Filed: Mar. 24, 2016
Latest Update: Mar. 02, 2020
Summary: 14-543-cv Davis v. Shah UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2014 (Argued: January 5, 2015 Decided: March 24, 2016) Docket No. 14-543-cv HARRY DAVIS, RITA-MARIE GEARY, PATTY POOLE, ROBERTA WALLACH, on behalf of themselves and others similarly situated, Plaintiffs-Appellees, — v. — NIRAV SHAH, individually and in his official capacity as Commissioner of the New York State Department of Health, Defendant-Appellant. B e f o r e: LYNCH and CHIN, Circuit Judges, and KORM
Summary: 14-543-cv Davis v. Shah UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2014 (Argued: January 5, 2015 Decided: March 24, 2016) Docket No. 14-543-cv HARRY DAVIS, RITA-MARIE GEARY, PATTY POOLE, ROBERTA WALLACH, on behalf of themselves and others similarly situated, Plaintiffs-Appellees, — v. — NIRAV SHAH, individually and in his official capacity as Commissioner of the New York State Department of Health, Defendant-Appellant. B e f o r e: LYNCH and CHIN, Circuit Judges, and KORMA..
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14‐543‐cv
Davis v. Shah
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2014
(Argued: January 5, 2015 Decided: March 24, 2016)
Docket No. 14‐543‐cv
HARRY DAVIS, RITA‐MARIE GEARY, PATTY POOLE, ROBERTA WALLACH,
on behalf of themselves and others similarly situated,
Plaintiffs‐Appellees,
— v. —
NIRAV SHAH, individually and in his official capacity
as Commissioner of the New York State Department of Health,
Defendant‐Appellant.
B e f o r e:
LYNCH and CHIN, Circuit Judges, and KORMAN, District Judge.*
__________________
*
The Honorable Edward R. Korman, of the United States District Court for the
Eastern District of New York, sitting by designation.
Plaintiffs‐appellees brought this class action against defendant‐appellant
Nirav Shah, Commissioner of the New York State Department of Health,
challenging New York’s restrictions on coverage of certain medical services
under its Medicaid plan. Plaintiffs argued that New York’s 2011 plan
amendments limiting coverage of orthopedic footwear and compression
stockings to certain enumerated medical conditions violate the Medicaid Act’s
reasonable standards, home health services, due process, and comparability
provisions, as well as the anti‐discrimination provision and integration mandate
of the Americans with Disabilities Act and Rehabilitation Act. The district court
granted summary judgment to defendants on plaintiffs’ home health services
claim and the hearing aspect of plaintiffs’ due process claim, and granted
summary judgment to plaintiffs on all their remaining claims. It subsequently
entered a permanent injunction barring New York from enforcing the coverage
restrictions.
We affirm in part and vacate in part. Because neither the Medicaid Act
nor the Supremacy Clause confers a private cause of action to enforce the
reasonable standards provision, we vacate the grant of summary judgment to
plaintiffs on their reasonable standards claim. We decline to reach plaintiffs’
integration mandate claim as largely duplicative of their anti‐discrimination
claim under the Americans with Disabilities Act and Rehabilitation Act. With
respect to plaintiffs’ other claims, however, we affirm the district court’s
summary judgment rulings. Nevertheless, because the injunction ordered by the
district court is broader than is warranted by our liability determinations, we
vacate that injunction and remand for reconsideration of the appropriate relief.
AFFIRMED IN PART, VACATED IN PART, AND REMANDED.
VICTOR PALADINO, Assistant Solicitor General (Barbara D.
Underwood, Solicitor General, and Andrea Oser, Deputy
Solicitor General, on the brief), for Eric T. Schneiderman,
Attorney General of the State of New York, Albany, New
York, for Defendant‐Appellant.
2
GEOFFREY A. HALE (Bryan D. Hetherington and Jonathan Feldman,
Empire Justice Center, and Martha Jane Perkins, National
Health Law Program, on the brief), Empire Justice Center,
Rochester, New York, for Plaintiffs‐Appellees.
Molly J. Moran, Acting Assistant Attorney General (Mark L. Gross
and Robert A. Koch, Attorneys, on the brief), Department of
Justice, Civil Rights Division, Washington, D.C., for Amicus
Curiae United States Department of Justice in Support of Plaintiffs‐
Appellees.
Benjamin C. Mizer, Principal Deputy Assistant Attorney General
(Alisa B. Klein and Lindsey Powell, Attorneys, on the brief),
Department of Justice, Civil Division, Washington, D.C., for
Amicus Curiae United States Department of Health and Human
Services, Centers for Medicare and Medicaid Services, in Support of
Neither Party.
GERARD E. LYNCH, Circuit Judge:
Plaintiffs‐appellees Harry Davis, Rita‐Marie Geary, Patty Poole, and
Roberta Wallach (“plaintiffs”) brought this class action against defendant‐
appellant Nirav Shah, Commissioner of the New York State Department of
Health (the “Commissioner”), challenging New York’s coverage restrictions on
certain medical services provided under its Medicaid plan. Plaintiffs argue that
New York’s 2011 plan amendments, which restrict coverage of orthopedic
3
footwear and compression stockings to patients with certain enumerated medical
conditions, violate the Medicaid Act’s reasonable standards, home health
services, due process, and comparability provisions, as well as the anti‐
discrimination provision and integration mandate of Title II of the Americans
with Disabilities Act (“ADA”) and § 504 of the Rehabilitation Act. The United
States District Court for the Western District of New York (Charles J. Siragusa,
Judge) granted summary judgment to defendant on plaintiffs’ home health
services claim and the hearing aspect of their due process claim, and granted
summary judgment to plaintiffs on all their remaining claims. The court
subsequently entered a permanent injunction barring New York from enforcing
its coverage restrictions against any beneficiaries under its plan.
We affirm in part and vacate in part. Because neither the Medicaid Act nor
the Supremacy Clause confers a private cause of action to enforce the reasonable
standards provision, we vacate the district court’s grant of summary judgment to
plaintiffs on that claim. We also decline to reach plaintiffs’ unequal treatment
claim under the ADA and Rehabilitation Act as largely duplicative of their
integration mandate claim. With respect to the remaining claims, however, we
affirm the summary judgment rulings of the district court. Because orthopedic
4
footwear and compression stockings constitute optional “prosthetics” rather than
mandatory “home health services” under the Medicaid Act, defendant is entitled
to summary judgment on plaintiffs’ home health services claim. Because the due
process provision required New York to provide plaintiffs with written notice –
though not evidentiary hearings – prior to terminating their benefits, defendant is
entitled to summary judgment on the hearing element and plaintiffs are entitled
to summary judgment on the notice element of plaintiffs’ due process claim.
Because New York’s coverage restrictions deny some categorically needy
individuals access to the same scope of medically necessary services made
available to others, plaintiffs are entitled to summary judgment on their
comparability provision claim. Because New York’s restrictions violate the
integration mandate of the ADA and Rehabilitation Act, plaintiffs are entitled to
summary judgment on their anti‐discrimination claims under those statutes.
Finally, because the injunction granted by the district court is broader than
is warranted by our liability conclusions, we vacate that injunction and remand
for further consideration of the appropriate relief.
5
BACKGROUND
I. The Federal Medicaid Program
Enacted in 1965 as Title XIX of the Social Security Act, 42 U.S.C. § 1396 et
seq., the Medicaid Act is a cooperative federal‐state program designed to provide
medical assistance to persons whose resources are insufficient to meet the costs of
their necessary medical care. Himes v. Shalala, 999 F.2d 684, 686 (2d Cir. 1993).
On the federal level, the program is administered by the Centers for Medicare
and Medicaid Services (“CMS”), a division of the United States Department of
Health and Human Services (“HHS”). Although no state is required to
participate in Medicaid, states that choose to do so must formulate a plan of
administration that complies with both the Medicaid Act and regulations
promulgated by HHS. 42 U.S.C. § 1396a; Lewis v. Thompson, 252 F.3d 567, 569
(2d Cir. 2001). Once CMS approves the state plan as complying with all statutory
and regulatory requirements, the federal government will subsidize a significant
portion of the state’s expenditures in administering the program. 42 U.S.C.
§§ 1396a(b), 1396b; Rodriguez v. City of New York, 197 F.3d 611, 613 (2d Cir.
1999).
6
A state’s Medicaid plan defines both the categories of individuals eligible
for benefits and the categories of services that are covered for those different
groups. See 42 U.S.C. § 1396a(a); Pharm. Research & Mfrs. of Am. v. Walsh, 538
U.S. 644, 650 (2003). With regard to beneficiaries, the Medicaid Act requires any
state participating in Medicaid to provide medical assistance to the “categorically
needy.” Roach v. Morse, 440 F.3d 53, 59 (2d Cir. 2006). That group includes
aged, blind, or disabled individuals who qualify for supplemental security
income; individuals eligible for the Aid to Families with Dependent Children
program; and other low‐income groups, such as pregnant women and children,
entitled to poverty‐related benefits. See 42 U.S.C. § 1396a(a)(10)(A)(i); Walsh, 538
U.S. at 651 n.4. A state may also, at its option, provide medical assistance to the
“medically needy.” Roach, 440 F.3d at 59. That group includes individuals
whose income or resources exceed the financial threshold for categorical
coverage, but who otherwise meet the eligibility requirements that define the
categorically needy. See 42 U.S.C. § 1396a(a)(10)(C); 42 C.F.R. § 435.301; Walsh,
538 U.S. at 651 n.5. Unlike the categorically needy, who can cover the costs of
neither their basic needs nor necessary medical care, the “medically needy” have
7
sufficient resources to cover their basic needs but not their necessary medical
care. Roach, 440 F.3d at 59.
With regard to services provided under a state plan, the Medicaid Act
similarly specifies certain categories of mandatory and optional medical care. 42
U.S.C. § 1396a(a)(10)(A); id. § 1396d(a); Rodriguez, 197 F.3d at 613. A state is
required to provide some benefits to all categorically needy individuals,
including, among others, nursing facility services for persons over 21 and “home
health care services.” 42 U.S.C. § 1396a(a)(10)(A); id. §§ 1396d(a)(4), (7). While a
state need not provide either service to the medically needy, any state that elects
to provide nursing facilities services to those beneficiaries must also provide
home health services. Id. § 1396a(a)(10)(D); 42 C.F.R. § 440.220(a)(3).
Furthermore, the Medicaid Act identifies a number of purely optional services
that a state may provide to either the categorically needy or to both the
categorically and medically needy. Optional services include, among other
things, “prosthetic devices.” 42 U.S.C. § 1396a(a)(10)(A); id. § 1396d(a)(12); see
also 42 C.F.R. 440.120(c); id. § 440.225.
The Medicaid Act imposes several requirements on the administration of
both required and optional services under a state plan. Under the so‐called
8
“reasonable standards” provision, the Act provides that a participating state
must “include reasonable standards . . . for determining eligibility for and the
extent of medical assistance under the plan which . . . are consistent with the
objectives” of the Medicaid program. 42 U.S.C. § 1396a(a)(17). Under the so‐
called “comparability” provision, the Act requires that the medical assistance
available to any categorically needy individual “shall not be less in amount,
duration, or scope than the medical assistance made available to any other such
individual,” nor “less in amount, duration, or scope than the medical assistance
made available to [non‐categorically needy] individuals.” 42 U.S.C.
§ 1396a(a)(10)(B); see also 42 C.F.R. § 440.240; Rodriguez, 197 F.3d at 615. Finally,
under the due process provision, a state plan participating in Medicaid must
“provide for granting an opportunity for a fair hearing before the State agency to
any individual whose claim for medical assistance under the plan is denied.” 42
U.S.C. § 1396a(a)(3). That requirement entails both written notice of any intended
actions affecting a beneficiary’s claim and an evidentiary hearing to contest
denials of service. See 42 C.F.R. §§ 431.206(b), (c); id. § 431.210.
