Opinion
CIVIL ACTION NO. 1:19-cv-04521-LMM
2021-09-13
C.R., a minor child, BY AND THROUGH her mother and legal guardian, Mary REED, Plaintiff, v. Caylee NOGGLE, in her official capacity as Commissioner of the Department of Community Health, Defendant.
Joshua H. Norris, Law Office of Joshua H. Norris, Decatur, GA, for Plaintiff. Mark J. Cicero, Michelle LeGrande, Department of Law, Atlanta, GA, for Defendant.
Joshua H. Norris, Law Office of Joshua H. Norris, Decatur, GA, for Plaintiff.
Mark J. Cicero, Michelle LeGrande, Department of Law, Atlanta, GA, for Defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW ORDER
Leigh Martin May, United States District Judge
Plaintiff C.R. filed this suit against Defendant Caylee Noggle, in her official capacity as Commissioner of the Georgia Department of Community Health ("DCH"), on October 8, 2019. Using 42 U.S.C. § 1983 as her vehicle, C.R. alleges that DCH violated the Medicaid Act, 42 U.S.C. § 1396 et seq. , various federal regulations implementing the Medicaid Act, and the Due Process Clause of the Fourteenth Amendment to the United States Constitution. The Court held a bench trial on June 9 and 10, 2021. See Dkt. Nos. [86, 87]. The parties subsequently submitted proposed findings of fact and conclusions of law, Dkt. Nos. [94, 95], and objections to those proposals, Dkt. Nos. [98, 99]. After due consideration of the evidence presented, the Court issues the following findings of fact and conclusions of law:
The original named defendant in this action was Frank Berry, then the Commissioner of DCH. On August 23, 2021, Ms. Noggle was substituted for Mr. Berry pursuant to Federal Rule of Civil Procedure 25(d). See Dkt. No. [100].
FINDINGS OF FACT
A. Background
1. The State of Georgia participates in the federal Medicaid program. DCH is responsible for administering Georgia's Medicaid program. DCH must comply with the Medicaid Act and federal regulations that implement the Act.
2. Through the Children's Intervention Services ("CIS") program, DCH covers restorative and rehabilitative therapies for Medicaid beneficiaries under 21 years of age. These include speech therapy and feeding therapy.
3. C.R. is a five-year-old Medicaid beneficiary who suffers from multiple complex and chronic medical conditions. These include receptive and expressive language disorders, hypotonia, mandibular hypoplasia, oral dysphagia, GERD, bilateral hearing loss, hypotonic cerebral palsy, and craniofacial nerve palsy. As a result of these and other conditions, C.R. has difficulty feeding, communicating, and managing oral secretions such as saliva. C.R. has received speech therapy and feeding therapy for these issues.
4. Beginning in May 2017, Plaintiff received those therapies from Angela LaGambina at Cobblestone Therapy Group ("Cobblestone"). Ms. LaGambina treated C.R. through June 2020.
B. C.R.’s May 2019 Request for Prior Authorization of Additional Units of Speech and Feeding Therapy
i. Background
1. Medicaid is a payor of last resort. In other words, if a Medicaid beneficiary has private health insurance, Medicaid pays for covered care only to the extent the private insurance company does not.
2. C.R. is insured by United Healthcare.
3. Accordingly, Medicaid can reimburse Cobblestone for C.R.’s speech and feeding therapy only to the extent United Healthcare does not pay for those services.
4. Heather Jones, Cobblestone's co-founder and billing manager, testified that United Healthcare has informed Cobblestone it will cover 37 therapy visits per year.
Unless otherwise noted, the Court uses "Medicaid" to refer to Georgia's Medicaid program.
5. Ms. Jones testified that United Healthcare has both paid and denied claims for therapy made after C.R. has used her 37 permitted visits. Ms. Jones said that in 2019 United Healthcare paid for 121 or 122 visits. Thus, Ms. Jones believes that C.R. may, despite United Healthcare's communications to the contrary, be entitled to unlimited visits.
6. According to Ms. Jones, C.R.’s policy with United Healthcare contains a $5,000 annual deductible. United Healthcare will not pay for C.R.’s therapy sessions until the value of her claims during a calendar year exceeds $5,000. Before C.R. meets her annual deductible, and whenever United Healthcare refuses to pay a claim for C.R.’s therapy, Cobblestone attempts to bill Medicaid.
7. Providers use "billing codes" to seek reimbursement from Medicaid for speech and feeding therapy. Speech therapy and feeding therapy are assigned separate codes and must be billed separately.
8. For billing purposes, Medicaid divides speech and feeding therapy into "units" of time. For speech and feeding therapy, each unit denotes a session lasting at least 15 minutes. A provider billing Medicaid for a unit of speech or feeding therapy must provide the service for a minimum of 15 minutes; there is no maximum length of time. Once a provider passes the 15-minute threshold, the provider receives a fixed payment from Medicaid, regardless of the therapy session's duration.
9. The CIS program allows beneficiaries to receive eight total units of speech and feeding therapy per month without prior authorization. To bill Medicaid for additional units of either service, the beneficiary must receive prior authorization from DCH.
10. Before May 2019, Ms. LaGambina provided three sessions per week of speech and feeding therapy to C.R. Each session lasted one hour. Each hour consisted of approximately 30 minutes of speech therapy and 30 minutes of feeding therapy. This treatment plan required more than CIS's eight permitted units. Before May 2019, C.R. had received prior authorization for those additional units.
