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Summary: RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 13a0068p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT _ X - JOHN B., et al., - Plaintiffs-Appellants, - - No. 12-5307 v. , > - Department of Finance and Administration, et - MARK EMKES, Commissioner, Tennessee - - al., Defendants-Appellees. - N Appeal from the United States District Court for the Middle District of Tennessee at Nashville. No. 3:98-cv-168—Thomas A. Wiseman, Jr., District Judge. Ar
Summary: RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 13a0068p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT _ X - JOHN B., et al., - Plaintiffs-Appellants, - - No. 12-5307 v. , > - Department of Finance and Administration, et - MARK EMKES, Commissioner, Tennessee - - al., Defendants-Appellees. - N Appeal from the United States District Court for the Middle District of Tennessee at Nashville. No. 3:98-cv-168—Thomas A. Wiseman, Jr., District Judge. Arg..
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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 13a0068p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
-
JOHN B., et al.,
-
Plaintiffs-Appellants,
-
-
No. 12-5307
v.
,
>
-
Department of Finance and Administration, et -
MARK EMKES, Commissioner, Tennessee
-
-
al.,
Defendants-Appellees. -
N
Appeal from the United States District Court
for the Middle District of Tennessee at Nashville.
No. 3:98-cv-168—Thomas A. Wiseman, Jr., District Judge.
Argued: October 5, 2012
Decided and Filed: March 14, 2013
Before: ROGERS, COOK, and KETHLEDGE, Circuit Judges.
_________________
COUNSEL
ARGUED: Katherine L. McDaniel, KIRKLAND & ELLIS LLP, New York, New York,
for Appellants. Michael W. Kirk, COOPER & KIRK, PLLC, Washington, D.C., for
Appellees. ON BRIEF: Katherine L. McDaniel, KIRKLAND & ELLIS LLP, New
York, New York, G. Gordon Bonnyman, Jr., Michele M. Johnson, Christopher E.
Coleman, TENNESSEE JUSTICE CENTER, Nashville, Tennessee, for Appellants.
Michael W. Kirk, Nicole J. Moss, COOPER & KIRK, PLLC, Washington, D.C., Linda
A. Ross, OFFICE OF THE TENNESSEE ATTORNEY GENERAL, Nashville,
Tennessee, for Appellees.
_________________
OPINION
_________________
KETHLEDGE, Circuit Judge. Consent decrees are not entitlements. Instead, a
decree may remain in force only as long as it continues to remedy a violation of federal
1
No. 12-5307 John B., et al. v. Emkes, et al. Page 2
law. Here, Tennessee’s Medicaid program has operated under a federal consent decree
for 15 years. In recent years, however, the State moved to vacate the decree on grounds
that the State is now compliant with both the decree and the Medicaid statute. The
district court conducted a month-long evidentiary hearing to explore those grounds.
Afterward, the court issued an exhaustive opinion in which it found that the State has
vastly improved its Medicaid program and is indeed compliant with all the relevant
provisions of federal law. Thus the court vacated the decree.
The plaintiffs now challenge the court’s decision on numerous grounds. Some
of those grounds misstate the bases of the court’s decision. Other grounds are simply
meritless. Our conclusion is therefore the same as the district court’s: control of
Tennessee’s Medicaid program must now return to the State of Tennessee.
I.
Medicaid is a cooperative federal-state program that provides medical care to the
poor. States are not required to participate in Medicaid, but those that do must comply
with the Medicaid Act, 42 U.S.C. § 1396 et seq. Tennessee participates in Medicaid
through a program known as TennCare. See Tenn. Code § 71-5-102.
In relevant part, the Medicaid Act requires that TennCare administer an Early
and Periodic Screening, Diagnosis, and Treatment program for all enrollees under the
age of 21. See 42 U.S.C. §§ 1396a(a)(43), 1396d(r). As a part of this program,
TennCare must provide two basic services: first, provide medical checkups to its
enrollees on a regular basis (referred to as “screens” by the Act); and second, diagnose
and treat any health problems revealed by those screens. See id. § 1396a(a)(43)(B)–(C).
TennCare must also conduct outreach to educate its enrollees about these services. See
id. § 1396a(a)(43)(A).
In 1998, the plaintiffs filed a putative class action under 42 U.S.C. § 1983,
alleging that TennCare had failed to fulfill these obligations. The parties quickly settled,
and the district court entered a consent decree that explained in detail the requirements
that TennCare had to meet to “achieve and maintain compliance” with the Medicaid Act.
No. 12-5307 John B., et al. v. Emkes, et al. Page 3
See Consent Decree ¶ 14. The parties expressly based these requirements on the
assumption that the Act created rights enforceable under § 1983. See Consent Decree
¶ 15. The decree also included a sunset clause. In relevant part, that clause provides that
the decree “shall expire” when TennCare reaches an “adjusted periodic screening
percentage” of 80%, and is in “current, substantial compliance” with the rest of the
decree. See Consent Decree ¶ 113, at 54.
Eight years later, this court held that one part of the Medicaid Act—42 U.S.C.
§ 1396a(a)(30)—was unenforceable under § 1983. See Westside Mothers v. Olszewski,
454 F.3d 532, 542 (6th Cir. 2006) (Westside Mothers II). Shortly thereafter, TennCare
moved to vacate the consent decree under Federal Rule of Civil Procedure 60(b), arguing
that Westside Mothers II had invalidated the parties’ assumption that the Medicaid Act
created rights enforceable under § 1983. The district court denied the motion. TennCare
appealed.
On appeal, we affirmed in part, reversed in part, and remanded. See John B. v.
Goetz, 626 F.3d 356 (6th Cir. 2010). Like the district court, we rejected TennCare’s
argument that Westside Mothers II had left the entire Medicaid Act unenforceable under
§ 1983. But we agreed that certain parts of the Act—such as § 1396a(a)(30)—could not
be privately enforced. Thus, we instructed the district court to determine the statutory
basis of the decree, and to vacate any paragraphs based on parts of the Act that are not
privately enforceable. We also ordered the case reassigned to a new district judge.
Judge Thomas A. Wiseman, Jr. took up the case on remand. The district court
familiarized itself with the case’s 13-year history and ordered that the parties file
supplemental briefs with respect to TennCare’s Rule 60(b) motion to vacate the decree.
It also held a hearing on that motion. The court later issued a 17-page opinion that
examined the statutory basis of every paragraph in the decree. In that opinion, the court
held that several of the decree’s paragraphs had been based upon statutory provisions or
regulations that were themselves unenforceable under § 1983. Thus, the court vacated
those paragraphs. But the court held that “the [d]ecree as a whole, and the principal
provisions in it, remained enforceable.”