9
II. New York’s 2011 Medicaid Amendments
The State of New York has participated in the federal Medicaid program
since 1966. See N.Y. Soc. Serv. Law § 363; DeJesus v. Perales, 770 F.2d 316, 319
(2d Cir. 1985). The terms of New York’s Medicaid plan, which is administered by
the New York State Department of Health (“NYSDH”), are set out in the New
York Social Services Law, see N.Y. Soc. Serv. Law § 363 et seq., and Title 18 of the
New York Codes, Rules and Regulations, see 18 N.Y.C.R.R. § 500 et seq.
New York has chosen to provide Medicaid coverage to both the
categorically needy and the medically needy. See N.Y. Soc. Serv. Law § 366;
Lewis, 252 F.3d at 570. Standard coverage for both types of beneficiaries under
its plan is defined as the provision of
medically necessary medical, dental and remedial care,
services, and supplies . . . which are necessary to prevent,
diagnose, correct or cure conditions in the person that
cause acute suffering, endanger life, result in illness or
infirmity, interfere with such person’s capacity for normal
activity, or threaten some significant handicap . . . .
N.Y. Soc. Serv. Law § 365‐a(2). Such standard medical assistance includes both
nursing facility services and “home health services provided in a recipient’s
home.” Id. §§ 365‐a(2)(b), (d). It also includes coverage of “sickroom supplies,
10
eyeglasses, prosthetic appliances and dental prosthetic appliances.” Id. § 365‐
a(2)(g).
Until 2011, New York’s Medicaid program provided orthopedic footwear
and compression stockings to all beneficiaries for whom such services were
medically necessary. During that time, regulations promulgated by the NYSDH
defined “orthopedic footwear” as
shoes, shoe modifications, or shoe additions which are
used to correct, accommodate or prevent a physical
deformity or range of motion malfunction in a diseased or
injured part of the ankle or foot; to support a weak or
deformed structure of the ankle or foot, or to form an
integral part of a brace.
18 N.Y.C.R.R. § 505.5(a)(4) (effective until Apr. 6, 2011). Although the regulations
did not define “compression stockings,” the acting director of operations at
NYSDH’s Office of Health Insurance Programs has described such items as
hosiery that exerts pressure against the legs so as to “comfort aching and tired
legs,” “prevent varicose veins from stretching and hurting,” “improve blood and
lymph circulation,” and minimize swelling.2 Joint App’x at 353.
2
As used throughout this lawsuit, the term “compression stockings” has
encompassed two separate items: “compression stockings,” which have a high
compression gradient and require custom fitting, and “surgical stockings,” which
have a lower compression gradient and may be sold over the counter. Because
11
In 2011, New York found itself facing a state‐wide fiscal crisis. In
searching for ways to reduce its budget, New York discovered that orthopedic
footwear and compression stocking were a source of significant waste in its
Medicaid program. In the fiscal year for 2010‐2011, nearly half of state Medicaid
payments for orthopedic footwear went to the treatment of hammertoes and
bunions, common medical conditions that can readily be treated through
inexpensive off‐the‐shelf products. Similarly, numerous beneficiaries submitting
claims for compression stockings had used such items to treat common and
relatively mild complaints, such as varicose veins or aching legs.
To reduce spending, New York amended its Medicaid plan to limit
coverage for both orthopedic footwear and compression stockings to what it
deemed to be the most frequently occurring serious conditions requiring their
use. In the spring of 2011, the New York legislature added a set of qualifications
to N.Y. Soc. Serv. Law § 365‐a(2)(g), which addresses New York’s provision of
“sickroom supplies, eyeglasses, prosthetic appliances and dental prosthetic
appliances.” The revised version of that provision now provided that
the differences between these two items are not material to the case, we adopt the
parties’ usage and use the single phrase to refer to both.
12
(iii) prescription footwear and inserts are limited to
coverage only when used as an integral part of a lower
limb orthotic appliance, as part of a diabetic treatment
plan, or to address growth and development problems in
children; [and]
(iv) compression and support stockings are limited to
coverage only for pregnancy or treatment of venous stasis
ulcers . . . .
N.Y. Soc. Serv. Law §§ 365‐a(2)(g)(iii), (iv) (effective Apr. 1, 2011).
To reflect the legislature’s changes, NYSDH also amended the definitions
section at 18 N.Y.C.R.R. § 505.5(a) and added a new limiting provision at
§ 505.5(g). The regulatory definition of “orthopedic footwear” now described
such items as
shoes, shoe modifications, or shoe additions which are
used . . . in the treatment of children, to correct, accom‐
modate or prevent a physical deformity or range of
motion malfunction in a diseased or injured part of the
ankle or foot; in the treatment of children, to support a weak
or deformed structure of the ankle or foot; as a component
of a comprehensive diabetic treatment plan to treat
amputation, ulceration, pre‐ulcerative calluses, peripheral
neuropathy with evidence of callus formation, a foot
deformity or poor circulation; or to form an integral part
of an orthotic brace.
18 N.Y.C.R.R. § 505.5(a)(4) (effective Apr. 6, 2011) (emphases added). The new
subsection at § 505.5(g) listed several “established defined benefit limits” on
13
Medicaid services, including limitations on orthopedic footwear and
compression stockings that tracked the language of the legislature’s new
qualifications at § 365‐a(2)(g). See id. §§ 505.5(g)(1), (2).3 The limitations
provision warned that NYSDH “shall not allow exceptions to defined benefit
limitations.” Id. § 505.5(g).
Prior to implementing its changes, NYSDH submitted a proposed plan
amendment for review by CMS, noting the new restrictions on New York’s
coverage of orthopedic footwear and compression stockings. CMS informally
3
1 The regulatory limitation, which largely echoes the amended definition of
2 “orthopedic footwear” in § 505.5(a)(4), reads:
3
4 (1) Compression and surgical stockings are limited to
5 coverage during pregnancy and for venous stasis ulcers.
6 (2) Orthopedic footwear is limited to coverage in the
7 treatment of children to correct, accommodate or prevent
8 a physical deformity or range of motion malfunction in a
9 diseased or injured part of the ankle or foot; in the
10 treatment of children to support a weak or deformed
11 structure of the ankle or foot; as a component of a
12 comprehensive diabetic treatment plan to treat
13 amputation, ulceration, pre‐ulcerative calluses, peripheral
14 neuropathy with evidence of callus formation, a foot
15 deformity or poor circulation; or to form an integral part
16 of an orthotic brace.
17
18 Id. §§ 505.5(g)(1), (2).
14
advised the department that it need not obtain CMS’s approval for the new
coverage restrictions because, as paraphrased by NYSDH, “such changes in
medical necessity criteria were within the State’s purview.” Joint App’x at 360.
The record contains no written statement from CMS embodying this advice. The
advice is evidenced only by an affidavit from Jonathan Bick, the acting director of
operations at New York’s Office of Health Insurance Programs, attesting to what
he was told by CMS.
NYSDH subsequently adopted its new regulations on an emergency basis
effective April 6, 2011, and as a permanent rule effective March 28, 2012. It
communicated the new changes in service to medical suppliers by issuing a
series of “Provider Update[s] for Pharmacy and DME Providers.” JA162. It did
not notify individual beneficiaries of the changes.
By restricting coverage for orthopedic footwear and compression
stockings, New York saved $14.6 million during the 2011‐2012 fiscal year.
III. The Plaintiffs
Plaintiffs include both categorically needy and medically needy
individuals who qualify for New York’s Medicaid plan on the basis of their
disabilities. They suffer from a variety of ailments, including multiple sclerosis,
15
paraplegia, lymphedema, cellulitis, psoriatic arthritis, peripheral neuropathy,
and trans‐metatarsal amputation. Plaintiffs’ doctors have prescribed them
orthopedic footwear or compression stockings as medically necessary items to
treat their afflictions. Such products help plaintiffs to maintain mobility and to
avoid more serious complications, including skin ruptures, infections, and
further amputations, which may require extended hospital care or even
institutionalization. The Commissioner does not dispute that orthopedic
footwear or compression stockings are in fact medically necessary to treat
plaintiffs’ conditions.
Prior to New York’s 2011 amendments, most plaintiffs had received
Medicaid coverage for their orthopedic footwear or compression stockings.6
Because none of plaintiffs’ diagnoses fall within New York’s 2011 list of
qualifying conditions, however, plaintiffs lost funding for those services in April
2011. They received no written notice of the new coverage restrictions, but
instead learned of New York’s change in service when they attempted to fill or
refill their orders and were denied by their medical providers.
6
One plaintiff, Patty Poole, was first prescribed compression stockings in the
spring of 2011, after New York’s coverage restrictions took effect.
16
IV. Procedural History
On March 14, 2012, plaintiffs commenced this suit as a putative class action
against the Commissioner in the United States District Court for the Western
District of New York. They claimed that New York’s coverage restrictions
violated the Medicaid Act’s reasonable standards provision, 42 U.S.C.
§ 1396a(a)(17), its home health services provision, id. § 1396a(a)(10)(D), its due
process provision, id. § 1396a(a)(3), and its comparability provision, id.
§ 1396a(a)(10)(B). They also claimed that the amendments discriminated against
them on the basis of disability and put them at risk of institutionalization in
violation of Title II of the ADA, 42 U.S.C. § 12131 et seq., and § 504 of the
Rehabilitation Act, 29 U.S.C. § 794. Plaintiffs sought declaratory and injunctive
relief prohibiting NYSDH from implementing the service changes, as well as
attorneys’ fees and costs and disbursements.
In October 2012, plaintiffs moved for summary judgment on all counts of
the complaint, and the Commissioner cross‐moved for summary judgment on all
counts. Prior to considering those motions, the district court granted plaintiffs’
motion for class certification. Echoing the broad certification request in plaintiffs’
complaint, the court certified a class that encompassed
17
[a]ll current and future New York State Medicaid
recipients for whom Defendant has directly or indirectly
failed to provide coverage for medically necessary
orthopedic footwear and compression stockings as a result
of New York Soc. Serv. Law § 365‐a(2)(g)(iii) and (iv) and
regulations and policies promulgated thereto.
Joint App’x at 415.7
On December 9, 2013, the district court issued an order granting in part
and denying in part both parties’ motions for summary judgment. The district
court granted judgment to defendant on plaintiffs’ home health services claim,
holding that orthopedic footwear and compression stockings qualified as
“prosthetics” rather than “home health services,” and consequently were
optional services that failed to trigger that provision. With regard to the
remaining claims, however, the district court ruled largely in favor of plaintiffs.
Judge Siragusa found that New York’s restrictions violated the Medicaid Act’s
reasonable standards provision by denying coverage of medically necessary
services without any consideration of beneficiaries’ medical needs, and violated
the comparability provision by discriminating among categorically needy
7
On December 13, 2012, plaintiffs filed an amended class complaint. The terms
of that amended complaint do not differ meaningfully from the original for the
purposes of this appeal.
18
beneficiaries on basis of their medical conditions. While concluding that the due
process provision did not entitle plaintiffs to evidentiary hearings prior to the
termination of their benefits, the judge held that New York had nevertheless
violated that provision by implementing its restrictions without first providing
written notice to individual beneficiaries. Finally, the court held that New York’s
plan amendments conflicted with both the ADA and Rehabilitation Act by
treating some disabled individuals more favorably than others, and by putting
plaintiffs at risk of institutionalization in violation of the integration mandate.
The district court thus concluded that plaintiffs were entitled to permanent
injunctive relief, and directed the parties to “settle and submit a proposed Order
concerning such injunctive relief” within fourteen days. Sp. App’x at 62. In light
of the court’s decision, NYSDH announced that it would cease enforcing its plan
amendments, explaining that it would simply “return to its previous coverage
policy” for orthopedic footwear and compression stockings. Joint App’x at 465.
Subsequently, the district court entered a final order of judgment that, among
other things, permanently enjoined NYSDH and its agents from enforcing the
coverage restrictions against any beneficiaries under New York’s Medicaid plan.
19
DISCUSSION
We review a district court’s order granting summary judgment de novo,
resolving all ambiguities and drawing all permissible factual inferences in favor
of the non‐moving party. Doe ex rel. Doe v. Whelan, 732 F.3d 151, 155 (2d Cir.
2013). We may affirm a grant of summary judgment only if the movant
establishes that there is no genuine dispute as to any material facts and that the
movant is entitled to judgment as a matter of law. Id.; see also Fed. R. Civ. P.
