Derek Waskul v. Washtenaw Cnty. Community Mental Health ( 2020 )

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 20a0346p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
DEREK WASKUL, by his guardian, Cynthia Waskul; ┐
CORY SCHNEIDER, by his guardians, Martha and │
Wendy Schneider; KEVIN WIESNER, by his guardian, │
Kerry Kafafian; WASHTENAW ASSOCIATION FOR │
COMMUNITY ADVOCACY; LINDSAY TRABUE, by her │
> No. 19-1400
guardian, Kristin Kill; HANNAH ERNST, by her
│
guardians, Susan and Robert Ernst,
│
Plaintiffs-Appellants, │
│
v. │
│
│
WASHTENAW COUNTY COMMUNITY MENTAL HEALTH; │
TRISH CORTES, in her official capacity as Director of │
Washtenaw County Community Mental Health; │
COMMUNITY MENTAL HEALTH PARTNERSHIP OF │
SOUTHEAST MICHIGAN; JANE TERWILLIGER, in her │
official capacity as director of Community Mental │
Health Partnership of Southeast Michigan; MICHIGAN │
DEPARTMENT OF HEALTH AND HUMAN SERVICES; │
ROBERT GORDON, in his official capacity as Director │
of Michigan Department of Health and Human │
Services, │
Defendants-Appellees. │
┘
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 2:16-cv-10936—Arthur J. Tarnow, District Judge.
Argued: June 11, 2020
Decided and Filed: October 29, 2020
Before: CLAY, WHITE, and READLER, Circuit Judges.
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 2
_________________
COUNSEL
ARGUED: Edward P. Krugman, NATIONAL CENTER FOR LAW AND ECONOMIC
JUSTICE, New York, New York, for Appellants. Stefani A. Carter, STEFANI A. CARTER,
PLLC, Ypsilanti, Michigan, for Appellees Washtenaw County Community Mental Health and
Trish Cortes. Marcelyn A. Stepanski, ROSATI SCHULTZ JOPPICH & AMTSBUECHLER
PC, Farmington Hills, Michigan, for Appellees Community Mental Health Partnership of
Southeast Michigan and Jane Terwilliger. Tracy E. Van den Bergh, MICHIGAN
DEPARTMENT OF ATTORNEY GENERAL, Lansing, Michigan for Appellees Michigan
Department of Health and Human Services and Robert Gordon. ON BRIEF: Edward P.
Krugman, NATIONAL CENTER FOR LAW AND ECONOMIC JUSTICE, New York, New
York, Nicholas A. Gable, LEGAL SERVICES OF SOUTH CENTRAL MICHIGAN, Ypsilanti,
Michigan, Lisa Ruby, MICHIGAN POVERTY LAW PROGRAM, Ypsilanti, Michigan, for
Appellants. Stefani A. Carter, STEFANI A. CARTER, PLLC, Ypsilanti, Michigan, for
Appellees Washtenaw County Community Mental Health and Trish Cortes. Marcelyn A.
Stepanski, ROSATI SCHULTZ JOPPICH & AMTSBUECHLER PC, Farmington Hills,
Michigan, for Appellees Community Mental Health Partnership of Southeast Michigan and Jane
Terwilliger. Kristin M. Heyse, William Morris, MICHIGAN DEPARTMENT OF ATTORNEY
GENERAL, Lansing, Michigan for Appellees Michigan Department of Health and Human
Services and Robert Gordon.
CLAY, J., delivered the opinion of the court in which WHITE, J., joined. READLER, J.
(pp. 46–54), delivered a separate opinion concurring in part and dissenting in part.
_________________
OPINION
_________________
CLAY, Circuit Judge. In 2015, a predecessor to Defendant Washtenaw County
Community Mental Health modified the methodology through which it allocated funding to
individuals with disabilities receiving community living support services pursuant to a Medicaid
waiver received by the State of Michigan. Plaintiffs, five individuals receiving those services,
together with the Washtenaw Association for Community Advocacy, challenge that
methodology in this case against Defendants the Michigan Department of Health and Human
Services, Community Mental Health Partnership of Southeast Michigan, Washtenaw County
Community Mental Health, and the directors of these organizations. In particular, Plaintiffs
assert that by implementing or allowing implementation of this new methodology, Defendants
violated provisions of the Medicaid Act, 42 U.S.C. §§ 1396a(a)(8), (a)(10)(A), (a)(10)(B),
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 3
1396n(c)(2)(A) and (C); Title II of the Americans with Disabilities Act (“ADA”), 42 U.S.C.
§ 12132; § 504 of the Rehabilitation Act, 29 U.S.C. § 794; the Michigan Mental Health Code,
Mich. Comp. Laws § 330.1722; and the terms of Michigan’s Medicaid Habilitation Supports
Waiver and the contracts implementing it. The district court dismissed Plaintiffs’ claims in full.
For the reasons set forth in this opinion, we REVERSE the district court’s decision and
REMAND for further proceedings consistent with this opinion.
BACKGROUND
Factual Background
The State of Michigan offers funding and support to qualifying individuals with
disabilities to aid them in living independently in their own home communities, rather than in
institutionalized care facilities, pursuant to a Medicaid waiver (the “Habilitation Supports
Waiver” or the “Waiver”) obtained from the federal government. This Community Living
Support (“CLS”) program furthers those individuals’ self-determination by allowing them to
structure their own support services based on their medical needs.
Plaintiffs in this case are five individuals who participate in Michigan’s CLS program
and the Washtenaw Association for Community Advocacy (“WACA”), a non-profit organization
of which the individual Plaintiffs are members that advocates for support services for individuals
with developmental disabilities. Plaintiff Derek Waskul has severe cognitive impairment and
autism and requires 24/7 supervision. Plaintiff Cory Schneider has autism, a developmental
disability, and an undiagnosed behavior disorder that also require 24/7 care. Plaintiff Kevin
Wiesner has severe developmental disabilities and suffers from seizures. Plaintiff Lindsay
Trabue has Down syndrome and is non-verbal. She has only very basic functional skills and also
requires 24/7 care. Finally, Plaintiff Hannah Ernst has been diagnosed with Angelman
syndrome, a seizure disorder, and cognitive impairment.
At bottom, Plaintiffs allege that a change in the method through which their CLS budgets
are calculated has prevented them from receiving required services and support, in violation of
federal and state law and Defendants’ contracts with one another. Plaintiffs’ claims hinge on
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 4
Medicaid requirements and funding mechanisms, and so we must begin by surveying Michigan’s
Medicaid framework.
A. Michigan’s Medicaid Framework
The joint federal-state Medicaid program provides medical assistance to qualifying
individuals who are unable to pay or do not have private insurance, pursuant to Title XIX of the
Social Security Act, 42 U.S.C. § 1396 et seq. (the “Medicaid Act”). In order to receive federal
Medicaid funds, states must develop a plan to administer their program in compliance with
federal statutory and regulatory requirements. 42 U.S.C. § 1396a(a); 42 C.F.R. § 430.10. Once
their plan is approved by the Centers for Medicare and Medicaid Services (“CMS”), states
receive federal funds to supplement state spending on Medicaid-covered services. See 42 U.S.C.
§ 1396b(a).
Michigan’s Medicaid program is administered by Defendant Michigan Department of
Health and Human Services (“the Department”), which is led by Defendant Robert Gordon, its
director (collectively, “State Defendants”). 42 U.S.C. § 1396a(a)(5) (requiring that each state
“provide for the establishment or designation of a single State agency to administer or to
supervise the administration of” their plan); 42 C.F.R. § 431.10(b)(1). The Department then
contracts with regional prepaid inpatient health plans (“PIHPs”), which are public managed care
organizations that receive funding and arrange and pay for Medicaid services. 42 U.S.C.
§ 1396u-2(a)(1)(B); Mich. Comp. Laws § 400.109f. Defendant Community Mental Health
Partnership of Southeast Michigan (“CMHPSM”) is the PIHP responsible for Washtenaw
County, and is led by Defendant Jane Terwilliger, its executive officer (collectively, “PIHP
Defendants”).1 The Department has supervisory and policymaking authority over the PIHPs and
must ensure that PIHPs retain oversight and accountability over any subcontractors. PIHPs
subcontract with community organizations that provide or arrange for mental health services for
recipients, including Defendant Washtenaw County Community Mental Health (“WCCMH”).
WCCMH is the public community mental health authority for Washtenaw County and is led by
Defendant Trish Cortes, its director (collectively, “County Defendants”). The relationships
1
According to Plaintiffs, Defendant Terwilliger left her position at CMHPSM in April 2019. The parties
do not further acknowledge this fact in their briefing; their posture has not apparently changed as a result.
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 5
between the Department, CMHPSM, and WCCMH are governed by federal and state law, in
addition to specific contracts. See, e.g., 42 U.S.C. § 1396u-2(a)(1)(B); Mich. Comp. Laws
§§ 330.1100a(18), 400.109f.
B. The Community Living Support Program Framework
Under this framework, Defendants work together to ensure CLS services are provided to
qualifying recipients, including the individual Plaintiffs, pursuant to the terms of Michigan’s
Habilitation Supports Waiver. That waiver is financed through so-called “capitation
procedures.” This means that the federal government provides the relevant entity—here the
PIHP, Defendant CMHPSM—with a fixed amount of funding for each person
participating in the CLS program, regardless of how many services the entity
ultimately provides to the recipient. The PIHP then determines how to allocate these funds to
recipients. (Am. Compl., R. 146 at PageID #3718; Application for Habilitation
Supports Waiver, MI.0167.R04.00, at 5–6 (Oct. 1, 2010) (hereinafter, “Waiver”),
available at https://www.michigan.gov/documents/mdch/Habilation_Supports_Waiver_340749_
7.pdf.) PIHPs can make or lose money depending on how the amount they receive in capitation
funds compares to the amount of funding they provide recipients, but they must ensure that the
services they provide comply with the terms of their contract with the State, which itself must
ensure that it complies with the terms of the Medicaid Act, federal regulations, and the Waiver.