No. 12-5307 John B., et al. v. Emkes, et al. Page 4
Meanwhile, TennCare filed a second motion to vacate the decree. There,
TennCare argued in part that it had fulfilled the terms of the decree’s sunset clause by
reaching a screening percentage greater than 80% and by achieving current, substantial
compliance with the rest of the decree. Thereafter, the district court held an 18-day
evidentiary hearing, during which it heard testimony from 31 witnesses and admitted
260 exhibits. The court also received 345 pages of proposed findings of fact and
conclusions of law from the parties. The court later issued a 38-page opinion that
included a thorough examination of TennCare’s compliance with the decree and the
Medicaid Act.
The district court began that examination with a discussion of TennCare’s
outreach efforts. The court found that, after enrolling in TennCare, a family with
children learns about the Early and Periodic Screening, Diagnosis, and Treatment
program in five different ways. First, Tennessee’s Department of Human Services
(which handles the enrollment process) tells each family about the program and urges
them to take their children to the doctor for a screen. Second, TennCare sends each
family a welcome letter that encourages them to schedule an appointment. Third, a
managed-care organization (i.e., a contractor that TennCare hires to manage part of its
program) sends each family a member handbook that includes information about
screening services. Fourth, a managed-care organization calls each newly enrolled
family to urge them to schedule a screen. And fifth, Tennessee’s Department of Health
also calls each family to tell them about the program, to offer assistance in scheduling
a screen, and to offer transportation to the appointment.
The district court also found that TennCare sends at least five reminders to its
enrollees about screening appointments each year. Each family receives quarterly
newsletters and a postcard around the child’s birthday, all of which encourage the family
to schedule a screen. Families may receive further reminders from the Department of
Health, which runs a community-outreach program designed to target hard-to-reach
enrollees, such as pregnant teenagers.
No. 12-5307 John B., et al. v. Emkes, et al. Page 5
In addition, the district court found that TennCare makes numerous attempts to
contact children that have missed a screen. When a child’s date for a screen has passed,
a managed-care organization sends a reminder to the family. If a child goes an entire
year without a screen, the family will receive two more reminders—one from a
managed-care organization and one from TennCare. The Department of Health also runs
a home-visit program to reach children that have missed a screen. Under this program,
the Department sends a community-outreach worker to the home of any child who is
overdue for a screen, and urges the family to schedule an appointment. Thus, if a child
goes a whole year without a screen, TennCare will contact that child’s family at least
nine times—four times through quarterly newsletters, one time through a postcard, three
times through reminder notices, and one time through a home visit.
Next, the district court examined TennCare’s screening services. It found that
TennCare provides the four types of screens required by the Medicaid Act: physical,
vision, hearing, and dental. See 42 U.S.C. § 1396d(r). The court also found that
TennCare had complied with the Act by adopting the periodicity schedules (i.e.,
schedules that state how often a child should receive each type of screen) recommended
by a committee of experts in each field. See, e.g., 42 U.S.C. § 1396d(r)(1)(A)(i).
TennCare provides screens to its enrollees free of charge, whether or not the screen is
recommended by the relevant periodicity schedule. Thus, parents or guardians can take
a child in for as many screens as they like, no matter how many times they have already
done so.
The district court also examined TennCare’s diagnostic and treatment services.
The court looked first at TennCare’s policies and found that “TennCare children are
entitled to receive, free of charge, all medically necessary covered diagnosis and
treatment services.” The court then examined how TennCare’s managed-care
organizations actually applied those policies. “In practice[,]” the court found, “the vast
majority of diagnosis and treatment services are provided to TennCare enrollees
automatically, without any medical-necessity review, when the service is ordered by a
licensed provider.” And the court found that, even when a managed-care organization
No. 12-5307 John B., et al. v. Emkes, et al. Page 6
does engage in medical-necessity review, the organization usually approves the
requested service.
In the comparatively few cases where a managed-care organization denies a
requested service, TennCare offers the affected family an exhaustive appeals process.
An appeal begins with TennCare asking the managed-care organization to have a second
doctor review the request. If that doctor recommends denial, TennCare sends the case
to an independent medical consultant. If the consultant also recommends denial, the case
goes to an administrative law judge. Thus, on appeal, TennCare will only deny a
requested service if two doctors, an independent medical consultant, and an
administrative law judge all agree that the service is not medically necessary.
The district court also found that the plaintiffs’ own witnesses “largely confirmed
that TennCare provides medically necessary diagnostic and treatment services.”
Although these witnesses testified that TennCare did not always provide services as
quickly as it should, the plaintiffs “did not identify any instance where needed services
were not ultimately provided.”
The district court then examined the four primary ways that TennCare monitors
its compliance with the Medicaid Act. First, the court found that Tennessee was the first
state in the country to require that its managed-care organizations earn full accreditation
from the National Committee for Quality Assurance, which is an independent
organization dedicated to improving health-care quality. Of TennCare’s three
managed-care organizations, two have earned the highest overall accreditation rating of
“excellent” and the third earned the second-highest rating of “commendable.”
Second, the court found that TennCare requires its managed-care
organizations to use a measuring tool known as the Healthcare Effectiveness Data and
Information Set (HEDIS). This tool measures the performance of TennCare’s
managed-care organizations in 75 different areas. See HEDIS & Performance
Measurement, NATIONAL COMMITTEE FOR QUALITY ASSURANCE,
http://www.ncqa.org/HEDISQualityMeasurement.aspx (last visited Feb. 19, 2013).
HEDIS allows TennCare to track its year-to-year performance and to compare itself with
No. 12-5307 John B., et al. v. Emkes, et al. Page 7
other health plans across the country. The court also found that TennCare’s HEDIS
results “compare[d] favorably to national Medicaid averages[.]” For example,
TennCare’s results exceeded, or were comparable to, the national average for “access
to and availability of care for children, timeliness and frequency of prenatal care, child
immunization rates, and effectiveness of behavioral health[.]” According to the court,
these results compared “even more favorably to the Southeastern regional averages.”
Third, the court found that TennCare requires its managed-care organizations to
use another measuring tool known as Consumer Assessment of Healthcare Providers and
Systems (CAHPS). This tool measures the satisfaction of TennCare’s enrollees with
their medical care. Again, the court found that TennCare’s CAHPS results were better
than the national averages for Medicaid. For example, between 84% and 86% of
TennCare’s enrollees stated that they always or usually get the care they need for their
children—whereas only 77% of Medicaid recipients nationally said the same.
Fourth, the court found that TennCare had hired Qsource to serve as its External
Quality Review Organization. See generally 42 C.F.R. § 438.356. In that role, Qsource
performs two primary tasks: First, it reviews the policies adopted by TennCare’s
managed-care organizations to determine whether they comply with federal law.