56(a).
We review a district court’s grant of a permanent injunction for abuse of
discretion. Shain v. Ellison, 356 F.3d 211, 214 (2d Cir. 2004). A district court
abuses its discretion when “(1) its decision rests on an error of law . . . or a clearly
erroneous factual finding, or (2) its decision – though not necessarily the product
of a legal error or a clearly erroneous factual finding – cannot be located within
the range of permissible decisions.” ACORN v. United States, 618 F.3d 125, 133
(2d Cir. 2010) (internal quotation marks omitted). To prevail on a motion for a
permanent injunction, a plaintiff must both succeed on the merits and
demonstrate the “absence of an adequate remedy at law and irreparable harm if
the relief is not granted.” Roach, 440 F.3d at 56 (internal quotation marks
20
omitted). Because the Commissioner does not dispute either that plaintiffs will
suffer irreparable harm if NYSDH continues to enforce its coverage restrictions or
that plaintiffs lack an adequate remedy at law, the only issues before us are the
merits of plaintiffs’ statutory claims.
I. Reasonable Standards Provision
First, plaintiffs claim that New York’s coverage restrictions on orthopedic
footwear and compression stockings violate the reasonable standards provision
of the Medicaid Act by denying beneficiaries access to services on the basis of
their diagnoses without regard to their medical needs.
The Medicaid Act provides that any state participating in the federal
program must “include reasonable standards . . . for determining eligibility for
and the extent of medical assistance under the plan which . . . are consistent with
the objectives of this subchapter.” 42 U.S.C. § 1396a(a)(17). As interpreted by
HHS, that provision requires that each service administered by a state “be
sufficient in amount, duration, and scope to reasonably achieve its purpose,” 42
C.F.R. § 440.230(b), though a state may place “appropriate limits” on its services
“based on such criteria as medical necessity or on utilization control procedures,”
id. § 440.230(d).
21
In 42 U.S.C. § 1983, Congress has created a cause of action whereby
plaintiffs may sue a defendant “who, under color of any statute, ordinance,
regulation, custom, or usage, of any State . . . , subjects, or causes to be subjected,
any citizen of the United States . . . to the deprivation of any rights, privileges, or
immunities secured by the Constitution and laws [of the United States].” 42
U.S.C. § 1983; see also Giordano v. City of New York, 274 F.3d 740, 750 (2d Cir.
2001). That language on its face might appear to permit plaintiffs to sue the
Commissioner to vindicate their claims that New York’s 2011 amendments
violate the “laws” of the United States insofar as they are inconsistent with the
reasonable standards provisions of 42 U.S.C. § 1396a(a)(17) and 42 C.F.R.
§ 440.230(b).
The Supreme Court, however, has interpreted § 1983 to create a cause of
action only for violations of federal laws that “manifest[ ] an unambiguous intent
to confer individual rights.” Gonzaga Univ. v. Doe, 536 U.S. 273, 280 (2002)
(internal quotation marks omitted). Federal laws that merely set standards on
the basis of which states may receive federal funding, for example, but that do
not create specific rights for individuals, are not enforceable by a civil action
under § 1983. Id. at 283. Because the Medicaid Act’s reasonable standards
22
provision addresses a state’s general administrative duties under the Act, rather
than defining individual beneficiaries’ entitlements under that program, it does
not appear to contain the type of rights‐creating language necessary to confer a
private cause of action. See Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. —,
—, 135 S. Ct. 1378, 1387 (2015). Unsurprisingly, our sister courts of appeals to
have considered the issue have thus concluded that the reasonable standards
provision creates no such individual right. See Hobbs ex rel. Hobbs v.
Zenderman, 579 F.3d 1171, 1182 (10th Cir. 2009); Lankford v. Sherman, 451 F.3d
496, 509 (8th Cir. 2006); Watson v. Weeks, 436 F.3d 1152, 1162 (9th Cir. 2006).
Plaintiffs, for their part, seem to concede that the reasonable standards
provision creates no private right of action under § 1983. Instead, plaintiffs argue
that the Supremacy Clause of Article VI of the United States Constitution endows
them with independent authority to bring their statutory claim.8
This Court has previously held that where a state law conflicts with a
federal statute, the Supremacy Clause creates a private cause of action to enforce
8
The Supremacy Clause provides that the “Constitution, and the Laws of the
United States, which shall be made in Pursuance thereof . . . shall be the supreme
Law of the Land,” and that all courts “shall be bound thereby, any Thing in the
Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const.,
Art. VI, cl. 2.
23
the federal statute’s superior requirements. In Burgio & Campofelice, Inc. v. New
York State Department of Labor, 107 F.3d 1000 (2d Cir. 1997), for example, we
affirmed that “the Supremacy Clause creates an implied right of action for
injunctive relief against state officers who are threatening to violate the federal
Constitution or laws.” Id. at 1006 (internal quotation marks omitted); see also
Loyal Tire & Auto Ctr., Inc. v. Town of Woodbury, 445 F.3d 136, 149 (2d Cir.
2006).
In its recent decision in Armstrong, however, the Supreme Court rejected
that interpretation of Article VI. As the Court noted, the “ample discussion” of
the Supremacy Clause during the ratification debates included no mention of
endowing individuals with private rights of action against the states – despite the
fact that the constitutional creation of such a cause of action would have
significantly restricted Congress’s power to establish mechanisms for the
enforcement of its own laws. 575 U.S. at —, 135 S. Ct. at 1383. In context, the
Court found it “apparent” that the Supremacy Clause simply “creates a rule of
decision” by which courts are to resolve conflicts between state and federal laws.
Id. But it “is not the source of any federal rights, and certainly does not create a
24
cause of action” to enforce federal statutes that do not independently provide for
private enforcement. Id. (internal citation and quotation marks omitted).
After concluding that the Supremacy Clause does not create a private right
of action, the Supreme Court further determined that the language of the
provision of the Medicaid Act at issue in the case, 42 U.S.C. § 1396a(a)(30)(A), at
least when “coupled with the express provision of an administrative remedy,”
indicated that Congress intended to foreclose a private equitable remedy for
violation of that provision. Armstrong, 135 S. Ct. at 1385. The provision at issue
requires that state plans
provide such methods and procedures relating to the
utilization of, and the payment for, care and services
available under the plan . . . as may be necessary to
safeguard against unnecessary utilization of such care and
services and to assure that payments are consistent with
efficiency, economy, and quality of care and are sufficient
to enlist enough provides so that care and services are
available under the plan at least to the extent that such
care and services are available to the general population
in the geographic area.
Id., quoting § 1396a(a)(30)(A). The Court concluded that the “broad[],”
“complex[],” and “judgment‐laden” nature of the provision’s text made it
25
“judicially unadministrable.” Id. Accordingly, the Court held that the provision
was not privately enforceable by invoking the federal courts’ equitable powers.
Plaintiffs’ claim under the reasonable standards provision in this case rests
entirely on an implied right of action arising out of the Supremacy Clause.
Because the Court’s decision in Armstrong denies the existence of any such right,
Armstrong would thus seem to preclude their claim. Moreover, the language of
the reasonable standards provision is similar to that of § 1396a(a)(30)(A),
requiring that states “include reasonable standards . . . for determining
eligibility.” 42 U.S.C. § 1396a(a)(17). Indeed, a district court in our circuit
recently noted that the provision “consists of a broad grant of discretion to the
states,” and that, “[l]ike [subs]ection 30(A), [the reasonable standards provision]
focuses on programmatic aspects of the state plan as a whole, rather than on the
specific benefits that must be accorded to individuals.” Cruz v. Zucker, No. 14‐
CV‐4456 (JSR), 2015 WL 4548162, at *11 (S.D.N.Y. July 29, 2015). The district court
thus held that the reasonable standards provision “is not privately enforceable”
under Armstrong.” Id. We agree.
Plaintiffs object, however, that the Commissioner has waived his challenge
to their right to enforce the reasonable standards provision – under Armstrong or
26
otherwise – because he did not raise that defense in opposition to plaintiffs’
motion for summary judgment before the district court. It is true that, as a
general matter, “a federal appellate court does not consider an issue not passed
upon below.” Baker v. Dorfman, 239 F.3d 415, 420 (2d Cir. 2000), quoting
Singleton v. Wulff, 428 U.S. 106, 120 (1976). Yet because “waiver rules are
prudential and not jurisdictional,” we may exercise discretion to address an issue
not raised properly before the district court. Paese v. Hartford Life & Accident
Ins. Co., 449 F.3d 435, 446 (2d Cir. 2006). We are most likely to exercise such
discretion “(1) where consideration of the issue is necessary to avoid manifest
injustice, or (2) where the issue is purely legal and there is no need for additional
fact‐finding.” Baker, 239 F.3d at 420 (internal quotation marks omitted). A
party’s assertion of a claim earlier in the proceedings, as well as a lack of
prejudice to the opposing party, may also weigh in favor of considering new
claims. See Stichting Ter Behartiging Van de Belangen Van Oudaandeelhouders
In Het Kapitaal Van Saybolt Int’l B.V. v. Schreiber, 407 F.3d 34, 45‐46 (2d Cir.
2005) (subsequent history omitted).
Although the Commissioner did not raise his Supremacy Clause objection
in his summary judgment papers before the district court, he included it in his
27
initial answer to plaintiffs’ complaint and in his opposition to plaintiffs’ motion
for a preliminary injunction. Indeed, plaintiffs’ extensive briefing on this issue on
appeal demonstrates that plaintiffs suffered no unfair surprise or prejudice from
defendant’s failure to argue the matter in opposition to summary judgment.
Furthermore, the Commissioner’s objection to plaintiffs’ assertion of a cause of
action based on the Supremacy Clause raises a discrete question of law – one
recently clarified by and readily resolved in light of the Supreme Court’s decision
in Armstrong – that is dispositive of plaintiffs’ reasonable standards claim.
Under these circumstances, we find it appropriate to exercise our discretion to
resolve the Commissioner’s objection on the merits.
Because Armstrong forecloses plaintiffs’ claim that the Supremacy Clause
endows them with an implied right of action to enforce the reasonable standards
provision, defendant is entitled to summary judgment on plaintiffs’ claim under
§ 1396a(a)(17).
II. Home Health Services
Second, plaintiffs claim that New York’s coverage restrictions for
orthopedic footwear and compression stockings based on a beneficiary’s medical
condition violates the Medicaid Act’s home health services provision by denying
28
beneficiaries access to obligatory medical “equipment” or “supplies.” We agree
with the district court that this claim is unpersuasive.9
Under the home health services provision, a state participating in the
federal Medicaid program must provide “home health services for any
individual who, under the State plan, is entitled to nursing facility services.” 42
U.S.C. § 1396a(a)(10)(D). The parties do not dispute that New York’s Medicaid
plan provides nursing facilities services to both the categorically needy and the
medically needy, and that New York is consequently obligated to provide home
health services to both groups. They dispute, however, whether orthopedic
9
We note that, in contrast to Plaintiffs’ claim under the reasonable standards
provision, the Commissioner has waived any argument that their claim under the
home health services provision is not privately enforceable. The Commissioner
did not make such an argument in its brief on appeal, nor did it attempt to assert
any such argument in its letter, pursuant to Rule 28(j), Fed. R. App. P., calling the
Armstrong case to our attention. In our view, it was wise to forgo such an
argument. Unlike the reasonable standards provision and the provision at issue
in Armstrong, the text of the home health services provision focuses on “the
specific benefits that must be accorded to individuals,” Cruz, 2015 WL 4548162,
at *11, expressly requiring that state plans provide certain specific benefits for
individual beneficiaries; the provision mandates “the inclusion of home health
services for any individual.” 42 U.S.C. § 1396a(a)(10)(D) (emphasis added). That is
not the type of broad, complex, judgment‐laden language that, Armstrong held,
precludes private enforcement. Rather, it is specific, benefit‐creating language
that confers rights on Medicaid recipients, enforceable under § 1983.
29
footwear or compression stockings qualify as “home health services” so as to
trigger that requirement.
