were made prior to the inclusion of changes made to the demonstration at approval, including additional beneficiary guardrails expected to help beneficiaries maintain enrollment.” AR 6731; see also HHS MSJ at 24. He elaborates that there are a number of exemptions from program requirements — for the medically frail, pregnant women, former foster youth, and domestic-violence survivors — and
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also several guardrails — including a good-cause exemption to certain penalties, an opportunity for re-enrollment after coming back into compliance with program requirements, screening beneficiaries for other eligibility possibilities before the lockout, full appeal rights prior to eligibility loss, and maintaining a system for “reasonable modification[]” of the requirements for persons with disabilities, “among other assurances.” AR 6729; see AR 6725–26; 6727–28; 6734–35; HHS MSJ at 25–27; Kentucky MSJ at 20–21.
Yet, again, this “response . . . is no answer at all.” Stewart I, 313 F. Supp. 3d at 263. The Commonwealth’s original application provided all of these exemptions, except that for domesticviolence survivors, which is now an exemption rather than a good-cause exception. It also included opportunities for beneficiaries to come back into compliance before the end of a penalty period. “Even with those reforms baked in, Kentucky estimated that 95,000 people would lose coverage,” and the “commenters, too, expressed their concerns about coverage losses with those features in mind.” Id. (citing AR 3694–95, 3937). Before Stewart I, the Commonwealth also added the good-cause exemption. In fact, between then and now, there have been very few substantive changes to Kentucky HEALTH. See Notice of Supplemental Filing at 1–2. Yet the Secretary has “never revised Kentucky’s estimate on coverage loss with” the exemptions, guardrails, or any other set of reforms in mind. See Stewart I, 313 F. Supp. 3d at 264. “Rather, he granted the waivers with no idea of how many people might lose Medicaid coverage and thus ‘failed to consider an important aspect of the problem.’” Id. (quoting State Farm, 463 U.S. at 43).
At oral argument, counsel for Kentucky suggested that the state had added additional guardrails — including extending an exemption to those exempt from work requirements associated with other entitlement programs and a physician-attestation option to support the
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medical-frailty exemption — that predated the Secretary’s original approval but postdated its 95,000 estimate. These additions, the Commonwealth contends, would have reduced its estimate. See Tr. at 23–25. Because the reapproval letter evinces consideration of neither of those things, the Court cannot consider them either, see SEC v. Chenery Corp., 318 U.S. 80, 87 (1943), nor can they be imagined to mitigate the coverage-loss estimate.
ii. Coverage Promotion The Secretary devotes little space, conversely, to describing how Kentucky HEALTH would promote coverage. He does elaborate that the “My Rewards Account incentives for healthy behaviors are intended to increase uptake of preventive services,” and the “waiver of retroactive eligibility” is designed to “encourage preventive care.” AR 6724. He also explains that the program will allow Kentucky to “evaluate whether the My Rewards and Deductible accounts, as well as redetermination and reporting requirements, will strengthen beneficiary engagement in their personal health and provide an incentive structure to support responsible consumer decision­making about maintaining health and accessing care and services,” particularly given that a “prior evaluation of one demonstration project with beneficiary engagement components has shown some promise that these strategies can have a positive impact on beneficiary behavior.” Id. As the Court noted before, the invocation of the incentive created by the waiver of retroactive eligibility is a “‘conclusory’ reference” to coverage promotion that “cannot suffice, ‘especially when viewed in light of’ an obvious counterargument.” Stewart I, 313 F. Supp. 3d at 265 (quoting Getty v. Fed. Sav. and Loans Ins. Corp., 805 F.2d 1050, 1057 (D.C. Cir. 1986)). In fact, “restricting retroactive eligibility will, by definition, reduce coverage.” Id. Whether or not the program generally will lead to an uptick in preventive care, the Secretary makes no effort to
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quantify that uptick or to weigh it against coverage losses for those whom Kentucky HEALTH may deprive of all access to care, preventive and otherwise. Likewise, even if beneficiaries become more engaged with their care, the Secretary must balance that with the possibility that there will be widespread lack of access to care. In light of the failure to weigh any coverage promotion in the face of the likelihood of substantial coverage loss, the Secretary did not “adequately analyze the . . . consequences” of the reapproval. See Am. Wild Horse, 873 F.3d at 932.
b. Health Moving off of coverage, the reapproval relies in part on the Secretary’s conclusion that Kentucky HEALTH will promote the health and wellness of its beneficiaries. Indeed, the Government contends that “Kentucky HEALTH is independently justified because the Secretary found that it is likely to improve the health of the Medicaid recipients receiving coverage under the demonstration.” HHS MSJ at 4. To the extent Plaintiffs believe that it “cannot be a freestanding objective of Medicaid to improve the health of the people that program covers,” the “Secretary emphatically disagrees.” Id. In the approval letter, he explains this is so because “there is little intrinsic value in paying for services if those services are not advancing the health and wellness of the individual receiving them, or otherwise helping the individual attain independence.” AR 6719. The Court rejected this argument in Stewart I. Treating health — rather than the furnishing of medical services — as the Act’s ultimate goal is nothing “more than a sleight of hand.” Stewart I, 313 F. Supp. 3d at 266. While the Court assumes that the Secretary is entitled to Chevron deference in isolating health as one of the “objectives” contemplated in § 1115, it cannot uphold his interpretation even under that standard. It fails at step two because it falls
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outside “the bounds of reasonableness.” Abbott Labs v. Young, 920 F.2d 984, 988 (D.C. Cir. 1990). “‘The reasonableness of an agency’s construction depends,’ in part, ‘on the construction’s fit with the statutory language, as well as its conformity to statutory purposes.’” Goldstein v. SEC, 451 F.3d 873, 881 (D.C. Cir. 2006) (quoting Abbott Labs, 920 F.2d at 988). On those scores, the Court cannot sustain the Secretary’s generalization of health from the Act’s objective of furnishing medical care.