Second, it reviews randomly selected medical files to make sure that TennCare’s
managed-care organizations are actually implementing those policies in practice.
Finally, the district court examined TennCare’s compliance with every paragraph
of the decree that the court had not already vacated. It found that TennCare was in
substantial compliance with the decree and had therefore fulfilled the terms of the
decree’s sunset clause. See Consent Decree ¶ 113, at 54.
Based on this extensive examination, the court found that, “compared with its
performance in 1998, TennCare ha[d] dramatically improved the provision of medical
services to its enrollees in every respect.” In fact, the court found that “no other state’s
. . . program surpasses that of Tennessee in any salient respect.” The court also
concluded that TennCare is “fully compliant with the [relevant Medicaid] law and
No. 12-5307 John B., et al. v. Emkes, et al. Page 8
regulations.” It therefore vacated the decree in full and dismissed the case. This appeal
followed.
II.
A.
The plaintiffs first challenge the district court’s order granting in part TennCare’s
Rule 60(b) motion to vacate the decree. We review that decision for an abuse of
discretion. See Northridge Church v. Charter Twp. of Plymouth, 647 F.3d 606, 613
(6th Cir. 2011). The plaintiffs have the burden to prove that the court had no reasonable
basis for granting the motion. See Cleveland Firefighters for Fair Hiring Practices v.
City of Cleveland,
669 F.3d 737, 740 (6th Cir. 2012).
Under Rule 60(b)(5), a court may vacate a consent decree if, among other things,
“a significant change . . . in law renders [its] continued enforcement detrimental.”
Northridge Church, 647 F.3d at 613 (quotation marks omitted). A change in law
satisfies that test when the parties “based their agreement on a misunderstanding” of the
law. Rufo v. Inmates of Suffolk Cnty. Jail, 502 U.S. 367, 390 (1992); accord Doe v.
Briley,
562 F.3d 777, 782–83 (6th Cir. 2009). Here, the district court held that the
parties based three clusters of paragraphs on a misunderstanding of the law. We
consider each in turn.
1.
The first cluster includes paragraphs 43, 58, 60(v)–(vi), 61(ii), and 71(ii) of the
consent decree. Broadly stated, these paragraphs address the adequacy of TennCare’s
provider network. Paragraph 43 requires that TennCare “ensure that [its managed-care
organizations’] networks are adequate . . . to properly screen children in conformity with
the requirements of . . . the Medicaid statute[.]” Paragraph 58 requires that all
utilization-review and prior-authorization decisions “be made only by qualified
personnel with education, training, or experience in child and adolescent health.”
Paragraph 60(v) requires that TennCare’s network “include providers with cultural and
linguistic competency . . . as may be needed for the effective treatment of children from
No. 12-5307 John B., et al. v. Emkes, et al. Page 9
ethnic minorities[.]” Paragraph 60(vi) requires that TennCare’s managed-care
organizations “have a sufficient array of services and specialists to meet the medical and
behavioral health needs” of TennCare’s enrollees. Paragraph 61(ii) requires that
TennCare’s “provider networks currently comply with the ‘Terms and Conditions for
Access’” document issued by the Health Care Financing Administration (now the
Centers for Medicare & Medicaid Services). And paragraph 71(ii) requires that
TennCare “[p]rovide a comprehensive and appropriate scope of geographically
accessible child and adolescent behavioral health services[.]”
The district court held that these network-adequacy paragraphs were all based
on § 1396a(a)(30)(A) of the Medicaid Act, which likewise addresses network adequacy.
Specifically, that subsection provides that TennCare must use procedures, including
“utilization review,” to assure that its provider network is comparable in size to the
private network in the geographic area. See 42 U.S.C. § 1396a(a)(30)(A). The court
also held that the parties based these paragraphs on a misunderstanding of subsection
30(A)—namely, that it created a right enforceable under § 1983. See Consent Decree
¶ 15. Westside Mothers II proved that assumption wrong, so the district court vacated
these paragraphs.
The plaintiffs now object to this holding on five grounds. First, they argue that
the court’s decision violated the law-of-the-case doctrine. In support, they point to a
2001 opinion in which Judge John T. Nixon (who later recused himself from the case)
held that TennCare had violated the consent decree. See John B. v. Menke, 176 F. Supp.
2d 786, 802–06 (M.D. Tenn. 2001). In that opinion, the plaintiffs say, the court
concluded that the entire decree was based on § 1396a(a)(43) of the Medicaid Act,
which of course is enforceable pursuant to § 1983. They therefore contend that, under
the law-of-the-case doctrine, the district court was required to find that subsection 43
was the statutory basis of the paragraphs at issue.
The plaintiffs overread Judge Nixon’s opinion. The law-of-the-case doctrine
only applies to issues the court actually decided. See United States v. Cunningham, 679
F.3d 355, 376–77 (6th Cir. 2012). And Judge Nixon did not actually decide the statutory
No. 12-5307 John B., et al. v. Emkes, et al. Page 10
basis of the consent decree. True, Judge Nixon held that TennCare had to comply with
subsection 43 in order to fulfill its obligations under the decree. But that is not the same
as a holding that the entire decree—including the network-adequacy paragraphs at issue
here—was based on subsection 43. Indeed, the plaintiffs have not pointed to any part
of Judge Nixon’s opinion that even mentions the network-adequacy paragraphs, much
less determines their statutory basis. So the law-of-the-case doctrine did not bind the
district court here.
Second, the plaintiffs argue that the decree’s primary purpose was to remedy
violations of subsection 43. They note that their complaint was “primarily based on”
subsection 43 and that the decree identifies subsection 43 as its “overall basis.” Thus,
the plaintiffs argue, the parties must have based the network-adequacy paragraphs on
subsection 43. But the decree’s purpose does not determine the statutory basis of each
individual paragraph. Indeed, if the plaintiffs were correct, we could not have ordered
the district court to vacate a substantial portion of the decree the last time this case was
before us—which of course we did. See John B., 626 F.3d at 363. So this argument too
is meritless.
Third, the plaintiffs argue that none of the network-adequacy paragraphs
explicitly mention subsection 30(A). That is true enough, but none of those paragraphs
explicitly mention subsection 43 either. Moreover, a paragraph can be based on
subsection 30(A) without mentioning it. For example, paragraph 61(ii) incorporates by
reference a document titled “Terms and Conditions for Access[.]” And that document
repeatedly says that TennCare must provide “access [to its networks] that is equal to or
greater than the currently existing practice in the fee-for-service system”—an implicit
reference to subsection 30(A)’s requirement that TennCare have a provider network that
is comparable in size to the private network in the geographic area. That the network-
adequacy paragraphs do not mention subsection 30(A), therefore, ultimately does not
matter here.