As a preliminary matter, the Commissioner insists that CMS implicitly
found that orthopedic footwear and compression stockings qualify as
“prosthetics” when it excused New York from seeking further agency approval
of its proposed coverage restrictions – permission CMS could have given only if
it deemed New York’s plan amendments consistent with the home health
services provision. As a general principle, we owe a “significant measure of
deference to CMS’s interpretation” of the Medicaid Act, Cmty. Health Ctr. v.
Wilson‐Coker, 311 F.3d 132, 137 (2d Cir. 2002), including to its “implicit
judgment” that “a state plan complies with federal law” in approving that plan,
id. at 140, as well as to “relatively informal” communications, such as letters from
local administrators, id. at 138. In this case, however, CMS has submitted an
amicus brief explicitly disclaiming that its communications with NYSDH reflected
any measured consideration of New York’s plan amendments entitled to judicial
deference. See U.S. CMS Amicus Br. at 8‐9.10 Because that representation
10
Two amicus briefs have been filed on behalf of the United States in this case: one
from the Department of Justice, addressing plaintiffs’ disability discrimination
claims, and one from CMS, addressing plaintiffs’ Medicaid Act claims. All
30
certainly merits deference from this Court, we proceed to address the merits of
plaintiffs’ home health services claim de novo.
The Medicaid Act does not define the meaning of “home health services.”
See 42 U.S.C. § 1396a(a)(10)(D). Implementing regulations issued by HHS
explain that such services include “[m]edical supplies, equipment, and
appliances suitable for use in any setting in which normal life activities take
place,” 42 C.F.R. § 440.70(b)(3) (effective July 1, 2016). In July 2011, CMS issued a
proposed rule containing more specific definitions of both “supplies” and
“equipment.” The final rule was issued on February 2, 2016. See Medicaid
Program; Face‐to‐Face Requirements for Home Health Services; Policy Changes
and Clarifications Related to Home Health, 81 Fed. Reg. 5530, 5566‐67 (Feb. 2,
2016) (codified at 42 C.F.R. § 440.70). The rule defines medical “supplies” as
“health care related items that are consumable or disposable, or cannot withstand
repeated use by more than one individual,” and medical “equipment and
appliances” as “items that are primarily and customarily used to serve a medical
purpose, generally are not useful to an individual in the absence of a disability,
references to the United States’s amicus brief during our discussion of plaintiffs’
Medicaid Act claims are to that latter brief.
31
illness or injury, can withstand repeated use, and can be reusable or removable.”
42 C.F.R. § 440.70(b)(3)(i)‐(ii) (effective July 1, 2016). We owe CMS’s definitions a
“significant measure of deference.” Cmty. Health Ctr., 311 F.3d at 137. As
discussed in greater detail below, however, we find the definitions in the rule,
which seem intended primarily to distinguish durable “equipment” from
consumable “supplies,” less than helpful in answering the question before us.
The definitions are so general that, if applied literally as a description of what
items must be provided under the rubric of “home health services,” they would
mandate the provision of any “health care related items” whatsover.
Independent of its obligation to cover home health services, a state
participating in Medicaid may also elect to provide beneficiaries with a variety of
optional benefits, including “prosthetic devices.” 42 U.S.C. § 1396d(a)(12). In
contrast to its broad and general definition of “home health services,”
“equipment,” and “supplies,” HHS has adopted a relatively specific definition of
“prosthetic devices.” That term encompasses
replacement, corrective, or supportive devices prescribed
by a physician or other licensed practitioner of the healing
arts . . . to – (1) Artificially replace a missing portion of the
body; (2) Prevent or correct physical deformity or
32
malfunction; or (3) Support a weak or deformed portion
of the body.
42 C.F.R. § 440.120(c). As purely elective features in a state Medicaid plan,
prosthetic devices are exempt from the requirements of § 1396a(a)(10)(D). See
Rodriguez, 197 F.3d at 616 n.3.
Under both New York’s statutory definitions and a common‐sense
understanding of the terms, both orthopedic footwear and compression stockings
fall squarely within the federal definition of “prosthetic devices.” The New York
regulations define “orthopedic footwear” as shoes or modifications used “to
correct, accommodate or prevent a physical deformity or range of motion
malfunction . . . ; to support a weak or deformed structure of the ankle or
foot . . . ; or to form an integral part of an orthotic brace.” 18 N.Y.C.R.R.
§ 505.5(a)(4). Similarly, compression stockings are, by definition, designed to
support weakened limbs, exerting pressure to comfort aching legs, alleviate pain
from varicose veins, and minimize debilitating swelling. See Joint App’x at 353.
These functions align neatly with the definition of “prosthetic devices” adopted
by HHS at 42 C.F.R. § 440.120(c).
33
Furthermore, New York itself appears to classify orthopedic footwear and
compression stockings within the category of “prosthetics.” When the New York
legislature enacted its new coverage restrictions in 2011, it codified those
restrictions under § 365‐a(2)(g) of the New York Social Services Law, which
addresses New York’s provision of “sickroom supplies, eyeglasses, prosthetic
appliances, and dental prosthetic appliances.” See N.Y. Soc. Serv. Law
§ 365‐a(2)(g). Orthopedic footwear and compression stockings certainly do not
fall within the category of “eyeglasses” or “dental prosthetic appliances.” Nor do
they plausibly qualify as “sickroom supplies,” which, lacking any more specific
guidance in the Social Services Law or agency regulations, we must interpret per
their common‐sense meaning as supplies produced for and used during medical
confinement. See Merriam‐Webster’s Collegiate Dictionary 1089 (10th ed. 1998)
(defining “sickroom” as “a room in which a sick person stays” or “a room in
which a person is confined by sickness”); 15 Oxford English Dictionary 418 (2d
ed. 1989) (defining “sickroom” as “[a] room occupied by, and set apart for, the
sick”).11 If only by process of elimination, New York’s codification of its coverage
11
While the reference to “sickroom supplies” in § 365‐a(2)(g) might conceivably
be read as equivalent to the broader category of “medical . . . supplies” in
§ 365‐a(2), the statute’s repeated references to additional subsets of “supplies”
34
restrictions on orthopedic footwear and compression stockings in § 365‐a(2)(g)
suggests that it classified such services as “prosthetic appliances.”
Plaintiffs note that NYSDH’s regulations define the term “compression
footwear” separately from “prosthetic appliances” – a distinction they claim
establishes that New York does not view such services purely as “prosthetics”
within the scheme of its Medicaid program. See 18 N.Y.C.R.R. § 505.5(a). We do
not assign that distinction as much significance as plaintiffs would attribute to it.
While plaintiffs are correct that the definitions section of § 505.5 includes separate
entries for “[o]rthopedic footwear” and “[p]rosthetic appliances,” see id.
§§ 505.5(a)(4), (5), that section also includes separate entries for “[d]urable
medical equipment” and “[m]edical/surgical supplies,” see id. §§ 505.5(a)(1), (2).12
suggests that those two terms are not coterminous. See N.Y. Soc. Serv. Law
§ 365‐a(2)(b) (addressing “supplies in a general hospital”); id. § 365‐a(2)(f)
(addressing “preventive, prophylactic and other routine dental . . . supplies”).
Similarly, NYSDH’s regulations consistently draw distinctions between those
two terms. See 18 N.Y.C.R.R. § 540.6(b)(1)(iii)(c) (noting that category of
“[m]edical supplies” “includ[es] sickroom supplies”); id. § 387.12(c)(1)
(differentiating between “medical supplies, sickroom equipment or other
prescribed equipment”).
12
Although the regulations’ reference to “[d]urable” medical equipment may
seem to diverge from the broad category of “medical equipment” under 42
C.F.R. § 440.70(b)(3), New York’s definition in fact closely echoes CMS’s own
definition of “equipment and appliances.” Compare 18 N.Y.C.R.R. § 505.5(a)(1)
35
The fact that New York’s regulations include an independent entry for
orthopedic footwear thus does not prevent orthopedic footwear from qualifying
as optional “prosthetics” any more than it prevents it from qualifying as
mandatory “equipment” or “supplies.” Nor does NYSDH’s decision to define
orthopedic footwear separately from prosthetics in § 505.5(a) change the fact that
NYSDH’s actual definition of that term falls squarely within the federal
understanding of “prosthetic devices” at 42 C.F.R. § 440.120(c), or that the New
York legislature listed both orthopedic footwear and compression stockings
under the category of “prosthetic appliances” at § 365‐a(2)(g). We accord more
weight to those facts than to any inferences to be drawn from NYSDH’s decision
to list compression footwear separately from both “prosthetic[s]” and
“equipment” or “supplies” in its definitions section.
(defining “[d]urable medical equipment” as prescribed “devices and
equipment . . . which . . . (i) can withstand repeated use for a protracted period of
time; (ii) are primarily and customarily used for medical purposes; (iii) are
generally not useful to a person in the absence of an illness or injury; and (iv) are
usually not fitted, designed or fashioned for a particular individual’s use”), with
42 C.F.R. § 440.70(b)(3)(ii)(effective July 1, 2016) (defining medical “equipment
and appliances” as “items that are primarily and customarily used to serve a
medical purpose, generally are not useful to an individual in the absence of a
disability, illness or injury, can withstand repeated use, and can be reusable or
removable”).
36
Plaintiffs also emphasize that New York’s coverage guidelines for medical
providers list compression stockings under the categories of both“Prosthetics”
and “Medical/Surgical Supplies.” See New York State Medicaid Program,
Durable Medical Equipment, Orthotics, Prosthetics, and Supplies: Procedure
Codes and Coverage Guidelines, Version 2012‐1, at 151 (4/2012) (listing “gradient
compression stockings” under “Prosthetics”); id. at 17 (listing “[s]urgical
stockings” under “Supplies”). We find that fact even less compelling. New
York’s provider manual does not create law, but simply provides guidance to
medical suppliers in dispensing their products. To that end, NYSDH asserts –
and plaintiffs do not dispute – that the sole purpose of classifying surgical
stockings as “[m]edical/surgical supplies” was to make those services available
for distribution at local pharmacies, rather than through specialized dealers.
Furthermore, to the extent that the provider manual includes “[s]urgical
stockings” in the category of “Medical/Surgical Supplies,” it further specifies that
this classification applies only to stockings used “for treatment of severe
varicosities and edema during pregnancy” – a definition consistent with New
York’s coverage restrictions. Id. at 17. The provider manual thus does not even
clearly conflict with – much less undermine – New York’s classification of
37
orthopedic footwear and compression stockings as prosthetics under § 365‐
a(2)(g).
Plaintiffs argue that, even if orthopedic footwear and compression
stockings qualify as “prosthetics” under New York’s plan, they may nevertheless
be subject to the home health services requirements so long as they also qualify as
medical equipment or supplies. To that end, plaintiffs insist that orthopedic
footwear and compression stockings fit easily within CMS’s definition of medical
“equipment,” as items that primarily “serve a medical purpose,” are “not useful
to an individual in the absence of a disability, illness or injury,” can “withstand
repeated use,” and can be “reusable or removable.” See 42 C.F.R. §
440.70(b)(3)(ii) (effective July 1, 2016).
We have our reservations as a matter of law about plaintiffs’ suggestion
that services falling squarely within the definition of optional “prosthetics” may
nevertheless qualify as mandatory services under the Medicaid Act. Regardless,
we need not resolve whether or under what circumstances that theory of the
Medicaid Act might prevail, because we conclude that plaintiffs’ approach is
plainly inappropriate in the circumstances of this case.
38
As noted above, the federal definition of “home health services” is
exceedingly broad. HHS states that such services include “[m]edical supplies,
equipment, and appliances suitable for use in any setting in which normal life
activities take place,” but it does not explain what sorts of items those “supplies,
equipment, and appliances” might comprise. See 42 C.F.R. § 440.70(b)(3)
(effective July 1, 2016). Extended literally to encompass any item of equipment or
medical appliance that an individual can use in a non‐institutionalized setting,
HHS’s definition would necessarily encompass most if not all “prosthetic
appliances.” Such a broad reading would plainly contradict Congress’s intent in
identifying a separate category of prosthetic appliances as purely elective
Medicaid services.
