Katie A. v. Bonta , 481 F.3d 1150 ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
KATIE A., by & through her next 
friend Michael Ludin; MARY B.,
by & through her next friend
Robert Jacobs; JANET C., by &
through her next friend Dolores
Johnson; HENRY D., by & through
his next friend Gillian Brown;
GARY E., by & through his next
friend Michael Ludin, individually
& on behalf of others similarly
situated,
Plaintiffs-Appellees, No. 06-55559
v.
 D.C. No.
CV 02-05662 AHM
LOS ANGELES COUNTY; LOS
ANGELES COUNTY DEPARTMENT OF OPINION
CHILDREN AND FAMILY SERVICES;
DOES, I thru 100 inclusive; DAVID
SANDERS,
Defendants,
and
DIANA BONTÁ, Director of CA
Dept of Health Services; RITA
SAENZ, Director of CA Dept of
Social Services,
Defendants-Appellants.

Appeal from the United States District Court
for the Central District of California
A. Howard Matz, District Judge, Presiding
Argued and Submitted
October 24, 2006—Pasadena, California
3387
3388 KATIE A. v. BONTÁ
Filed March 23, 2007
Before: Eugene E. Siler, Jr.,* A. Wallace Tashima, and
Carlos T. Bea, Circuit Judges.
Opinion by Judge Tashima
*The Honorable Eugene E. Siler, Jr., Senior United States Circuit Judge
for the Sixth Circuit, sitting by designation.
3390 KATIE A. v. BONTÁ
COUNSEL
Sandra L. Goldsmith, Deputy Attorney General, Los Angeles,
California, for the defendants-appellants.
KATIE A. v. BONTÁ 3391
Robert D. Newman, Esq., Western Center for Law and Pov-
erty, Los Angeles, California, for the plaintiffs-appellees.
OPINION
TASHIMA, Circuit Judge:
Defendants, the Director of the California Department of
Health Services (“DHS”) and the Director of the California
Department of Social Services (“DSS”), appeal from the dis-
trict court’s grant of a preliminary injunction ordering them to
screen members of a statewide class of foster children1 and,
where medically necessary, provide the children with the
forms of mental health care known as wraparound services
and therapeutic foster care. The district court found that “the
early and periodic screening, diagnostic, and treatment ser-
vices” (“EPSDT”) provisions of the Medicaid Act obligate the
State of California (“State”) to provide wraparound services
and therapeutic foster care to Medicaid-eligible children
under 21, and that the State does not currently provide those
forms of assistance, “as such.”
On appeal, defendants argue that the district court abused
its discretion in granting a preliminary injunction against them
and in denying their motion for reconsideration. Specifically,
they contend that the court: (1) failed to make findings of fact
and conclusions of law, as required by Federal Rule of Civil
Procedure 52(a); (2) committed clear error in its factual find-
ings; (3) applied the wrong legal standard both as to the stan-
dard for issuance of a mandatory preliminary injunction
against a state agency and as to the underlying legal ques-
tions; and (4) failed to comply with Federal Rule of Civil Pro-
cedure 65(d)’s requirement that an injunction be specific in its
terms. We have jurisdiction to review the district court’s order
1
The class also includes children at imminent risk of foster care place-
ment.
3392 KATIE A. v. BONTÁ
granting the preliminary injunction and the court’s denial of
the motion for reconsideration under 28 U.S.C. § 1292(a)(1).
Because the district court applied an erroneous interpreta-
tion of the Medicaid Act, we reverse and remand. We reject
defendants’ remaining contentions of error regarding the fac-
tual findings and legal standard relied on by the district court.
BACKGROUND
I. The Katie A. Class Action
In July 2002, a class of children who were in Los Angeles
County foster care or at risk of being placed into foster care
(Katie A., et al.) filed a complaint seeking declaratory and
injunctive relief against the Director of DHS and the Director
of DSS,2 as well as Los Angeles County, the Los Angeles
County Department of Children and Family Services
(“DCFS”), and the Director of DCFS (“LA County Defen-
dants”). The complaint alleged that the class was entitled to
and had not received “medically necessary mental health ser-
vices in a home-like setting.” Separate claims were alleged
under 42 U.S.C. § 1983, based on violations of the children’s
rights under the Medicaid Act, 42 U.S.C. § 1396 et seq., and
the Due Process Clause of the federal Constitution; under the
Americans with Disabilities Act and the Rehabilitation Act;
under the Due Process Clause of the California Constitution;
and under California statutory law.
The complaint was later amended to include a state-wide
class of children in foster care or at risk of being placed in
foster care. The district court certified the class under Federal
Rule of Civil Procedure 23(b)(2),3 and approved a settlement
2
DHS is the State agency responsible for administering Medicaid health
services in California. California’s Medicaid program is called “MediCal.”
DSS is the State agency responsible for supervising the administration of
child welfare services in California.
3
The class was defined as:
Children in California who (a) are in foster care or at imminent
KATIE A. v. BONTÁ 3393
agreement between the plaintiff class and LA County Defen-
dants.
Plaintiffs then moved for a preliminary injunction to
require the Director of DHS and the Director of DSS
(“defendants”) to provide wraparound services (“wrap-
around”) and therapeutic foster care (“TFC”) to members of
the class. Plaintiffs described wraparound and TFC as highly
effective “integrated community-based interventions for chil-
dren with emotional, behavioral, and mental health disorders.”