11. At trial, DCH asked Ms. Jones whether Cobblestone could have provided an hour of continuous speech therapy or an hour of continuous feeding therapy to C.R. Doing so would have required fewer total therapy sessions, and therefore fewer units, than the 30-minute sessions Cobblestone provided. Ms. Jones stated that hourlong sessions would be financially infeasible for Cobblestone, given Medicaid's reimbursement rate and the cost of operating the clinic. Ms. Jones, a licensed speech language pathologist, also testified that such a therapy program would be ineffective for, and injurious to, C.R.
ii. C.R.’s Request for Prior Authorization of Additional Units
12. CIS requires treatment providers seeking prior authorization for additional units of care to
submit plans of care that cover the following six months.
13. On May 8, 2019, Ms. LaGambina created a plan of care covering the period from June 1, 2019 to November 30, 2019. The plan, which spans several pages, describes C.R.’s medical history and details delays in the development of her motor, speech, language, feeding, and swallowing skills.
a. The plan states that C.R. is unable to consistently vocalize volitionally and cannot consistently consume liquids or solids. C.R. had, however, demonstrated some progress. She had improved her ability to manage oral secretions on her own and had begun to generate productive coughs.
b. The plan listed several goals for C.R.’s next six months of treatment. These included anticipating items in a pattern, sealing her lips in 80% of trials, and tolerating tastes of pureed food without aspirating.
14. The plan of care includes the same quantity of speech and feeding therapy that C.R. had been receiving and for which C.R. had previously been approved: three 60-minute sessions per week.
15. Dr. Dennis Selva, C.R.’s primary care physician, certified that he reviewed the plan of care and that the requested treatment was medically necessary. Dr. Selva testified that he did not conduct any independent research before signing the plan of care but deferred to Ms. LaGambina due to her specialist expertise and experience treating C.R.
16. On May 22, 2019, Dr. Selva signed an order for six months of speech and feeding therapy consisting of three 60-minute sessions per week.
17. On C.R.’s behalf, Cobblestone submitted a request for prior authorization of the excess units necessary to cover Dr. Selva's ordered amount of therapy.
C. The Denial of C.R.’s Request
1. Under a contract between DCH and a company called Alliant Health Solutions ("Alliant"), Alliant reviews requests for prior authorization submitted by Medicaid beneficiaries participating in the CIS program. These include requests for prior authorization of additional units of speech and feeding therapy.
2. Alliant delegated to Bassha Walker, a licensed speech language pathologist, the task of reviewing C.R.’s request.
3. Initially, Alliant issued a technical denial of C.R.’s request. The denial asked for updated audiological data and information regarding C.R.’s swallowing therapy. Ms. LaGambina testified that Cobblestone provided the requested information.
4. Ms. Walker subsequently determined that the units of speech
For at least some months covered by the request, Cobblestone requested more units than necessary because it failed to account for the eight units provided by CIS policy. Nonetheless, Cobblestone's request covered the full amount of therapy Dr. Selva had ordered.
As explained in the Conclusions of Law section of this Order, Alliant reviews requests for prior authorization as an arm of DCH. Therefore, the Court refers interchangeably to actions taken by "DCH" and "Alliant."
and feeding therapy C.R. requested were not medically necessary and denied the request in full.
5. In her testimony, Ms. Walker described three criteria she uses to determine medical necessity:
a. First, she references the definition contained in CIS's manual. That definition embraces treatments "the omission of which could adversely affect the eligible member's medical condition." Dkt. No. [90] at 139.
b. Second, Ms. Walker uses a definition from the American Speech Language Hearing Association ("ASHA"). Under that definition, a "Medicaid claim[ ] may be supported when," among other things, the requested "treatment [is] expected to yield improvement within a reasonable amount of time." Id. at 141.
c. Third, Ms. Walker considers whether a child has demonstrated "some kind of quick, rapid change," or rapid improvement, "in their skills." Id. at 152. Ms. Walker testified that she created this criterion herself, based on her clinical experience, training, and guidelines from private insurers.
6. Ms. Walker testified that, after reviewing the plan of care, she believed C.R. had not shown rapid improvement and denied C.R.’s request for additional units of speech and feeding therapy on that basis. Ms. Walker said that in her view C.R. had made only small improvements since 2017, and those improvements were not sufficiently significant to warrant intensive therapy.
7. Alliant and DCH notified Cobblestone and C.R.’s parents of Ms. Walker's denial in four documents.
a. DCH issued two identical notifications of the denial—the first on June 3, 2019 and the second on June 12, 2019. Dkt. Nos. [88-15, 88-16]. The notification letters list each of C.R.’s requests for additional units, the dates each request was made and adjudicated, and the reason for each request's denial. Under the heading "Denial Reason," the notification letters say either "WRD" or "OPG." The notification letters supply no additional reasons. The letters also inform their recipients that a provider may request reconsideration of a denial of prior authorization, and provide instructions for filing such a request.
b. On June 11, 2019, Alliant transmitted to Cobblestone a document stating the reasons for Ms. Walker's denial. Dkt. No. [88-3]. Citing the CIS policy manual, the document states that prior authorizations are "only granted for services that are documented to be medically necessary and appropriate. PA is based solely on medical needs of the child." It goes on to say that the "[d]ocumentation presented does not justify the continuation of skilled intervention for a frequency of 3 X week."
c. On June 14, 2019, Alliant sent a "Final Review Determination" notifying Cobblestone of Ms. Walker's denial. Dkt. No. [88-4]. The letter lists the billing codes and time periods for which prior authorization was denied, followed by a section titled "Peer reviewer's comments" where Ms. Walker stated reasons
for her denial. Those reasons were identical to those in the June 11 notification. On the following pages, the letter informs the recipient that she has the right to a hearing upon a timely request.