The Secretary’s primary contention is that health must be an independent objective because there is little value in paying for healthcare if it is not advancing that goal. As the Court explained in its prior Opinion, health was not necessarily the ultimate aim Congress pursued when it decided to “provide health insurance to needy populations.” Stewart I, 313 F. Supp. 3d at 267. “It . . . had an interest in making healthcare more affordable for such people.” Id. That focus is evident in the structure of the Act, which does not require states “to provide direct medical services to its citizens” but rather “provides federal funding so that the state can ‘pay[] . . . [for] part or all of the cost of medical care and services for a defined set of individuals.’” Id. (quoting Adena Reg’l Med. Ctr. v. Leavitt, 527 F.3d 176, 180 (D.C. Cir. 2008)). Indeed, the history of the ACA’s passage indicates that Congress was moved by the problem of medical bankruptcies and the concern that one of now two equally healthy people could have seen their life irrevocably altered by the cost of care. Id. Congress thus designed a scheme to address not health generally but the provision of care to needy populations. The Secretary is not free instead to extrapolate the objectives of the statute to a higher level of generality and pursue that aim in the way he prefers. See Waterkeeper Alliance v. EPA, 853 F.3d 527, 535 (D.C. Cir. 2017) (“[A]gencies are . . . bound not only by the ultimate purposes
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Congress has selected, but by the means it has deemed appropriate, and prescribed, for the pursuit of those purposes.”) (internal quotation marks omitted).
No more persuasive is Kentucky’s argument that the ACA altered the objectives of the Act to include health as a stand-alone aim. To begin, for the reasons discussed in Section B.1, supra, the Court is dubious that the ACA altered the objectives of Medicaid at all. None of the Commonwealth’s specific arguments here alters that conclusion.
It first contends that because the ACA amended the definition of “medical assistance” to include care itself as well as the payment for that care, the Act’s objectives must now include health as well as furnishing medical assistance. See Kentucky MSJ at 7. It next maintains that because the Act requires that medical care be furnished with “reasonable promptness,” the statute must be concerned with health because receiving care promptly “is undeniably linked to health and wellness.” Id. at 8. Neither of those statutory features suggests that promoting health as a stand-alone objective has replaced furnishing medical assistance as the statute’s primary aim. Medical care is not health; health may be the result of medical care. Faring no better is the state’s citation-less assertion that “it makes sense to treat expanded Medicaid as a transition program, at least in part, given the inevitable fluctuations in the economy.” Id. at 18. While the Commonwealth may believe it makes sense to treat the expansion population differently from the traditional Medicaid population, there is no evidence that Congress intended to so treat them. Indeed, the expansion is part of a comprehensive coverage regime. See NFIB, 567 U.S. at 581.
The Court will not explain again why holding health to be a freestanding objective of the Act would “have bizarre results.” Stewart I, 313 F. Supp. 3d at 267. Were that the case, nothing would prevent the Secretary from conditioning coverage on a special diet or certain exercise regime. Id. at 267–68. While there would likely be a basis to conclude that “[e]ither of those
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conditions could promote ‘health’ or ‘well-being’ . . .[,] both are far afield of the basic purpose of Medicaid: ‘reimburs[ing] certain costs of medical treatment for needy persons.’” Id. at 268 (quoting Harris, 448 U.S. at 301).
Because the Court finds that health is not a freestanding objective of the statute, it need go no further, since, if that is so, the Secretary’s consideration of it cannot support his § 1115 analysis. Even if health were such an objective, approving Kentucky HEALTH on this basis would still be arbitrary and capricious. The Secretary, most significantly, did not weigh health gains against coverage losses in justifying the approval. Because the provision of Medicaid coverage is indisputably a central objective of the Act, the Secretary’s consideration of the separate objective of health does not excuse him from addressing an “important aspect of the problem.” State Farm, 463 U.S. at 43. This is especially true where the Secretary himself acknowledged that there is a conflict between his reasoning for why the program promotes health and the possibility that it will cause widespread coverage deprivation: “To create an effective incentive for beneficiaries to take measures that promote health and independence, it may be necessary for states to attach penalties to failure to take those measures,” which “may mean that beneficiaries who fail to comply will lose Medicaid coverage, at least temporarily.” AR 1631.
Even solely in the realm of health, moreover, the agency fell short. That is because it did not consider the health benefits of the project relative to its harms to the health of those who might lose their coverage. Commenters made clear that those health effects were significant. See AR 12918, 12967, 13175, 15482, 15486, 19388–89, 19985–86. Even if health were an appropriate consideration under § 1115, therefore, these oversights demonstrate why it would be necessary to weigh purported health benefits against the coverage losses and resulting health consequences. This the Secretary did not do, rendering his decision arbitrary and capricious.