Plaintiffs argued that the EPSDT provisions obligate the State
to provide wraparound and TFC to them. In particular, they
alleged that MediCal policies impeding access to wraparound
services or TFC violated the Medicaid statute. They alleged
that MediCal covered only some components of wraparound
and TFC, and that State policies made it difficult to access
either type of care.
Defendants argued that the Medicaid statute does not
require them to provide services in the wraparound or TFC
forms demanded by plaintiffs,4 and that MediCal provides all
required services. They characterized wraparound and TFC as
processes or approaches, rather than services, and argued that
risk of foster care placement; and (b) have a mental illness or
condition that has been documented or, had an assessment
already been conducted, would have been documented; and (c)
who need individualized mental health services, including but not
limited to professionally acceptable assessments, behavioral sup-
port and case management services, family support, crisis sup-
port, therapeutic foster care and other necessary services in the
home or in a home-like setting, to treat or ameliorate their illness
or condition.
4
Both plaintiffs and defendants, as well as the district court, have used
the phrase “as such” to modify the phrase “wraparound and TFC”
throughout the case, as a shorthand way of expressing the idea of “wrap-
around and TFC as distinct programs” or as “separately covered packages
of services under Medi-Cal.” As discussed below, this modifier was cru-
cial to the district court’s understanding and analysis of the case.
3394 KATIE A. v. BONTÁ
the Medicaid Act does not create obligations to provide either.
Defendants also disputed plaintiffs’ contention that all of the
components of wraparound and TFC are health care services
properly covered by Medicaid.
On March 14, 2006, the district court entered an order
granting a mandatory preliminary injunction against defen-
dants, ordering them to provide medically necessary wrap-
around services5 and TFC6 to class members on a consistent,
statewide basis within 120 days of the order’s entry. Stating
that defendants did not dispute that they did not provide wrap-
around and TFC as such, the court found that “wraparound
services and therapeutic foster care fall within the EPSDT
obligations of Medicaid-participating states.”7 The court also
5
The court relied on plaintiffs’ description of wraparound services,
which was as follows:
Providers of wraparound care services: (a) engage in a unique
assessment and treatment planning process that is characterized
by the formation of a child, family, and multi-agency team, (b)
marshal community and natural supports through intensive case
management, and (c) make available an array of therapeutic inter-
ventions, which may include behavioral support services, crisis
planning and intervention, parent coaching and education, mobile
therapy, and medication monitoring.
6
The court also incorporated plaintiffs’ description of TFC as programs
that:
(a) place a child singly, or at most in pairs, with a foster parent
who is carefully selected, trained, and supervised and matched
with the child’s needs; (b) create, through a team approach, an
individualized treatment plan that builds on the child’s strengths;
(c) empower the therapeutic foster parent to act as a central agent
in implementing the child’s treatment plan; (d) provide intensive
oversight of the child’s treatment, often through daily contact
with the foster parent; (e) make available an array of therapeutic
interventions to the child, the child’s family, and the foster family
. . . ; and (f) enable the child to successfully transition from thera-
peutic foster care to placement with the child’s family or alterna-
tive family placement by continuing to provide therapeutic
interventions.
7
As a preliminary matter, the court held that plaintiffs properly relied on
the private right of action contained in 42 U.S.C. § 1983 to enforce the
KATIE A. v. BONTÁ 3395
cited what it described as plaintiffs’ undisputed evidence that
wraparound and TFC are medically necessary for children
with serious mental health needs. On this basis, the court con-
cluded that plaintiffs had shown a strong likelihood of suc-
ceeding on the merits of their Medicaid Act claim. The court
also described the potential for irreparable harm to plaintiffs
in the form of unnecessary institutionalization and unmet
mental health needs, if the injunction were not issued.
The court denied defendants’ motions for clarification and
reconsideration, but subsequently issued an Addendum to the
order, which contained short answers to defendants’ questions
from their motion for clarification. The Addendum also con-
tained appendices (“Appendices A and B”) listing the compo-
nents of wraparound and TFC for purposes of compliance
with the order.
II. The Medicaid Framework and the EPSDT Obligation
Medicaid is a cooperative federal-state program that directs
federal funding to states to assist them in providing medical
assistance to low-income individuals. 42 U.S.C. § 1396.
States choose whether to participate in Medicaid. Once a state
enters the program, the state must comply with the Medicaid
Act and its implementing regulations. Alexander v. Choate,
469 U.S. 287, 289 n.1 (1985); see generally 42 U.S.C. § 1396
et seq. California has chosen to participate in Medicaid.
To participate in Medicaid, a state must submit and have
approved by the Secretary of Health and Human Resources a
state plan for medical assistance. 42 U.S.C. § 1396. The Med-
icaid Act requires that each state plan “provide for making
medical assistance available, including at least the care and
right to EPSDT services created by 42 U.S.C. § 1396a(a)(10), citing Wat-
son v. Weeks, 436 F.3d 1152 (9th Cir.), cert. denied, 127 S. Ct. 598 (2006).
Defendants have not disputed that ruling on appeal.
3396 KATIE A. v. BONTÁ
services listed in paragraphs (1) through (5), (17) and (21) of
section 1396d(a) of this title, to all individuals [listed under
certain statutory provisions].” 42 U.S.C. § 1396a(a)(10).