8. The four notifications of Ms. Walker's denial do not provide any further explanation of her reasoning. They do not mention the ASHA standard or state that Ms. Walker believed C.R. had not demonstrated the rapid improvement that, in Ms. Walker's view, would justify the therapy for which C.R. had requested prior authorization.
9. Following receipt of these notices, C.R.’s mother, Mary Reed, requested an administrative hearing. On August 16, 2019, Ms. Reed withdrew her request.
D. C.R.’s Treatment and Condition Following the Denial
1. Until September 2019, C.R. continued to receive speech and feeding therapy as she had before the denial.
2. Ms. Jones testified that at some point during September 2019, United Healthcare informed Cobblestone that C.R. had used all her permitted benefits for the calendar year. At that point, Cobblestone reduced C.R.’s speech and feeding therapy from 24 to eight units per month but continued to attempt to bill United Healthcare.
3. C.R. received eight combined units of speech and feeding therapy during the months of September, October, and November 2019.
4. As a substitute for therapy during periods when C.R.’s therapy was reduced, Ms. Reed performed some of the therapy herself.
5. Ms. LaGambina testified that C.R. was adversely affected by the reduction in her therapy. According to Ms. LaGambina, C.R. had been able to trigger a swallow nine out of ten times before the reduction, but could do so zero out of five or one in ten times after the reduction. Ms. LaGambina also testified that C.R.’s communication skills regressed, as C.R. required more prompting to generate vocalizations. According to Ms. LaGambina, vocalization skills require continual development and C.R. risks losing the ability to vocalize if she does not receive sustained therapy.
6. Ms. LaGambina testified that C.R. regressed at least in part because home therapy is not an adequate substitute for the therapy C.R. receives in a clinical setting. According to Ms. LaGambina, Ms. Reed cannot assess C.R.’s progress in the same manner Ms. LaGambina, a professional clinician, can.
7. On November 12, 2019, Ms. LaGambina prepared another plan of care for C.R. Among other things, the plan reported C.R.’s progress on goals described in the May 8 plan of care. On certain measures—such as tolerating tastes of puree without aspiration—C.R. showed no regression. On numerous other measures, however, she did. For example, C.R. no longer demonstrated the ability to vocalize "Ma" when prompted, and she succeeded
less frequently at moving her tongue to the side of her mouth. The plan also noted that the frequency of C.R.’s successful swallows had "decreased significantly."
8. At some point during that period, for reasons unknown to Ms. Jones, United Healthcare resumed paying Cobblestone's claims. Cobblestone accordingly increased the frequency of C.R.’s therapy, beginning in December 2019.
CONCLUSIONS OF LAW
A. Standard of Proof
1. The standard of proof in a civil non-jury trial, such as this, is a preponderance of the evidence. See Johnson v. Florida, 348 F.3d 1334, 1347 (11th Cir. 2003). A plaintiff bears the burden of satisfying the finder of fact that it has proven every element of its claim by a preponderance of the evidence. See id.; Fire Ins. Exch. v. McCoy, 637 F. Supp. 2d 991, 992 (M.D. Ala. 2009). "The burden of showing something by a preponderance of the evidence ... requires the trier of fact to believe that the existence of a fact is more probable than its nonexistence before he may find in favor of the party who has the burden to persuade the judge of the fact's existence." Concrete Pipe & Prod. of Cal., Inc. v. Constr. Laborers Pension Tr. for S. Cal., 508 U.S. 602, 622, 113 S.Ct. 2264, 124 L.Ed.2d 539 (1993) (quotation marks and alteration omitted).
B. Alliant's Denial of C.R.’s Request for Prior Authorization Constitutes State Action for Which DCH May Be Held Liable
1. To obtain "relief in an action brought under [ 42 U.S.C.] § 1983, [a plaintiff] must establish that they were deprived of a right secured by the Constitution or laws of the United States, and that the alleged deprivation was committed under color of state law." Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 49–50, 119 S.Ct. 977, 143 L.Ed.2d 130 (1999). The latter element requires a showing that the alleged wrong was the product of state action. See, e.g., Focus on the Fam. v. Pinellas Suncoast Transit Auth., 344 F.3d 1263, 1276 (11th Cir. 2003).
[S]tate action requires both an alleged ... deprivation "caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the State or by a person for whom the State is responsible," and that "the party charged with the deprivation must be a person who may fairly be said to be a state actor."
Sullivan, 526 U.S. at 50, 119 S.Ct. 977 (quoting Lugar v. Edmondson Oil Co., 457 U.S. 922, 937, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982) ). The state action requirements of § 1983 and the Fourteenth Amendment are coextensive. Rendell-Baker v. Kohn, 457 U.S. 830, 838, 102 S.Ct. 2764, 73 L.Ed.2d 418 (1982) ; see also Focus on the Fam., 344 F.3d at 1276 n.4.
2. The Medicaid Act delegates to participating states the task of designing Medicaid programs that comply with federal mandates. See Moore ex rel. Moore v. Reese, 637 F.3d 1220, 1238 (11th Cir. 2011). Georgia law
gives DCH the authority to create regulations governing requests for EPSDT services and explicitly contemplates DCH's use of "utilization review vendors." O.C.G.A. § 49-4-169.3(a) ; see also Moore, 637 F.3d at 1238 ("In Georgia, Defendant DCH is the single state agency tasked with administering the Medicaid program."). DCH has promulgated applicable regulations in its CIS Manual, and Alliant must apply DCH's requirements when reviewing requests for prior authorization. Alliant therefore "act[s] with knowledge of and pursuant to" federal and Georgia Medicaid requirements, satisfying the first prong of the "state action" test. Sullivan, 526 U.S. at 50, 119 S.Ct. 977 (citation and quotation marks omitted).