Fourth, the plaintiffs argue that TennCare needs adequate networks to comply
with subsection 43’s screening and treatment requirements. Thus, they say, the
No. 12-5307 John B., et al. v. Emkes, et al. Page 11
network-adequacy paragraphs must be based on that subsection. But the plaintiffs
overlook that TennCare also needs adequate networks to comply with subsection 30(A)’s
geographic-comparability requirement. So this argument likewise goes nowhere.
Fifth, the plaintiffs argue that the language of the network-adequacy paragraphs
shows that they are based on subsection 43, rather than subsection 30(A). For most of
these paragraphs—namely, paragraphs 43, 60(v)–(vi), 61(ii), and 71(ii)—the plaintiffs’
argument is utterly conclusory: they merely quote the language of each paragraph, and
then announce that it does not refer to subsection 30(A). Suffice it to say that the
plaintiffs’ bare assertions as to these paragraphs are unconvincing.
The plaintiffs develop this argument only for paragraph 58, which requires that
“utilization review and prior authorization decisions be made only by qualified
personnel[.]” Although paragraph 58 and subsection 30(A) both discuss “utilization
review[,]” the plaintiffs argue that “there is virtually no relationship between the two
[provisions].” In support, the plaintiffs contend that “[subsection] 30(A) mandates that
[TennCare] employ utilization review . . . [while] [p]aragraph 58 prohibits [TennCare]
from using [it] . . . inappropriately.” (Quotation marks omitted.) But the plaintiffs have
tried to create a contradiction where none exists. There is nothing inconsistent about
requiring that TennCare use utilization review, and then explaining that it must employ
qualified personnel when it does so. Instead that makes perfect sense. This argument
is meritless.
2.
The district court also vacated paragraph 84 of the consent decree. In relevant
part, that paragraph provides:
The Department of Children’s Services shall ensure that the case
planning and case review required under the relevant portions of the
Adoption Assistance and Child Welfare Act[, 42 U.S.C. § 670 et seq.,]
for TennCare children in DCS custody . . . shall identify and provide for
the treatment of the behavioral health and medical needs of these children
in accordance with [the Act.]
No. 12-5307 John B., et al. v. Emkes, et al. Page 12
The district court held that the parties based this paragraph on the Adoption Act. It also
held that the parties based this paragraph on the belief that the Act creates rights
enforceable under § 1983. See Consent Decree ¶ 15. But the Act does not do so,
see John B., 626 F.3d at 363; and thus the district court vacated this paragraph.
The plaintiffs again disagree with the court’s statutory-basis determination. They
argue that the parties based this paragraph on 42 U.S.C. § 1396a(a)(43), rather than the
Adoption Act, because the paragraph enforces “only the parts of the [Adoption Act] that
overlap with” subsection 43. But this argument proves only that the Adoption Act and
subsection 43 both address children’s medical care; it does not prove which of those
provisions the parties based paragraph 84 on. Moreover, the text of paragraph 84 shows
that the parties based it on the Adoption Act. That paragraph says that the Department
of Children’s Services must care for TennCare children “in accordance with” the
Adoption Act; and it notably does not say that the Department must act in accordance
with subsection 43 as well. The district court did not abuse its discretion on this point.
3.
The third cluster includes paragraphs 78–83, all of which address TennCare’s
coordination with other government agencies. The district court held that the parties
based these paragraphs on a federal Medicaid regulation, 42 C.F.R. § 441.61(c). That
regulation has two main requirements. First, it provides that TennCare “must make
appropriate use of State health agencies, State vocational rehabilitation agencies, and
Title V grantees.” Second, it says that TennCare “should make use of other public
health, mental health, and educational programs and related programs . . . to ensure an
effective child health program.” The court further held that § 441.61(c) did not create
rights enforceable under § 1983. It therefore vacated these paragraphs.
The plaintiffs argue that the court erred when it held that § 441.61(c) is not
enforceable under § 1983. To that end, the plaintiffs contend that, “if a statute is
privately enforceable, so too are its implementing regulations.” And because the district
court held that § 441.61(c) implements a statutory provision that is privately
No. 12-5307 John B., et al. v. Emkes, et al. Page 13
enforceable—namely, 42 U.S.C. § 1396a(a)(43)(C)—the plaintiffs say that this
regulation is enforceable as well.
That a statutory provision is privately enforceable, however, does not necessarily
mean that a regulation that implements the provision is privately enforceable as well.
To the contrary, an implementing regulation is not privately enforceable—even if its
controlling statute is—when it “imposes an obligation or prohibition that is not imposed
generally by the controlling statute.” Ability Ctr. of Greater Toledo v. City of Sandusky,
385 F.3d 901, 906 (6th Cir. 2004). Section 441.61(c) does precisely that: it requires that
TennCare coordinate its services with other agencies, even though subsection 43(C) says
nothing of the sort. Consequently, the district court did not abuse its discretion in
vacating these paragraphs.
4.
Finally, the plaintiffs argue that the district court should not have vacated any of
the decree’s paragraphs because they all “further[] the objectives” of subsection 43. In
support, the plaintiffs rely on Local No. 93, International Ass’n of Firefighters, AFL-CIO
C.L.C. v. City of Cleveland, which says that a consent decree must “further the objectives
of the law upon which the complaint was based.” 478 U.S. 501, 525 (1986). This
argument confuses a necessary condition with a sufficient one. It is true that a decree
must further the objectives of the federal law that formed the basis of the complaint. But
that does not mean that a decree is enforceable simply because it does so; the decree
must still be based on a provision that is privately enforceable. See John B., 626 F.3d
at 362. And because the parties failed to base the paragraphs at issue here on a privately
enforceable provision, the court was within its discretion to vacate them. See Briley, 562
F.3d at 782–83. Indeed, we expressly instructed the court to do so. See John B., 626
F.3d at 362–63. The plaintiffs’ reliance on Firefighters is unpersuasive.
In sum, the plaintiffs had the burden of proving that the district court abused its
discretion when it vacated paragraphs 43, 58, 60(v)–(vi), 61(ii), 71(ii), and 78–84. See
Cleveland Firefighters for Fair Hiring Practices, 669 F.3d at 740. The plaintiffs have
No. 12-5307 John B., et al. v. Emkes, et al. Page 14
not met that burden. We therefore reject their challenge to the court’s order granting in
part TennCare’s Rule 60(b) motion to vacate the decree.
B.