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c. Financial Independence The Secretary also posits that the project will “test[] measures designed to help adults transition from Medicaid to greater financial independence and other forms of health coverage,” including by preparing them for the commercial health market. See HHS MSJ at 2; AR 6724– 25. As the Court found before, financial self-sufficiency is not an independent objective of the Act and, as such, cannot undergird the Secretary’s finding under § 1115 that the project promotes the Act’s goals. This is so even where the Court accords Chevron deference to his interpretation of financial independence as an “objective” contemplated in § 1115. For the reasons that follow, it is an unreasonable reading of the relevant provision because it is incompatible with the surrounding statutory language and aims. See Goldstein, 451 F.3d at 881. The Secretary does not specify the statutory basis from which he derives financial independence as a purpose. Rather, he explains that “there is little intrinsic value in paying for services if those services are not” improving beneficiaries’ health “or otherwise helping . . . individual[s] attain independence.” AR 6719. As before, the Secretary is not free to generalize or otherwise extrapolate the ultimate value of the program Congress designed. Rather, he must employ the means Congress prescribed to tackle the problem it identified. See Waterkeeper Alliance, 853 F.3d at 535. In his previous approval, the Secretary did specify a statutory basis to believe selfsufficiency is an objective of the Act — namely, § 1396-1’s appropriation to states to “furnish . . . rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care.” From that, he relied on the mention of “independence or self-care” to conclude that “greater independence” and “reduc[ing] reliance on public assistance” are stand-alone objectives of the Act. See Stewart I, 313 F.3d at 271 (citing AR 4,
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5). The Court found that contention unpersuasive because “[t]he text . . . quite clearly limits its objectives to helping States furnish rehabilitation and other services that might promote self-care and independence,” so that it “does not follow that limiting access to medical assistance would further that same end.” Id. The Secretary, in any case, does not seem to renew that argument here.
The Commonwealth does offer additional reasons as to why the Court should find that financial independence is a stand-alone objective of the Act. Again, because the Secretary did not rely on them in his approval, the Court need not consider them. See Chenery, 318 U.S. at 87. To add a set of suspenders to its belt, it nevertheless does so briefly here. In Kentucky’s view, it is an “extreme position to believe that Medicaid is unconcerned with whether able-bodied persons stay on government assistance.” Kentucky MSJ at 15. The Commonwealth acknowledges that the Court previously found that financial independence was not a stand-alone objective of the Act, but reasons that it may make sense as an objective for the expansion population, if not the traditional one. This is so, it believes, because “Section 1396-1 makes clear that it does not list the universe of ‘purposes’ for appropriations for expanded Medicaid.” Id.
For the reasons already explained, the Court does not find that the objectives for the expansion are different. Renewing its argument in this specific context, the Commonwealth urges that “‘[i]ndependence’ for [the traditional] four populations and what they need to attain it is quite different from ‘independence’ for the expanded Medicaid population and what they need to attain it.” Id. at 16. Kentucky concludes that “independence and self-care” should take on a different meaning for the expansion population because they are able-bodied adults who do not require “rehabilitation and other services” to attain self-sufficiency. See Kentucky MSJ at 16–
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17. The Court finds this position unconvincing because even able-bodied adults may require rehabilitation or other services to “retain” that capacity, even if they need not “attain” it. See 42 U.S.C. § 1396-1. (And, of course, it is worth noting here that 20% of the beneficiaries to which Kentucky HEALTH would apply are members of the traditional Medicaid population. See Stewart I, 313 F. Supp. 3d at 268.)
Kentucky contends finally that its “interpretation of ‘independence’ is bolstered by 42 U.S.C. § 1396u-1(b)(3)(A), which permits termination of Medicaid benefits to those individuals who have had Temporary Assistance for Needy Families benefits terminated ‘because of refusing to work,’” and the Second Circuit’s decision in Aguayo v. Richardson, 473 F.2d 1090 (2d Cir. 1973), in which it believes that the court approved a similar waiver application for a different entitlement program on the basis that it would promote beneficiaries’ self-sufficiency. See Kentucky MSJ at 18–19. Neither the statutory provision nor the Second Circuit’s decision, however, sheds light on the objectives of Medicaid. Section 1396u-1(b) is a specific statutory provision allowing states to coordinate eligibility for people who are covered by both Medicaid and TANF. TANF has job preparation as one of its objectives and includes work requirements. See 42 U.S.C. § 601; 42 U.S.C. § 607. That Congress allows for states to coordinate their administration of these two different programs does not transform the purposes of Medicaid.
Aguayo is no more instructive. In that case, the Second Circuit upheld a waiver allowing for work requirements in the Aid to Families with Dependent Children statute. The Commonwealth asserts that the purpose language in the AFDC statute is “remarkably similar” to that in the Medicaid statute. See Kentucky MSJ at 19. Although the phrase “maximum selfsupport and personal independence” does appear in the AFDC statute, see Aguayo, 473 F.2d at 1103–04, the AFDC and Medicaid statutes are very different. The Court cannot credit the
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Commonwealth’s “argument for uniform usage” and “ignore[] the cardinal rule that statutory language must be read in context since a phrase gathers meaning from the words around it.” Gen. Dynamics Land Sys., Inc. v. Cline, 540 U.S. 581, 596 (2004). That is so because the AFDC statute also contained purposes such as keeping children in their own homes, in addition to achieving “maximum self-support.” See Aguayo, 473 F.3d at 1104. The Medicaid Act lacks those additional objectives. The AFDC statute, moreover, already included some work requirements when the court upheld it in Aguayo, including some from the inception of the program “quite similar to those” at issue in the waiver. Id.; see also H.R. Rep. No. 74-615 at 3 (1935); Public Welfare Amendments of 1962, Pub. L. No. 87-543, § 105, 76 Stat. 172, 186. The Medicaid Act does not. The Court is not suggesting a waiver application approving work requirements in some form could never be lawful because the Medicaid Act does not contain work requirements. Rather, the point is only that the existence of work requirements in the AFDC statute is probative of their compatibility with that Act’s objectives and the possibility that additional similar requirements would promote those aims.