Once an individual has elected to receive CLS services, they go through what is known as
a person-centered planning (“PCP”) process, during which an individual plan of
service (“IPOS”) and corresponding budget for CLS services is developed. Mich. Dep’t
of Health & Human Servs., Medicaid Provider Manual at
328 (hereinafter “Mich. Medicaid Provider Manual”), available at http://www.mdch.state.mi.us/
dch-medicaid/manuals/MedicaidProviderManual.pdf), see 42 C.F.R. § 441.301(b)(1)(i). The
IPOS describes the services that have been deemed “medically necessary” for each recipient
based on criteria defined in Michigan’s Medicaid Provider Manual. (Am. Compl., R. 146 at
PageID #3713; Mich. Medicaid Provider Manual at 337 (“The determination of a medically
necessary support, service or treatment must be . . . [d]ocumented in the individual plan of
service.”).) Michigan’s Waiver application, later approved by CMS, explained:
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An individual budget includes the expected or estimated costs of . . . obtaining the
mental health services and supports included in the IPOS. . . . Once the IPOS is
developed, the amount of funding needed to obtain the identified services and
supports is determined collectively by the participant, the mental health agency
(PIHP or designee), and others participating in the PCP process. This process
involves costing out the services and supports using the rates for providers chosen
by the participant and the number of hours authorized in the IPOS. . . . The
individual budget is authorized in the amount of that total cost of all services and
supports in the IPOS.
(Waiver at 134.) The individual then enters a “self-determination arrangement” with their local
community mental health service program. (Id. at 135.) Under that arrangement, the individual
determines how to use the funds in their budget to execute their IPOS. This includes hiring,
scheduling, and paying staff, as well as selecting, arranging, and paying for services, supports,
and treatments listed in the IPOS. A fiscal intermediary actually holds the funds and pays bills
directed to them.
C. WCCMH’s Budget Methodology
This brings us to the change in budget methodology that prompted this case. Budgets for
CLS services are calculated by multiplying how many hours of services a participant’s IPOS
calls for by a specific rate. Starting in at least April 2012, the CLS budget for recipients in
Washtenaw County was developed by providing a rate for staff or providers and then allowing
billing of other services and supports (e.g., workers’ compensation, staff training, and
transportation) as separate line items. In 2015, the predecessor to WCCMH, Washtenaw
Community Health Organization (“WCHO”), shifted to a budget methodology under which it
provided a single, all-inclusive rate to cover both staff and services.2 WCCMH now operates
under this methodology.
2
Defendant WCCMH explains that WCHO also used this methodology prior to 2012, and argues that the
methodology implemented between 2012 and 2015 duplicated costs by providing for them in calculating the staff
rate and then also paying for them separately as additional line items. Defendants previously argued that this billing
methodology violated Medicaid regulations and their inter-entity contracts, and the district court denied a
preliminary injunction in part because Plaintiffs were not “entitled to the reinstatement of a calculation method that
violates Medicaid regulations and existing contracts between WCCMH and the State and PIHP.” (Order Denying
Pls. Mot. for Prelim. Inj., R. 55 at PageID #1168.) A court’s determination of substantive issues at the preliminary
injunction stage is “not dispositive of those substantive issues on the merits,” Wilcox v. United States, 888 F.2d
1111, 1114 (6th Cir. 1989), and the district court did not rely on this issue or suggest that the prior methodology
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 7
As this Court explained in a previous opinion in this case,
The budgeting change did not reduce the total number of service hours recipients
were authorized to receive. The effect of utilizing an all-inclusive rate, however,
was to reduce the total budget amount for each recipient. As a practical matter,
service recipients had to reduce the hourly rate they paid service providers to
maintain the level of hours authorized prior to the budget change. The notice to
recipients acknowledged this reality, stating that “[w]hile this is not a reduction in
your current level of services, it may reduce the amount you can pay your staff.”
Waskul v. Washtenaw Cty. Cmty. Mental Health, 900 F.3d 250, 254 (6th Cir. 2018). CLS
recipients like the individual Plaintiffs now had to begin budgeting from the fixed all-inclusive
rate (then $13.88 per hour) and subtract out the costs of non-staff services and supports in order
to determine the amount they could pay staff. Plaintiffs Waskul, Schneider, and Wiesner
challenged the resulting reductions in their budgets in Medicaid Fair Hearings through the
Michigan Administrative Hearing System. An administrative law judge ruled in their favor, and
their budgets were increased, but the budget methodology was not changed.
Plaintiffs allege that, due to this change in the budget methodology, the funding they
receive no longer suffices to cover the services required by their IPOSs. In particular, they say
that they cannot find sufficient CLS providers willing to work at the low rates they must pay
under the new budgeting method and that, in order to pay providers more, they are now
compelled to pay for supports and services themselves and hire family members at below-market
rates. As a result of the reduction in support, they allege that they have not been able to receive
all of the services identified in their IPOSs and their conditions have deteriorated.
Procedural Background
In 2016, Plaintiffs Waskul, Wiesner, Schneider and WACA filed the original complaint
in this case (“Waskul I”), asserting five claims, including violations of constitutional and
statutory due process, the Medicaid Act, and the Michigan Mental Health Code. Plaintiffs then
violated any contract or law in deciding Defendants’ motions to dismiss. Defendants do not argue that the current
methodology is the only permissible methodology, and whether the prior methodology is permissible goes to what
relief Plaintiffs can be provided. Since Plaintiffs request a variety of forms of relief and the district court has broad
discretion to fashion appropriate injunctive relief if or when it becomes necessary, see, e.g., United States v.
Oakland Cannabis Buyers’ Co-op, 532 U.S. 483, 496 (2001), at this juncture, we need not consider whether the
prior methodology complied with Medicaid law and regulations and with the Defendants’ agreements.
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moved for a preliminary injunction, which the district court denied, finding that WACA lacked
standing, that the individual Plaintiffs could not show the required irreparable harm on their due
process claims because they had received hearings following the change in budget methodology,
and that they could not show a likelihood of success on their remaining claims because the prior
budgeting method to which Plaintiffs sought to return violated Medicaid requirements. Plaintiffs
only appealed the district court’s decision as to WACA’s standing, and on appeal sought only
preliminary injunctive relief of “fresh notices and hearing rights” for the unnamed members of
the organization. (Waskul v. Washtenaw Cnty. Cmty. Mental Health, No. 16-2742, Pls.’ Br.,
Doc. No. 18 at 48.)
While that appeal was pending, Plaintiffs filed a new case in the district court (Waskul II,
E.D. Mich. No. 17-cv-12355), adding Plaintiffs Trabue and Ernst and asserting five new claims.
The new complaint also responded to the preliminary injunction ruling by attempting to show
that the prior budgeting method did not violate Medicaid requirements. Plaintiffs moved to
consolidate the two cases and for leave to file an amended complaint conforming the original
complaint in Waskul I to that in Waskul II. The district court granted the motion to consolidate,
but held the motion for leave to amend in abeyance pending the resolution of Plaintiffs’ appeal to
this Court. Defendants moved to dismiss the Waskul II complaint or for judgment on the
pleadings. The district court stayed proceedings in full until resolution of the appeal. Following
that stay, Plaintiff Schneider filed a motion for leave to file a second motion for a preliminary
injunction.
On August 14, 2018, this Court issued its decision regarding Plaintiffs’ appeal. Waskul,
900 F.3d at 250. It found that WACA lacked standing to seek the relief it requested on appeal—
namely, “(1) ‘fresh notices,’ and (2) ‘hearing rights with respect to the reduction in their CLS
budgets’”—because its three named members had already received that relief prior to the
complaint being filed and because Plaintiffs could not identify any other members that would
benefit from that relief. Id. at 256–58. But see id. at 258–60 (Stranch, J., concurring in the
judgment) (concluding that WACA had sufficiently shown standing, but concurring because
“[o]n the record before us, we cannot conclude that either of the budget calculation methods at
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issue is required or prohibited by the statute or regulation and, therefore, the district court did not
abuse its discretion in determining there was ‘not a high likelihood of success’”).
After this Court’s decision, the district court lifted the stay and requested supplemental
briefing on the pending motions in Waskul II. The parties agreed to withdraw pending motions
and refile them with modified arguments as desired. Plaintiffs responded to those motions, and
Defendants replied. Plaintiff Schneider then renewed his motion for a preliminary injunction. At
the motion hearing, the district court granted Plaintiffs’ longstanding request for leave to file the
amended complaint and agreed to treat the pending motions as directed at the amended
complaint.
On March 20, 2019, the district court issued an order construing Defendants’ motions as
motions to dismiss and dismissing Plaintiffs’ claims in their entirety. This timely appeal
followed.
DISCUSSION
Standard of Review
We review the grant of a motion to dismiss de novo. Mezibov v. Allen, 411 F.3d 712, 716
(6th Cir. 2005). “To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
A claim is facially plausible only when “the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct alleged,” thus
raising “more than a sheer possibility that a defendant has acted unlawfully.” Id. In our review,
we construe the complaint in the light most favorable to the plaintiff, accept all well-pleaded
factual allegations as true, and draw all reasonable inferences in her favor. Cahoo v. SAS
Analytics, Inc., 912 F.3d 887, 897 (6th Cir. 2019).
On appeal, the parties dispute what evidence the district court considered and what
evidence we may consider. Plaintiffs contend that, given the district court’s extended delay in
granting their motion to amend their complaint, we should consider other materials before the
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district court that they relied on in opposing Defendants’ dispositive motions, including the
evidentiary records associated with Defendants’ initial motions to dismiss and for summary
judgment, Plaintiff Schneider’s motion for a preliminary injunction, and supplemental briefing
and arguments submitted to the district court following various status conferences and hearings.
