Opinion ID: 168152
Heading Depth: 1
Heading Rank: 2

Heading: Reasonable Promptness and Comparability

Text: W e begin with the claim that the State has failed to comply with the requirements of reasonable promptness and comparability. If a state chooses to participate in M edicaid, it must submit a state plan for providing “medical assistance.” 42 U.S.C. § 1396a(a). The M edicaid Act imposes a number of conditions on a state plan, two of which are at issue in this case. The first is that medical assistance “shall be furnished with reasonable promptness to all eligible individuals.” Id. § 1396a(a)(8). The second, the comparability requirement, is that the assistance any patient receives “shall not be less in amount, duration, or scope than the medical assistance made available to any other such individual.” Id. § 1396a(a)(10)(B)(i). In addressing these claims, we assume that the individual plaintiffs may sue to enforce their rights under subsections (8) and (10). Since the Supreme Court clarified when a statute creates an enforceable private right in Gonzaga University v. Doe, 536 U.S. 273 (2002), several circuit courts have considered whether one or both of these subsections creates an enforceable private right. Each has concluded that the provision in question does. See, e.g., Watson v. Weeks, 436 F.3d 1152, 1159 & n.8 (9th Cir. 2006) (following the five federal circuit courts that have found a private right to sue for enforcement of § 1396a(a)(10), two of which did so after Gonzaga); Sabree v. Richman, 367 F.3d 180, 192 (3d Cir. 2004) (finding that each provision created an enforceable private right). But see -7- Sanders ex rel. Rayl v. Kan. Dep’t of Soc. and Rehab. Servs., 317 F. Supp. 2d 1233, 1250 (D. Kan. 2004) (concluding that subsection (8) does not create an enforceable private right but finding it “a closer question” than for some M edicaid provisions); M .A.C. v. Betit, 284 F. Supp. 2d 1298, 1307 (D. Utah 2003) (concluding that subsection (8) does not create an enforceable private right). In this case, the district court did not clearly decide whether this portion of the statute creates a federal right enforceable under § 1983, but the parties have not disputed the point. W e therefore assume without deciding that § 1983 gives the plaintiffs a right of action to enforce subsections (8) and (10). See Burks v. Lasker, 441 U.S. 471, 475-76 & n.5 (1979) (“The question whether a cause of action exists is not a question of jurisdiction, and therefore may be assumed without being decided.”). On the merits, the plaintiffs’ reasonable promptness and comparability claims are two ways of characterizing one problem: that the individual plaintiffs are not receiving the comprehensive residential services they need. They are thus (1) not receiving them promptly and (2) not receiving them to the extent that others receive them. The outcome of both claims turns on the same question: W hat is the “medical assistance” that the State must provide promptly and equally? The M edicaid Act defines “medical assistance” as “payment of part or all of the cost of the [described] care and services.” 42 U.S.C. § 1396d(a). The -8- statutory definition mentions payment for, but not provision of, services. In other words, “the statutory reference to ‘assistance’ appears to have reference to financial assistance rather than to actual medical services.” Bruggeman ex rel. Bruggeman v. Blagojevich, 324 F.3d 906, 910 (7th Cir. 2003); see also Westside M others v. Olszewski, 454 F.3d 532, 540 (6th Cir. 2006) (concluding that 42 U.S.C. §§ 1396a(a)(8) and (10) do not “require the State to provide medical services directly” but rather require only financial assistance). 2 On its face, then, the M edicaid Act requires any state participating in M edicaid to pay promptly and evenhandedly for medical services w hen the state is presented w ith the bill. If that is all the statute requires, then the plaintiffs have no claim: they are on a waiting list for services, not a waiting list for payment for services. The plaintiffs offer two reasons we should reject the natural reading of the statute. The first is that the definition of “medical assistance,” w hen read in context, requires the State to provide actual services and not merely to pay for them. The plaintiffs point to five contextual clues that “medical assistance” 2 Some courts have suggested that there exists a circuit split on the question of w hether “medical assistance” requires a state to provide actual services. Sabree ex rel. Sabree v. Richman, 367 F.3d 180, 181 n.1 (3d Cir. 2004); Westside M others, 454 F.3d at 