Even if financial independence were an objective of the Act and thus a proper consideration for § 1115 approval, the Secretary’s invocation of it cannot support the approval here for a separate reason. That is because, absent any attempt to estimate the number of people who will gain employment and move onto commercial coverage or otherwise attain financial independence — or any analysis of the mechanism by which they are likely to do so — his assertion that some significant number of people would migrate is insufficient. As the Court pointed out before, “[I]t is not obvious that the community-engagement requirement alone would help a person shift to private insurance,” particularly given that “individuals can meet it, for example, by volunteering in the community” — an activity that “may have long term benefits”
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but would not come with health coverage. See Stewart I, 313 F. Supp. 3d at 264; see also AR 12823–24, 12858, 12973–75, 14044–45, 16716–18 (explaining beneficiaries unlikely to get coverage on labor market). Even if some number of beneficiaries were to gain independence, the Secretary does not weigh the benefits of their self-sufficiency against the consequences of coverage loss, which would harm and undermine the financial self-sufficiency of others. See AR 12916–17, 13547, 16723–24, 17464–65, 19985–87, 26311. These deficiencies render his determination arbitrary and capricious.
d. Fiscal Sustainability Long diverted into myriad other byways, the Court now arrives at the broad avenue that constitutes Defendants’ key position. Fiscal sustainability is, in fact, the primary rationale on which the Secretary relied in approving this demonstration. In his view, “Demonstration projects that seek to improve beneficiary health and financial independence” improve well-being and “at the same time, allow states to maintain the long-term fiscal sustainability of their Medicaid programs.” AR 6720. The Secretary explained that “Kentucky expects that the reforms included in the demonstration will enable the Commonwealth to continue to offer Medicaid to the ACA expansion population,” since Kentucky “has repeatedly stated that if it is unable to move forward with its Kentucky HEALTH demonstration project, it will discontinue coverage for the ACA expansion population.” AR 6726. “[E]ven assuming” that the program would result in the estimated eligibility losses, he posits that the number of people who lose coverage under Kentucky HEALTH “is likely dwarfed by the 454,000 newly eligible adults who stand to lose coverage if Kentucky elects to terminate the non-mandatory ACA expansion.” AR 6732. And because “the demonstration provides coverage to individuals that the state is not required to cover[,] [a]ny potential loss of coverage that may result from a demonstration is properly
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considered in the context of a state’s substantial discretion to eliminate non-mandatory benefits or to eliminate coverage” altogether for the expansion population. See AR 6731.
In this explanation, the Secretary does not make entirely clear whether he interprets fiscal sustainability to be an independent objective of the Act, or whether making the program more fiscally sustainable is essentially a point about coverage promotion — that is, whether saving money by covering fewer people is ultimately coverage promoting because any number of people Kentucky still covers under the demonstration would be greater than the number of people covered if it terminated the ACA expansion. Based on federal Defendants’ representations during oral argument, it seems that the Government primarily presses the latter iteration. See Tr. at 8, 53. The Court, nevertheless, will address each in turn, finding that either way the argument is sliced, it cannot support the Secretary’s reapproval here.
i. Fiscal Sustainability as Independent Objective The first issue is whether the Secretary could reasonably conclude that the approval of Kentucky HEALTH was justified because it advanced, as an independent objective of the Act, the fiscal sustainability of the safety net. The Court preliminarily considers under the Chevron framework whether the Secretary permissibly interpreted the Act to contain fiscal sustainability as a stand-alone objective; finding in the affirmative, it next addresses whether the agency’s conclusion that the program would advance that objective is arbitrary and capricious. The Commonwealth is the party that most clearly contends that fiscal sustainability is an independent objective of the Medicaid Act. It maintains first that, as a textual matter, specific language in § 1396-1 supports this position. See Kentucky MSJ at 10. Although the Secretary did not clearly rely on this rationale in the reapproval letter — and does not do so in his briefing here — the letter does at least understand “Section 1115 demonstration projects . . . [to] provide
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an opportunity for states to test policies that ensure the fiscal sustainability of the Medicaid program, better ‘enabling each [s]tate, as far as practicable under the conditions in such [s]tate,’ to furnish medical assistance.” AR 6719 (citing 42 U.S.C. § 1396-1). Federal Defendants, at oral argument, offered that portion of the letter in support of this contention. See Tr. at 50–51.
As discussed previously, the Court finds at Chevron step one that the word “objectives” as it appears in § 1115 is ambiguous. It therefore proceeds to Chevron’s second step and asks whether the Secretary’s interpretation is reasonable. The statutory text on which Defendants rely provides that the Act aims to “enabl[e] each State, as far as practicable under the conditions in such state, to furnish” first, medical assistance and second, rehabilitation and other services. See 42 U.S.C. § 1396-1. In context, practicability is at least a qualifier of the extent to which states must furnish medical assistance. Given that the Act stipulates mandatory floors for benefits and coverage populations, see 42 U.S.C. §§ 1396a, 1396a(a)(10)(A), the Court believes the qualifier is as easily understood as establishing a ceiling as it is lowering the floor. That said, it cannot find his interpretation unreasonable under Chevron. Defendants may, as a result, take into account fiscal sustainability in determining under § 1115 whether a demonstration project promotes the objectives of the Act.