Defendants seek to rely on similar evidence, including testimony from the preliminary injunction
hearing.
We decline to consider this evidence. As a general rule, a court considering a motion to
dismiss “must focus only on the allegations in the pleadings.” Bates v. Green Farm Condo.
Ass’n, 958 F.3d 470, 483 (6th Cir. 2020). This does not include plaintiffs’ responses to a motion
to dismiss. Id. “If plaintiffs believe they need to supplement their complaint with additional
facts to withstand [a motion to dismiss] . . . they have a readily available tool: a motion to amend
the complaint under Rule 15.” Id. They cannot “amend their complaint in an opposition brief or
ask the court to consider new allegations (or evidence) not contained in the complaint.” Id.
Plaintiffs offer no explanation for why they did not seek a second amendment of their complaint,
especially given the court’s willingness to permit Defendants to update their motions to dismiss
following this Court’s disposition of Plaintiffs’ appeal. Thus, we will consider the viability of
Plaintiffs’ claims without reference to evidence not included in Plaintiffs’ complaint.
Standing
Before turning to the merits of Plaintiffs’ claims, we must address several threshold
matters. First, PIHP Defendants assert on appeal that Plaintiff WACA “lack[s] standing to bring
claims on behalf of unnamed individuals.” (PIHP Defs.’ Br. at 39–42.) As discussed, we
previously found that Plaintiff WACA lacked standing to assert its due process claims because
all named members of the association had received the relief then sought—fresh notices and
hearing rights—prior to filing their complaint and Plaintiffs did not show that any unnamed
member of the association had not received this relief. Waskul, 900 F.3d at 256–58. Plaintiffs
have voluntarily dismissed their due process claims, and their remaining claims do not suffer
from this deficiency.
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“An association has standing to bring suit on behalf of its members when [1] its members
would otherwise have standing to sue in their own right, [2] the interests at stake are germane to
the organization’s purpose, and [3] neither the claim asserted nor the relief requested requires the
participation of individual members in the lawsuit.” Friends of the Earth, Inc. v. Laidlaw Envtl.
Servs., Inc., 528 U.S. 167, 181 (2000). “Regarding the first element, it generally suffices for an
association to demonstrate that ‘at least one of [its] members would have standing to sue on his
own.’” Waskul, 900 F.3d at 255 (alteration in original) (quoting United Food & Comm. Workers
Union Local 751 v. Brown Grp., Inc., 517 U.S. 544, 554–55 (1996)). Thus, if any of the
individual Plaintiffs have standing, WACA may appropriately assert standing based upon their
standing, because each is a member of WACA. A plaintiff has standing only if: (1) she has
suffered an “injury in fact,” i.e., actual or imminent, concrete and particularized harm to a legally
protected interest; (2) there is “a causal connection between the injury and the conduct
complained of”; and (3) the injury is likely to be redressed by a favorable decision. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560–61 (1992). A plaintiff must demonstrate standing
separately for each claim and each form of relief sought. Waskul, 900 F.3d at 255.
Regarding the first prong of the associational standing test, PIHP Defendants contend that
the individual Plaintiffs lack standing because their “complaints were redressed through the state
administrative process or are otherwise moot.” (PIHP Defs.’ Br. at 40–41.) They point out that
Plaintiffs Waskul, Wiesner, and Schneider “are currently receiving the same or higher rates than
they received prior to May 2015” and that the CLS rate has been raised multiple times since May
2015. (Id. at 12.) But even if this is true, as the district court concluded, “[t]his argument
mistakenly assumes that the only form of relief sought is an adjustment to the hourly rate,” when
in fact Plaintiffs “have repeatedly made clear that they are challenging the budgeting method, not
simply the amount budgeted for.” (Dist. Ct. Op., R. 164 at PageID #4368.) The allegation
underlying each of Plaintiffs’ claims on appeal is that they are actually being harmed by
Defendants’ failure to use or ensure a budget method that allows their IPOSs to be fully
implemented. This alleged harm is current and ongoing. And unlike Plaintiffs’ previous due
process claims, none of the relief Plaintiffs seek to remedy this harm has already been afforded
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to any of the individual named Plaintiffs.3 Defendants do not contest any of the remaining
standing elements as to any individual Plaintiff, and there are no apparent deficiencies in the
individual Plaintiffs’ standing as to each claim and form of relief sought. Thus, Plaintiffs have
shown that WACA’s “members would otherwise have standing to sue in their own right.”
Laidlaw, 528 U.S. at 181.
Turning to the second prong of the associational standing test, Defendants do not contest
that WACA’s “interests at stake are germane to the organization’s purpose.” Id. And indeed,
ensuring CLS recipients’ IPOS budgets are correctly calculated and otherwise sufficient is
clearly germane to WACA’s “mission and purpose [of] advocating for persons with
developmental disabilities and their families in order to help them obtain and maintain services.”
(Am. Compl., R. 146 at PageID #3774.)
PIHP Defendants do contest the remaining element of associational standing—that is,
whether the claims asserted or relief requested require WACA’s members’ participation in this
suit. See Laidlaw, 528 U.S. at 181. They contend that the relief Plaintiffs seek may not benefit
other individual members of WACA. While PIHP Defendants correctly point out that
individuals’ IPOS budgets are different and tailored based on their specific medical situation, the
parties agree that the same methodology is applied to determine each CLS recipient’s budget.
The participation of individual members is not necessary to determining whether a methodology
commonly applied to all members is valid. Moreover, Plaintiffs allege that application of this
methodology resulted in an “instant[] and drastic[]” reduction to CLS recipients’ IPOS budgets,
(Am. Compl., R. 146 at PageID #3731), suggesting that the declaratory and prospective
injunctive relief sought by Plaintiffs will benefit all members. See Warth v. Seldin, 422 U.S.
490, 515 (1975) (“If in a proper case the association seeks a declaration, injunction, or some
3
Specifically, Plaintiffs ask the court to declare unlawful the current budget methodology and
corresponding rate reduction, as well as any denial of participants’ rights to self-determination. They further request
that the court enjoin Defendants from continuing to use the current budget methodology and depriving CLS
recipients of services provided in the most integrated setting. They request costs and attorneys’ fees and “such other
relief as is just and proper.” (Am. Compl., R. 146 at PageID #3807.) In their amended complaint, Plaintiffs also
asked the court, as a remedy for alleged due process violations, to enjoin Defendants “from denying participants
their right to procedural due process” and from refusing to reinstate pre-May 2015 funding until recipients are
afforded IPOS meetings and provided notice and an opportunity to be heard regarding any proposed cuts. (Id. at
#3806.) However, Plaintiffs no longer seek this relief after voluntarily dismissing their due process claims.
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other form of prospective relief, it can reasonably be supposed that the remedy, if granted, will
inure to the benefit of those members of the association actually injured.”). Thus, Plaintiffs have
made the showing necessary to demonstrate that WACA has associational standing.
Eleventh Amendment Immunity
We must next address a second threshold matter. In their briefing, State and PIHP
Defendants contend that they are entitled to Eleventh Amendment immunity against Plaintiffs’
claims. Some of these arguments are specific to certain of Plaintiffs’ claims and so we will
address them in our analysis of those claims. But two of their arguments address Plaintiffs’
claims more generally.
First, State Defendants argue that “[t]o the extent that [Plaintiffs] seek either some form
of monetary compensation or retrospective injunctive relief,” they are immune under the
Eleventh Amendment. (State Defs.’ Br. at 4.) But Plaintiffs request purely prospective
declaratory and injunctive relief, and Plaintiffs’ only claim against the Department directly is
brought under § 504 of the Rehabilitation Act. Michigan waived its Eleventh Amendment
immunity against § 504 claims by accepting federal Medicaid funding after enactment of
42 U.S.C. § 2000d-7. See, e.g., Carten v. Kent State Univ., 282 F.3d 391, 398 (6th Cir. 2002);
see also 42 U.S.C. § 2000d-7(a)(1) (“A State shall not be immune under the Eleventh
Amendment . . . from suit in Federal court for a violation of section 504 of the Rehabilitation Act
of 1973 . . . .”).
Because Plaintiffs seek prospective injunctive relief, Plaintiffs’ claims against Defendant
Gordon in his official capacity are permitted under Ex parte Young, 209 U.S. 123 (1908).4
Westside Mothers v. Haveman (“Westside Mothers I”), 289 F.3d 852, 860–62 (6th Cir. 2002).
This is true “notwithstanding” the fact that this relief will have “a direct and substantial impact
on the state treasury.” Milliken v. Bradley, 433 U.S. 267, 289 (1977). Still, “[a] court may enter
a prospective injunction that costs the state money, but only if the monetary impact is ancillary,
i.e., not the primary purpose of the suit.” Barton v. Summers, 293 F.3d 944, 950 (6th Cir. 2002).
4
Plaintiffs’ request for attorneys’ fees is also permitted under Ex parte Young. Hutto v. Finney, 437 U.S.
678, 691–92 (1978).
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 14
In the present case, the primary purpose of the suit is to ensure that Plaintiffs receive the services
required under their IPOSs. Moreover, since PIHPs control the allocation of funding to
Plaintiffs, it is unclear whether any relief awarded will have any monetary impact on the State of
Michigan.
PIHP Defendants, too, claim that they are entitled to Eleventh Amendment immunity.