Next, the plaintiffs challenge the district court’s order granting TennCare’s
motion to vacate the decree under the sunset clause. See Consent Decree ¶ 113, at 54.
Notably absent from the plaintiffs’ challenge, however, is any effort to contest the
district court’s factual findings regarding TennCare’s delivery of services to its enrollees.
Those findings came after the court heard 18 days of testimony and considered hundreds
of exhibits; and the findings include that TennCare reminds parents and guardians in
virtually every way imaginable to obtain screens for their children free of charge; that
TennCare is a national leader in implementing programs to ensure its compliance with
federal law; that TennCare has dramatically improved its provision of services since
1998; and that no other state’s Medicaid program surpasses TennCare in any salient
respect.
What the plaintiffs argue, rather, is that the district court should have considered
more evidence than it did during the evidentiary hearing, and that the court
misinterpreted certain paragraphs of the decree. We consider these arguments in turn.
1.
The plaintiffs argue that the district court improperly refused to consider
TennCare’s past violations of the consent decree when it granted the motion to vacate.
It is true, of course, that the district court told the parties that the scope of its 18-day
evidentiary hearing was limited to whether TennCare was in “current, substantial
compliance” with the decree. We review that limitation for an abuse of discretion.
See Gonzales v. Galvin, 151 F.3d 526, 534–535 (6th Cir. 1998). And that limitation was
plainly within the court’s discretion. Present compliance, not past, was the ultimate
issue before the court; and in deciding that issue the court was not required to conduct
the equivalent of an archaeological dig. Moreover, the plaintiffs’ argument is incorrect
even when considered on its own terms. The district court did consider the case’s long
No. 12-5307 John B., et al. v. Emkes, et al. Page 15
history—which is why the court took the trouble to become familiar with it. And the
court’s opinion expressly stated that TennCare had violated the decree in 2001 and that,
as a result, TennCare now bore “the burden of proving . . . that [it was] in substantial
compliance with the [d]ecree.” See John B. v. Emkes,
852 F. Supp. 2d 957, 961 (M.D.
Tenn. 2012).
The plaintiffs further contend that the court’s decision to limit the scope of the
hearing prevented them from impeaching TennCare’s witnesses with evidence of past
noncompliance with the decree. But the district court allowed the plaintiffs to do
precisely that. For example, the court allowed the plaintiffs to cross-examine Dr. Wendy
Long about TennCare’s problems tracking referrals—a problem that reached back to
2005. Thus, this argument simply mischaracterizes what happened in the district court.
The plaintiffs also contest several of the court’s evidentiary decisions, which we
likewise review for an abuse of discretion. See United States v. Stepp, 680 F.3d 651, 660
(6th Cir. 2012). First, the plaintiffs argue that the court wrongly excluded a group of
100 documents on the ground that they were “too old.” But again the plaintiffs
mischaracterize the court’s decision. The court excluded those documents not because
they were old, but because the plaintiffs tried to admit them en masse, at the end of the
hearing, when TennCare’s witnesses could no longer respond to them. Second, the
plaintiffs contend that the court excluded as “dated” the minutes from a 2008 meeting
of the Tennessee Children’s Care Coordination Steering Panel. Yet the plaintiffs fail to
mention that the court also based that decision on hearsay grounds: the plaintiffs offered
the document for the truth of the matter asserted, and failed to identify an applicable
hearsay exception. They have not done any better here, so the document was
inadmissible in any event. Third, the plaintiffs object to the court’s exclusion of certain
reports that court-appointed monitors wrote about TennCare in 2007. True, the court did
exclude these reports as beyond the scope of the hearing; but the reports were already
part of the record in the case, so they did not need to be admitted during the hearing for
the court to consider them. The plaintiffs’ evidentiary arguments are meritless.
No. 12-5307 John B., et al. v. Emkes, et al. Page 16
2.
The plaintiffs next challenge the merits of the district court’s order to vacate the
decree under the sunset clause. That clause provides, in relevant part, that the decree
“shall expire” when TennCare reaches an “adjusted periodic screening percentage” of
80% and is in “current, substantial compliance” with the decree’s other requirements.
See Consent Decree ¶ 113, at 54. The district court found that TennCare had achieved
both goals, so it vacated the decree. In doing so, the plaintiffs contend, the court
misinterpreted the decree.
We review the district court’s interpretation of the consent decree de novo.
See Sault Ste. Marie Tribe of Chippewa Indians v. Granholm, 475 F.3d 805, 810
(6th Cir. 2007). For these purposes, we interpret the consent decree as a contract.
See id. And under Tennessee law, which guides our interpretation of the decree here,
our primary goal is to give effect to the parties’ intent as expressed in the decree itself.
See DePasquale v. Chamberlain,
282 S.W.3d 47, 53 (Tenn. Ct. App. 2008).
a.
The plaintiffs first argue that the district court misinterpreted paragraph 39 of the
decree, which describes TennCare’s outreach obligations. That paragraph provides that
Tennessee “shall adopt any policies and procedures necessary to ensure that TennCare
rules and guidelines . . . require compliance with . . . each specific outreach and
informing requirement under federal law[.]” (Emphasis added.) The district court held
that TennCare had in fact adopted such “policies and procedures,” and thus had complied
with paragraph 39. See John B., 852 F. Supp. 2d at 976.
But the plaintiffs contend that paragraph 39 requires more than the adoption of
certain policies. Rather, they say, TennCare must show that its outreach efforts are
actually “effective.” But that is not what the decree says. Paragraph 39 says that
TennCare must adopt policies and procedures that themselves require compliance with
federal outreach requirements. TennCare has done so; and that means it has complied
with paragraph 39.
No. 12-5307 John B., et al. v. Emkes, et al. Page 17
b.
The plaintiffs also argue that the district court misinterpreted paragraphs 53 and
54, which describe TennCare’s diagnostic and treatment obligations. Paragraph 53
provides that
[TennCare] shall establish and maintain a process for reviewing the
practices and procedures of [its managed-care organizations and the
Department of Children’s Services], and require such modifications of
those practices and procedures as are necessary to ensure that children
can be appropriately referred from one level of screening or diagnosis to
another, more sophisticated level[.]
Paragraph 54 provides that “[TennCare] shall ensure that, within their respective spheres
of responsibility, TennCare, [its managed-care organizations] and [the Department of
Children’s Services] provide children all medically necessary . . . services[.]” In sum,
these two paragraphs require that TennCare provide to its enrollees all medically
necessary diagnostic and treatment services.