3. Alliant is also a state actor for § 1983 purposes. A party qualifies as a state actor in one of three ways:
(1) the State has coerced or at least significantly encouraged the action alleged to violate the Constitution (‘State compulsion test’); (2) the private part[y] performed a public function that was traditionally the exclusive prerogative of the State (‘public function test’); or (3) the State had so far insinuated itself into a position of interdependence with the [private party] that it was a joint participant in the enterprise (‘nexus/joint action test’).
Rayburn ex rel. Rayburn v. Hogue, 241 F.3d 1341, 1347 (11th Cir. 2001) (citation and alterations omitted). Under the nexus/joint action test, there must be a "symbiotic relationship" between the parties that "involve[s] the ‘specific conduct of which the plaintiff complains.’ " Id. at 1348 (quoting Sullivan, 526 U.S. at 51, 119 S.Ct. 977 ).
4. Alliant is not merely a state-regulated entity; it is DCH's "agent." M.H. v. Berry, No. 1:15-CV-1427-TWT, 2021 WL 1192938, at *4 (N.D. Ga. Mar. 29, 2021). DCH sub-delegates "its responsibility for [evaluating] ‘prior approval’ [requests] to" Alliant. Catanzano ex rel. Catanzano v. Dowling, 60 F.3d 113, 119 (2d Cir. 1995) (holding that an entity deputized by the state to "make [its] own determinations as to the medical necessity and appropriateness" of a Medicaid benefit was a state actor). As Catherine Ivy, a Deputy Executive Director at DCH who supervises the CIS program, testified, DCH's sub-delegation "charge[s]" Alliant with making medical necessity determinations. Dkt. No. [90] at 194–95. Alliant does so according to mandates and standards committed to DCH by federal and Georgia law. See id. at 195. That task that would fall to DCH if it did not contract with Alliant. Cf. Blum v. Yaretsky, 457 U.S. 991, 1011, 102 S.Ct. 2777, 73 L.Ed.2d 534 (1982) ("[P]rivately owned enterprises providing services that the State would not necessarily provide, even though they are extensively regulated," are not state actors). Accordingly, the Court concludes Alliant's denial of C.R.’s request constituted state action for which DCH may be held liable under § 1983 and the Fourteenth Amendment. The Court proceeds to the merits of C.R.’s claims.
C. The Denial of Additional Units of Speech and Feeding Therapy Services
Violated the Medicaid Act and Federal Regulatory Requirements
1. The Medicaid Act requires states participating in the Medicaid program to provide certain "early and periodic screening, diagnostic, and treatment" ("EPSDT") services to beneficiaries. 42 U.S.C. § 1396d(r). The law requires states to cover "necessary health care, diagnostic services, [and] treatment ... to correct or ameliorate defects and physical and mental illnesses and conditions discovered by" screenings, "whether or not such services are covered under the State[’s] plan." Id. § 1396d(r)(5) (emphasis added). State Medicaid programs must provide EPSDT services to beneficiaries under the age of 21. Id. § 1396a(43).
2. State Medicaid programs must also "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 Act. Id. § 1396a(17). States are to "provide such safeguards as may be necessary to assure that eligibility for care and services under the plan will be determined, and such care and services will be provided, in a manner consistent with simplicity of administration and the best interests of the recipients." Id. § 1396a(19). Federal regulations supplement these broad requirements. An EPSDT service "must be sufficient in amount, duration, and scope to reasonably achieve its purpose," but state Medicaid programs "may place appropriate limits on a service based on such criteria as medical necessity or on utilization control procedures." 42 C.F.R. § 440.230(b), (d).
3. This "medical necessity" standard "has become a judicially accepted component of the federal legislative scheme .... Accordingly, even if a category of medical services or treatments is mandatory under the Medicaid Act, participating states must provide those medical services or treatments for Medicaid recipients only if they are ‘medically necessary.’ " Moore, 637 F.3d at 1232–33. "[T]he Medicaid Act ‘confers broad discretion on the States to adopt standards for determining the extent of medical assistance, requiring only that such standards be "reasonable" and "consistent with the objectives" of the Act.’ " Id. at 1259 (quoting Beal v. Doe, 432 U.S. 438, 444, 97 S.Ct. 2366, 53 L.Ed.2d 464 (1977) ). As C.R.’s treating physician, Dr. Selva "assumes ‘the primary responsibility of determining what treatment should be made available to" C.R. Id. at 1255 (quoting Rush v. Parham, 625 F.2d 1150, 1156 (5th Cir. Sept. 15, 1980) ). "Both the treating physician and the state have roles to play, however, and a private physician's word on medical necessity is not dispositive." Id. (citation and alterations omitted).
4. "When a state Medicaid agency has exceeded the bounds of its authority by adopting an unreasonable definition of medical necessity or by failing to ensure that a required service is ‘sufficient in amount, duration, and scope to reasonably achieve its purpose,’ aggrieved Medicaid recipients have recourse in the courts." Id. (quoting 42 C.F.R. § 440.230(b) ).
5. In sum, the statutory and regulatory provisions described above require DCH to:
a. Provide speech and feeding therapy services to C.R. when those services are medically necessary to correct or ameliorate her conditions.
b. Provide those services in a sufficient amount, duration, and scope to reasonably achieve their corrective or ameliorative purpose.
6. The parties do not dispute—and the Court finds—that the speech and feeding therapy at issue in this case qualify as EPSDT services. Those therapies were designed to "correct or ameliorate" C.R.’s numerous diagnosed and undisputed medical conditions. 42 U.S.C. § 1396d(r)(5). DCH was therefore required to provide them in an "amount, duration, and scope" sufficient to "reasonably achieve [their purposes]." 42 C.F.R. 440.230(b).