This argument also fails. “[T]he Eleventh Amendment does not extend its immunity to units of
local government” or other political subdivisions, like CMHPSM. Bd. of Trustees of Univ. of
Ala. v. Garrett, 531 U.S. 356, 369 (2001). CMHPSM is thus entitled to Eleventh Amendment
immunity only if it operates as an arm of the State. Lowe v. Hamilton Cnty. Dep’t of Job &
Family Servs., 610 F.3d 321, 325 (6th Cir. 2010). CMHPSM bears the burden of showing that it
operates in this capacity. Id. at 324. In assessing whether a public entity is an “arm of the State”
entitled to Eleventh Amendment immunity or a “political subdivision” not entitled to that
immunity, we consider four factors:
(1) the State’s potential liability for a judgment against the entity; (2) the language
by which state statutes and state courts refer to the entity and the degree of state
control and veto power over the entity’s actions; (3) whether state or local
officials appoint the board members of the entity; and (4) whether the entity’s
functions fall within the traditional purview of state or local government.
Ernst v. Rising, 427 F.3d 351, 359 (6th Cir. 2005) (citations omitted). Of these, “[t]he state’s
potential legal liability for a judgment against the defendant ‘is the foremost factor’ to consider
in our sovereign immunity analysis.” Lowe, 610 F.3d at 325.
PIHP Defendants contend that CMHPSM “functions fiscally as an arm of the state (and,
by virtue of the necessity of state approval of various operational aspects of each entity,
administratively, as well).” (PIHP Defs.’ Br. at 37.) Considering the first factor, it is true that
Michigan financially supports CMHPSM pursuant to state law. See Mich. Comp. Laws
§ 330.1202(1). However, according to the current Department-CMHPSM contract, that financial
support is provided through payment of a “fixed per person monthly rate . . . for each Medicaid
eligible person,” regardless of what payments CMHPSM makes to recipients. (Medicaid
Managed Specialty Supports and Services Concurrent 1915(b)/(c) Waiver Program FY 19 at 9,
16, https://www.nmre.org/wp-content/uploads/2018/09/FY19-NMRE-PIHP-Contract-and-
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 15
Attachments.pdf.) The record does not suggest that Michigan would have any obligation or
liability for judgments against CMHPSM. To the contrary, the contract between the two entities
establishes that liability as a result of claims or judgments “arising out of activities to be carried
out pursuant to the obligation of the PIHP under this contract shall be the responsibility of the
PIHP, and not the responsibility of the [Department], if . . . caused by, or aris[ing] out of, the
actions or failure to act on the part of the PIHP.” (Id. at 14.) Thus, this factor weighs against
finding that CMHPSM is an arm of the State.
Turning to the other factors, Michigan law recognizes that PIHPs are regional entities
governed by bylaws adopted by county officials. Mich. Comp. Laws § 330.1204b; (see also
CMHPSM Bylaws, R. 135-3 at PageID #3542.) PIHPs do not serve the State, but only a region
within it. See Lowe, 610 F.3d at 332 (“[T]he fact that [an entity’s] programs are designed to
serve a specific local community weighs against characterizing it as an arm of the state, rather
than a political subdivision.”). While the Department has some supervisory responsibilities over
PIHPs, see Mich. Comp. Laws § 330.1232, they are controlled by county-level entities, including
community mental health authorities like WCCMH. (CMHPSM Bylaws, R. 135-3 at PageID
#3542). Likewise, PIHPs’ board members are appointed by county-level entities. (Id. at
##3545–46.) Finally, while PIHPs do exercise some functions falling within the purview of state
government, the simple fact than an entity “exercise[s] a slice of state power” does not by itself
entitle that entity to Eleventh Amendment immunity. See Lowe, 610 F.3d at 330 (quoting N. Ins.
Co. of N.Y. v. Chatham County, 547 U.S. 189, 193–94 (2006)). Altogether, the remaining factors
also do not suggest that CMHPSM is an arm of the state. Thus, CMHPSM cannot avoid liability
by asserting Eleventh Amendment immunity.
PIHP Defendants also assert that Defendant Terwilliger is entitled to Eleventh
Amendment immunity because Plaintiffs sue her in her official capacity. However, “[t]he only
immunities that can be claimed in an official-capacity action are forms of sovereign immunity
that the entity, qua entity, may possess, such as the Eleventh Amendment.” Kentucky v.
Graham, 473 U.S. 159, 167 (1985). Because CMHPSM itself is not entitled to immunity,
Terwilliger is also not entitled to immunity.
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 16
Exhaustion
Having now ascertained that Plaintiffs have standing to bring this case and that
Defendants are not entitled to Eleventh Amendment immunity, we must contend with one final
threshold matter. PIHP Defendants assert that Plaintiffs were required to exhaust their
administrative remedies provided by the State under the Medicaid Act, 42 U.S.C. § 1396a(a)(3),
before they could bring their Medicaid claims in this suit. Three of the five Plaintiffs on appeal
did so and received favorable remedies, and two did not. According to PIHP Defendants, both
groups have somehow failed to exhaust their remedies and therefore cannot bring this suit.
Defendants are incorrect. Exhaustion of state administrative remedies is not a prerequisite to suit
under § 1983, Patsy v. Bd. of Regents of Fla., 457 U.S. 496, 516 (1982), and “§ 1983 contains no
exhaustion requirement beyond what Congress has provided,” Heck v. Humphrey, 512 U.S. 477,
483 (1994). Our sister circuits have commonly concluded that the Medicaid Act does not require
Plaintiffs to exhaust their state administrative remedies.5 See, e.g., Romano v. Greenstein,
721 F.3d 373, 376 (5th Cir. 2013); Roach v. Morse, 440 F.3d 53, 56–58 (2d Cir. 2006)
(Sotomayor, J.); Houghton ex rel. Houghton v. Reinertson, 382 F.3d 1162, 1167 n.3 (10th Cir.
2004); Alacare, Inc.-North v. Baggiano, 785 F.2d 963, 967–69 (11th Cir. 1986). We agree.
We now turn to the content of Plaintiffs’ claims.
5
We note that we have previously held that a group of nursing homes suing the Secretary of the
Department of Health and Human Services was required to exhaust their available remedy of review by the
Secretary before bringing suit against her to challenge Medicare and Medicaid regulations. Mich. Ass’n of Homes &
Servs. for the Aging, Inc. v. Shalala, 127 F.3d 496, 497 (6th Cir. 1997). However, we concluded so only because a
provision of the Medicaid Act discussing remedies available to care facilities specifically incorporated provisions of
the Social Security Act that required judicial review of the decision only after a hearing by the Secretary. Id. at 499
(noting 42 U.S.C. § 1396i(b)(2) incorporates 42 U.S.C. § 405(g)). There is no such provision limiting remedies to
Medicaid beneficiaries like the individual Plaintiffs. As explained by the Fifth Circuit, the provisions at issue in
Michigan Association of Homes and Services for the Aging, Inc. “involve review of decisions of the Secretary of
Health and Human Services—a federal agency—regarding provider eligibility” and are inapplicable “where a
Medicaid claimant seeks review of a state agency decision.” Romano v. Greenstein, 721 F.3d 373, 376 n.11 (5th
Cir. 2013).
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 17
I. The Medicaid Act’s Reasonable-Promptness and Availability- and Comparability-
of-Services Provisions, 42 U.S.C. §§ 1396a(a)(8), (10)(A), and (10)(B)
Plaintiffs argue that the individual Defendants have violated 42 U.S.C. §§ 1396a(a)(8)
and (10)(A) because the budget method they are implementing or allowing to be implemented
“makes it impossible for participants to obtain adequate medically necessary services with
reasonable promptness.” (Am. Compl., R. 146 at PageID #3785.) They argue that these
Defendants have violated § 1396a(a)(10)(B) by denying them services “sufficient in scope to
achieve the services’ purpose.” (Id. at #3783.) Defendants respond that these provisions do not
allow for a private right of action under 42 U.S.C. § 1983, and even if they do, Plaintiffs’
complaint does not adequately allege that they have been denied the opportunity to receive
necessary medical services under these provisions. The district court found that these provisions
allow for a private right of action, but concluded that Plaintiffs had not alleged facts sufficient to
state such a claim because they had not identified medically necessary services they were being
denied and because they had the option to use county-contracted providers or make additional
requests through the PCP process in order to obtain these services.
The district court correctly concluded that §§ 1396a(a)(8) and (10) afford a private right
of action. However, the district court erred in dismissing Plaintiffs’ claims thereunder. We
begin with Plaintiffs’ right of action.
A. Private Right of Action Under § 1983
Section 1396a(a)(10)(A) requires that state Medicaid plans provide for making certain
described categories of medical assistance available to qualified individuals. See also 42 U.S.C.
§ 1396n(c)(1) (providing that under a Habilitation Supports Waiver, this assistance includes
“payment for part or all of the cost of home or community-based services” for qualified
individuals). Section 1396a(a)(10)(B), meanwhile, requires that “the medical assistance made
available to any individual described . . . shall not be less in amount, duration, or scope than the
medical assistance made available” to others under Medicaid. Finally, § 1396a(a)(8) requires
state plans to provide individuals with the opportunity to apply for this assistance “and that such
assistance shall be furnished with reasonable promptness to all eligible individuals.”
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 18
In Westside Mothers v. Olszewski (“Westside Mothers II”), 454 F.3d 532, 540–41 (6th
Cir. 2006), this Court found that the plaintiffs had forfeited their claims that payments provided
to them by the defendants “were insufficient to enlist an adequate number of providers, which
effectively frustrates §§ 1396a(a)(8), 1396a(a)(10) by foreclosing the opportunity for eligible
individuals to receive the covered medical services.” But in dismissing those claims based on
forfeiture, this Court specifically “modif[ied] the district court’s order to reflect a dismissal
without prejudice . . . because plaintiffs may be able to amend the complaint to allege that
inadequate payments effectively deny the right to ‘medical assistance.’” Id. at 541. This
suggests that the Westside Mothers II panel implicitly concluded that Plaintiffs had a private
right of action under these provisions.6 We agree.