CMS’s elaborations of the terms “supplies, equipment, and appliances”do
little to remedy this problem. The rule defines “supplies” as “health care related
items that are consumable or disposable, or cannot withstand repeated use by
more than one individual,” and defines “equipment and appliances” as items
that “are primarily . . . used to serve a medical purpose, generally are not useful
to an individual in the absence of a disability, illness or injury, can withstand
repeated use, and can be reusable or removable.” 42 C.F.R. § 440.70(b)(3)(i)‐(ii)
39
(effective July 1, 2016). Whittled down to their essence, those definitions
essentially characterize medical “supplies” and “equipment” as, respectively,
items for medical use that cannot withstand repeated use by an individual, and
items for medical use that can withstand such use. Applied with no room for
exception, those definitions would absorb the entire universe of prosthetic
appliances, and much else, under the umbrella of obligatory services.
In context, we must assume that HHS’s more specific definition of
“prosthetic devices” in 42 C.F.R. § 440.120(c) carves out precisely such an
exception, exempting any items described therein from mandatory coverage
under the home health services provision. Indeed, that reading is the necessary
consequence of the familiar canon of statutory construction that a “specific
provision takes precedence over a more general” one. United States v.
Torres‐Echavarria, 129 F.3d 692, 700 n.3 (2d Cir. 1997). As the Supreme Court has
recently affirmed, that canon dictates that where “a general permission or
prohibition is contradicted by a specific prohibition or permission,” the “specific
provision is construed as an exception to the general one.” RadLAX Gateway
Hotel, LLC v. Amalgamated Bank, 566 U.S. —, —, 132 S. Ct. 2065, 2071 (2012)
(emphasis added). That principle provides an apt guide to the interaction
40
between optional prosthetics and mandatory home health services under the
Medicaid Act. Given the sheer breadth of HHS’s definition of “home health
services” and its relative precision in defining “prosthetic devices,” the close
overlap between orthopedic footwear and compression stockings and HHS’s
definition of optional prosthetics suggests that those services fall within a
statutory exception to the obligatory provisions of the home health services
clause.
That conclusion, moreover, makes eminent sense. The coverage of home
health services is made mandatory for states that also provide nursing facility
services, and is intended to permit patients who would otherwise be confined to
nursing home facilities to receive equivalent treatment more economically in
their own homes. The items covered by the home health services provision are
thus primarily the types of medical supplies and equipment available in nursing
homes as a matter of course, but not typically available in ordinary residences or
community settings. Prosthetic devices such as artificial limbs are not aspects of
that sort of care, but rather are permanent or long‐lasting substitutes or supports
for “missing,” “weak or deformed portion[s] of the body.” 42 C.F.R. § 440.120(c).
Such devices transcend the “sickroom” and may be used by individuals who
41
have no need of ongoing care in a nursing facility or in the home. It thus makes
sense that their availability should be determined by separate rules.
Finally, in an amicus brief to the Court, the United States suggests that even
if the federal Medicaid Act’s definition of home health services is too vague to
provide useful guidance, a state itself may define medical “equipment” or
“supplies” so as to classify particular items as both prosthetics and mandatory
home health services. That is to say, if New York defined medical “equipment”
or “supplies” with sufficient generosity and specificity to clearly encompass
orthopedic footwear and compression stockings, the United States insists that we
would need to defer to that definition and treat those items as mandatory within
New York’s Medicaid plan.
That theory offers plaintiffs no solace in this case, however, where New
York’s definitions of medical equipment and supplies flatly preclude the
conclusion that orthopedic footwear and compression stockings – or, indeed, any
“prosthetics” under New York’s plan – also qualify as home health services.
Section 505.5(a)(1) of NYSDH’s regulations define “[d]urable medical
equipment” as medical “devices and equipment, other than prosthetic or orthotic
appliances,” that can withstand protracted use and are not usually fitted or
42
designed for any individual recipient. 18 N.Y.C.R.R. § 505.5(a)(1) (emphasis
added). Similarly, § 505.5(a)(2) defines medical “supplies” as “items for medical
use other than . . . prosthetic or orthotic appliances, durable medical equipment, or
orthopedic footwear” that are consumable and non‐reusable. Id. § 505.5(a)(2)
(emphasis added). Those definitions explicitly exclude from the New York’s
understanding of “equipment” or “supplies” either orthopedic footwear or, more
broadly, any items that also qualify as “prosthetics” – a category that includes,
per N.Y. Soc. Serv. Law § 365‐a(2)(g), prescription footwear and compression
stockings.13 Because New York’s definitions of medical supplies or equipment do
not plausibly encompass either orthopedic footwear or compression stockings –
or, indeed, allow any overlap with the category of “prosthetics” within New
13
The fact that § 505.5(a)(2), but not § 505.5(a)(1), also explicitly excludes
“orthopedic footwear” might be taken to suggest that orthopedic footwear
indeed qualifies as medical equipment. We decline to adopt that reading. First,
since § 505.5(a)(2) also excludes “equipment” from its definition of supplies,
while § 505.5(a)(1) does not exclude “supplies” from its definition of equipment,
the list of exceptions at § 505.5(a)(2) is clearly non‐exhaustive. Furthermore,
excluding “orthopedic footwear” from § 505.5(a)(1)’s definition of “equipment”
may have been less necessary than excluding it from § 505.5(a)(2)’s definition of
“supplies,” since § 505.5(a)(1)’s stipulation that medical equipment is not usually
“fitted . . . for a particular individual’s use” would appear to exempt orthopedic
footwear in any case.
43
York’s plan – those definitions cannot bring such services under the category of
mandatory “home health services.”
We thus agree with the Commissioner that orthopedic footwear and
compression stockings qualify as optional “prosthetics” rather than obligatory
“equipment” or “supplies” under New York’s Medicaid plan. The district court
thus properly entered summary judgment in favor of defendant on plaintiffs’
home health services claim.
III. Due Process Provision
Third, plaintiffs claim that New York violated the Medicaid Act’s due
process provision by implementing its new coverage restrictions on orthopedic
footwear and compression stockings without providing affected beneficiaries
notice of the changes or an opportunity to request evidentiary hearings to contest
them.14
14
As with the home health care provision, the Commissioner raises no claim that
the due process provision is not privately enforceable pursuant to § 1983. Once
again, we agree. The due process language also contains clear and specific
benefit‐creating language, requiring that state plans provide “an opportunity for
a fair hearing . . . to any individual . . . with reasonable promptness. 42 U.S.C. §
1396a(a)(3) (emphasis added).
44
The Medicaid Act requires that any state participating in Medicaid
“provide for granting an opportunity for a fair hearing before the State agency to
any individual whose claim for medical assistance under the plan is denied.” 42
U.S.C. § 1396a(a)(3). Consistent with that requirement, HHS’s regulations specify
that, “[a]t the time of any action affecting [a beneficiary’s] claim,” the state must
“inform every applicant or beneficiary in writing” of (1) his right to a hearing, (2)
the method by which he may obtain a hearing, and (3) his right of representation
at the proceedings. 42 C.F.R. §§ 431.206(c)(2), (b). The “notice required under
§ 431.206(c)(2)” must contain five pieces of information: (1) a statement of the
state’s intended action, (2) its reasons for that action, (3) the federal or state law
that supports or requires that action, (4) an explanation of whether and under
what circumstances the beneficiary may obtain an evidentiary hearing, and (5) an
explanation of the circumstances under which the beneficiary’s coverage will be
continued. Id. § 431.210.
Despite the general requirement of an evidentiary hearing, HHS has
specified that no state is obliged to grant a beneficiary such a hearing where “the
sole issue is a Federal or State law requiring an automatic change adversely
affecting some or all beneficiaries.” Id. § 431.220(b). Accordingly, where a state
45
amends its Medicaid plan so as to eliminate a certain branch of coverage,
beneficiaries who contest that amendment as a matter of law but “fail[ ] to raise a
valid factual dispute about their eligibility for coverage” under the new scheme
are not entitled to a hearing. Rosen v. Goetz, 410 F.3d 919, 926 (6th Cir. 2005)
(internal quotation marks omitted); see also id. at 927 (noting CSM’s approval of
that interpretation). No similar exception applies, however, to a state’s duty to
provide notification of its intended plan changes under § 431.206.
Because plaintiffs raise no factual disputes about their right to coverage
under New York’s Medicaid plan, as modified by the 2011 amendments,
§ 431.220(b) excuses NYSDH from having to provide plaintiffs with evidentiary
hearings prior to terminating their benefits. Nevertheless, since § 431.206 and
§ 431.210 still oblige New York to provide written notice of any “action affecting
[a beneficiary’s] claim,” id. § 431.206(c)(2), NYSDH violated the Medicaid Act’s
due process provision by failing to inform plaintiffs of its upcoming changes in
coverage prior to termination.
The Commissioner challenges this latter conclusion on two grounds. First,
he suggests that, per the Supreme Court’s decision in Atkins v. Parker, 472 U.S.
115 (1985), the legislative process surrounding New York’s adoption of its plan
46
amendments provided sufficient inquiry notice to satisfy the Medicaid Act’s due
process requirements. We disagree.
In Atkins, the Supreme Court dismissed plaintiffs’ claim that they were
entitled to individualized notice prior to benefit reductions under the Food
Stamp Act, alerting them not only to the general change in law but also its precise
effects on each of their households. Id. at 117, 121. Unlike the present case, there
was no dispute in Atkins that the statutory scheme required, and that the state
had in fact provided, written notice to all beneficiaries of the general changes to
the aid program – the only right claimed by plaintiffs here. See id. at 123‐27. In
evaluating plaintiffs’ subsequent claim that such generalized notice violated their
constitutional due process rights, the Atkins Court held – as the Commissioner
now emphasizes – that Congress’s “legislative determination” to amend the Food
Stamp Act “provide[d] all the process that [wa]s due.” Id. at 130 (internal
quotation marks omitted). As a constitutional matter, that holding proceeds
inevitably from the principle that “[a]ll citizens are presumptively charged with
knowledge of the law.” Id. Yet that principle does nothing to relieve New York
of its duty to comply with the Medicaid Act’s statutory requirements that a state
47
provide written notice of “any action affecting [a beneficiary’s] claim.” 42 C.F.R.
§ 431.206(c)(2).
Alternatively, the Commissioner argues that, even if NYSDH violated the
Medicaid Act’s due process provision by failing to provide written notice of its
coverage changes, that failure was harmless error. Based on the record – not
least, the fact that plaintiffs brought this timely lawsuit challenging New York’s
proposed restrictions – the Commissioner insists that the absence of written
notice did not deprive plaintiffs of any meaningful opportunities to protect their
statutory rights.
The Commissioner’s argument is facile at best. Where a statute explicitly
prescribes procedures to be followed by a state agency prior to taking certain
actions, the agency cannot avoid an injunction demanding compliance with those
requirements by assigning plaintiffs the burden of demonstrating why such
procedural requirements – enacted in a direct exercise of Congress’s legislative
judgment – are worth respecting in any given instance. As we have repeatedly
recognized, § 1396a(a)(3) and its accompanying regulations endow individual
beneficiaries under the Medicaid Act with an enforceable right to receive due
process prior to state actions affecting their claims – including the right to receive
48
written notice of policy changes. See Shakhnes v. Berlin, 689 F.3d 244, 254 (2d
Cir. 2012) (§ 1396a(a)(3) “creates a right . . . enforceable under § 1983”); Granato v.
Bane, 74 F.3d 406, 408 (2d Cir. 1996) (state action terminating Medicaid services
“trigger[s] the recipient’s right to notice, a hearing, and the continuation of . . .
services pending that hearing”). The fact that a handful of named plaintiffs
managed to bring a federal lawsuit challenging the legality of New York’s
coverage restrictions despite having received no notice of those restrictions is
hardly an adequate response to plaintiffs’ complaint that New York deprived
them of the administrative process promised them by the Medicaid Act.