Identifying an objective of the Act is just the first step, however. The Secretary must also give an adequate explanation for why Kentucky HEALTH advances that objective and why, if it is adverse to other Medicaid objectives, he could reasonably conclude that, on balance, it promotes the objectives of the Act as required by § 1115. On these fronts, he fell short. First, he made no finding, supported by substantial evidence, that Kentucky HEALTH would improve the sustainability of Kentucky’s Medicaid program — either by accruing savings to the state or by any other mechanism. Second, he unreasonably prioritized program savings without weighing
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those against the consequences of lost coverage, rendering his determination arbitrary and capricious.
Beginning with the first, the Secretary made no finding that Kentucky HEALTH would save the Commonwealth any amount of money or otherwise make the program more sustainable in some way. In the last round of litigation, the Court isolated some confusion about savings attributable to the program: Defendants “repeatedly highlight[ed] that the program could save $2.2 billion,” but the “Commonwealth’s own records show that . . . the state’s actual savings would be $331 million.” Stewart I, 313 F. Supp. 3d at 271. While not a trivial number, the back-and-forth highlights the importance of analyzing the evidence to come to some reasonable conclusion. The Court is not suggesting here that the Secretary must quantify some exact amount of savings, but he must make some finding that supports his conclusion that the project would actually advance Kentucky Medicaid’s fiscal sustainability. This is especially so where — although the Court does not pass on the persuasiveness of the evidence — the record contains some reason to believe that full administration of the expansion will save the Commonwealth money, while reducing coverage of the expansion population would cost the state. See AR 4970, 4974–75 (study determining Kentucky will experience significant “positive fiscal impact” from expansion through 2021).
The point is not to evaluate how Kentucky ought to spend its money. See Tr. at 29 (maintaining that Kentucky’s “budgetary priorities” are “[its] prerogative”). The Commonwealth, moreover, may well be free to pull out of the expansion entirely (or, indeed, all of Medicaid) if it chooses not to spend its money that way. The central point is that — without a finding about the savings that Kentucky HEALTH could be expected to yield — the Secretary could not make a reasoned decision that it would promote fiscal sustainability. If he is to rely on
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that rationale, he must so find. Otherwise, as here, he has not marshaled substantial evidence for that position and, indeed, has ignored contrary evidence in the record. See Fred Meyer Stores, Inc. v. NLRB, 865 F.3d 630, 638 (D.C. Cir. 2017) (finding agency acted arbitrarily and capriciously when it “evidence[d] a complete failure to reasonably reflect upon the information contained in the record and grapple with contrary evidence”); Am. Wild Horse, 873 F.3d at 923 (agency must “examine all relevant factors and record evidence”).
Second, the Secretary’s reliance on fiscal sustainability was arbitrary and capricious because he did not compare the benefit of savings to the consequences for coverage. The Ninth Circuit has twice invalidated similar approvals, holding that the agency acted in an arbitrary and capricious manner in approving a § 1115 waiver that — as here — derived cost savings from shrinking a state’s Medicaid rolls without adequately considering the program’s coverage consequences. See Newton-Nations v. Betlach, 660 F.3d 370, 381 (9th Cir. 2011) (holding Secretary’s approval of § 1115 waiver arbitrary and capricious where its purpose was “to save money”); Beno v. Shalala, 30 F.3d 1057, 1069 (9th Cir. 1994) (rejecting benefits cut conceived as work incentive and finding that the “statute was not enacted to enable states to save money or to evade federal requirements”).
The Government attempts to distinguish these cases by arguing that they held that § 1115 authority did not extend to the approval of simple benefits cuts enacted to save money. Kentucky HEALTH, Defendants argue, is not a simple “benefit cut.” Tr. at 7, 10–11. That distinction, however, is not convincing. As a technical matter, Kentucky HEALTH does not, on its face, simply cut benefits. But the Secretary’s analysis of the program was defective precisely because he did not adequately consider the significant number of people for whom the program would entail a loss of all benefits. Their loss of coverage appears, from the record in this case, to
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be how the Commonwealth would save money. That is precisely what the Ninth Circuit said states cannot do with a § 1115 waiver.
Defendants rejoin with several cases that they claim stand for the proposition that the manner in which they considered fiscal sustainability here was reasonable. See HHS MSJ at 15– 18 (citing Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 663, 666–67 (2003) (plurality); N.Y. State Dept. of Soc. Servs. v. Dublino, 413 U.S. 405 (1973); Pharm. Research & Mfrs. of Am. v. Thompson, 362 F.3d 817, 824–25 (D.C. Cir. 2004); Aguayo, 473 F.2d at 1103– 04); Kentucky MSJ at 11 (citing similar plus Crane v. Matthews, 417 F. Supp. 532, 540 (N.D. Ga. 1976), and Cal. Welfare Rights Org. v. Richardson, 348 F. Supp. 491, 496 (N.D. Cal. 1972)). These cases are of mixed relevance. For example, as the Court discussed previously, Aguayo’s conclusion that the imposition of work requirements promotes the objectives of the AFDC statute — which differ from Medicaid’s — does not bear squarely on the Medicaid context, especially where the reasoning hinged in no small part on the long history of work requirements in the AFDC program. See 473 F.2d at 1103–04. Dublino holds that federal work requirements do not preempt the state’s imposition of work requirements on AFDC recipients but does not analyze the propriety of the state program or its approval. See 413 U.S. 405. Crane and Richardson affirm that the Secretary’s authority under § 1115 is broad, both in the context of affirming copayment requirements. See Crane, 417 F. Supp. at 540; Richardson, 348 F. Supp. at 496. The Court does not gainsay that he has “considerable discretion” under § 1115. See Stewart I, 313 F. Supp. 3d at 256. The question here, however, is whether he has lawfully exercised it.