Despite this, Defendants argue that §§ 1396a(a)(8) and (10) do not establish individual
rights enforceable under § 1983 because, in Westside Mothers II, this Court found that a different
provision, § 1396a(a)(30)(A),7 did not establish such rights. 454 F.3d at 542–43. The Supreme
Court has since agreed. Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. 320, 328–29 (2015)
(“In our view the Medicaid Act implicitly precludes private enforcement of § 30(A) . . . .”).
Defendants point out that § 1396a(a)(30)(A) “explicitly addresse[s] provider reimbursement rates
with regard to individuals’ access to healthcare services” and reason that “if an individual cannot
6
Notably, the same panel, considering a prior appeal in that case, applied the Supreme Court’s analysis in
Blessing v. Freestone, 520 U.S. 329 (1997), to determine whether provisions of § 1396a had created individual
rights enforceable under § 1983. See Westside Mothers I, 289 F.3d at 862–63. It concluded they did. Id. That
analysis refers to §§ 1396a(a)(8) and (a)(10)(A), suggesting it addressed those provisions. See id. at 863. However,
upon hearing the appeal in Westside Mothers II, the same panel concluded that the district court was not wrong to
address the issue again on remand because “the opinion in Westside Mothers I creates considerable ambiguity as to
whether the prior panel applied the Blessing test to each of the statutory provisions identified in the plaintiffs’
amended complaint,” and so “the law of the case doctrine does not apply and . . . our earlier decision in this case did
not foreclose the district court’s consideration of whether plaintiffs have a right of action under § 1983 to enforce
violations of §§ 1396a(a)(8) [and] 1396a(a)(10).” Westside Mothers II, 454 F.3d at 539. Thus, Westside Mothers I
does not definitively decide whether §§ 1396a(a)(8) and (10) afford a private right of action under § 1983.
7
That provision requires state plans to:
provide such methods and procedures relating to the utilization of, and the payment for, care and
services available under the plan . . . as may be necessary to safeguard against unnecessary
utilization of such care and services and to assure that payments are consistent with efficiency,
economy, and quality of care and are sufficient to enlist enough providers so that care and services
are available under the plan at least to the extent that such care and services are available to the
general population in the geographic area.
42 U.S.C. § 1396a(a)(30)(A).
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 19
enforce a Medicaid provision that speaks directly to provider reimbursement, that individual
cannot enforce a provision that does so — at best — indirectly.” (State Defs.’ Br. at 19; see also
PIHP Defs.’ Br. at 26.)
This is not the proper analysis. In Blessing v. Freestone, 520 U.S. 329 (1997), the
Supreme Court laid out three factors relevant to whether a statute confers rights enforceable
under § 1983: (1) whether Congress “intended that the provision in question benefit the
plaintiff”; (2) whether “the right assertedly protected by the statute is not so ‘vague and
amorphous’ that its enforcement would strain judicial competence”; and (3) whether the statute
“unambiguously impose[s] a binding obligation on the States” by couching its right “in
mandatory, rather than precatory, terms.” Id. at 340–41 (quoting Wright v. City of Roanoke
Redev. and Hous. Auth., 479 U.S. 418, 431–32 (1987)). The Court “clarified the first of
Blessing’s three requirements” in Gonzaga University v. Doe, 536 U.S. 273 (2002), “making
clear that only unambiguously conferred rights, as distinguished from mere benefits or interests,
are enforceable under § 1983.” Westside Mothers II, 454 F.3d at 541–42. Thus, we must inquire
“whether or not Congress intended to confer individual rights upon a class of beneficiaries,” in
particular looking to “whether the pertinent statute contains ‘rights-creating’ language that
reveals congressional intent to create an individually enforceable right.” Id. at 542 (quoting
Gonzaga, 536 U.S. at 285, 287). Finally, we must ask whether Congress “explicitly foreclose[d]
recourse to § 1983” under the relevant statute, including by establishing a “remedial scheme
sufficiently comprehensive to supplant § 1983.” Westside Mothers I, 289 F.3d at 863. Applying
this analysis demonstrates that §§ 1396a(a)(8) and (10) do allow for a private right of action.
This conclusion is supported by the frequency with which other courts have held that these
provisions create rights enforceable under § 1983, even post-Gonzaga.8
Considering the first Blessing factor in Westside Mothers II, this Court reasoned that “the
text of § 1396a(a)(30)[(A)] does not focus on individual entitlements.” 454 F.3d at 543. Indeed,
8
See, e.g., Romano, 721 F.3d at 377–79 (§ 1396a(a)(8)); Doe v. Kidd, 501 F.3d 348, 355–57 (4th Cir. 2007)
(§ 1396a(a)(8)); Watson v. Weeks, 436 F.3d 1152, 1159–62 (9th Cir. 2006) (§ 1396a(a)(10)); S.D. ex rel. Dickson v.
Hood, 391 F.3d 581, 602–07 (5th Cir. 2004) (§ 1396a(a)(10)); Sabree ex rel. Sabree v. Richman, 367 F.3d 180, 183
(3d Cir. 2004) (§§ 1396a(a)(8) and (10)); Bryson v. Shumway, 308 F.3d 79, 88–89 (1st Cir. 2002) (§ 1396a(a)(8));
Doe ex rel. Doe v. Chiles, 136 F.3d 709, 714–19 (11th Cir. 1998) (§ 1396a(a)(8)).
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 20
that provision never once references individuals. See 42 U.S.C. § 1396a(a)(30)(A). By contrast,
§§ 1396a(a)(8) and (10) do focus on individual entitlements, requiring that “all individuals” have
the opportunity to apply for medical assistance, that “all eligible individuals[’]” assistance be
furnished reasonably promptly, and that assistance “to any individual described” equal the
assistance available to other Medicaid recipients. 42 U.S.C. §§ 1396a(a)(8), (a)(10). This is “the
kind of ‘individually focused terminology’ that ‘unambiguously confer[s]’ an ‘individual
entitlement’ under the law.” See Harris v. Olszewski, 442 F.3d 456, 461 (6th Cir. 2006)
(alteration in original) (quoting Gonzaga, 536 U.S. at 283, 287) (concluding that § 1396a(a)(23)
creates rights enforceable under § 1983 in part because the provision explicitly refers to “any
individual eligible for medical assistance”).
Turning to the second Blessing factor, this Court found in Westside Mothers II that the
“‘broad and nonspecific’ language” of § 1396a(a)(30)(A) was not amenable to judicial remedy.
454 F.3d at 543 (quoting Gonzaga, 536 U.S. at 292). We noted that the provision “sets forth
general objectives, including ‘efficiency, economy, and quality of care,’ but does not identify
what standards are required by such terms.” Id.; accord Armstrong, 575 U.S. at 328 (“It is
difficult to imagine a requirement broader and less specific than § 30(A)’s mandate that state
plans provide for payments that are ‘consistent with efficiency, economy, and quality of care,’ all
the while ‘safeguard[ing] against unnecessary utilization of . . . care and services.’”).
But unlike § 1396a(a)(30)(A), §§ 1396a(a)(8) and (10) are amenable to judicial remedy.
Section 1396a(a)(8) requires simply that eligible individuals have the opportunity to apply for
available medical assistance, and that this assistance “be furnished with reasonable promptness.”
Courts can easily determine whether individuals have been given the opportunity to apply for
medical assistance by looking to the face of a state’s Medicaid plan, records supplied by agencies
and recipients, and witness testimony. And the regulations make clear that the standard for
“reasonable promptness” is within at least forty-five or ninety days, depending on the basis for
an individual’s application. See 42 C.F.R. § 435.912(c)(3); see also Romano, 721 F.3d at 378–
79; Doe v. Kidd, 501 F.3d 348, 356 (4th Cir. 2007); Doe ex rel. Doe v. Chiles, 136 F.3d 709,
716–17 (11th Cir. 1998). Similarly, § 1396a(a)(10) is not vague or amorphous, as it specifically
defines what care and services must be made available to recipients by reference to § 1396d(a),
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 21
see id. § 1396a(a)(10)(A), and sets forth criteria for determining whether those services are
equitably provided, id. § 1396a(a)(10)(B) (explaining that assistance made available “shall not be
less in amount, duration, or scope” than that made available to other individuals) (emphasis
added). See also Watson v. Weeks, 436 F.3d 1152, 1161 (9th Cir. 2006); S.D. ex rel. Dickson v.
Hood, 391 F.3d 581, 605 (5th Cir. 2004).
Regarding the third factor, as this Court explained in Westside Mothers I, these
provisions “are couched in mandatory rather than precatory language, stating that Medicaid
services, ‘shall be furnished’ to eligible [individuals]” with reasonable promptness, 289 F.3d at
863 (quoting 42 U.S.C. § 1396a(a)(8)) (emphasis added), and that state plans “must” provide
medical assistance, 42 U.S.C. § 1396a(a). Finally, it is Defendants’ burden to show that
Congress foreclosed a remedy under § 1983. See Golden State Transit Corp. v. City of Los
Angeles, 493 U.S. 103, 107 (1989). And while it is true that 42 U.S.C. § 1396c allows CMS to
withhold Medicaid funds if states breach these requirements, this enforcement provision by itself
does not necessarily foreclose relief. Armstrong, 575 U.S. at 328. Because the other factors
point in favor of finding an enforceable right, and because Congress did not explicitly foreclose
relief or provide a comprehensive remedial scheme, we conclude that Plaintiffs have a private
right of action under both §§ 1396a(a)(8) and (a)(10).