In any event, the record demonstrates that NYSDH’s failure to provide
written notice of its coverage restrictions in fact caused plaintiffs direct and
practical harm. Absent such advance notice, plaintiffs had to endure the cost,
inconvenience, and distress of seeking to refill their prescriptions, only to have
their requests rejected by their providers or pharmacists. They suffered the
disadvantage of receiving no opportunity to ration their current items or to find
novel means to obtain replacements in light of advance knowledge that their
Medicaid coverage was set to expire. And even once they learned from their
providers that their benefits had been discontinued, they received no notification
49
of their right to a hearing and renewed benefits should their factual
circumstances change. See 42 C.F.R. §§ 431.210(d)(2), (e). Under such
circumstances, NYSDH’s failure to abide by the procedural requirements of the
Medicaid Act’s due process provision was hardly “harmless.”
We thus agree with the district court that defendant is entitled to summary
judgment on plaintiffs’ due process claim with respect to plaintiffs’ right to have
received evidentiary hearings prior to the termination of their Medicaid benefits,
but that plaintiffs are entitled to summary judgment with respect to their right to
have received written notice of the coverage restrictions prior to termination.
Plaintiffs’ injunctive relief on this ground should be limited to an order barring
implementation of NYSDH’s restrictions pending the provision of written notice
to affected beneficiaries. See Eder v. Beal, 609 F.2d 695, 702 (3d Cir. 1979);
Catanzano by Catanzano v. Dowling, 847 F. Supp. 1070, 1086 (W.D.N.Y. 1994).
IV. Comparability Provision
Fourth, plaintiffs argue that New York’s coverage restrictions violate the
Medicaid Act’s comparability provision by providing lesser medical services to
some categorically needy individuals than to others with the same medical needs.
50
The comparability provision of the Medicaid Act seeks to ensure that the
categorically needy receive maximum access to benefits provided under a state
Medicaid plan, guaranteeing that “the primary concern of the states in providing
financial assistance [rests with] those persons who lack sufficient income to meet
their basic needs.” Camacho v. Perales, 786 F.2d 32, 38 (2d Cir. 1986). Pursuant
to that goal, the provision imposes two requirements on any state participating in
the federal program. First, “the medical assistance made available to any
[categorically needy] individual . . . shall not be less in amount, duration, or
scope than the medical assistance made available to any other such individual.”
42 U.S.C. § 1396a(a)(10)(B)(i); Rodriguez, 197 F.3d at 615. Second, such medical
assistance “shall not be less in amount, duration, or scope than the medical
assistance made available to [non‐categorically needy] individuals.” 42 U.S.C.
§ 1396a(a)(10)(B)(ii).15 Elaborating on both elements, HHS’s implementing
15
As with the home health services and due process claims, and in contrast to the
reasonable standards claims, the Commissioner does not argue that the
comparability provision is not enforceable under § 1983. In cases decided before
Armstrong, courts of appeals, including this one, have commonly adjudicated
private suits seeking to enforce a state’s compliance with the comparability
provision, see, e.g., Rodriguez, 197 F.3d at 615‐16; Schott v. Olszewski, 401 F.3d
682, 686‐87 (6th Cir. 2005) – even while simultaneously denying the existence of
any such private right of action to enforce the reasonable standards provision, see
Lankford, 451 F.3d at 505‐09. Such claims remain viable after Armstrong, as the
51
regulations reiterate that the comparability provision demands that all state
Medicaid plans comply with two separate criteria: both “that the services
available to any categorically needy beneficiary . . . are not less in amount,
duration, and scope than those services available to a medically needy beneficiary,”
42 C.F.R. § 440.240(a) (emphasis added), and “that the services available to any
individual in the [‘categorically needy’ group] are equal in amount, duration, and
scope for all beneficiaries within the group,” id. § 440.240(b) (emphasis added).
Those requirements apply equally to mandatory and optional medical services.
Lankford, 451 F.3d at 505.
As § 1396a(a)(10)(B)(i) establishes and HHS’s regulations clarify, the
comparability provision does not protect categorically needy beneficiaries simply
by prohibiting states from treating them less favorably than the medically needy.
It also prohibits states from discriminating among the categorically needy by
“provid[ing] benefits to some categorically needy individuals but not to others.”
comparability provision contains specific benefits‐creating language, mandating
that “the medical assistance made available to any [categorically needy]
individual . . . shall not be less in amount, duration, or scope than the medical
assistance made available to any other such individual.” 42 U.S.C.
§ 1396a(a)(10)(B). This provision guarantees a certain level of benefits to
categorically needy individuals, and provides a specific standard by which to
measure that benefit.
52
Rodriguez, 197 F.3d at 615. That prohibition includes providing different
amounts, durations, or levels of medical care to different individual beneficiaries
within any one categorically needy group. Id.; White v. Beal, 555 F.2d 1146, 1149
(3d Cir. 1977) (“[A]ll persons within a given category must be treated equally.”);
Becker v. Toia, 439 F. Supp. 324, 333 (S.D.N.Y. 1977) (“[E]ach person . . . shall be
eligible for the same ‘amount, duration and scope’ of coverage as all the others in
his or her group . . . .”); see also Sobky v. Smoley, 855 F. Supp. 1123, 1140‐41 (E.D.
Cal. 1994) (listing cases).16
The Commissioner does not dispute that plaintiffs include categorically
needy individuals, nor that all the plaintiffs, no matter their diagnoses, have a
genuine medical need for orthopedic footwear or compression stockings. By
denying plaintiffs access to such services purely on the basis of the nature of their
16
Section 440.240(b) also demands “that the services available to any individual
in the [‘medically needy’ group] are equal in amount, duration, and scope for all
beneficiaries within the group,” suggesting that the comparability provision may
prohibit a state from providing unequal services to individuals within each
subset of the medically needy. See 42 C.F.R. § 440.240(b)(2). To the extent that
§ 440.240(b)(2) bars discrimination among medically needy individuals, however,
it appears to reach beyond the text of § 1396a(a)(10)(B). Regardless, plaintiffs do
not claim that New York is prohibited from discriminating on the basis of
medical condition among the medically needy, arguing only that it may not do so
with respect to the categorically needy. See Appellees’ Br. at 39‐41.
53
medical conditions, New York’s restrictions thus provide some categorically
needy individuals lesser medical assistance than is available to others with the
same levels of medical need. By definition, such a selective distribution of
medical assistance offers an unequal “scope” of benefits to individuals within the
categorically needy class, violating the plain language of § 1396a(a)(10)(B)(i) and
§ 440.240(b).
In an amicus brief to this Court, the United States suggests that our
resolution of plaintiffs’ claim depends on the breadth with which New York
defines the “purpose” of orthopedic footwear and compression stockings under
its plan. If, for example, New York’s designated purpose in providing orthopedic
footwear were to aid growth in children, or if its purpose in providing
compression stockings were to reduce swelling during pregnancy, then New
York could restrict coverage of those services to children and pregnant women
while nevertheless providing “equal access” to such services for all categorically
needy individuals. If, by contrast, New York defined the purpose of those
services simply as relieving pain or enhancing mobility, then § 1396a(a)(10)(B)
would require it to provide those benefits to all categorically needy individuals
with an equivalent medical need for such services. The crucial distinction, the
54
United States thus suggests, is between adopting a medical service with a broad
purpose and then limiting access to that service only to some categorically needy
beneficiaries, which would violate the comparability provision, and adopting a
service tailored to treating only certain conditions, which a state may do without
running afoul of § 1396a(a)(10)(B).
Portions of the record in fact suggest that New York restricted the purpose
of orthopedic footwear – though not compression stockings – under its plan to
treating limited medical conditions.17 During the 2011 revisions to its regulations,
17
The United States suggests that the record fails to clarify New York’s intended
purpose in providing such services, and that we should consequently abstain
from resolving plaintiffs’ challenge absent additional discovery. We disagree.
First, the United States’s assessment of the record overlooks New York’s explicit
definition of “orthopedic footwear” at § 505.5, discussed below. Even assuming
that the record did not establish New York’s intent, however, that deficiency
would not preclude us from reaching plaintiffs’ claim. To the extent that New
York has failed to establish the purpose behind its provision of orthopedic
footwear and compression stockings on the record, that failure would simply
compel us to conclude, for the purposes of this appeal, that New York had no
specialized definition in mind. Absent any reason to believe that New York
understood those services as limited to only a selective subset of their common
uses, we could only assume that the purpose of such services was to provide the
sorts of medical benefits with which they are typically associated. Cf. N.Y. Soc.
Serv. Law § 365‐a(2) (broadly defining “standard” coverage under New York’s
Medicaid program as services “necessary to prevent, diagnose, correct or cure
conditions . . . that cause acute suffering, . . . result in illness or infirmity, interfere
with [a] capacity for normal activity, or threaten some significant handicap . . .”).
55
NYSDH also amended the definition of “orthopedic footwear” under
§ 505.5(a)(4) to comport with New York’s new coverage restrictions. Where
previous versions of § 505.5 had defined orthopedic footwear as shoes or inserts
used to “correct, accommodate or prevent a physical deformity or range of
motion malfunction,” “support a weak or deformed structure of the ankle or
foot,” or “form an integral part of a brace,” 18 N.Y.C.R.R. § 505.5(a)(4) (effective
until Apr. 6, 2011), the new regulations defined that term as any shoe or insert
used
in the treatment of children, to correct, accommodate or
prevent a physical deformity or range of motion
malfunction . . . ; in the treatment of children, to support a
weak or deformed structure of the ankle or foot; as a
component of a comprehensive diabetic treatment plan to
treat [various conditions and deformities]; or to form an
integral part of an orthotic brace.
18 N.Y.C.R.R. § 505.5(a)(4) (effective Apr. 6, 2011) (emphases added). That
definition, which provides the best record evidence of New York’s intended
purpose in providing orthopedic footwear under its Medicaid plan, would
appear to exemplify the type of limited statutory definition that the United States
suggests may excuse New York’s restrictions from violating the comparability
provision.
56
Nevertheless, we cannot accept the United States’s proposition that the
comparability provision defers to a state’s definition of the “purpose” of any
given service – a proposition it presents without citing any legal authority in
support – as a correct interpretation of the Medicaid Act. We do not question
that a state may, within reason, define the scope and purpose of the services it
provides under its Medicaid plan, especially when those services are purely
elective. Yet allowing a state to deny medical benefits to some categorically
needy individuals that it provides to others with the exact same medical needs
simply by defining such services – however arbitrarily – as aimed at treating only
some medical conditions would risk swallowing the comparability provision
whole. If, for example, New York defined the purpose of an arm cast as
supporting regrowth of broken bones in the right arm only, or defined the
purpose of a prosthetic leg as enhancing mobility in disabled individuals born
without limbs, surely it would violate the comparability requirement to deny
equivalent services to categorically needy individuals who break their left arms,
or who lose limbs through amputation, but who have the same indisputable
medical needs for a cast or prosthetic. Such a scenario would seem an archetypal
57
instance of denying some categorically needy individuals the same “scope” of
medical assistance available to others under a state plan.
Medical services are always, by nature, diagnosis‐specific, and rarely are
two diagnoses or medical histories exactly alike. Once we accept the principle
that the comparability provision prohibits discrimination among individuals as
well as groups, see 42 C.F.R. § 440.240(b), it follows that that provision prohibits
discrimination among individuals with the same medical needs stemming from
different medical conditions. See Rolland v. Cellucci, 52 F. Supp. 2d 231, 238 (D.
Mass. 1999) (noting cases holding “that the comparability provision is violated if
there is a disparity of treatment among the categorically needy even when those
individuals have differing disabilities”); Parry By & Through Parry v. Crawford,
990 F. Supp. 1250, 1257 (D. Nev. 1998) (holding that comparability provision
prohibits denial of services to categorically needy individuals with different
medical conditions but equivalent needs). To the extent that such a provision
might be read simply as precluding discrimination among individuals with the
very same medical conditions, indeed, it would simply govern the equitable
administration of a state plan, not the formal terms of that plan, which are
explicitly at issue in the prohibition. See 42 U.S.C. § 1396a(a)(10) (“A State plan
58
for medical assistance must . . . provide . . . .”); 42 C.F.R. § 40.240(b) (“The plan
must provide that . . . .”).