The Government relies particularly on Thompson, in which, in their view, the D.C. Circuit held it permissible to “impose a burden on Medicaid recipients to keep other people off
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of Medicaid.” Tr. at 11–12. This case, they believe, is parallel because it seeks to lift people out of Medicaid to make the program smaller and therefore more fiscally viable. Id. at 12. Thompson, in turn, relies significantly on Walsh. See 362 F.3d at 821. Neither, however, aids Defendants here. In fact, their analysis demonstrates why this approval was legally defective.
Walsh is a fractured opinion upholding the vacatur of a preliminary injunction preventing the implementation of a Medicaid-covered outpatient drug program that the state of Maine sought to implement. See 538 U.S. 644. In the part of the opinion on which the Government relies, three Justices affirmed that the program served “two Medicaid-related interests” in benefiting the “medically needy” and in “enabling some borderline aged and infirm persons better access to prescription drugs earlier,” thereby “reduc[ing]” Medicaid expenses. Id. at 663 (plurality opinion). “A third rather obvious Medicaid purpose [would]” also “be fostered” because “[a]voiding unnecessary costs in the administration of a State’s Medicaid program obviously serves the interests of both the Federal Government and the States that pay the cost of providing prescription drugs to Medicaid patients.” Id. at 663–64 (plurality opinion).
“The analyses in Walsh enlighten[ed]” that of the D.C. Circuit in Thompson, which concerned a similar program. See 362 F.3d at 821. There, the court considered a challenge to the Secretary’s approval of “a low-cost state prescription drug coverage program . . . for beneficiaries of Medicaid and two non-Medicaid state health programs.” Id. at 819. The D.C. Circuit held that the approval did not violate “the general statutory mandate that Medicaid services be provided in a manner consistent with the best interests of recipients.” Id. (citing 42 U.S.C. § 1396a(a)(19)). The court upheld the Secretary’s determination that “the best interests requirement . . . allow[s] a state to establish a Medicaid prior authorization program in order to secure rebates on drugs for non-Medicaid populations” if a state demonstrates that the program
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will further “the goals and objectives of the Medicaid program.” Id. at 824–25. In that case, the prior authorization program furthered Medicaid’s objectives because it allowed the state to make prescription drugs accessible to borderline Medicaid populations who were, in turn, less likely to become Medicaid eligible. The rebate program thereby preserved Medicaid resources. Id. at 825. In Defendants’ view, Thompson demonstrates that it is permissible to “impose a burden on Medicaid recipients to keep other people off of Medicaid.” Tr. at 11–12.
Those cases do not establish that the Secretary acted reasonably here. If anything, they illuminate how the project in this case — and the reasoning given to support it — departs from previous ones. Most importantly, the programs in those cases involved only incidental burdens on Medicaid recipients. Specifically, the drug-rebate programs at issue in Walsh and Thompson made certain drugs, but not others, more difficult to obtain and in so doing provided reduced-cost medication to all individuals in the state. Neither program entirely stripped coverage or a mandatory benefit from Medicaid recipients. Language in those opinions addressed this very concern. As Walsh noted, “[P]roviding benefits to needy persons and . . . curtailing the State’s Medicaid costs . . . would not provide a sufficient basis for upholding the program if it severely curtailed Medicaid recipients’ access to prescription drugs.” 538 U.S. at 664–65 (emphasis added). Thompson reasoned similarly, pointing out “the absence of any demonstrable significant impediment to Medicaid services from [the challenged] prior authorization requirement.” 362 F.3d at 826 (citing Walsh, 538 U.S. at 664, 688).
Those disclaimers make eminently clear that a project that enhances financial sustainability may not advance the objectives of Medicaid if it significantly impedes or curtails Medicaid services or coverage. Important to both the D.C. Circuit and the Supreme Court was the fact that neither program threatened the entirety of beneficiaries’ Medicaid coverage — or
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even an aspect of their coverage, like that for prescription drugs — in the name of cost savings. Rather, both of those cases explicitly sanctioned an incidental burden on Medicaid recipients. They do not suggest that Medicaid recipients can be significantly burdened — that is, for example, their eligibility significantly restricted or benefits significantly cut — in the name of saving money. That there are limits on the extent to which fiscal sustainability can justify cuts like those outlined in these cases makes sense. Most cuts to Medicaid services would reduce the cost of Medicaid and thus advance the sustainability of the program to some extent. But it would be nonsensical to conclude that any cut therefore always promotes the Act’s objectives.
Perhaps the most important takeaway from these cases is what the Court has been saying all along: the Secretary must engage in considered analysis of the fiscal-sustainability concern, both alone and relative to the issue of coverage loss. See Thompson, 362 F.3d at 826. The D.C. Circuit considered in some detail the Secretary’s explanation for the mechanism by which the project under review would save money — including the nature of the incidental burden it imposed — and the amount of money that would be saved, ultimately finding that it passed muster. Id. The agency had the same responsibility here. In failing to analyze the nature of expected savings, id. at 825–26, whether the burden on Medicaid recipients was minimal, id. at 826, and how the savings should be balanced against the burdens, the Secretary acted arbitrarily and capriciously.
ii. Fiscal Sustainability as Coverage Promoting Defendants’ alternative fiscal-sustainability position is that Kentucky HEALTH is coverage promoting because, absent its approval, the Commonwealth will — given fiscal strain — simply de-expand Medicaid. This coverage-promotion argument, in fact, does not depend on fiscal sustainability at all. Rather, all that matters is that a state, like Kentucky, has threatened to
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de-expand Medicaid if its proposed demonstration is not approved. The underlying reason for the threat — whether budgetary priorities, fiscal crisis, or other policy goals — is of no moment. This route is legally permissible, Defendants assert at multiple points, because the expansion population is optional and therefore need not receive any coverage. As the Secretary indicated in the reapproval letter, Kentucky HEALTH should be viewed “in the context of a state’s substantial discretion” to eliminate coverage for the expansion population. See AR 6731; see also Tr. at 18, 52. A demonstration that shrinks coverage may thus be coverage promoting for the purposes of § 1115 as long as the state threatens that if the demonstration is not approved, it will discontinue coverage entirely. See HHS MSJ at 18–20; AR 6729.