“[E]arly and periodic screening, diagnostic, and treatment ser-
vices . . . for individuals who are eligible under the plan and
are under the age of 21” are among the mandatory categories
of medical assistance. 42 U.S.C. § 1396d(a)(4)(B).8
Thus, California, like all other states participating in Med-
icaid, is required to provide EPSDT care to eligible children
under the age of 21.9 EPSDT services are defined in
§ 1396d(r). The EPSDT services at issue in this case, wrap-
around and TFC, are claimed to fall under subsection (r)(5) as
“[s]uch other necessary health care, diagnostic services, treat-
ment, and other measures described in subsection (a) of this
section to correct or ameliorate defects and physical and men-
tal illnesses and conditions discovered by the screening ser-
vices, whether or not such services are covered under the
State plan.” 42 U.S.C. § 1396d(r)(5).
Under § 1396d(r)(5), states must “cover every type of
health care or service necessary for EPSDT corrective or ame-
liorative purposes that is allowable under § 1396d(a).” S.D. ex
rel. Dixon v. Hood, 391 F.3d 581, 590 (5th Cir. 2004) (citing
Collins v. Hamilton, 349 F.3d 371 (7th Cir. 2003)); Pediatric
Specialty Care, Inc. v. Ark. Dep’t of Human Servs., 293 F.3d
472 (8th Cir. 2002); Pittman v. Sec’y, Fla. Dep’t of Health &
Rehab., 998 F.2d 887 (11th Cir. 1993); Pereira v. Kozlowski,
996 F.2d 723 (4th Cir. 1993)).10 Although states have the
8
All subsequent references to statutory sections are to sections of Title
42 of the United States Code, unless otherwise noted.
9
A large subset of the plaintiffs are eligible for Medicaid as foster chil-
dren receiving federal assistance under Title IV-E of the Social Security
Act, and others may be eligible on other grounds. See 42 U.S.C.
§ 1396a(a)(10)(A)(i)(I). The district court’s order covers only MediCal eli-
gible children.
10
This is subject to certain limits; for example, a state need not pay for
experimental medical procedures. See Miller v. Whitburn, 10 F.3d 1315,
1318 (7th Cir. 1993); McLaughlin v. Williams, 801 F. Supp. 633, 637-38
(S.D. Fla. 1992).
KATIE A. v. BONTÁ 3397
option of not providing certain “optional” services listed in
§ 1396d(a) to other populations, they must provide all of the
services listed in § 1396d(a) to eligible children when such
services are found to be medically necessary. Section
1396d(a) contains a list of 28 categories of care or services;
these categories are fairly general, including descriptions such
as “inpatient hospital services” and “private duty nursing ser-
vices.” 42 U.S.C. § 1396d(a)(1)-(8).
The EPSDT obligation is thus extremely broad. The federal
agency charged with administering the Medicaid Act, the
Centers for Medicare and Medicaid Services (“CMS”), has
described EPSDT as a “comprehensive child health program
of prevention and treatment.” CMS, U.S. Dep’t of Health &
Human Servs., Pub. No. 45, State Medicaid Manual
§ 5010(B) (hereinafter “State Medicaid Manual”).11
STANDARD OF REVIEW
We review the district court’s grant or denial of a prelimi-
nary injunction for abuse of discretion. Earth Island Inst. v.
U.S. Forest Serv., 442 F.3d 1147, 1156 (9th Cir. 2006). “The
district court necessarily abuses its discretion when it bases its
decision on an erroneous legal standard or on clearly errone-
ous findings of fact.” Rodde v. Bont, 357 F.3d 988, 994 (9th
Cir. 2004) (citations and internal quotation marks omitted);
see also Stanley v. Univ. of S. Cal., 13 F.3d 1313, 1319 (9th
Cir. 1994) (“An order [granting a preliminary injunction] is
reversible for legal error if the court did not apply the correct
preliminary injunction standard, or if the court misappre-
hended the law with respect to the underlying issues in litiga-
11
Courts have accorded CMS’ interpretations of the Medicaid Act, such
as that found in the State Medicaid Manual, “respectful consideration”
based on the agency’s expertise, the statute’s complexity and technical
nature, and the broad authority delegated to the Secretary of Health and
Human Services under the Act. S.D. ex rel. Dixon, 391 F.3d at 590 n.6;
see also Wis. Dep’t of Health & Family Servs. v. Blumer, 534 U.S. 473,
497 (2002).
3398 KATIE A. v. BONTÁ
tion.”) (citation and internal quotation marks omitted).12
Where an injunction is issued against state officials, a district
court will “be deemed to have committed an abuse of discre-
tion . . . if its injunction requires any more of state officers
than demanded by federal constitutional or statutory law.”
Clark v. Coye, 60 F.3d 600, 604 (9th Cir. 1995) (citation
omitted).