Accordingly, we reject the suggestion that a state’s definition of the
purpose behind its medical services may, in and of itself, resolve a plaintiff’s
challenge under the comparability provision. Rather, any genuine enforcement
of the Medicaid Act’s comparability requirements must entail some independent
judicial assessment of whether a state has made its services available to all
categorically needy individuals with equivalent medical needs. See White, 555
F.2d at 1150 (assessing validity of state’s judgment of comparative medical need).
Where a state purports to have made a medical determination that a particular
service is not a necessary or appropriate treatment for a particular condition, our
review of that judgment would presumably be highly deferential.18 Even then,
however, our deference may be limited by the requirement that a state’s
determination bear some genuine relation to beneficiaries’ medical needs. See
18
If, for example, New York had decided to eliminate coverage of orthopedic
footwear and compression stockings for such conditions as hammertoes and
bunions, for which the Commissioner contends that such treatments are wasteful
and medically unnecessary, we would be presented with quite a different case.
The Commissioner, however, makes no such argument about the conditions
suffered by plaintiffs and the class they represent, and indeed concedes that the
items in question are medically necessary to treat those conditions.
59
Pashby v. Delia, 709 F.3d 307, 341 (4th Cir. 2013) (holding that comparability
provision allows states to “provide[ ] different coverage to different categorically
needy individuals . . . so long as th[at] coverage . . . bears a reasonable relation to
the particular needs of the individual”) (internal quotation marks omitted);
White, 555 F.2d at 1150‐51 (holding that “state’s broad discretion to define the
medical conditions for which treatment is ‘necessary’” is limited by nexus to
medical need).
The record in this case exemplifies how easily a state can amend its
definitions of its medical services without any regard to beneficiaries’ medical
needs – and the propriety of some judicial oversight over those definitions. The
Commissioner does not purport to have determined that orthopedic footwear or
compression stockings are medically necessary to treat only the medical
conditions to which he has restricted them, nor that individuals with those
medical conditions have a more urgent medical need for those services. Indeed,
the Commissioner concedes that such products may be equally necessary for
plaintiffs as they are for covered beneficiaries. Rather, he explains that, as a
cost‐saving measure, New York has elected to provide those products only to the
most common conditions for which they are medically necessary – thus denying
60
coverage of those services not only to some individuals who do not genuinely
need them, but also to some, such as plaintiffs, who do. The state then simply
amended the governing regulations to define the purpose of the treatments as
coextensive with the coverage it had decided, for non‐medical reasons, to
provide. Such an ipse dixit cannot suffice to avoid the mandate of the
comparability requirement.
New York’s coverage restrictions thus violate the plain text of
§ 1396a(a)(10)(B)(i) and § 440.240(b), denying categorically needy individuals
comparable access to equally necessary medical services. The district court
properly entered summary judgment in favor of plaintiffs on their claim under
the comparability provision.
V. Anti‐Disability Discrimination under the ADA and Rehabilitation Act
Fifth, plaintiffs claim that New York’s restrictions on orthopedic footwear
and compression stockings violate Title II of the ADA and § 504 of the
Rehabilitation Act by excluding disabled individuals from public medical
services on the basis of their disabilities, and violate the integration mandate of
61
those statutes by placing plaintiffs at a substantial risk of requiring
institutionalized care.19
Both Title II of the ADA and § 504 of the Rehabilitation Act protect the
rights of disabled individuals to participate in state‐administered or funded
services. Title II provides that “no qualified individual with a disability shall, by
reason of such disability, be excluded from participation in or be denied the
benefits of the services, programs, or activities of a public entity, or be subjected
to discrimination by any such entity.” 42 U.S.C. § 12132. Similarly, § 504
provides that “[n]o otherwise qualified individual with a disability . . . shall,
solely by reason of her or his disability, be excluded from the participation in, be
denied the benefits of, or be subjected to discrimination under any program or
activity receiving Federal financial assistance.” 29 U.S.C. § 794(a).
Because the standards imposed by Title II on public entities are generally
equivalent to those of § 504, we “treat claims under the two statutes identically”
in most cases. Henrietta D. v. Bloomberg, 331 F.3d 261, 272 (2d Cir. 2003). To
19
Although our resolution of plaintiffs’ comparability provision claim suffices to
entitle the categorically needy plaintiffs to relief, we proceed to address plaintiffs’
ADA and Rehabilitation claims because those challenges hold the possibility of a
scope of relief encompassing at least some of the medically needy.
62
state a prima facie claim under either provision, a plaintiff must establish
“(1) that she is a qualified individual with a disability; (2) that she was excluded
from participation in a public entity’s services, programs or activities or was
otherwise discriminated against by a public entity; and (3) that such exclusion or
discrimination was due to her disability.” Fulton v. Goord, 591 F.3d 37, 43 (2d
Cir. 2009) (internal quotation marks and alterations omitted).20 A plaintiff may
base her discrimination claim on one of three theories of liability: disparate
treatment, disparate impact, or failure to make a reasonable accommodation. Id.
The Commissioner does not dispute that at least some plaintiffs qualify as
disabled individuals for the purposes of Title II and § 504. Nor does he dispute
that New York’s coverage restrictions on orthopedic footwear and compression
stockings exclude those plaintiffs from access to public medical services on the
basis of their medical conditions, effectively subjecting plaintiffs to disparate
treatment within New York’s Medicaid program.21 Accordingly, the sole
20
A plaintiff bringing a Rehabilitation Act claim must also establish that the
defendant receives federal funding. Henrietta D., 331 F.3d at 272.
21
Although plaintiffs’ amended complaint alleges that New York’s restrictions
both discriminate on the basis of disability and fail to provide reasonable
accommodations, see Joint App’x at 404‐05, their appellate brief suggests that the
latter ground is subsidiary to their primary argument, see Appellees’ Br. at
63
question before us on appeal is whether New York’s denial of necessary medical
services to some disabled individuals on the basis of their medical conditions
constitutes discrimination due to disability so as to violate the ADA and
Rehabilitation Act.
The Commissioner insists that NYSDH’s restrictions do not violate either
Title II or § 504 because they do not discriminate against the disabled, but simply
allocate limited state resources among disabled individuals. According to the
Commissioner, the ADA and Rehabilitation Act prohibit discrimination against
the disabled as compared to the able‐bodied, but do not bar public entities from
drawing distinctions among groups of the disabled themselves.22 Courts,
including this one, have held that the ADA does not bar unequal treatment of
58 n.18. We thus construe their brief as primarily pressing a disparate treatment
claim.
22
The Commissioner also suggests that plaintiffs cannot prevail on their Title II
claim because they have provided no evidence that New York’s coverage
restrictions were motivated by animus against disabled individuals. While
claims for damages under Title II require proof of discriminatory animus, claims
for injunctive relief demand no such showing. See Garcia v. S.U.N.Y. Health Scis.
Ctr. of Brooklyn, 280 F.3d 98, 115 (2d Cir. 2001) (“[O]ur holding that private
damage claims under Title II require proof of discriminatory animus or ill will
based on disability does not affect . . . actions by private individuals for
injunctive relief . . . .”). Because plaintiffs seek injunctive rather than monetary
relief, they need not establish discriminatory animus to succeed on their claim.
64
different disabilities, so long as disabled individuals are not denied services
provided to the able‐bodied on the basis of their disabilities. See, e.g., Traynor v.
Turnage, 485 U.S. 535, 549 (1988); Modderno v. King, 82 F.3d 1059, 1062 (D.C. Cir.
1996); Flight v. Gloeckler, 68 F.3d 61, 63‐64 (2d Cir. 1995); P.C. v. McLaughlin, 913
F.2d 1033, 1041 (2d Cir. 1990).
Plaintiffs argue that a majority of the Supreme Court endorsed a broader
view of discrimination under the ADA in Olmstead v. L.C. ex rel. Zimring, 527
U.S. 581 (1999). We agree that it did, at least with respect to a program requiring
persons with mental disabilities to receive care in an institutionalized setting,
while allowing those with physical disabilities to receive similar services in a
community setting.
More specifically, Olmstead unquestionably holds that the “unjustified
institutional isolation of persons with disabilities” is, in an of itself, a prohibited
“form of discrimination.” 527 U.S. at 600; see also id. at 607 (Stevens, J,
concurring in part and concurring in the judgment) (“Unjustified disparate
treatment, in this case, ‘unjustified institutional isolation,’ constitutes
discrimination under the Americans with Disabilities Act of 1990.”); id. at 613‐14
(Kennedy, J, concurring in judgment) (“I deem it relevant and instructive that
65
Congress in express terms identified the ‘isolat[ion] and segregat[ion]’ of
disabled persons by society as a ‘for[m] of discrimination’ and noted that
discrimination against the disabled ‘persists in such critical areas as
. . . institutionalization.’” (alterations in original) (citations omitted)).
Justice Ginsburg, writing in Olmstead, reached that conclusion over the
state’s objection that “discrimination necessarily requires uneven treatment of
similarly situated individuals,” and that the plaintiffs had not identified a
“comparison class” of similarly‐situated non‐disabled individuals “given
preferential treatment,” id. at 598 (internal quotation marks omitted); cf.
Henrietta D., 331 F.3d at 277 (holding, in context of reasonable accommodations
claim, that evidence “that a disability makes it difficult for a plaintiff to access
benefits . . . is sufficient to sustain a claim,” regardless of comparative treatment
of others).23 Indeed, in Amundson ex rel. Amundson v. Wisconsin Dep’t of
23
In a prior case, this Court has suggested that the relevant portions of Justice
Ginsburg’s opinion in Olmstead reflect the views of only a plurality. See
Henrietta D., 331 F.3d at 276. The Olmstead opinion itself characterizes the
portions of Justice Ginsburg’s opinion discussing the scope of “discrimination”
under the ADA as representing the opinion of the Court. See Olmstead, 527 U.S.
at 587 (noting that Justice Ginsburg delivered the opinion of the Court with
respect to Part III‐A). Whether everything in Part III‐A in fact carries the
endorsement of a majority of the Justices depends on whether one reads Justice
Stevens’s concurring opinion as turning solely on his view that “‘unjustified
66
Health Services, 721 F.3d 871 (7th Cir. 2013), the Seventh Circuit observed that
“‘discrimination’ as used in § 12132 includes . . . undue institutionalization of
disabled persons, no matter how anyone else is treated.” Id. at 874 (emphasis in
original).
In this case, New York’s plan amendments restrict coverage of orthopedic
footwear and compression stockings for disabled persons to a narrow set of
medical conditions. Any disabled persons who do not happen to suffer from
those enumerated ailments are thus denied access to medically necessary
assistance directly on the grounds of their disabling conditions. It is undisputed
that at least some of the plaintiffs suffer from disabilities, which could be
ameliorated by the services New York now denies to them, and that, without
those services, would lead to their institutionalization. By subjecting those
institutional isolation’ constitutes discrimination under the Americans with
Disabilities Act of 1990.” See id. at 607 (Stevens, J., concurring in part and
concurring in the judgment). Indeed, Justice Stevens pinpointed the specific part
of Justice Ginsburg’s opinion, id., citing id. at 600‐01, which rested largely on the
effect of such unjustified isolation and the fact that, unlike § 504 of the
Rehabilitation Act, the ADA contains an “express recognition [of the fact] that
isolation or segregation of persons with disabilities is a form of discrimination,”
id. at 600 n.11 (majority opinion). For the reasons set forth below, we need not
delve further into this question and we leave for another day the issue of whether
the ADA bans all forms of intra‐class discrimination.
67
plaintiffs to an increased risk of institutionalization, New York’s coverage
restrictions “exclude[ ] [disabled persons] from participation in a public entity’s
services . . . due to [their] disability.” Fulton, 591 F.3d at 43 (internal quotation
marks omitted); 42 U.S.C. § 12132 (prohibiting discrimination against disabled
individuals “by reason of [their] disability”); 29 U.S.C. § 794(a) (prohibiting
discrimination against disabled individuals “solely by reason of [their]
disability”).
As the Supreme Court held in Olmstead, this conclusion follows in
substantial part from the “integration mandate,” which is consistent with the
“concept of discrimination advanced in the ADA.” 527 U.S. at 598; see 42 U.S.C.