According to the plaintiffs, the district court held that TennCare complied with
these paragraphs because it “adopt[ed] policies that require [its managed-care
organizations] to provide [the necessary] services”—what they refer to as a
“have-a-policy” standard. But again the plaintiffs misrepresent the court’s holding. The
court did not say that TennCare had complied with paragraph 53 simply because
TennCare “had a policy.” Instead, the court held that TennCare had actually reviewed
its contractors’ practices and ordered the contractors to change them when necessary.
See John B., 852 F. Supp. 2d at 979. For example, the court found that
Qsource—TennCare’s External Quality Review Organization—regularly reviews the
policies and practices of the managed-care organizations. Qsource then works with
TennCare’s Quality Oversight Unit “to identify opportunities for improvement and to
develop a quality strategy[.]” Id. at 973.
Similarly, the court did not hold that TennCare had complied with paragraph 54
merely because it adopted certain policies and procedures. True, the court reviewed
TennCare’s policies and found that its enrollees “[were] entitled to receive, free of
No. 12-5307 John B., et al. v. Emkes, et al. Page 18
charge, all medically necessary covered diagnosis and treatment services.” Id. at 970.
But more to the point, the court examined how TennCare provided those services “[i]n
practice[.]” See id. And the court found, for example, that “the vast majority of
diagnosis and treatment services are provided to TennCare enrollees automatically,
without any medical-necessity review[.]” Id. at 970.
The court’s conclusion that TennCare complied with paragraphs 53 and 54,
therefore, was based on its finding that TennCare actually provides to its enrollees the
services that those paragraphs require TennCare to provide. And in making that finding,
the court did not—as the plaintiffs assert here—“brush aside undisputed evidence” that
TennCare had failed to comply with the decree. Instead, the court considered the
plaintiffs’ evidence and found it unpersuasive. Indeed, the court found that the
plaintiffs’ own witnesses “largely confirmed that TennCare provides medically
necessary diagnostic and treatment services.” Id. at 985. And the court found that the
plaintiffs had not “identif[ied] any instance”—not a single one—“where needed services
were not ultimately provided.” Id. at 985. The plaintiffs have not even argued, much
less proved, that these findings were clearly erroneous. The district court did not err in
any respect in concluding that TennCare had complied with paragraphs 53 and 54 of the
decree.
c.
The plaintiffs next argue that the district court misinterpreted paragraph 96,
which provides that “[TennCare] shall establish . . . an ongoing process for monitoring
and reporting [its] compliance with the [decree’s] requirements[.]” The court held that
TennCare had complied with this paragraph in two ways. First, TennCare used several
third-party measurements to track its performance. See id. at 971–74. For example,
TennCare required that its managed-care organizations obtain accreditation from the
National Committee for Quality Assurance, which is a nonprofit organization dedicated
to improving the quality of health care. Second, TennCare adopted several internal
reporting methods, including the filing of semiannual compliance reports with the court
and the plaintiffs. See id. at 974–75.
No. 12-5307 John B., et al. v. Emkes, et al. Page 19
The plaintiffs contend that none of these monitoring processes “fully or
adequately assess [TennCare’s] performance.” They therefore accuse the district court
of “sidestepp[ing] the evidentiary record” and “effectively read[ing] out of the [d]ecree
the requirement that [TennCare] specifically monitor its actual provision of [medical]
services.” (The latter point is the supposed misinterpretation of the paragraph.) But
these assertions again mischaracterize the court’s decision. The court did not sidestep
the evidentiary record; instead it sifted through the record to make five pages’ worth of
detailed findings about TennCare’s monitoring processes. And the court did not read the
monitoring requirement out of the decree. Instead it concluded—based upon factual
findings that the plaintiffs do not venture to challenge here—that TennCare met that
requirement. The plaintiffs’ argument that the court misinterpreted paragraph 96 is
meritless.
d.
Finally, the plaintiffs argue that the district court misinterpreted paragraph 46.
That paragraph describes a three-step process that TennCare uses to calculate the
“adjusted periodic screening percentage” mentioned in the decree’s sunset clause. First,
TennCare calculates a “screening ratio[,]” which is the number of “periodic screens” that
TennCare provided in the past year, divided by “the number of . . . screens that should
have occurred” during that time. Second, TennCare multiplies the screening ratio by
100 to get a “periodic screening percentage.” Third, TennCare adjusts that screening
percentage by conducting a “medical record review.” Only the first step of this process
is at issue here.
In 2010, TennCare reported an adjusted periodic screening percentage of
91.3%, well above the 80% target in the sunset clause. TennCare therefore argued
during the evidentiary hearing that it had satisfied the sunset clause’s requirement. The
plaintiffs responded that TennCare had improperly calculated both the numerator and
denominator of the screening ratio. The district court admitted expert testimony from
both sides and held that TennCare had calculated the ratio correctly.
No. 12-5307 John B., et al. v. Emkes, et al. Page 20
On appeal, the plaintiffs first object to TennCare’s method of counting the
number of screens that it provided its enrollees in the past year (i.e., the screening ratio’s
numerator). To determine that number, TennCare relies on a set of codes that doctors
use to describe and bill for the services they provide. Doctors use several codes to bill
TennCare for the screens they perform. Thus, every time that TennCare receives a bill
using one of these screening codes, TennCare counts it toward the numerator.
The plaintiffs argue that this counting method inflates the numerator. They say
a checkup should only count as a “periodic screen” if it was required by TennCare’s
periodicity schedule, which states how often each child should receive a screen. Thus,
the plaintiffs contend, the periodicity schedule should limit the number of screens that
TennCare can count per child. For example, if a child received 10 screens in a year
where the periodicity schedule required only seven, then TennCare should only count
the seven screens towards the screening ratio.
The problem with this argument is that paragraph 46 expressly refutes it. That
paragraph lists several billing codes that “will be the primary determinants of which
[checkups] are counted as periodic screens.” And TennCare uses precisely those billing
codes when counting the number of screens it provided in a particular year—which
means that it calculates the screening ratio’s numerator in precisely the manner that the
decree says it should. Moreover, paragraph 46 says nothing about using the periodicity
schedule to limit the number of screens that TennCare may count per child.
Finally—and germane to the question of the parties’ intent—the plaintiffs do not explain
how, as a practical matter, TennCare could even apply such a limit, given that the billing
codes themselves say nothing about whether a screen was required by the periodicity
schedule.
That said, the plaintiffs try to bolster their argument in two ways. First, they
contend that TennCare’s calculation method conflicts with the instructions for the
CMS-416 form, which TennCare uses to report its screening ratio to the federal
government. But those instructions do not apply to calculation of the numerator.