540. The existence of such a split is not entirely clear. Tw o circuits have held that “medical assistance” requires only financial assistance. See Bruggeman, 324 F.3d at 910; Westside M others, 454 F.3d at 540. Another circuit has reserved the question. Sabree, 367 F.3d at 181. W ithout expressly addressing the issue, two other circuits appear to have treated the statute as requiring the provision of actual services. Bryson v. Shumway, 308 F.3d 79, 81, 88-89 (1st Cir. 2002); Doe v. Chiles, 136 F.3d 709, 714, 717 (11th Cir. 1998). -9- means actual services and not just financial payments. None of these clues, however, is sufficiently convincing to depart from the statutory definition of “medical assistance.” First, the plaintiffs point to another provision in the M edicaid Act, 42 U.S.C. § 1396a(a)(2), which requires the State to “assure that the lack of adequate funds from local sources will not result in lowering the amount, duration, scope or quality of care and services available under the plan.” But this requirement explicitly controls the method of “financial participation by the State.” Id. (emphasis added). The State must ensure that the non-federal portion of an eligible patient’s bill is paid, by picking up any slack from “local sources” of funding, but this provision says nothing about providing the services themselves. Second, the plaintiffs suggest that the comparability provision requires the State to provide actual services because the “medical assistance” must be the same “in amount, duration, or scope.” 42 U.S.C. § 1396a(a)(10)(B)(i). The words of this provision, however, can apply to the payment for services no less logically than to the provision of services. It is coherent, and consistent with the text of the comparability provision, to require states to pay for services on a comparable basis— in the same amounts, for the same duration, and in the same scope. Accordingly, this provision does not indicate w hich meaning we should give to “medical assistance,” and it thus gives us no reason to depart from the general statutory definition for the M edicaid Act. -10- Third, the plaintiffs suggest that the State must provide services whenever necessary to assure that “care 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). The plaintiffs give scant attention to this argument, and for good reason. In Bruggeman the Seventh Circuit held that this provision was “insufficiently definite to be justiciable, and in addition cannot be interpreted to create a private right of action.” Bruggeman, 324 F.3d at 911 (citing three other circuits that have reached the same conclusion, under the M edicaid Act or under § 1983). W e need not reach the private-right-of-action question, which is not before us, to determine that this provision does not require the State to provide actual services. If this provision implicitly required the State to provide services, because it is something in the “best interests of the recipients,” we see no logical end. W ithout a logical stopping point or anything more definite than “best interests,” we do not read this provision to require the State to provide actual services. Fourth, the plaintiffs point to the plan the State filed with the federal government, which promised to provide ICFs/M R with “No Limitations.” Colorado State M edicaid Plan, R. Vol. IV, at 755. This phrase appears in the state plan on a page titled “Amount, Duration and Scope of M edical and Remedial Care and Services Provided to the Categorically Needy.” Id. A series of services are mentioned, from ICFs/M R to nurse-midwife services, and for each the -11- governm ent checked boxes indicating that the services are provided with “No Limitations,” are provided “With Limitations,” or are “Not Provided.” Id. As the director of the State’s M edical Assistance Office explained, “limitations” are limits on payments to otherwise eligible patients, such as the limit that the State will pay for only 45 days of in-patient psychiatric services in a calendar year. R. Vol. II, at 350. If the State wishes to enforce such a limit on the provided services it will pay for, it must announce the limit in the state plan. By choosing “No Limitations,” the State was abjuring limits such as the length of ICF/M R services for which it would pay, but there is no indication that by checking this box the State promised to build, staff, and maintain as many ICFs/M R as w ould be needed to meet the demand in Colorado. Fifth, the plaintiffs assert that Colorado’s waiver application indicates a comm itment to ensuring that every eligible patient receives services, either