DISCUSSION
I. The District Court’s Factual Findings
Defendants argue that the district court clearly erred in a
number of its findings of fact. We review a district court’s
factual findings for clear error, and this court will not reverse
“if the district court’s findings are plausible in light of the
record viewed in its entirety . . . even if it is convinced it
would have found differently.” Husain v. Olympic Airways,
316 F.3d 829, 835 (9th Cir. 2002), aff’d, 540 U.S. 644 (2004).
First, defendants argue that the court erred in stating that
“Defendants do not dispute that currently they are not provid-
ing these forms of assistance [wraparound and TFC], as such,
to members of the plaintiff class.” However, defendants
immediately follow this contention with this statement:
“ ‘Wraparound services’ and ‘therapeutic foster care’ are not
12
Citing Thomas v. County of Los Angeles, 978 F.2d 504 (9th Cir.
1992), defendants argue that a heightened standard of appellate review
applies to preliminary injunctions against state agencies. Thomas, how-
ever, employed “more rigorous” review only in the sense that the court
checked to see whether the district court properly applied the rule that
requires a showing of “an intentional and pervasive pattern of misconduct”
by officials before a federal court may enjoin a state or local law enforce-
ment agency. See id. at 508 (citing Rizzo v. Goode, 423 U.S. 362, 375
(1976)). Therefore, Thomas does not alter the general standard of appellate
review for preliminary injunctions against state or local agencies. Cf.
Rodde, 357 F.3d at 994-95 (applying normal standard of appellate review
to a preliminary injunction issued against the County of Los Angeles
under the Americans with Disabilities Act).
KATIE A. v. BONTÁ 3399
Medicaid-covered services as such and are therefore not cov-
ered as such under the Medi-Cal program.” (Emphasis
added.) This statement coincides almost exactly with the dis-
trict court’s description of defendants’ position. It is therefore
difficult to see how defendants can argue that the court’s find-
ing was clearly erroneous, while essentially reiterating that
finding as their position in their next sentence.13
Defendants also argue that the court overlooked or mis-
characterized several of their legal arguments (whether they
disputed plaintiffs’ categorization of which statutory provi-
sions encompass the components of wraparound and TFC,
and the nature of their contentions regarding the coverage of
§ 1396d(a)). The district court’s characterizations of the par-
ties’ legal arguments, however, are not factual findings;
because we do not rely on or defer to them, we need not
review them for clear error.14
Defendants further argue that the court erred in finding that
other states fund wraparound and TFC programs under Med-
icaid. The district court cited those states’ practices as support
for its conclusion that wraparound and TFC are Medicaid-
covered services. Evidence in the record supports the court’s
13
Defendants attempt to qualify their agreement with the district court’s
finding by asserting that any component of wraparound or TFC that is
covered under Medicaid is already covered under MediCal. The district
court did not make any factual findings on this issue, however, because the
court found that the Medicaid Act requires the State to provide wrap-
around and TFC “as such.” The State could apparently not meet this obli-
gation by funding only individual components of those types of care.
Therefore, given the court’s legal conclusion, there was no reason for the
court to make findings regarding the State’s provision of the components.
14
Defendants’ contention that the court committed clear error in charac-
terizing wraparound services and TFC as “services” is similarly mis-
placed, because that was not a pure factual finding, but an application of
a statutory term. The court’s finding was specifically directed to the ques-
tion of whether those types of care are “early and periodic screening, diag-
nostic, and treatment services” falling under § 1396d(r)(5) — which must
be resolved as a matter of statutory interpretation. See Part III.B, infra.
3400 KATIE A. v. BONTÁ
findings, and defendants have not presented any strong evi-
dence to the contrary. For example, evidence that some states’
programs use blended funding is not inconsistent with the fact
that such programs use Medicaid funding. Nor did defendants
point to any specific evidence that other states are only able
to fund wraparound and TFC through waivers allowing them
to offer services not otherwise covered by Medicaid.
II. The Mandatory Preliminary Injunction
[1] Defendants contend that the district court failed to apply
the appropriate legal standard for issuance of a mandatory
preliminary injunction. We disagree. First, the district court
correctly described the applicable test for the granting of a
preliminary injunction, see Rodde, 357 F.3d at 994 (describ-
ing test), as well as the heightened standard that applies to
mandatory injunctive relief, see Stanley, 13 F.3d at 1320 (stat-
ing that, when issuing a mandatory preliminary injunction, the
court must find that the “facts and law clearly favor” plain-
tiffs).
[2] Second, in concluding that plaintiffs were entitled to a
mandatory preliminary injunction, the district court correctly
applied these tests. The court found that plaintiffs had a strong
likelihood of success on the merits of their Medicaid Act
claims. It also discussed the possibility that plaintiffs would
face unnecessary institutionalization without the preliminary
injunction, recognized that such harms were “grave,” and
rejected defendants’ arguments that plaintiffs failed to show
that they faced irreparable harm. It is evident that the court
concluded that plaintiffs faced the potential for irreparable
injury without the injunction. This is sufficient to meet the
general requirement of “probable success on the merits and
the possibility of irreparable injury” for preliminary injunctive
relief. Rodde, 357 F.3d at 994. The court’s finding of a strong
likelihood that plaintiffs would succeed on the merits of their
claims also evidences a conclusion that the law and facts
clearly favor plaintiffs, meeting the requirement for issuance
KATIE A. v. BONTÁ 3401
of a mandatory preliminary injunction. Stanley, 13 F.3d at
1320.
Defendants also argue that the district court did not make
any explicit findings showing that it considered the federalism
principles that require federal courts to grant each state “the
widest latitude in the dispatch of its own internal affairs” and
to find “a threat of immediate and irreparable harm” before
enjoining a state agency’s operations. See Rizzo, 423 U.S. at
378-79; Gomez v. Vernon, 255 F.3d 1118, 1128 (9th Cir.