B. Merits
Turning then to the merits, Plaintiffs assert two separate claims based on these
provisions. First, Count IV of Plaintiffs’ amended complaint asserts that Defendants failed to
ensure that the individual Plaintiffs were able to obtain medically necessary services with
reasonable promptness, in violation of §§ 1396a(a)(8) and (10)(A). As previously discussed,
those provisions require states’ Medicaid plans to provide “for making [specified] medical
assistance available” to qualifying individuals, including the individual Plaintiffs, and “that all
individuals wishing to make application for medical assistance under the plan shall have the
opportunity to do so, and that such assistance shall be furnished with reasonable promptness to
all eligible individuals.” 42 U.S.C. §§ 1396a(a)(10)(A), (8). The “medical assistance” to be
provided under a state plan includes “payment of part or all of the cost of” “community
supported living arrangements services” that “assist a developmentally disabled individual . . . in
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 22
activities of daily living necessary to permit such individual to live in the individual’s own
home,” including “[p]ersonal assistance,” “[t]raining and habilitation services (necessary to assist
the individual in achieving increased integration, independence and productivity),” and
“[s]upport services necessary to aid an individual to participate in community activities.”
42 U.S.C. § 1396n(c)(1); id. § 1396d(a)(23) (defining “medical assistance”); id. §§ 1396u(a)(1),
(2), (7) (defining “community supported living arrangements services”). Thus, the CLS services
that Plaintiffs seek clearly fall within the “medical assistance” that must be paid for or provided
by the State with relative promptness pursuant to §§ 1396a(a)(8) and (10)(A).
Second, in Count III of their amended complaint, Plaintiffs assert that Defendants have
failed “to pay for services in the amount, scope, and duration needed to reasonably achieve their
purpose,” in violation of § 1396a(a)(10)(B). (Pls.’ Br. at 16.) As previously discussed,
§ 1396a(a)(10)(B) requires state Medicaid plans to ensure that individuals are provided medical
assistance “not . . . less in amount, duration, or scope than the medical assistance made available
to any other such individual” under the provision. Plaintiffs do not assert that Defendants have
failed to ensure that the individual Plaintiffs are provided services comparable to other relevant
individuals, and in fact concede that they can make no such assertion because CMS waived
Michigan’s obligation to comply with those requirements.
Instead, Plaintiffs assert that Defendants violated § 1396a(a)(10)(B)’s “sufficiency
requirements,” which they say are set forth in 42 C.F.R. § 440.230(b) and were not waived. The
parties do not dispute whether § 1396a(a)(10)(B) actually sets forth sufficiency requirements,
whether 42 C.F.R. § 440.230(b) actually interprets 42 U.S.C. § 1396a(a)(10)(B) (as opposed to
some other statutory provision, e.g., §§ 1396a(a)(8) or (a)(10)(A)), or whether—if
§ 1396a(a)(10)(B) does indeed establish sufficiency requirements—CMS waived Michigan’s
obligation to comply with those requirements alongside its waiver of that statute’s comparability
requirements. These issues strike us as relevant to Plaintiffs’ Count III. However, “[i]n our
adversarial system of adjudication, we follow the principle of party presentation” and “rely on
the parties to frame the issues for decision.” United States v. Sineneng-Smith, 140 S. Ct. 1575,
1579 (2020) (quoting Greenlaw v. United States, 554 U.S. 237, 243 (2008)). Absent briefing or
argument on any of these issues, we assume without deciding that § 1396a(a)(10)(B) does
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 23
establish sufficiency requirements embodied in 42 C.F.R. § 440.230(b). Under these provisions,
then, “[e]ach service” provided to Plaintiffs under Michigan’s Medicaid plan “must be sufficient
in amount, duration, and scope to reasonably achieve [their] purpose[s],” 42 C.F.R. § 440.230(b),
including “permit[ting] [the] individual to live in the individual’s own home,” “achieving
increased integration, independence and productivity,” and enabling the individual “to participate
in community activities,” 42 U.S.C. §§ 1396u(a)(1), (2), (7).
Turning then to the district court’s stated reasons for dismissal and the parties’ arguments
on appeal, Plaintiffs dispute the district court’s conclusion that they did not sufficiently state
their § 1396a claims because their complaint failed to identify any “specific, medically necessary
services which they are being denied under the existing budgeting scheme.” (Dist. Ct. Op., R.
164 at PageID #4371.) We agree that the district court ignored Plaintiffs’ well-pleaded
allegations in reaching this conclusion. The heart of Plaintiffs’ complaint is that the current
budget methodology prevents them from promptly receiving sufficient medically necessary
services, as detailed in their IPOSs and as required for them to live at home and participate in the
community. In Westside Mothers II, this Court acknowledged that the plaintiffs’ assertions that
“the payments [they received] were insufficient to enlist an adequate number of providers” may
suffice to state a claim that “inadequate payments effectively deny the right to ‘medical
assistance,’” that §§ 1396a(a)(8) and (10) protect. 454 F.3d at 540–41; see also Health Care for
All, Inc. v. Romney, No. 00-10833, 2005 WL 1660677, at *10–11 (D. Mass. July 14, 2005);
Okla. Chapter of Am. Acad. of Pediatrics v. Fogarty, 366 F. Supp. 2d 1050, 1109 (N.D. Okla.
2005); Sobky v. Smoley, 855 F. Supp. 1123, 1149 (E.D. Cal. 1994). Plaintiffs explained in their
complaint that their IPOSs identified their medically necessary services and supports. They then
alleged that the current budget methodology prevented each individual Plaintiff from receiving
supports or care identified in their IPOS. (See Am. Compl., R. 146 at PageID #3753 (explaining
that Plaintiff Waskul cannot find providers to fill all of the CLS hours required by his IPOS and
has to stay home three days a week because of short staffing); id. at ##3758–59 (stating that
Plaintiff Schneider can only employ providers for sixty-five of ninety-three CLS hours required
by his IPOS and must pay for transportation and community activities himself); id. at #3766
(noting that Plaintiff Wiesner can only secure two of three providers, eighty of 120 total CLS
hours, and a portion of the community hours called for in his IPOS); id. at ##3771–72
 No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 24
(explaining that Plaintiff Trabue can participate in activities called for by her IPOS only by
paying for them herself); id. at #3773 (stating that Plaintiff Ernst must pay for transportation and
community activities provided for in her IPOS out of pocket).) This suffices to show that they
are not receiving medically necessary services with relative promptness and in sufficient
amounts to achieve their purpose.
The district court also concluded that Plaintiffs undisputedly had the option to use
providers who contract with the County if they could not find their own providers to work at the
pay they can offer under the current methodology. Thus, even if Plaintiffs couldn’t hire CLS
providers, it said, they were not necessarily deprived of community-based services. It is true
that, were such services actually available, Plaintiffs could not show a violation of
§§ 1396a(a)(8) and (10) simply because they did not get to choose their own providers, as
nothing in these provisions evidently requires Plaintiffs to be provided services by the providers
of their choice. And in an April 2015 letter submitted with Plaintiffs’ complaints, WCHO notes
that one way individuals might fill their staffing needs following the budget change is by
“us[ing] one of our contracted providers for CLS services.” (Am. Compl. Ex. 4, R. 146-5 at
PageID #3834.) But in finding that Plaintiffs could have fulfilled their staffing needs through the
use of these agency-contracted providers, the court accepted the facts as presented by Defendants
and made several inferences against Plaintiffs, contrary to its duty in considering motions to
dismiss. It inferred that these providers were actually available; it inferred that these providers
would be able to fill Plaintiffs’ staffing needs; and it inferred that if Plaintiffs had relied upon
these providers, they would not still face a shortfall in other aspects of their CLS services. In
fact, the complaint alleged that agency providers were “not suitable” to fulfill Plaintiff Ernst’s
staffing needs, giving rise to the reasonable inference that these providers could not fill the gaps
in staffing from which Plaintiffs suffered. (Am. Compl., R. 146 at PageID ##3772–73.) Thus,
while this option, if available, may undermine Plaintiffs’ claims at the summary judgment or trial
stage, it does not defeat their claims at this stage.
The court also determined that Plaintiffs’ claim failed because if they faced a shortfall in
funding, they could simply request additional funding through the PCP process. Again, if this
option were actually available, it might undermine Plaintiffs’ claims. However, the complaint
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 25
explains that Plaintiffs’ budget is now developed by multiplying “a specific rate times the
number of [service] hours in the IPOS.” (Am. Compl., R. 146 at PageID #3732.) Thus, without
increasing the number of service hours called for by the IPOS, Plaintiffs cannot increase their
budgets. Plaintiffs at no point allege that the hours identified in their IPOS are insufficient to
meet their needs—instead, they allege that the budget they receive per hour is insufficient
because it is improperly calculated. Nor do Plaintiffs apparently have any new medical needs
that their IPOS can be updated to accommodate. As Plaintiffs explained at the hearing on
Defendants’ motions to dismiss, “[b]ecause the services that [they] are asking for are already in
the IPOS, there is nothing to supplement” the IPOS with in order to receive more funds. (Mot.
Hr’g Tr., R. 149 at PageID ##4021–22.) Moreover, the complaint suggests that at least some of
the individual Plaintiffs have already requested and been denied additional funds to cover
specific services already identified under their IPOSs. (See, e.g., Am. Compl., R. 146 at PageID
#3759 (stating that Plaintiff Schneider “requested $400 monthly for transportation and $200
monthly for community activities” and was told that “these costs are above what the current self-
determination budget covers”); id. at #3769 (explaining that former Plaintiff Erlandson requested
additional funds for a CLS staff supervisor and was rejected).)