from ICFs/M R or HCBS. The waiver application provides that a developmentally disabled adult deemed to require the level of care offered by an ICF/M R will be “informed of any feasible alternatives” to ICFs/M R and “[g]iven the choice of either institutional or home and community-based services.” R. Vol. IV, at 863. Although the waiver application suggests that a developmentally disabled person will have a choice between an ICF/M R and HCBS, it does not assign to the State, or any other party, the responsibility to ensure that such facilities are in fact available. Indeed, the waiver application appears to mean only that the choice -12- among “feasible alternatives” is to be made by the recipient – not that the State must make alternatives available. Because it is at best ambiguous on the point, it provides no reason to reject the natural reading of the statutory definition. None of these five contextual clues, therefore, undermines the statutory definition of “medical assistance” as payment for services. The plaintiffs’ second reason to reject the payment-only reading of “medical assistance” is policy based. The plaintiffs accuse the State of promising to pay for services for the developmentally disabled and then suppressing the supply of these services. They are effectively asking us, in the alternative, (1) to conclude that in the context of the M edicaid A ct, the state plan, and the State’s waiver application, “medical assistance” includes a requirement that the State be a service-provider of the last resort; or (2) to graft onto “medical assistance” a good-faith requirement that would oblige the state not to discourage proposals from outside care providers. Such a good-faith requirement has intuitive appeal, for the State has obvious conflicts of interest. At oral argument the State even conceded that it may not escape paying for ICF/M R services by setting rates so low that no one can provide them. Cf. Westside M others, 454 F.3d at 541 (allowing plaintiffs, after amending their complaint, “to allege that inadequate payments effectively deny the right to ‘medical assistance’”). Nevertheless, we need not decide w hether a state has (or may assume) a good-faith obligation not to prevent new entrants into this market. The precise -13- claim brought by the plaintiffs is narrow. The plaintiffs do not suggest that ICF/M R rates have been set so low as to prohibit new entrants to the market. Nor do the plaintiffs claim that the State has discouraged efforts to build HCBS facilities, which is where the greatest shortfall in facilities exists. And the plaintiffs do not claim that the state has denied or effectively denied (through delay or similar means) a formal application to build new ICF/M R facilities. Indeed, the plaintiffs could not claim this, because no such applications have been filed. Instead, the individual plaintiffs claim that the State has discouraged efforts to build new ICFs/M R by responding cooly to initial inquiries. This is too nebulous a basis to support a legal claim. It is the State’s prerogative to prefer HCBS over ICFs/M R – a preference shared by many advocates for the developmentally disabled – and to make that policy preference known. Assuming arguendo that the State has a duty (either statutory or self-imposed) not to prevent new entrants who could provide ICF/M R services, it violated no such duty here, where it neither rejected nor was even presented with any formal applications. If a case arises in which the State has effectively prevented a qualified provider of ICF/M R services from entering the market, we will have to decide whether such a good-faith requirement exists. W e therefore agree with the Sixth and Seventh Circuits that the M edicaid statute does not require states to be service-providers of last resort. See Westside M others, 454 F.3d at 540; Bruggeman, 324 F.3d at 910. Although Bruggeman -14- concerned a claim about the location of ICFs/M R within a state, and not about the lack of them, the Seventh Circuit’s conclusion is directly on point and persuasive: M edicaid is a payment scheme, not a scheme for state-provided medical assistance, as through state-owned hospitals. The regulations that implement the provision indicate that what is required is a prompt determination of eligibility and prompt provision of funds to eligible individuals to enable them to obtain the covered medical services that they need . . . ; a requirement of prompt treatment would amount to a direct regulation of medical services. Bruggeman, 324 F.3d at 910. The State must pay for medical services, but it need not provide them.