Although paragraph 46 incorporates them for certain purposes, it does not do so when
No. 12-5307 John B., et al. v. Emkes, et al. Page 21
explaining how to count the number of screens that TennCare performed. Second, the
plaintiffs point to a decision from the Northern District of Illinois, which held that a
counting method similar to TennCare’s was “misleading” and “overstate[d] the actual
level of . . . services provided.” Memisovski ex rel. Memisovski v. Maram, No. 92 C
1982, 2004 WL 1878332, *28, *53 (N.D. Ill. Aug 23, 2004). But that case is inapposite
for the simple reason that it did not involve the decree that we construe here. The
plaintiffs’ objections to TennCare’s calculation of the screening ratio’s numerator,
therefore, are meritless.
The plaintiffs also object to TennCare’s method of counting the number of
periodic screens that should have occurred during the past year (i.e., the screening ratio’s
denominator). To determine that number, TennCare uses a formula again found in
paragraph 46 of the decree. That formula incorporates TennCare’s periodicity
schedule—the more screens the schedule requires, the larger the screening ratio’s
denominator.
In 2010, TennCare used a periodicity schedule that required 30 total screens for
outreach purposes. When calculating its screening ratio, however, TennCare used a
schedule that required only 24 screens. The plaintiffs argue that TennCare’s use of the
24-screen schedule artificially decreased the number of screens that should have
occurred in the past year, thereby increasing the screening ratio.
To determine which periodicity schedule TennCare should have used when
calculating the screening ratio, we start with the text of the decree. Paragraph 46 begins
by saying that TennCare must use “HCFA 416 mathematical methodology” to determine
“the number of periodic screens that should have occurred” in the baseline year. (HCFA
416 mathematical methodology was a calculation method promulgated by the Health
Care Financing Administration. That method is now promulgated by the Centers for
Medicare & Medicaid Services and is known as CMS-416 methodology.) Paragraph 46
then says that periodic screening percentages in later years “will be calculated using
methodology identical to that used in calculation of the baseline periodic screening
percentage.”
No. 12-5307 John B., et al. v. Emkes, et al. Page 22
The parties disagree about the meaning of the words “methodology identical” as
used in this paragraph. The plaintiffs contend that the methodology used to calculate the
screening ratio in a particular year must be “identical” to the “HCFA 416 mathematical
methodology” for that year. In contrast, TennCare argues that the words “methodology
identical” require it to use a periodicity schedule “identical” to the one it used in the
baseline year (i.e., October 1, 1995 through September 30, 1996).
The plaintiffs have the better reading of this paragraph. The periodicity schedule
is merely an input for the screening-ratio methodology, not a part of the methodology
itself. Thus, when TennCare changes its periodicity schedule, the denominator of its
screening ratio should reflect that change. Moreover, TennCare has not consistently
followed its own proposed interpretation of “methodology identical”: in the baseline
year, TennCare used a 20-screen schedule to calculate its screening ratio, but in 1999 it
began using a 24-screen schedule. If paragraph 46 actually required TennCare to use the
same periodicity schedule that it used in the baseline year, TennCare presumably would
not have made that change.
Paragraph 46 therefore requires that TennCare follow the CMS-416 methodology
each year. That methodology is explained in the instructions to the CMS-416 form. In
relevant part, those instructions require that TennCare use its “most recent periodicity
schedule” when it completes the form. The issue therefore becomes what the
instructions mean by “most recent periodicity schedule[.]”
States use the CMS-416 form to comply with 42 U.S.C. § 1396a(a)(43)(D),
which directs each state to “report[] to the Secretary [of Health and Human Services] . . .
information relating to early and periodic screening, diagnostic, and treatment services
provided under the [state’s] plan[.]” Section 1396d(r), in turn, defines the phrase “early
and periodic screening, diagnostic, and treatment services” to include screening services
that are provided “at intervals which meet reasonable standards of medical . . . practice,
as determined by the State after consultation with recognized medical . . . organizations
involved in child health care[.]” 42 U.S.C. § 1396d(r)(1)(A)(i). Thus, when the
CMS-416 instructions refer to the “most recent periodicity schedule,” they refer to the
No. 12-5307 John B., et al. v. Emkes, et al. Page 23
schedule that the State adopted “after consultation with recognized medical . . .
organizations involved in child health care[,]” in compliance with § 1396d(r).
Here, the district court found that TennCare had adopted the 30-screen schedule
to comply with this part of § 1396d(r). See John B., 852 F. Supp. 2d at 967; see also
TennCare Rule 1200-13-13-04(b)(8) (adopting the “latest” periodicity schedule
recommended by the American Academy of Pediatrics, which currently requires
30 total screens). Thus, when TennCare calculated its screening ratio, it should have
used a 30-screen periodicity schedule rather than a 24-screen one. The court therefore
misinterpreted the portion of paragraph 46 that prescribes the denominator of the
screening ratio.
III.
And so the district court, in the course of making literally dozens of interpretive
decisions with respect to a notoriously complex statute and decree, made a single
technical mistake. We now consider whether that error was harmless. See Fed. R. Civ.
P. 61. An error is harmless if it “do[es] not affect any party’s substantial rights.” Id.
TennCare’s primary argument in the district court was that it had satisfied the
terms of the consent decree’s sunset clause. In the alternative, however, TennCare
argued that its program had “complie[d] fully with the governing provisions of the
Medicaid statute[,]” and that the district court should vacate the decree on that basis. In
support, TennCare cited the Supreme Court’s decision in Horne v. Flores, 557 U.S. 433
(2009). There, the Court held, in determining whether to grant a Rule 60(b)(5) motion
in institutional litigation, that the district court and court of appeals alike must determine
whether “ongoing enforcement of the original order [is] supported by an ongoing
violation of federal law[.]” Id. at 454. Thus, we think it fair to construe TennCare’s
alternative argument as one for relief under Rule 60(b)(5) on the ground that ongoing
enforcement of the decree would not remedy an ongoing violation of federal law.
Moreover, we can affirm on any basis supported by the record, see Taylor v. KeyCorp,
680 F.3d 609, 616 (6th Cir. 2012); so we consider whether the Supreme Court’s decision
in Horne requires affirmance here.
No. 12-5307 John B., et al. v. Emkes, et al. Page 24
Under Rule 60(b)(5), a party can ask a court to vacate a consent decree “if a
significant change . . . in factual conditions . . . renders [its] continued enforcement
detrimental.” Northridge Church, 647 F.3d at 613 (quotation marks omitted). This rule
“serves a particularly important function in . . . institutional reform litigation.” Horne,
557 U.S. at 447 (quotation marks omitted). In such cases, we must take a “flexible
approach” to these motions so that “responsibility for discharging the State’s obligations
is returned promptly to the State and its officials when the circumstances warrant.” Id.
at 450 (quotation marks omitted).