Finally, throughout the course of their general argument, Defendants contend that CLS
recipients are obligated to rely on natural or community supports, including family care, before
they may use Medicaid funds. Accordingly, in their view, there is no problem with compelling
individual Plaintiffs to pay out of pocket for certain supports or to enlist family members to
provide care. However, the extent to which Plaintiffs can be required to do so is again a question
of fact. Medicaid regulations call for individuals’ IPOSs to include “natural supports,” or
“unpaid supports that are provided voluntarily to the individual in lieu of [Waiver] services and
supports.” 42 C.F.R. §§ 441.301(b)(1)(i), (c)(2)(v). Michigan’s Medicaid Provider Manual
states:
[The Department] encourages the use of natural supports to assist in meeting an
individual’s needs to the extent that the family or friends who provide the natural
supports are willing and able to provide this assistance. PIHPs may not require a
beneficiary’s natural support network to provide such assistance as a condition for
receiving specialty mental health supports and services. The use of natural
supports must be documented in the beneficiary’s individual plan of service.
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 26
(Mich. Medicaid Provider Manual at 325.) Plaintiffs’ complaint suggests that the individual
Plaintiffs’ family members do not voluntarily provide care to them so much as they are
compelled to do so by the current budget methodology, often at significant detriment to their
health and finances. (See, e.g., Am. Compl., R. 146 at PageID #3753 (Plaintiff Waskul was
“forced to hire” his father for care, although he is only available on weekends and in the
evening); id. at #3760 (Plaintiff Schneider was “forced to hire” his 77-year-old ailing
grandfather, and his grandparents are providing nearly 50% of his care because he is “short-
staffed and cannot find CLS providers”); id. at #3765 (Plaintiff Wiesner’s mother was compelled
to pay for and provide his IPOS-required community activity and transportation, causing her to
fall behind on her taxes and putting her at risk of foreclosure); id. at #3771 (Plaintiff Trabue’s
family is “forced to pay” for exercise activities called for by her IPOS).) Thus, to the extent that
Plaintiffs must depend on non-voluntary natural supports or supports not documented in their
IPOS, this too does not defeat their claim.
To be sure, while the Supreme Court has explained that “serious statutory questions
might be presented if a state Medicaid plan excluded necessary medical treatment from its
coverage,” the district court is correct that it is not “inconsistent with the objectives of the
[Medicaid] Act for a State to refuse to fund unnecessary though perhaps desirable medical
services.” Beal v. Doe, 432 U.S. 438, 444–45 (1977). The potential availability of county
providers, the potential that Plaintiffs could modify their budgets to ensure necessary medical
coverage is available, and the potential that Plaintiffs’ reliance on natural supports is within the
scope of their IPOSs all suggest that Plaintiffs may not be able to succeed on this claim at later
stages of their litigation. This said, at this juncture, Plaintiffs’ allegations suffice to state a
plausible claim that they are being denied sufficient necessary medical services. We therefore
reverse the district court’s dismissal of Counts III and IV of Plaintiff’s amended complaint.
II. The Medicaid Act’s Necessary-Safeguards and Free-Choice Provisions,
42 U.S.C. §§ 1396n(c)(2)(A) and (C)
Plaintiffs next claim that Defendant Gordon, Director of the Michigan Department of
Health and Human Services, violated §§ 1396n(c)(2)(A) and (C), pertaining to assurances
required for grant of Michigan’s Medicaid Waiver, by permitting the implementation of the new
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 27
budget method. Defendant Gordon responds that there is no private right of action to enforce
those provisions. Alternatively, he asserts that even if there was, Plaintiffs have not stated a
claim because he properly exercised his review and oversight authority. The district court found
that there was a private right of action under these provisions, but that Plaintiffs did not state a
claim because Defendant Gordon did not violate the Act by setting a limit on the budget and
because Plaintiffs are not effectively homebound. Because §§ 1396n(c)(2)(A) and (C) are
properly enforceable under § 1983 and because Plaintiffs have plausibly stated a claim that
Defendant Gordon violated these provisions, we also reverse the district court’s decision as to
these claims.
A. Private Right of Action Under § 1983
As with §§ 1396a(a)(8) and (10), the parties dispute whether §§ 1396n(c)(2)(A) and (C)
are individually enforceable under § 1983. Those provisions state that:
[A habilitation supports] waiver shall not be granted under this subsection unless
the State provides assurances satisfactory to the Secretary that—
(A) necessary safeguards . . . have been taken to protect the health and welfare of
individuals provided services under the waiver and to assure financial
accountability for funds expended with respect to such services; [and] . . .
(C) such individuals who are determined likely to require the level of care
provided in a hospital, nursing facility, or intermediate care facility for
[individuals with intellectual disabilities] are informed of the feasible alternatives,
if available under the waiver, at the choice of such individuals, to the provision of
inpatient hospital services, nursing facilities, or services in an intermediate care
facility for [individuals with intellectual disabilities] . . . .
42 U.S.C. § 1396n(c)(2). We have previously found that both §§ 1396n(c)(2)(A) and (C) are
enforceable under § 1983. Wood v. Tompkins, 33 F.3d 600, 611 (6th Cir. 1994). However, since
then, the Supreme Court has issued its decisions in Blessing and Gonzaga expanding upon when
a statute creates rights enforceable under § 1983, and so that decision no longer binds us.
Nevertheless, upon reconsideration, we adhere to our conclusion that §§ 1396n(c)(2)(A) and (C)
are enforceable under § 1983. The analysis that this Court applied in Wood nearly parallels the
analysis required under Blessing and Gonzaga. See id. at 607–11. And the great majority of
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 28
courts to consider the question of whether these provisions allow for a private right of action
post-Gonzaga has found that they do.9
Our own application of the Blessing-Gonzaga analysis confirms that §§ 1396n(c)(2)(A)
and (C) do indeed create rights enforceable under § 1983. As with the § 1396a provisions
addressed in Part I, Defendant Gordon compares §§ 1396n(c)(2)(A) and (C) to
§ 1396a(a)(30)(A), which both this Court and the Supreme Court have held does not allow for
individual enforcement under § 1983. (State Defs.’ Br. at 39); see Westside Mothers II, 454 F.3d
at 542–43; Armstrong, 575 U.S. at 328–29. Again, this comparison is inapt.
Considering the first prong of Blessing, it is clear that Congress intended both
§§ 1396n(c)(2)(A) and (C) to confer individual rights enforceable under § 1983. Both provisions
are “phrased in terms of the persons benefited,” Gonzaga, 536 U.S. at 284, as they center around
what shall be provided to “individuals” under the statute, 42 U.S.C. §§ 1396n(c)(2)(A), (C).10
See Harris, 442 F.3d at 461 (holding that similar references to individuals were “the kind of
‘individually focused terminology’ that ‘unambiguously confer[s]’ an ‘individual entitlement’
9
See, e.g., Ball v. Rodgers, 492 F.3d 1094, 1117 (9th Cir. 2007) (§ 1396n(c)(2)(C)); Jackson v. Dep’t of
Human Servs. Div. of Developmental Disabilities, No. 17-118, 2019 WL 669804, at *2–3 (D.N.J. Feb. 19, 2019)
(§ 1396n(c)(2)(A)); Ball v. Kasich, 244 F. Supp. 3d 662, 684 (S.D. Ohio 2017) (§ 1396n(c)(2)(C)); Guggenberger v.
Minnesota, 198 F. Supp. 3d 973, 1014–15 (D. Minn. 2016) (§ 1396n(c)(2)(C)); Cohen v. Chester Cnty. Dep’t of
Mental Health/Intellectual Disabilities Servs., No. 15-2585, 2016 WL 3031719, at *8 (E.D. Pa. May 25, 2016)
(§ 1396n(c)(2)(A)); Steward v. Abbott, 189 F. Supp. 3d 620, 635–37 (W.D. Tex. 2016) (§ 1396n(c)(2) generally);
Ill. League of Advocates for the Developmentally Disabled v. Quinn, No. 13-1300, 2013 WL 5548929, at *9–10
(N.D. Ill. Oct. 8, 2013) (§ 1396n(c)(2)(C)); Zatuchni v. Richman, No. 07-4600, 2008 WL 3408554, at *8–11 (E.D.
Pa. Aug. 12, 2008) (§ 1396n(c)(2)(C)); Michelle P. ex el. Deisenroth v. Holsinger, 356 F. Supp. 2d 763, 769 (E.D.
Ky. 2005) (§ 1396n(c)(2)(C)); Masterman v. Goodno, No. 03-2939, 2004 WL 51271, at *9–10 (D. Minn. Jan. 8,
2004) (§§ 1396n(c)(2)(A) and (C)). But see M.A.C. v. Betit, 284 F. Supp. 2d 1298, 1307 (D. Utah 2003)
(§ 1396n(c)(2)(C)); Gaines v. Hadi, No. 06-60129, 2006 WL 6035742, at *23–24 (S.D. Fla. Jan. 30, 2006)
(§ 1396n(c)(2)(A)).
10
The simple fact that § 1396n imposes requirements on states by stating that “[a] waiver shall not be
granted . . . unless the State provides assurances satisfactory to the Secretary” regarding necessary safeguards and
free choice does not preclude our conclusion that these provisions confer individual rights. 42 U.S.C. § 1396n(c)(2);
see Rodgers, 492 F.3d at 1111 (rejecting the argument that this language shows that “the provisions’ objective is not
to benefit HCBS-eligible Medicaid recipients directly”). We see no functional difference between this language and
§ 1396a’s statement that “[a] State plan for medical assistance must” make certain provisions. 42 U.S.C. § 1396a(a).
And both Congress and this Court have concluded that such language can confer individual rights. 42 U.S.C. §
1320a-2 (explaining that a provision of the Medicaid Act “is not to be deemed unenforceable because of its
inclusion in a section . . . specifying the required contents of a State plan”); Harris, 442 F.3d at 461 (explaining that
“by saying that ‘[a] State plan . . . must . . . provide’” something, a statute “uses the kind of ‘rights-creating,’
‘mandatory language’ that the Supreme Court and our court have held establishes a private right of action”
(alterations in original) (citations omitted)).