7. Ms. Walker explicitly stated that she examined C.R.’s medical history for "rapid improvement" and denied C.R.’s request because she believed C.R. had not demonstrated rapid improvement. In Ms. Walker's opinion, rapid improvement or rapid change in a child's condition is necessary to justify the quantity of therapy C.R. requested. Ms. Walker also stated that she applies ASHA's "expected to yield improvement" standard. Neither Ms. Walker's own "rapid improvement" standard or the ASHA standard are consistent with the "correct or ameliorate" standard mandated by the Medicaid Act.
8. The Centers for Medicare and Medicaid Services ("CMS") defines ameliorative services as those "that maintain or improve [a] child's current health condition." Centers for Medicare and Medicaid Services, EPSDT - A Guide for States: Coverage in the Medicaid Benefit for Children and Adolescents 10 (2014) (emphasis added). These services "are covered when they prevent a condition from worsening or prevent development of additional health problems." Id. (emphasis added). The Court finds this definition, promulgated by the federal agency responsible for overseeing Medicaid, persuasive. See Christensen v. Harris County, 529 U.S. 576, 587, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000) (explaining that agencies’ interpretative guidelines "are ‘entitled to respect’ ... to the extent that those interpretations have the ‘power to persuade.’ " (quoting
The parties entered a copy of this document into evidence at trial. See Dkt. No. [88-17].
At trial, Ms. Ivy similarly defined "ameliorative" care as care that "stop[s] the progression of disease, or ... stabilize[s] a condition." Dkt. No. [90] at 180.
Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944) )); Moore, 637 F.3d at 1235 n.26 (affording Skidmore deference to a CMS manual and citing several cases that did the same). Because an ameliorative treatment need only keep a patient's condition in stasis, Ms. Walker's "rapid improvement" standard and the ASHA "expected to yield improvement" standard are incompatible with the Medicaid Act's mandate to cover ameliorative EPSDT services.
9. The use of these standards caused DCH to deny C.R. EPSDT benefits that were medically necessary to ameliorate her conditions. The plan of care submitted to Alliant extensively detailed the nature and severity of C.R.’s numerous medical conditions. The plan of care also reported, through data from numerous trials and evaluative techniques, that while receiving intensive speech and feeding therapy C.R. had made progress toward many of the goals set in her previous plan of care. Despite these strong indications that C.R.’s requested quantity of therapy was medically necessary to at least ameliorate her conditions, Ms. Walker denied C.R.’s request using the ASHA standard and because she did not believe C.R. had demonstrated rapid improvement.
10. As a result of the denial, in September, October, and November 2019 C.R. received fewer units of therapy than she had before the denial. Ms. LaGambina's November 2019 plan of care documents C.R.’s regression in numerous evaluative categories, and Ms. LaGambina testified at trial that this regression stemmed from the reduction in C.R.’s therapy. Given Ms. LaGambina's qualifications as a licensed speech language pathologist, her years-long history of treating C.R., and the findings in the November 2019 plan of care, the Court finds Ms. LaGambina's testimony credible. Because DCH failed to provide an amount of speech and feeding therapy that reasonably achieved a corrective or ameliorative purpose, DCH's denial of C.R.’s June 2019 request for prior authorization violated 42 U.S.C. § 1396d(r)(5) and 42 C.F.R. § 440.230(b).
11. DCH's arguments to the contrary are unsupported by the trial record. First, DCH claims C.R. has attempted to "generalize[ ]" Ms. Walker's testimony about rapid improvements "to all intensive therapy scenarios" when Ms. Walker's testimony was more narrowly focused. Dkt. No. [98] at 5. In fact, C.R.’s counsel specifically asked Ms. Walker whether she thought "C.R. was showing rapid improvement in the plan of care dated May 2019." Dkt. No. [90] at 152. Ms. Walker replied, "No, sir, I did not." Id. Counsel then asked, "And so you denied this request?" to which Ms. Walker replied, "Yes, sir, I did." Id. Nothing Ms. Walker said on cross-examination casts doubt on the notion that she examined C.R.’s plan of care and medical history for evidence of "some sort of significant, rapid change." Id. at 170.
12. Next, DCH argues that because "speech therapy codes are untimed, Cobblestone could have provided" the same total quantity of therapy it had supplied before the denial of C.R.’s request for prior authorization. Dkt. No. [94] ¶ 43. According to DCH, Cobblestone could have simply combined two speech or feeding therapy sessions into one, providing an hour of continuous speech therapy and an hour of continuous feeding therapy per week and thereby reduced the total number of units it needed to bill.
13. The fact that speech and feeding therapy are billed using untimed codes means that, as a purely abstract matter, Cobblestone could have done what DCH suggests. In reality, that was not possible. The Court credits Ms. Jones's testimony that providing speech and feeding therapy to C.R. in one-hour increments would so ineffective and fatiguing for C.R. as to be unethical. Furthermore, Ms. Jones credibly testified that allotting 30 minutes to one unit is standard in her industry; given Medicaid's reimbursement rate, billing one unit of therapy for an hour of work would cause Cobblestone to operate at a loss. By DCH's logic, it would never need to grant a request for prior authorization for a service billed using an untimed code: The provider could simply lengthen each treatment session, without limit, to provide the total quantity of care desired. Of course, DCH did not require Cobblestone to do that when it approved C.R.’s requests for prior authorization before May 2019. For all these reasons, the notion that "[t]he decision to reduce [C.R.’s therapy] services was a financial decision by Cobblestone and was not prompted by any action of DCH" is without merit. Dkt. No. [94] ¶ 49. Because DCH denied C.R.’s request for prior authorization of additional units, Cobblestone was effectively required to reduce C.R.’s therapy when United Healthcare stopped paying claims and C.R. had exhausted her monthly eight-unit allotment.