§ 12101(a)(2) (“[H]istorically, society has tended to isolate and segregate
individuals with disabilities, and, despite some improvements, such forms of
discrimination against individuals with disabilities continue to be a serious and
pervasive social problem.”); § 12101(a)(5) (“[I]ndividuals with disabilities
continually encounter various forms of discrimination, including . . . segregation
. . . ”). Promulgated by the Department of Justice (“DOJ”) pursuant to its
enforcement powers under Title II of the ADA, the integration mandate provides
that a public entity must “administer services, programs, and activities in the
68
most integrated setting appropriate to the needs of qualified individuals with
disabilities.” 28 C.F.R. § 35.130(d). The “most integrated setting appropriate” is
the “setting that enables individuals with disabilities to interact with
non‐disabled persons to the fullest extent possible.” Olmstead, 527 U.S. at 592
(internal quotation marks omitted).24
In Olmstead, the Supreme Court interpreted the integration mandate to
mean that the “unjustified isolation” of disabled individuals in institutionalized
care facilities constitutes discrimination on the basis of disability under the ADA.
527 U.S. at 597. As the Court observed, the “unjustified institutional isolation” of
disabled persons both “perpetuates unwarranted assumptions that persons so
isolated are incapable or unworthy of participating in community life,” and
“severely diminishes [their] everyday life activities.” Id. at 600‐01. To avoid such
damaging repercussions, the integration mandate thus requires a state to provide
community‐based treatment for disabled persons when (1) “the State’s treatment
24
Although the integration mandate appears only in DOJ’s implementing
regulations for the ADA, see 28 C.F.R. § 35.130 (drawing authority from 42 U.S.C.
§ 12134), we have recognized that its theory of liability also supports a
discrimination claim under the Rehabilitation Act. See Disability Advocates, Inc.
v. N.Y. Coal. for Quality Assisted Living, Inc., 675 F.3d 149, 152 (2d Cir. 2012); see
also Frederick L. v. Dep’t of Pub. Welfare, 364 F.3d 487, 490 & n.2 (3d Cir. 2004).
69
professionals determine that such placement is appropriate,” (2) “the affected
persons do not oppose such treatment,” and (3) “the placement can be reasonably
accommodated, taking into account the resources available to the State and the
needs of others with [similar] disabilities.” Id. at 607.
Following the Supreme Court’s decision, DOJ announced its view that the
disability discrimination claim recognized in Olmstead is not limited to
individuals already subject to unjustified isolation, but also “extend[s] to persons
at serious risk of institutionalization or segregation.” U.S. Dep’t of Justice,
Statement of the Department of Justice on Enforcement of the Integration
Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C.,
Q.6 (last updated June 22, 2011), [hereinafter “DOJ Statement”], available at
www.ada. gov/olmstead/q&a _olmstead.htm. As the Department explained, a
plaintiff “need not wait until the harm of institutionalization or segregation
occurs or is imminent” in order to bring a claim under the ADA. Id. Rather, a
plaintiff establishes a “sufficient risk of institutionalization to make out an
Olmstead violation if a public entity’s failure to provide community services . . .
will likely cause a decline in health, safety, or welfare that would lead to the
individual’s eventual placement in an institution.” Id. (emphasis added).
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Because the integration mandate “is a creature of the [DOJ’s] own regulations,”
DOJ’s interpretation of that provision is “controlling unless plainly erroneous or
inconsistent with the regulation.” Auer v. Robbins, 519 U.S. 452, 461 (1997)
(internal quotation marks omitted).25
Unsurprisingly, against this backdrop, courts of appeals applying the
disability discrimination claim recognized in Olmstead have consistently held
that the risk of institutionalization can support a valid claim under the
integration mandate. See Pashby, 709 F.3d at 322 (4th Cir. 2013) (holding that
plaintiffs may raise successful ADA and Rehabilitation Act claims “because they
face a risk of institutionalization”); M.R. v. Dreyfus, 697 F.3d 706, 720 (9th Cir.
2012) (recognizing violation where plaintiffs established that “reduced access to
personal care services will place them at serious risk of institutionalization”);
Radaszewski ex rel. Radaszewski v. Maram, 383 F.3d 599, 608 (7th Cir. 2004)
(recognizing violation where state’s actions “portend[ ] . . . unjustified
25
The other amicus brief filed on behalf of the United States in this case, submitted
by DOJ and addressing plaintiffs’ ADA and Rehabilitation Act claims, similarly
embraces this position. See U.S. Department of Justice Amicus Br.
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institutional isolation” (internal quotation marks omitted));26 Fisher v. Okla.
Health Care Auth., 335 F.3d 1175, 1181‐82 (10th Cir. 2003) (holding that Olmstead
does not require a disabled person to submit to institutionalization when
“imperiled with segregation” due to a state policy). As the Tenth Circuit has
observed, “nothing in the plain language of the [integration mandate]” nor “in
the Olmstead decision supports a conclusion that institutionalization is a
prerequisite to enforcement.” Fisher, 335 F.3d at 1181. To the contrary, the
ADA’s protections “would be meaningless if plaintiffs were required to segregate
themselves by entering an institution before they could challenge an allegedly
discriminatory law or policy,” id. – not least, since “[i]nstitutionalization
sometimes proves irreversible,” Dreyfus, 697 F.3d at 735.
26
Contrary to the Commissioner’s assertion, the Seventh Circuit’s opinion in
Amundson ex rel. Amundson v. Wisconsin Department of Health Services., 721
F.3d 871 (7th Cir. 2013), does not hold otherwise. In Amundson, plaintiffs
claimed that Wisconsin’s reduction in group care reimbursements violated the
integration mandate by forcing them out of their preferred group homes, but
they produced no evidence that the new rate was insufficient for admission into
other integrated facilities. Id. at 873‐74. Absent any showing that plaintiffs had
either “been placed in an institution” or were unable to “find another group home
willing to accept the level of reimbursement,” the Seventh Circuit dismissed their
claim as unripe. Id. at 874. As Radaszewski demonstrates, however, the Seventh
Circuit has acknowledged that a genuine risk of institutionalization may support
a claim under the integration mandate. See 383 F.3d at 608.
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We find DOJ’s and our sister circuits’ interpretation of Olmstead both
consistent with the integration mandate and well‐reasoned, and we adopt it as
our own. We thus hold that a plaintiff may state a valid claim for disability
discrimination by demonstrating that the defendant’s actions pose a serious risk
of institutionalization for disabled persons. In this case, plaintiffs attest – and the
Commissioner does not dispute – that New York’s restrictions on medically
necessary orthopedic footwear and compression stockings will severely
exacerbate their ailments, putting them at a substantial risk of requiring
institutionalized care. That showing establishes an injury sufficient to carry
plaintiffs’ integration mandate claim.
Because the “State’s responsibility, once it provides community‐based
treatment to qualified persons with disabilities, is not boundless,” a state may be
able to “resist modifications that entail a ‘fundamenta[l] alter[ation]’ of the States’
services and programs.” Olmstead, 527 U.S. at 603, quoting 28 CFR §
35.130(b)(7), (alteration in original); see Fisher, 335 F.3d at 1182‐83. We need not
decide whether a state can claim a fundamental alteration as a defense to an
integration mandate claim, as opposed to a reasonable modifications claim,
because the Commissioner here does not does not suggest that covering
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compression stockings and orthopedic shoes would cause a fundamental
alteration to the State’s program.
The Commissioner does insist, however, that even assuming that a
substantial risk of institutionalization may violate the integration mandate, the
plaintiffs cannot prevail on their claim in this case, which involves purely
optional services under New York’s Medicaid program. Since New York could
permissibly eliminate coverage of all orthopedic footwear and compression
stockings, and thus leave plaintiffs with the same risk of institutionalization,
without violating either the Medicaid Act or the ADA, the Commissioner argues
that New York’s decision to provide those benefits to only select recipients
cannot be seen to “create” any such risk.
New York’s conceded discretion to decide whether to provide coverage of
orthopedic footwear and compression stockings under the Medicaid Act,
however, does not affect its duty to provide those services in a
non‐discriminatory manner under the ADA. A state’s duties under the ADA are
wholly distinct from its obligations under the Medicaid Act. The Medicaid Act
aims to provide comprehensive but resource‐conscious medical care to needy
individuals, a goal that it effects by mandating different levels of assistance for
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different populations. See generally 42 U.S.C. § 1396a. By contrast, the ADA
reflects a “national mandate for the elimination of discrimination against
individuals with disabilities.” Id. § 12101(b)(1). Accordingly, although the ADA
cannot and does not “require[ ] States to provide a certain level of benefits to
individuals with disabilities,” it can and does require states to “adhere to the
ADA’s nondiscrimination requirement with regard to the services they in fact
provide.” Olmstead, 527 U.S. at 603 n.14 (internal quotation marks omitted). As
we noted in Rodriguez, “it is not our role to determine what Medicaid benefits
New York must provide,” but rather to “determine whether New York
discriminates on the basis of a . . . disability with regard to the benefits it does
provide.” 197 F.3d at 619.
So long as New York continues to provide coverage of orthopedic footwear
and compression stockings under its Medicaid plan, it cannot deny such services
only to certain disabled beneficiaries, with the effect of placing those disabled
persons at substantial risk of institutionalization, because such a denial subjects
plaintiffs to unjustified isolation on the basis of their disabilities in violation of
the integration mandate. Since the Commissioner does not dispute the validity of
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plaintiffs’ claim with regard to the remaining Olmstead factors, plaintiffs are
entitled to summary judgment on their integration mandate claim.
VI. Remedies
Finally, we come to the question of remedy. In the proceedings below, the
district court certified plaintiffs’ class action on behalf of all “current and future
New York State Medicaid recipients for whom Defendant has directly or
indirectly failed to provide coverage for medically necessary orthopedic footwear
and compression stockings as a result of [the 2011 restrictions].” Joint App’x at
415. The court subsequently entered a permanent injunction prohibiting
NYSDH and its agents from enforcing those coverage restrictions against any
beneficiaries under New York’s Medicaid plan.
The breadth of that remedy depended largely on the district court’s ruling
in favor of plaintiffs on their reasonable standards claim – a ruling that would
have precluded NYSDH from enforcing its coverage restrictions against any and
all beneficiaries. With that claim now resolved in favor of the Commissioner,
however, plaintiffs’ remaining successful claims do not compel such sweeping
relief. Without exception, the provisions on which plaintiffs have prevailed
entail remedies that are either more modest or benefit smaller subsets of the
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plaintiff class. Plaintiffs’ success under the comparability provision precludes
New York from restricting coverage of orthopedic footwear and compression
stockings only as to the categorically needy, not the medically needy. Plaintiffs’
success on their ADA and Rehabilitation Act claims precludes New York from
denying coverage only to beneficiaries with medical conditions that qualify as
“disabilities” within the meaning of those statutes and are at risk of
institutionalization. And plaintiffs’ successful due process provision claim
simply obliges New York to provide written notice to affected beneficiaries prior
to implementing its new restrictions, rather than prohibiting New York from
implementing those restrictions altogether.
Accordingly, while we affirm the district court’s grants of summary
judgment to plaintiffs on their claims under the comparability provision, the due
process provision, and the anti‐discrimination provision of the ADA and
Rehabilitation Act, we must remand the case to allow the district court to craft a
remedy more appropriately tailored to those claims. See Patsy’s Italian Rest., Inc.
v. Banas, 658 F.3d 254, 272 (2d Cir. 2011) (“[I]njunctive relief should be narrowly
tailored to fit specific legal violations.” (internal quotation marks omitted)). In so
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doing, the court should reconsider both the proper breadth of the class
certification and appropriate scope of injunctive relief.
CONCLUSION
For the foregoing reasons, the district court’s judgment is VACATED as to
plaintiffs’ claims under the Medicaid Act’s reasonable standards provision and
AFFIRMED as to plaintiffs’ claims under the home health services, due process,
the comparability provisions of the Act, and under Title II of the ADA and § 504
of the Rehabilitation Act. The injunction issued by the district court is
VACATED and the case is REMANDED to the district court for reconsideration
of appropriate relief.
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