2001); Hodgers-Durgin v. de la Vina, 199 F.3d 1037, 1042
(9th Cir. 1999). The district court, however, did describe
plaintiffs’ vulnerability, complex needs, and ongoing “unmet
mental health needs and the harms of unnecessary institution-
alization.” That description suffices to show that the court
found a threat of immediate and irreparable harm to plaintiffs.
As for the deference accorded to state agencies in their inter-
nal affairs, the court appropriately allowed defendants an
opportunity jointly to develop the remedial plan needed to
implement the injunction. No further deference was required;
the order itself required only that defendants supply the ser-
vices that the court found to be required under federal law. It
did not mandate detailed or burdensome procedures for com-
pliance. See Clark, 60 F.3d at 604.
III. The Medicaid Act
The district court’s determination that the EPSDT provi-
sions of the Medicaid Act require the State to provide wrap-
around and TFC was the foundation for its ruling that
plaintiffs have a strong likelihood of success on the merits.
Whether the district court correctly interpreted the EPSDT
provisions of the Medicaid Act is a question of statutory inter-
pretation that we review de novo. Bay Area Addiction
Research & Treatment, Inc. v. City of Antioch, 179 F.3d 725,
730 (9th Cir. 1999).
Defendants contend that the district court erred in determin-
ing that the EPSDT provisions of the Medicaid Act require
3402 KATIE A. v. BONTÁ
the State to provide wraparound and TFC. They argue that,
even assuming all the components are covered under
§ 1396d(a), federal law does not require the State to offer the
components as a “bundle” of services. They also dispute the
court’s conclusion that all the component services included
within wraparound and TFC fall under § 1396d(a).
We conclude that the district court applied an erroneous
legal standard in concluding that the EPSDT provisions
require the State to provide wraparound and TFC. The district
court mistakenly assumed that if all the components of wrap-
around and TFC fall within categories listed in § 1396d(a),
and that wraparound and TFC can be deemed health care “ser-
vices” in themselves, then the package of components must be
offered in the form of wraparound or TFC. This assumption
was flawed, for reasons that we explain below.
In general, the EPSDT provisions require only that the indi-
vidual services listed in § 1396d(a) be provided, without spec-
ifying that they be provided in any particular form.15
A. The district court’s approach
The district court first determined that wraparound and
TFC are mental health “services,” rather than simply pro-
cesses, approaches, or philosophies. The court then noted that
a service may fall under one of the 28 categories of
§ 1396d(a) without being expressly listed as one of those cate-
gories. Relying on plaintiffs’ breakdown of wraparound and
TFC into component services, and their listing of specific pro-
visions of § 1396d(a) which would cover each component, the
15
It is possible that if the State fails adequately to provide the compo-
nent services, and the effectiveness of those services requires their coordi-
nated delivery, it may be appropriate to require the State to provide
services packaged together in a particular form, such as wraparound or
TFC. Because, however, the predicate is unmet in this case, we need not
address that possibility.
KATIE A. v. BONTÁ 3403
court concluded that each component likely falls under one or
more of the § 1396d(a) categories listed by plaintiffs. For
example, the court found that one component of wraparound,
“engagement of the child and family,” likely falls under
§ 1396d(a)(19) as “case management.” After stating that all
the components of both wraparound and TFC would fall
under the State’s EPSDT obligations, the court concluded
that, as a result, wraparound and TFC are themselves within
the State’s EPSDT obligations.
The court did not explore the possibility that the State
might only have an obligation to fund the component services
of wraparound and TFC, rather than to offer the coordinated
complex of services in a single package. This is clear from the
way that the court addressed whether the State was violating
its EPSDT obligations — which is to say that the court did
not address the question beyond stating that defendants did
not dispute that they were not providing wraparound and TFC
“as such” to members of the plaintiff class.
But defendants had stated in their opposition to plaintiffs’
motion for a preliminary injunction that “Medi-Cal already
covers the services that Plaintiffs are entitled to under Medic-
aid” and that plaintiffs were seeking a “bundled rate.”16 There
was also evidence in the record that MediCal currently reim-
burses providers for at least some components of wraparound
and TFC. Therefore, the court should have examined whether
all required component services under § 1396d(a) were
already being supplied. If all mandated services under
§ 1396d(a) are being supplied effectively, the State is not
obliged to go further and package the services as wraparound
and TFC.
16
It should be noted that defendants also disputed whether the compo-
nents of wraparound and TFC were actually covered under the Medicaid
statute.
3404 KATIE A. v. BONTÁ
B. The EPSDT provisions require that a specified set of
health services be provided in an effective manner to
eligible children
[3] As stated above, under the EPSDT provisions, states
have an obligation to cover every type of health care or ser-
vice necessary for EPSDT corrective or ameliorative purposes
that is allowable under § 1396d(a). The states also have an
obligation to see that the services are provided when screen-
ing reveals that they are medically necessary for a child. This
obligation is created by § 1396a(a)(43)(C), which states that
a state plan must provide for arranging, directly or through
referral, necessary corrective treatment under the EPSDT
obligation. See § 1396a(a)(43)(C); Clark v. Richman, 339 F.