D. DCH's Notices of the Denial of C.R.’s Request for Prior Authorization Violated the Due Process Clause and Federal Regulations
1. The Due Process Clause of the Fourteenth Amendment "requires notice and the opportunity to be heard incident to the deprivation of life, liberty or property at the hands of the government." Grayden v. Rhodes, 345 F.3d 1225, 1232 (11th Cir. 2003). It is well settled that recipients of public benefits "ha[ve] a ‘property’ interest in their continued receipt." Walters v. Nat'l Ass'n of Radiation Survivors, 473 U.S. 305, 320 n.8, 105 S.Ct. 3180, 87 L.Ed.2d 220 (1985). C.R.’s request for prior authorization sought to ensure continued receipt of the additional units of speech and feeding therapy she was already receiving. The denial of her request terminated her receipt of that benefit and triggered DCH's obligation to provide appropriate process under the Fourteenth Amendment's Due Process Clause.
2. When a state terminates public benefits, it must provide
"timely and adequate notice detailing the reasons for a proposed termination, and an effective opportunity to defend by confronting any adverse witnesses and by presenting [one's] own arguments and evidence orally." Goldberg v. Kelly, 397 U.S. 254, 267–68, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970) ; see also Barcia v. Sitkin, 367 F.3d 87, 107–08 (2d Cir. 2004) (" Goldberg stands for the proposition that a notice of hearing must identify a sufficient basis for a claimant's disqualification or ineligibility for benefits ...."). C.R. contends only that DCH's notices provided constitutionally insufficient explanations why her request was denied.
3. The June 3 and June 12 notices state that C.R.’s request was denied but do not supply an intelligible explanation for the denial. They simply list three-letter codes under "Denial Reason" headings without explaining what the codes mean. There is no way for a lay reader of these notices to understand on what basis the request for prior authorization was denied, and the parties offered no testimony or evidence at trial regarding the meaning of these codes. Put simply, the June 3 and June 12 notices’ use of unexplained three-letter codes, rather than words, to tell a beneficiary why her request was denied "do not give any indication to the average person of ... the reason for the" denial. Mitchell ex rel. Mitchell v. Comty. Mental Health of Cent. Mich., 243 F. Supp. 3d 822, 839 (E.D. Mich. 2017) (holding that plaintiff stated a claim for a Due Process Clause violation when notices denying Medicaid benefits "merely list[ed] codes under the[ir] actions taken section").
4. DCH may have been able to cure this problem by supplying a sufficient explanation in a subsequent notice. See Rosen v. Goetz, 410 F.3d 919, 931 (6th Cir. 2005) (finding that denial-of-benefits notices did not violate the Due Process Clause when a follow-up letter contained a sufficient explanation for the denial). The June 11 and 14 denial letters provide slightly more detail: They state that the "[d]ocumentation submitted does not justify the need for skilled intervention" three times a week and add that prior authorizations are "only granted for services that are documented to be medically necessary and appropriate." Dkt. Nos. [88-3]; [88-4] at 1. But that is all they state. They do not say why the documentation submitted did not justify C.R.’s requested quantity of therapy or why the services C.R. requested were not medically necessary. In essence, the June 11 and 14 denial letters inform the recipient that C.R.’s request for benefits was denied because she was not entitled to those benefits. That is an explanation without "reasons." Goldberg, 397 U.S. at 267, 90 S.Ct. 1011.
DCH claims that these notices are not in the trial record. In fact, both were admitted at trial, see Dkt. No. [86], and are docketed as joint trial exhibits, Dkt. Nos. [88-15, 88-16].
5. DCH objects that Alliant's initial technical denial specifically requested updated audiological data. Dkt. No. [98] at 10. But as DCH notes, and as the technical denial document reflects, the technical denial was not a final decision. See id.; Dkt. No. [88-3]. C.R. challenges, and the Court examines, the notices communicating DCH's final decision. Those are the notices that completely fail to explain why C.R.’s request for prior authorization was denied.
6. The Court is mindful that "[d]ue process is flexible and calls for such procedural protections as the particular situation demands." Mathews v. Eldridge, 424 U.S. 319, 334, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) (citation and alteration omitted). To determine whether due process has been satisfied in this case, the Court must "balance (1) the private interest affected by the official action; (2) the risk of an erroneous deprivation and the probable value, if any, of additional or substitute safeguards; and (3) [DCH's] interest, including the fiscal and administrative burdens that would be imposed by the additional or substitute safeguards." 75 Acres, LLC v. Miami-Dade County, 338 F.3d 1288, 1294 n.7 (11th Cir. 2003) (citing Mathews, 424 U.S. at 335, 96 S.Ct. 893 ). Here, the private interest at stake is considerable: Speech and feeding therapy affect C.R.’s health and development. Absent an explanation why benefits were denied, it could be difficult for C.R.’s parents or care providers to determine what documents to submit on a request for reconsideration or what arguments to pursue on an administrative appeal. An inability to effectively appeal a mistaken denial would cause C.R. to be erroneously deprived of medically necessary health care. Finally, adding at
The Supreme Court has instructed that "questions regarding the adequacy of the method used to give notice" should be resolved under a different standard. Dusenbery v. United States, 534 U.S. 161, 168, 122 S.Ct. 694, 151 L.Ed.2d 597 (2002) (emphasis added); see also Grayden, 345 F.3d at 1238–42. Because the dispute here concerns the content of DCH and Alliant's notices, not their form or the method of their dissemination, the Court applies Mathews. See Unan v. Lyon, 853 F.3d 279, 291–92 (6th Cir. 2017) (applying Mathews to allegedly insufficient explanations in Medicaid denial notices); Barcia, 367 F.3d at 107 (distinguishing questions about "constitutionally sufficient method[s] of notice" from those concerning "whether the content of the notice [is] sufficiently specific").