This contention is both inconsistent with the Medicaid Act and arbitrary and capricious. See Agape Church, Inc. v. FCC, 738 F.3d 397, 410 (D.C. Cir. 2013) (“The analysis of disputed agency action under Chevron Step Two and arbitrary and capricious review is often ‘the same, because under Chevron Step Two, [the court asks] whether an agency interpretation is arbitrary or capricious in substance.’”). As an initial matter, Defendants are incorrect that a state has additional discretion to diminish or condition eligibility for the expansion — as opposed to the traditional — population. Relying in part on NFIB, they repeatedly assert that Kentucky has the prerogative to de-expand. See HHS MSJ at 4, 6, 18, 19–20; Kentucky MSJ at 13; see also Tr. at 13, 18, 54. That may well be correct. But the privilege Kentucky seeks to exercise here is not to de-expand, but rather to implement the ACA expansion as an à la carte exercise, picking and choosing which of Congress’s mandates it wishes to implement. NFIB did not sanction that. Rather, the Court was very clear: “Nothing in [NFIB] precludes Congress from offering funds under the Affordable Care Act to expand the availability of health care, and requiring that States accepting such funds comply with the conditions on their use.” 567 U.S. at 585. The case held
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only that Congress was “not free . . . to penalize States that choose not to participate in [the expansion] by taking away their existing Medicaid funding.” Id. That is, the Court held that, as with traditional Medicaid, Congress may impose requirements on the states for the use of expansion funds. Nothing in that analysis allows for “additional discretion” in how the states comply with Medicaid requirements for the expansion population as compared to the traditional one.
While Defendants thus err in positing that their treatment of the expansion population is undergirded with any greater discretion than their administration of any other part of the Medicaid program, their arguments about flexibility vis-à-vis the expansion population are ultimately a red herring. That is so because the entire Medicaid program is optional for states. The Court does not see why — if Defendants are correct that threats to terminate the expansion program can supply the baseline for the Secretary’s § 1115 review — that argument would not be equally good as applied to traditional Medicaid. Their argument must thus posit that any § 1115 program that maintains any coverage for any set of individuals promotes the objectives of the Medicaid Act as long as the state threatens to terminate all of Medicaid in the absence of waiver approval.
Taken to its logical conclusion, the Secretary’s position thus makes little sense. Under his reasoning, states may threaten that they wish to de-expand, or indeed do away with all of Medicaid — for fiscal reasons or no reason at all — if the Secretary does not approve whatever waiver of whatever Medicaid requirements they wish to obtain. The Secretary could then always approve those waivers, no matter how few people remain on Medicaid thereafter because any waiver would be coverage promoting compared to a world in which the state offers no coverage at all. Remarkably, when asked for a limiting principle to this proposition during oral argument,
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Defendants did not give one. See Tr. at 9–11, 13–14. Could a state decide it did not wish to cover pregnant women? The blind? All but 100 people currently on its Medicaid rolls? The Secretary offers no reason that his position would not allow for any of those results.
Not only does Defendants’ position entail radical results, but it is also inconsistent with the text of § 1115. The statute requires the Secretary to evaluate whether the project will promote the objectives of the Act. See 42 U.S.C. § 1315; see also Tr. at 35, 38–39. Against what baseline is he supposed to evaluate the project? The structure of the waiver provision assumes the implementation of the Act. It confirms that the relevant baseline is whether the waiver will still promote the objectives of the Act as compared to compliance with the statute’s requirements, not as compared with a hypothetical future universe where there is no Act. This is so because the overarching provision authorizing these waivers stipulates that, if the Secretary makes a judgment that a demonstration promotes the objectives of the Act, he may then waive compliance with certain of its provisions “to the extent and for the period necessary” to carry out the project. See 42 U.S.C. § 1315(a), (a)(1). That is, the provision contemplates a limited waiver. It would make little sense to have such waiver authority and limitations where the relevant consideration was not full compliance with the Act’s requirements but instead no engagement whatsoever in the program.
The Court, furthermore, need not exclude the possibility that fiscal considerations are ever permissible in any context to reject the staggering breadth of the argument that Defendants present here. To summarize, their central contention is that, where a state threatens to discontinue Medicaid coverage entirely, any waiver approval would promote coverage. The argument does not depend on dealing with the expansion population; it is equally applicable to traditional Medicaid. It does not depend on a state’s being in a fiscally precarious position
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because it does not take into account the reason the state wants to discontinue participating in the Medicaid program. It is not subject to any kind of limiting principle. The Secretary’s interpretation constitutes “an impermissible construction of the statute . . . because [it] is utterly unreasonable in” its “breadth” — “nothing in this record . . . indicate[s] that Congress empowered the agency to effect” such a sweeping authority. See Aid Ass’n for Lutherans v. U.S. Postal Serv., 321 F.3d 1166, 1178 (D.C. Cir. 2003). Its interpretation is therefore “arbitrary [and] capricious in substance.” See Agape Church, 738 F.3d at 410. That provision of the Act does not turn the comprehensive Medicaid program that Congress designed into a buffet for states. Defendants’ remarkable interpretation of Section 1115 thus cannot stand.