Supp. 2d 631, 646-67 (M.D. Pa. 2004) (“[state’s] obligations
with respect to EPSDT services require more proactive steps,
such as actual provision of services”); Chisholm v. Hood, 110
F. Supp. 2d 499, 507 (E.D. La. 2000) (“states are further obli-
gated to actively arrange for corrective treatment” under
§ 1396a(a)(43)(C)); Salazar v. Dist. of Columbia, 954 F.
Supp. 278, 330 (D.D.C. 1996) (finding that District of Colum-
bia’s failure to ensure that EPSDT-eligible children receive
diagnosis and treatment for health problems detected during
screening violated § 1396a(a)(43)(C)); State Medicaid Man-
ual § 5310 (states must “[d]esign and employ methods to
assure that children receive . . . treatment for all conditions
identified as a result of examination or diagnosis”). Even if a
state delegates the responsibility to provide treatment to other
entities such as local agencies or managed care organizations,
the ultimate responsibility to ensure treatment remains with
the state. See, e.g., John B. v. Menke, 176 F. Supp. 2d 786,
801 (M.D. Tenn. 2001) (state cannot “disclaim responsibility
for the ultimate provision of EPSDT-compliant services by a
once-removed provider”).
[4] States also must ensure that the EPSDT services pro-
vided are reasonably effective. Thus, the State Medicaid Man-
ual states at several points that EPSDT services must be
KATIE A. v. BONTÁ 3405
sufficient “to achieve their purpose.” See State Medicaid
Manual § 5110 (“Services provided under EPSDT must be
sufficient in amount, duration, or scope to reasonably achieve
their purpose.”); id. § 5123 (while “42 C.F.R. 440.230 allows
[states] to establish the amount, duration and scope of services
provided under the EPSDT benefit . . . services must be suffi-
cient to achieve their purpose (within the context of serving
the needs of individuals under age 21)”). Other statutory pro-
visions and regulations under the Medicaid Act reinforce this
obligation. See, e.g., 42 U.S.C. § 1396a(a)(8) (stating that all
medical assistance, including EPSDT, must be furnished with
“reasonable promptness”); 42 C.F.R. § 441.61(b) (providing
that state must make available a variety of qualified providers
willing to provide EPSDT).
[5] Federal courts have scrutinized state Medicaid systems
to be sure that those systems are adequately designed to pro-
vide EPSDT services. See, e.g., Chisholm v. Hood (“Chisholm
II”), 133 F. Supp. 2d 894, 899-901 (E.D. La. 2001) (stating
that in not allowing psychologists directly to enroll as Medic-
aid providers and not providing alternative avenues of care,
system foreclosed access to necessary psychological services
for EPSDT-eligible children); John B., 176 F. Supp. 2d at
791-92, 800-05 (finding that the structure of the Tennessee
Medicaid managed care system “makes it impossible to fully
comply with federal mandates” including EPSDT).
C. As long as a State provides all EPSDT services in an
effective manner, the Medicaid statute does not
dictate that services must be “bundled”
[6] While the states must live up to their obligations to pro-
vide all EPSDT services, the statute and regulations afford
them discretion as to how to do so. There is nothing in the
EPSDT statutory provisions or regulations that indicates that
the state must generally design its Medicaid system to fund
“packages” of EPSDT services.17 The legislative history of the
17
Section 1396d(r)(5) obligates the states to provide “necessary health
care, diagnostic services, treatment, and other measures” and references
3406 KATIE A. v. BONTÁ
EPSDT provisions simply indicates a Congressional purpose
to provide a broad program of health care to poor children,
one that would include all the forms of care listed in § 1396d(a).18
In a number of cases, courts have held that particular types
of health services must be provided to Medicaid-eligible chil-
dren under a state’s EPSDT obligations. Those cases, how-
ever, did not require a state to fund distinct services covered
under separate categories of § 1396d(a) as a single package of
services. See S.D. ex rel. Dixon, 391 F.3d at 597 (incontinence
underwear falls under § 1396d(a)(7) as “home health care ser-
vices”); Collins, 349 F.3d at 374-76 (long-term care at psychi-
atric residential treatment facility falls under § 1396d(a)(16)
§ 1396d(a)’s description of 28 general categories of health care services.
The EPSDT regulations do not state whether services must be provided in
a single package, or can be covered as separate services. There are regula-
tions providing further definition of specific categories within § 1396d(a).
42 C.F.R. §§ 440.1-440.185. CMS has never promulgated final regulations
interpreting § 1396d(r)(5) since it was added by Congress in 1989. See
Medicaid Program; Early and Periodic Screening, Diagnosis, and Treat-
ment Services Defined, 58 Fed. Reg. 51,288 (proposed Oct. 1, 1993) (pro-
posed regulations).
18
Congress established the EPSDT program in 1967. See Stanton v.
Bond, 504 F.2d 1246, 1247 (7th Cir. 1974) (describing establishment of
program). Until 1989, states had substantial discretion regarding the ser-
vices that they would provide as part of the EPSDT benefit. In 1989, Con-
gress revised the EPSDT provisions to mandate broad coverage of
medically necessary health services for eligible children under 21. See
Omnibus Budget Reconciliation Act of 1989, Pub. L. 101-239, § 6403
(codified in part and as amended at 42 U.S.C. § 1396d(r)); H.R. Rep. No.