For this reason, DCH's argument that the June 14 letter contained a notice of the right to an administrative appeal is misplaced. See Dkt. No. [98] at 11–12. It is true that the June 14 letter informed its recipient of that right, and that Ms. Reed subsequently appealed DCH's denial. But Goldberg plainly requires some statement of the reasons for the denial. "The purpose of notice under the Due Process Clause is to apprise the affected individual of, and permit adequate preparation for, an impending ‘hearing.’ " Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1, 15, 98 S.Ct. 1554, 56 L.Ed.2d 30 (1978). As the Supreme Court recognized in Goldberg, providing no explanation for the termination of benefits thwarts that purpose.
least a few sentences of reasoning to one or more denial letters would not plausibly burden DCH or its prior authorization reviewers. Applying the Mathews factors, the Court concludes that the June 3, 11, 12, and 14 denial letters’ almost total failure to explain why C.R.’s request was denied violated the Due Process Clause of the Fourteenth Amendment.
7. The Due Process Clause is not the only mandate with which DCH and Alliant were required to comply. C.R. also challenges the adequacy of the denial letters under federal statutes and regulations that impose notice requirements on states’ denials of applications for Medicaid benefits.
8. Under 42 U.S.C. § 1396a(a)(3), state Medicaid plans 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 or is not acted upon with reasonable promptness." A state must inform individuals of their right to a fair hearing and the method by which they may obtain a hearing. 42 C.F.R. § 431.206. It must do so "[a]t the time the [state] agency denies an individual's claim for eligibility, benefits or services." Id. § 431.206(c)(2). Critically, the notice must also contain "[a] clear statement of the specific reasons supporting the intended action" and "[t]he specific regulations that support ... the action." Id. § 431.210(b) – (c).
9. The parties do not dispute that DCH and Alliant sent the June 3, 11, 12 and 14 denial notices pursuant to § 431.206(c)(2). Those notices violate § 431.210(b) for the same reason they violate the Due Process Clause: They completely fail to state specific reasons supporting the denial of C.R.’s request for prior authorization. Again, the June 14 letter's explanation of C.R.’s right to a hearing does not cure the violation: "General information about appeal rights unrelated to a specific request is insufficient" to satisfy § 431.210(b) ’s freestanding requirement of a clear and specific explanation. Murphy ex rel. Murphy v. Harpstead, 421 F. Supp. 3d 695, 708 (D. Minn. 2019). The June 3, 11, 12, and 14 letters do not satisfy this requirement.
E. DCH's Violations of the Medicaid Act, Federal Regulations, and the Due Process Clause Warrant Declaratory and Permanent Injunctive Relief
1. Under the Declaratory Judgment Act, a federal court "may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." 28 U.S.C. § 2201(a). The party seeking a declaratory judgment must show that, at the time the complaint
DCH's failure to provide constitutionally sufficient notice is particularly stark given the extensiveness of Ms. LaGambina's plan of care and the fact that Cobblestone supplied the audiological data Alliant requested.
was filed, she had "suffered some actual or threatened injury resulting from the defendant's conduct, that the injury fairly can be traced to the challenged action, and that the injury is likely to be redressed by favorable court disposition." Atlanta Gas Light Co. v. Aetna Cas. & Sur. Co., 68 F.3d 409, 414 (11th Cir. 1995). When those requisites are satisfied, district courts "maintain[ ] discretion about ‘whether and when to entertain an action under the Declaratory Judgment Act.’ " Stevens v. Osuna, 877 F.3d 1293, 1311 (11th Cir. 2017) (quoting Wilton v. Seven Falls Co., 515 U.S. 277, 282, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995) ). Two principal factors guide courts’ discretion: (i) whether "the judgment will serve a useful purpose in clarifying and settling the legal relations in issue," and (ii) whether a declaratory judgment "will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding." Otwell v. Ala. Power Co., 944 F. Supp. 2d 1134, 1148 (N.D. Ala. 2013) (citing 10B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 2759 (3d ed. 1998)).
2. Here, it is undisputed that there was a justiciable controversy between the parties when C.R. filed her complaint: She alleged DCH deprived her of a Medicaid benefit to which she was entitled, and did so with inadequate notice. That injury is redressable by a declaratory judgment and the Court finds that a declaratory judgment, in concert with the injunctive relief described below, will satisfy the ends of clarity and certainty.
3. Once a plaintiff has prevailed on the merits, she must show the following to obtain a permanent injunction: "(1) that [s]he has suffered an irreparable injury; (2) that [her] remedies at law are inadequate; (3) that the balance of hardships weighs in [her] favor; and (4) that a permanent injunction would not disserve the public interest." Barrett v. Walker Cnty. Sch. Dist., 872 F.3d 1209, 1229 (11th Cir. 2017) (citing eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006) ). C.R. has satisfied all those requirements.