In finding the Secretary’s position unreasonable, the Court does not suggest that the agency may never consider the fiscal sustainability of the Medicaid program. He very well might properly assess whether a more efficient way of administering a state’s Medicaid program would save resources or whether, as in Thompson, a state might save money by continuing to deliver mandatory care to mandatory populations while restricting precisely which kinds of tests or medications are available, for example. Those considerations are not incompatible with the prime objective of the Act being the furnishing of medical assistance. But that is not the exercise the Secretary engaged in here.
3. Relief Where a court concludes that an agency’s action is unlawful, “the practice . . . is ordinarily to vacate the rule.” Ill. Pub. Telecomms. Ass’n v. FCC, 123 F.3d 693, 693 (D.C. Cir. 1997). Defendants, however, protest that any relief should be limited to Plaintiffs here, rather than all Kentuckians who would lose coverage. See HHS MSJ at 41–42. In support, they contend that “[t]here is no equitable reason to disrupt the statewide implementation of Kentucky
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HEALTH and thus jeopardize the expansion coverage for hundreds of thousands of individuals who are not before this Court.” Id. The cases Defendants cite, however, merely concern equitable discretion in fashioning remedies or the need, for standing purposes, for a plaintiff’s remedy to be tailored to her injury. While the Court does retain discretion in granting relief under the APA, Defendants offer no reason that, in this case, it should depart from the ordinary practice of vacating the agency action found unlawful under the APA.
Even weighing the harms, as Defendants suggest, the balance does not net out in their favor. Indeed, while vacatur is warranted based on procedural deficiencies in the approval, as opposed to the Court’s analysis of the merits of Kentucky HEALTH, it is worth noting here that many of Plaintiffs’ objections to the program hinge on their concern that the demonstration project would cause a great deal of harm. In other words, the Court’s holding turns on the Secretary’s inadequate analysis of the likelihood of coverage loss and its consequences. In light of that, it is likely that vacatur would inflict less harm than allowing the project to take effect. As the Court explains in its Opinion today in Gresham v. Azar, No. 18-1900, Slip Opinion at 27– 28, 32 (Mar. 27, 2019), the loss of Medicaid coverage is a substantial burden on Plaintiffs and others like them.
There is another exception to the ordinary course of vacatur under the APA, which Defendants do not press but the Court nevertheless considers. “[A]lthough vacatur is the normal remedy, [courts] sometimes decline to vacate,” Allina Health Servs. v. Sebelius, 746 F.3d 1102, 1110 (D.C. Cir. 2014), depending on the “seriousness of the order’s deficiencies (and thus the extent of doubt whether the agency chose correctly) and the disruptive consequences of an interim change.” Allied-Signal, Inc. v. U.S. Nuclear Reg. Comm’n, 988 F.2d 146, 150–51 (D.C.
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Cir. 1993) (citation omitted). As before, “[n]either factor favors the Government.” Stewart I, 313 F. Supp. 3d at 273.
Failure to consider an important aspect of the problem is a “major shortcoming[]” generally warranting vacatur. Human Soc’y, 865 F.3d at 614–15; see also SecurityPoint Holdings, Inc. v. TSA, 867 F.3d 180, 185 (D.C. Cir. 2017); Wedgewood Village Pharmacy v. DEA, 509 F.3d 541, 552–53 (D.C. Cir. 2007). Stewart I offered clear guidance that Section 1115 mandated that coverage considerations be a central part of the analysis. Rather than follow that direction, the Secretary doubled down on his consideration of other aims of the Medicaid Act. Given a second failure to adequately consider one of Medicaid’s central objectives, the Court has some question about HHS’s ability to cure the defects in the approval. Vacatur would not, moreover, be especially disruptive. Unlike in Arkansas, Kentucky HEALTH has yet to take effect. Far from there being “no apparent way to restore the status quo ante,” Sugar Cane Growers Co-op of Fla. v. Veneman, 289 F.3d 89, 97 (D.C. Cir. 2002), there has yet been no departure. The Court therefore still “believes that preserving the status quo . . . is appropriate.” Stewart I, 313 F. Supp. 3d at 273.
C. Other Issues Plaintiffs raise a number of other issues, including that the Secretary acted in excess of statutory authority; that the SMD letter is an improperly promulgated substantive rule that should have been subject to notice and comment; and that they have a claim for relief under the Take Care Clause. As before, where Plaintiffs alleged a nearly identical set of additional claims, the Court “need not tackle Plaintiffs’ alternative bases for vacating some or all of the components” of Kentucky HEALTH or the SMD letter “[b]ecause [it] invalidates [the entire] approval” of Kentucky HEALTH. Id. at 272. Vacating the reapproval will give Plaintiffs all the relief they
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seek. “While those [other] questions may resurface on remand, they will not trouble the Court

now.” Id.

IV. CONCLUSION

For these reasons, the Court will grant Plaintiffs’ Motion for Summary Judgment on

Count VIII. It will also deny Defendants’ Cross-Motions, vacate the Secretary’s approval of

Kentucky HEALTH, and remand to the agency. A separate Order so stating will issue this day.

Date: March 27, 2019

/s/ James E. Boasberg JAMES E. BOASBERG United States District Judge

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