101-386, at 453 (1989) (Conf. Rep.), reprinted in 1989 U.S.C.C.A.N.
3018, 3056. See also 135 Cong. Rec. S13,233-34 (Oct. 12, 1989) (Sen.
Fin. Comm. Report) (explaining, as background to EPSDT amendments,
that “while states have always had the option to do so, many still do not
provide to children participating in EPSDT all care and services allowable
under federal law, even if otherwise not included in the state’s plan. . . .
The Committee amendment would require that states provide to children
all treatment items and services that are allowed under federal law and that
are determined to be necessary. . . .”).
KATIE A. v. BONTÁ 3407
as “inpatient psychiatric hospital services”); Pediatric Spe-
cialty Care, Inc., 293 F.3d at 480-81 (early intervention day
treatment services fall under § 1396d(a)(13) as “other diag-
nostic, screening, preventive, and rehabilitative services”);
Chisholm II, 133 F. Supp. 2d at 897-98 (behavioral and psy-
chological services for the autistic fall under both
§ 1396d(a)(6) as “any other type of remedial care recognized
under State law” and § 1396d(a)(13) as “other preventive, and
rehabilitative services”).
The issue of whether the state must provide “bundled”
EPSDT services was raised in a recent case quite similar to
this one in Massachusetts, in which a class of children with
serious emotional disturbances claimed a right under the
EPSDT provisions to “intensive home-based services,” which
would have included components falling under various cate-
gories of § 1396d(a). The district court avoided ruling on the
question of whether EPSDT required the state to provide “in-
tensive home-based services” to the children. Instead it
“looked behind the phrase to the array of actual clinical inter-
ventions that constitute, in the terms of the Medicaid statute,
‘medically necessary’ services for class members.” Rosie D.
v. Romney, 410 F. Supp. 2d 18, 30 (D. Mass. 2006).19 On that
basis, the court concluded that comprehensive assessment of
the children’s clinical needs, ongoing case management and
monitoring, and adequate in-home behavioral support services
were each required EPSDT services which the state had failed
to provide. Id. at 52-53. We believe that that analytic
approach was correct, insofar as it required the State to supply
the substantive EPSDT services described in § 1396d(a) with-
out curtailing the state’s administrative discretion as to how
to do so.
19
The court noted that the phrase “intensive home-based services” had
“generated an unhelpful, time-consuming, and largely irrelevant dispute
over whether the phrase describes a discrete clinical intervention (i.e., an
actual form of treatment) or merely one method or system for delivering
medical treatment.” 410 F. Supp. 2d at 30.
3408 KATIE A. v. BONTÁ
[7] The conclusion that as a general rule, states may fund
or provide medically necessary EPSDT services as separate
components is consistent with the overall structure and princi-
ples of the Medicaid program. Medicaid is a cooperative
federal-state program. Wilder v. Va. Hosp. Ass’n, 496 U.S.
498, 502 (1990). While the states must meet the substantive
obligations of the Medicaid Act, they nonetheless retain the
discretion to design and administer their Medicaid systems as
they wish. Frew v. Hawkins, 540 U.S. 431, 439 (2004) (noting
that consent decree at issue represented one choice among
“various ways that a State could implement the Medicaid
Act” to comply with the “general EPSDT statute”); John B.,
176 F. Supp. 2d at 800 (“The State has discretion with respect
to the provision of [EPSDT] services, so long as the plan
‘complies satisfactorily’ with federal law.”) (citing Chisholm
I); Chisholm I, 110 F. Supp. 2d at 506 (“Exactly how and in
what fashion the state provides [EPSDT] services is left up to
the state, as long as the state’s plan to provide EPSDT ser-
vices ‘complies satisfactorily’ with the requirements of fed-
eral law.”) (citing Mitchell v. Johnston, 701 F.2d 337, 343
(5th Cir.1983)); see also Blumer, 534 U.S. at 495 (stating
“that the leeway for state choices urged by both Wisconsin
and the United States is characteristic of Medicaid”); Alaska
Dep’t of Health & Soc. Servs. v. Ctrs. for Medicare & Medic-
aid Servs., 424 F.3d 931, 935 (9th Cir. 2005) (“Assuming that
its plan meets federal requirements, a state has considerable
discretion in administering its Medicaid program.”).
IV. The Approach on Remand
Here, the district court assumed that if each component of
a given type of care falls within the State’s EPSDT obliga-
tions, this necessarily implies that that form of care itself must
be funded and provided by the State as a single package.20
20
Plaintiffs themselves did not make this assumption; their motion for
a preliminary injunction cited examples of states that provide wraparound
and TFC by funding the individual components (while asserting that it is
“highly preferable” for providers to bill wraparound and TFC as “a bun-
dled package of services”).
KATIE A. v. BONTÁ 3409
Under that assumption, because MediCal does not fund wrap-
around or TFC as distinct types of care, the district court con-
cluded that the State was violating this obligation.