In applying this flexible approach, we must answer two questions: first, whether
the state has achieved compliance with the federal-law provisions whose violation the
decree sought to remedy; and second, whether the State would continue that compliance
in the absence of continued judicial supervision. See id.; Bd. of Educ. of Oklahoma City
Pub. Sch., Indep. Sch. Dist. No. 89, Oklahoma County, Okl. v. Dowell, 498 U.S. 237, 247
(1991). If the State has indeed implemented a “durable remedy[,]” then “continued
enforcement of the [decree] is not only unnecessary, but improper.” Horne, 557 U.S. at
450.
Here, the district court found that TennCare has achieved compliance with all of
the provisions of federal law whose violation the decree sought to remedy. To review:
TennCare “provid[es] or arrang[es] for the provision of . . . screening services in all
cases where they are requested” in compliance with 42 U.S.C. § 1396a(a)(43)(B).
TennCare provides all four types of screens required by the Medicaid Act: physical,
vision, hearing, and dental. See 42 U.S.C. § 1396d(r). TennCare has also adopted for
outreaches purposes the periodicity schedules recommended by a committee of experts
in each field. See, e.g., id. § 1396d(r)(1)(A)(i). And TennCare provides these screens
free of charge to its enrollees whenever they request them.
TennCare also “arrang[es] for . . . corrective treatment the need for which is
disclosed by such child health screening services” in compliance with section
1396a(a)(43)(C). TennCare enrollees are entitled to receive all medically necessary
diagnostic and treatment services. When these services are ordered by a licensed
No. 12-5307 John B., et al. v. Emkes, et al. Page 25
provider, TennCare provides most of them without engaging in a medical-necessity
review. When TennCare does perform that review and denies a request, it has an
exhaustive appeals process available if a family wishes to take advantage of it. This
process works well: during the evidentiary hearing, the plaintiffs failed to “identify any
instance where needed services were not ultimately provided.” See John B., 852 F.
Supp. 2d at 985.
In addition, TennCare “inform[s] all persons in [Tennessee] who are under the
age of 21 and who have been determined to be eligible for [Medicaid], of the availability
of early and periodic screening, diagnostic, and treatment services” in compliance with
section 1396a(a)(43)(A). TennCare contacts all newly enrolled families at least five
times to tell them about the program and to encourage them to schedule a screening
appointment. TennCare reminds each family about these services four times a year in
quarterly newsletters and once per year in a postcard. If a child goes a year without a
screen, TennCare sends three reminder notices and sends a community-outreach worker
to the child’s home to urge the family to schedule an appointment. On this point the law
does not require anything further: nine reminders to bring a child in for a screen are
enough.
In summary, the court found that, “compared with its performance in 1998,
TennCare ha[d] dramatically improved the provision of medical services to its enrollees
in every respect”; that “no other state’s . . . program surpasses that of Tennessee in any
salient respect”; and that TennCare is “fully compliant with the [relevant Medicaid] law
and regulations.”
The court also found that TennCare will continue to comply with federal law in
the absence of judicial supervision. During the 18-day evidentiary hearing, TennCare’s
director testified that TennCare will continue to use “independent, nationally recognized
third-party monitoring and oversight tools . . . to ensure that children continue to receive
the services to which they are entitled under federal law.” John B., 852 F. Supp. 2d at
975. The district court found this testimony credible because TennCare used those same
monitoring tools for adults, even though federal law does not require it to do so. See id.
No. 12-5307 John B., et al. v. Emkes, et al. Page 26
The court also found credible the director’s testimony that TennCare has no plans to cut
services to its enrollees. See id. at 970.
The court also rejected the plaintiffs’ arguments that TennCare would stop
complying with federal law if the decree were vacated. The plaintiffs had argued, for
example, that TennCare might eliminate the Quality Services Review process, which it
used to comply with paragraph 88 of the decree. The court acknowledged that
theoretical possibility, but pointed out that “[TennCare’s] obligation, going forward, is
not to remain in compliance with each precise term of the [d]ecree[.]” Id. at 983.
Rather, the court said, TennCare had to “remain in compliance with federal law[.]” Id.
And other than “speculation as to what the future holds[,]” the court saw no reason to
believe that TennCare would fail to remain in compliance. See id. Neither do we. The
record shows, instead, that TennCare has implemented a durable remedy for its past
violations of the Medicaid Act.
In Horne, the Supreme Court held that, in determining whether to terminate a
consent decree, the courts must go beyond “an inquiry into whether the original order
[i.e., the decree] ha[s] been satisfied.” 557 U.S. at 454. Instead, the Supreme Court said,
a “Court of Appeals need[s] to ascertain whether ongoing enforcement of the original
order [is] supported by an ongoing violation of federal law[.]” Id. Here, the district
court’s findings make clear that TennCare has implemented durable remedies to comply
with the provisions of federal law that the decree was intended to enforce. Upon this
record, therefore, “continued enforcement of the [decree] is not only unnecessary, but
improper.” Horne, 557 U.S. at 450.
TennCare’s mistake with respect to the calculation of the denominator for its
screening ratio does not change this result. That mistake at most amounts to a technical
violation of 42 U.S.C. § 1396a(a)(43)(D); and the plaintiffs themselves argued in the
district court that none of the consent decree’s provisions were based on subsection
43(D), and indeed that subsection 43(D) is not enforceable under § 1983 in any event.
See John B., 852 F. Supp. 2d at 947. Thus, TennCare’s violation of subsection 43(D),
to the extent there is one, does not provide us with any lawful basis to continue
No. 12-5307 John B., et al. v. Emkes, et al. Page 27
enforcement of the decree. Instead, given the district court’s undisputed findings with
respect to the sincerity of TennCare’s directors, we are confident that TennCare will
promptly remedy any technical violation of subsection 43(D) on its own.
Finally, our decision in Gonzales v. Galvin, 151 F.3d 526 (6th Cir. 1998) is not
contrary to our decision here. For two reasons: first, to the extent of any conflict
between the two cases, Horne trumps Gonzales; and second, Gonzales concerned
termination of a consent decree sua sponte, rather than by motion.
The district court’s error thus did not affect the substantial rights of the parties,
and was harmless.
* * *
The district court’s handling of this case after our remand last year was
exemplary. The court conducted an exhaustive evidentiary hearing, reviewed 345 pages
of proposed findings of fact and conclusions of law from the parties, and familiarized
itself with thousands of pages of evidence already in the record. And on the basis of all
of that evidence, the court found, in a thorough and carefully reasoned opinion, that
TennCare had vastly improved its delivery of services to enrollees, and indeed become
a national leader in its compliance with the Medicaid statute.
The court’s conclusions were sound. Its judgment is affirmed.