4. The denial of C.R.’s medically necessary speech and feeding therapy services with inadequate notice caused irreparable harm. The evidence and testimony discussed above shows that C.R. is a severely disabled child who requires frequent therapy to develop basic neuromuscular skills and to maintain the limited skills she has acquired. Speech and feeding therapy were medically necessary for C.R. in June 2019, and DCH's denial of those services injured C.R. by causing her condition to worsen. The denial of that necessary care constitutes irreparable harm. See Smith v. Benson, 703 F. Supp. 2d 1262, 1278 (S.D. Fla. 2010) ("In cases alleging that a state law violates the federal Medicaid statute and requesting injunctive relief, irreparable harm nearly always follows a finding of success on the merits .... Denying
a Medicaid recipient an essential medical service constitutes irreparable harm." (citations and alterations omitted)); Edmonds v. Levine, 417 F. Supp. 2d 1323, 1342 (S.D. Fla. 2006) (the denial of "Medicaid benefits to which Plaintiffs are legally entitled ... and [the] resultant loss of essential medical services[ ] constitutes an irreparable harm"). Should DCH again use impermissibly narrow criteria to deny C.R. medically necessary EPSDT services, C.R. will likely suffer further irreparable harm.
5. C.R. has no remedy at law for the denial of her medically necessary speech and feeding therapy, or for DCH's failure to satisfy the requirements of the Due Process Clause and 42 C.F.R. § 431.210. C.R.’s injury is not economic, and an award of money damages will not repair the developmental delays that DCH's denial of speech and feeding therapy services caused. "In such a case, the only relief available is injunctive relief." Edmonds, 417 F. Supp. 2d at 1341.
6. The balance of hardships clearly weighs in C.R.’s favor. As explained above, the denial of medically necessary speech and feeding therapy creates a substantial hardship for her. In response, DCH adverts to its "responsibility to guard against fraud, waste, and abuse." Dkt. No. [94] ¶ 3. The Court appreciates this responsibility, but an injunction simply requiring reviews and denials of C.R.’s requests for prior authorization to comply with the mandates of the Medicaid Act, federal regulations, and the Due Process Clause will not impose a significant burden on DCH or its prior authorization reviewers.
7. Finally, "an injunction to enforce the federal Medicaid Act is without question in the public interest." Edmonds, 417 F. Supp. 2d at 1343. An injunction in this case will simply prevent DCH from evaluating and denying C.R.’s requests for prior authorization using unlawful criteria. See United States v. Alabama, 691 F.3d 1269, 1301 (11th Cir. 2012) ("Frustration of federal statutes and prerogatives are not in the public interest ...."). Accordingly, the Court will enter a permanent injunction against DCH as set forth below.
F. C.R. is Entitled to Attorney's Fees Under 42 U.S.C. § 1988
1. Finally, C.R. requests attorney's fees pursuant to 42 U.S.C. § 1988. That statute provides that in an action, such as this, under § 1983, "the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs." 42 U.S.C. § 1988(b). C.R. is the prevailing party in this case: The Court's judgment in her favor and award of declaratory and injunctive relief "material[ly] alter[ ] ... the legal relationship
DCH points out that C.R. may be entitled to unlimited therapy visits under her United Healthcare plan. Dkt. No. [94] ¶¶ 54–55. Even if that is so, as Ms. Jones speculated, C.R. would still turn to Medicaid to cover those therapies during her annual deductible period.
between" her and DCH. Buckhannon Bd. and Care Home, Inc. v. W. Va. Dep't of Health and Human Res., 532 U.S. 598, 604, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001) ; see also Thomas v. Bryant, 614 F.3d 1288, 1294 (11th Cir. 2010) (plaintiffs who "clearly succeeded in obtaining the relief sought before the district court" were " ‘prevailing parties’ for the purposes of attorney's fees" (citation omitted)). Accordingly, the Court finds that C.R. is entitled to an award of attorney's fees under § 1988.
2. However, the Court presently has no information from which it can determine "the number of hours reasonably expended on the litigation" or "a reasonable hourly rate" for the services provided by C.R.’s counsel. ACLU of Ga. v. Barnes, 168 F.3d 423, 428 (11th Cir. 1999) (discussing the standard for attorney's fee awards under § 1988 ). The Court will therefore refrain from awarding a definite sum of attorney's fees at this time. C.R. is DIRECTED to submit further documentation in support of her claim for attorney's fees as set forth below.
CONCLUSION
For the foregoing reasons, the Court finds that C.R. is entitled to judgment on all claims. The Court enters judgment as follows:
1. The Court DECLARES that DCH's denial of C.R.’s May 2019 request for prior authorization of additional units of speech and feeding therapy violated 42 U.S.C. § 1396d(r)(5) and 42 C.F.R. § 440.230(b).
2. The Court DECLARES that DCH's June 3, 11, 12, and 14 notices of its denial of C.R.’s May 2019 request for prior authorization of additional units of speech and feeding therapy violated the Due Process Clause of the Fourteenth Amendment to the United States Constitution and 42 C.F.R. § 431.210(b).
3. DCH is PERMANENTLY ENJOINED from evaluating C.R.’s requests for prior authorization of additional units of speech and feeding therapy using a standard other than the "correct or ameliorate" standard prescribed by 42 U.S.C. § 1396d(r)(5).
4. DCH is PERMANENTLY ENJOINED from notifying C.R., or C.R.’s parents or guardians, of denials of prior authorization of additional units of speech and feeding therapy without providing an explanation for the denial that satisfies the requirements of the Due Process Clause of the Fourteenth Amendment to the United States Constitution and 42 C.F.R. § 431.210(b).
5. As the prevailing party, C.R. is entitled to attorney's fees under 42 U.S.C. § 1988.
6. C.R. is DIRECTED to submit, within twenty-one (21) days of the entry of this Order, documentation supporting her request for attorney's fees. Pursuant to Local Rule 7.1, DCH will have fourteen (14) days to respond, and C.R. will have fourteen (14) days to reply. The Clerk is DIRECTED to submit this matter to the undersigned after the parties have fully briefed the issue.
7. The Clerk is further DIRECTED to CLOSE this case.
IT IS SO ORDERED this 13th day of September, 2021.