[8] In analyzing the issue in this way, the court conflated
a two-step analysis into one; as a result, it applied a legal
interpretation of the Medicaid Act that is too sweeping. The
court should have first determined whether the State is meet-
ing its legal obligation under the EPSDT provisions to pro-
vide all individual health services that fall under the
categories listed in § 1396d(a). Then, if it found that the State
is failing to provide the individual health services effectively,
the court should have determined whether the failure could
only be remedied by ordering the State to fund the individual
services as a single “bundle.” Rather than applying a legal
rule that requires the State always to fund a coordinated bun-
dle of services if the individual components fall under
§ 1396d(a), the court should have applied a legal rule that
would allow the State to exercise its discretion as to how to
meet its EPSDT obligation effectively to provide all the com-
ponent services that fall under § 1396d(a). On remand, the
district court should analyze plaintiffs’ likelihood of success
on their Medicaid Act claims in this manner.
V. Other Claims of Error
[9] We reject defendants’ remaining contentions of error.21
First, defendants contend that the injunction against DSS is
“absolutely baseless.” We conclude that the district court did
21
Defendants also contend that they were “extremely prejudiced” by
several of the district court’s rulings that preceded the preliminary injunc-
tion, and by plaintiffs’ alleged failure to comply with a discovery order.
Because defendants provide no elaboration or legal argument regarding
the court’s supposed errors or the nature of any prejudice to them, we treat
these contentions as having been waived. See Indep. Towers of Wash. v.
Washington, 350 F.3d 925, 929 (9th Cir. 2003) (holding that court will
consider “only issues which are argued specifically and distinctly in a
party’s opening brief”).
3410 KATIE A. v. BONTÁ
not err in enjoining DSS, even though DSS does not adminis-
ter the State MediCal program and the complaint did not spec-
ify DSS as a defendant to the Medicaid Act claims. Under the
Federal Rules of Civil Procedure, every injunction “is binding
only upon the parties to the action, their officers, agents, ser-
vants, employees, and attorneys, and upon those persons in
active concert or participation with them who receive actual
notice of the order by personal service or otherwise.” Fed. R.
Civ. P. 65(d). DSS had actual notice of both the motion for
the preliminary injunction and of the order. Further, DSS
supervises the State child welfare system that is charged with
foster children’s care and can influence whether they will
receive needed mental health services or not — qualifying
them as “persons in active concert” with the DHS with regard
to the class members’ receipt of health care through MediCal.22
[10] Defendants also contend that the district court errone-
ously required that they provide services to class members,
rather than simply make such services available. The order
required the State to screen class members and provide wrap-
around and TFC to members where medically necessary.
Requiring the State actually to provide EPSDT services that
have been found to be medically necessary is consistent with
the language of the Medicaid Act, which requires that each
state plan “provide for . . . arranging for (directly or through
referral to appropriate agencies, organizations, or individuals)
corrective treatment the need for which is disclosed by such
child health screening services. . . .” 42 U.S.C.
§ 1396a(a)(43).
Finally, in their reply brief, defendants argue that plaintiffs’
22
That DSS has the power to affect foster care children’s receipt of men-
tal health services is demonstrated by its administration of both the State’s
non-MediCal wraparound services pilot project (“SB 163” project), which
uses State and county foster care funds to provide wraparound, and a fed-
eral child welfare demonstration project providing wraparound services
(“Title IV-E Waiver” project).
KATIE A. v. BONTÁ 3411
first amended complaint fails to cite the actual provision of
the Medicaid Act which creates the EPSDT entitlement
enforceable under § 1983. Defendants did not make this argu-
ment in their opening brief. An appellate court “will not ordi-
narily consider matters on appeal that are not specifically and
distinctly argued in appellant’s opening brief.” Koerner v.
Grigas, 328 F.3d 1039, 1048 (9th Cir. 2003) (citation omit-
ted); see also Indep. Towers of Wash., 350 F.3d at 929.
Exceptions apply when (1) there is good cause for the omis-
sion or manifest injustice may result if the issue is not consid-
ered; (2) the issue was raised in appellee’s brief; or (3) the
omission did not prejudice the opposing party’s defense.
Koerner, 328 F.3d at 1048-49. None of those exceptions
applies here.
In any event, it is clear that defendants had fair notice of
the nature of plaintiffs’ claims. See Conley v. Gibson, 355
U.S. 41, 47 (1957) (defendant must have fair notice of the
nature of plaintiff’s claim); see also Crull v. GEM Ins. Co.,
58 F.3d 1386, 1391 (9th Cir. 1995) (“The pleadings need not
identify any particular legal theory under which recovery is
sought.”).
Because we vacate the preliminary injunction, we need not
address defendants’ contentions that the form of the order vio-
lated Federal Rules of Civil Procedure 52(a) and 65(d). We do
note that on remand, in order to comply with Rule 52(a) and
to facilitate appellate review, the district court should first
make separate determinations as to (1) whether each compo-
nent service of wraparound and TFC falls under a particular
provision of § 1396d(a), and (2) whether defendants have
effectively provided each mandated component service,
before applying the standard discussed above to determine
whether the State should be required to provide the required
services in another manner which will render such services
effective, or proceed directly to wraparound and TFC. See
Fed. R. Civ. P. 52(a).
3412 KATIE A. v. BONTÁ
CONCLUSION
The district court abused its discretion by relying on an
erroneous legal interpretation of the federal Medicaid statute
in granting plaintiffs’ motion for a preliminary injunction.
The preliminary injunction is reversed and the case is
remanded for further proceedings consistent with this opinion.
REVERSED and REMANDED.