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 29
under the law” (alteration in original) (quoting Gonzaga, 536 U.S. at 283, 287)). And both
expressly identify individual rights to be protected—namely, individuals’ “health and welfare”
and informed choice. 42 U.S.C. §§ 1396n(c)(2)(A), (C). As the Ninth Circuit found when
considering subsection (c)(2)(C) in Ball v. Rodgers, 492 F.3d 1094, 1107 (9th Cir. 2007), “[t]he
statutory provisions are, in other words, ‘concerned with “whether the needs of any particular
person have been satisfied,”’ not solely with an aggregate ‘institutional policy and practice.’” Id.
(quoting Gonzaga, 536 U.S. at 288). This is unlike § 1396a(a)(30)(A), which only references
recipients of Medicaid services “in the aggregate” and “speaks not of any individual’s right but
of the State’s obligation to develop ‘methods and procedures for providing services generally.’”
Id. at 1109 (quoting Sanchez v. Johnson, 416 F.3d 1051, 1059 (9th Cir. 2005)).
Turning to Blessing’s second prong, the rights “assertedly protected by the statute [are]
not so ‘vague and amorphous’ that [their] enforcement would strain judicial competence.” 520
U.S. at 340–41. We have already concluded in Wood that “[t]he duties set forth [in
§§ 1396n(c)(2)(A) and (C)] do not involve any fuzzy, undefined concepts like ‘reasonable
efforts.’ Rather, these duties involve unambiguous directives that are well within the ability of
the judiciary to enforce.” 33 F.3d at 608. With regard to § 1396n(c)(2)(A), together, “the statute
and regulations carefully detail the specific [assurances] to be provided” regarding safeguards for
health and welfare. See Westside Mothers I, 289 F.3d at 863 (discussing §§ 1396a(a)(8) and
(10)). As laid out in 42 C.F.R. § 441.302(a), § 1396n(c)(2)(A) requires assurances that states
have set standards for service providers operating under the waiver, including state licensure and
certification requirements; that facilities in which services are provided are in compliance with
similar state standards; and that services are provided in home and community based settings.
As for § 1396n(c)(2)(C), the statute simply requires that individuals have a right to choose
among alternatives to institutionalized care and that they are informed of this choice. Rodgers,
492 F.3d at 1115. For both §§ 1396n(c)(2)(A) and (C), “[a] court can readily determine whether
a state is fulfilling these statutory obligations by looking to sources such as a state’s Medicaid
plan, agency records and documents, and the testimony of Medicaid recipients and providers.”
See id. And unlike § 1396a(a)(30)(A)’s requirement that payments be “‘consistent with
efficiency, economy, and quality of care,’ all the while ‘safeguard[ing] against unnecessary
utilization of . . . care and services,’” Armstrong, 575 U.S. at 328, determining states’
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 30
compliance with these provisions does not require any sort of broad, policy-based balancing or
“account[ing] for numerous, largely unquantifiable variables,” Rodgers, 492 F.3d at 1115.
Under Blessing’s third prong, both provisions “impose a binding obligation on the States”
by using “mandatory, rather than precatory” language. 520 U.S. at 341. Section 1396n(c)(2)
states that “[a] waiver shall not be granted . . . unless the State provides [the] assurances”
described. Id. (emphasis added). Finally, Congress has not foreclosed a remedy under § 1983
for either §§ 1396n(c)(2)(A) or (C). While §§ 1396n(c)(2)(A) and (C) are also explicitly
enforceable through termination of a state’s waiver, see 42 U.S.C. § 1396n(f)(1), again, this
alone does not preclude the existence of an individual right under § 1983, see Armstrong,
575 U.S. at 328.11 Section 1396a(a)(30)(A)’s similar enforcement provision precluded a finding
of a right only in combination with the fact that it failed the second Blessing prong. Id. That is
not the case with §§ 1396n(c)(2)(A) and (C). Neither did Congress explicitly foreclose relief or
provide for a comprehensive remedial scheme. Thus, Defendants have a private right of action
under both §§ 1396n(c)(2)(A) and (C).
B. Merits
Considering Plaintiffs’ claim under § 1396n(c)(2)(A), the federal regulation interpreting
this provision requires states to provide “assurance that services are provided in home and
community based settings, as specified in § 441.301(c)(4).” 42 C.F.R. § 441.302(a)(5). Section
441.301(c)(4), in turn, requires that home and community-based settings (1) “support[] full
access of individuals receiving [services] to the greater community, including opportunities to
. . . engage in community life, control personal resources, and receive services in the community,
to the same degree of access as individuals not receiving [services],” id. § 441.301(c)(4)(i); (2)
“[o]ptimize[], but . . . not regiment, individual initiative, autonomy, and independence in making
life choices,” id. § 441.301(c)(4)(iv); and (3) “[f]acilitate[] individual choice regarding services
and supports, and who provides them,” id. § 441.301(c)(4)(v). Plaintiffs’ amended complaint
11
The dissent’s citation to Nasello v. Eagleson, --- F.3d ---, 2020 WL 5905070 (7th Cir. Oct. 6, 2020), is
unconvincing, as that case addressed a different provision of the Medicaid Act. Further, its reasoning is inconsistent
with our caselaw and that of our sister circuits’ and appears to rule out a private right of action even in subsections
of the Medicaid Act that the dissent agrees create a private right of action. See id. at *2 (suggesting that
§ 1396a(a)(8) does not imply a private right of action).
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 31
addressed each of these requirements and contended that, by permitting alteration of the budget
methodology, Defendant Gordon failed to ensure that they were met.
The district court dismissed Plaintiffs’ § 1396n(c)(2)(A) claim because Defendant
Gordon has a “responsibility to set the appropriate budget.” (Dist. Ct. Op., R. 164 at PageID
##4373–74.) But this does not provide grounds for dismissal. Indeed, Plaintiffs agree that
Defendant Gordon has that responsibility. Their point is that he “is not exercising that
responsibility and that the budgets set . . . are not, in fact, ‘appropriate.’” (Pls.’ Br. at 49.) It is
readily apparent that, if Plaintiffs’ claims are proven, allowing the implementation of a flawed
budget methodology that results in underfunding of Plaintiffs’ IPOSs might not allow Plaintiffs
to receive the “same degree of access as individuals not receiving Medicaid HCBS,” optimize
their individual autonomy, or facilitate their individual choice. See 42 C.F.R. § 441.301(c)(4). If
Plaintiffs are able to show that they are compelled to use agency providers in order to maintain
their budgets, this may demonstrate that the budget methodology does not allow them sufficient
choice among providers. Id. § 441.301(c)(4)(v). While Defendant Gordon may be able to show
for the purposes of summary judgment or at trial that the current methodology achieves these
goals as best possible, Plaintiffs’ current allegations suffice to state a claim that he has not.
Turning to § 1396n(c)(2)(C), we agree with the Ninth Circuit that this provision confers
“two explicitly identified rights—(a) the right to be informed of the alternatives to traditional,
long-term institutional care, and (b) the right to choose among those alternatives.” Rodgers,
492 F.3d at 1107. Regulations interpreting this provision also confirm that the State must ensure
beneficiaries are “[g]iven the choice of either institutional or home and community-based
services.” 42 C.F.R. § 441.302(d)(2). Plaintiffs do not dispute that they were informed of their
alternatives, but instead argue that they were not provided a meaningful right to choose because
the current budget methodology means that if they opt for home-based services, they are
“effectively homebound, unable to get out into the community and unable to receive necessary
care, services, and support.” (Am. Compl., R. 146 at PageID ##3795–96.) In essence, Plaintiffs
argue that in order to receive their medically necessary supports, they are compelled to choose
institutionalized care. And indeed, should Defendants’ budget methodology preclude Plaintiffs
from receiving necessary services, this would effectively destroy the choice Defendant Gordon
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 32
must ensure exists under § 1396n(c)(2)(C). See, e.g., Cramer v. Chiles, 33 F. Supp. 2d 1342,
1353 (S.D. Fla. 1999) (“Underfunding of the Home and Community-Based Waiver program
compels institutionalization, thus negating a meaningful choice.”).
The district court dismissed Plaintiffs’ § 1396n(c)(2)(C) claim because they did not show
that they are “effectively homebound,” and because they purportedly could secure more funding
to implement their IPOS through the PCP process. (Dist. Ct. Op., R. 164 at PageID ##4374–75.)
Neither is an adequate reason to dismiss Plaintiffs’ claims. In finding that Plaintiffs did not
sufficiently allege that they were “effectively homebound” and that they could increase their
budgets for medically necessary services through the PCP process, the district court again
disregarded well-pleaded allegations in Plaintiffs’ complaint. The complaint not only alleged
that Plaintiff Waskul “goes three weekdays (Monday through Wednesday) without his normal
community routine and is confined to his home on those days,” but also that Plaintiff Wiesner
has not been sufficiently able to “get into the community during the [service] hours that are
currently provided” due to his inability to hire additional staff. (Am. Compl., R. 146 at PageID
##3753, 3766.) As previously discussed, Plaintiffs’ pleadings also suggest that the PCP process
cannot remedy this budget issue.
Defendant Gordon contends that this provision does not require the State to ensure that
Plaintiffs have “meaningful” alternatives to institutionalized care. (State Defs.’ Br. at 39.) We
disagree. An alternative in name only is no alternative, and if this provision has any purpose at
all, it is to ensure that Plaintiffs have access to meaningful alternatives. Accordingly, courts
regularly interpret this provision to require “meaningful choice.” See, e.g., Ball v. Kasich, 244 F.
Supp. 3d 662, 685 (S.D. Ohio 2017); Boulet v. Celluci, 107 F. Supp. 2d 61, 77 (D. Mass. 2000);
see also Cramer, 33 F. Supp. 2d at 1352–53 (stating that plaintiffs were provided “no real
choice”). A “meaningful choice” is one that is actually available and that fulfills individuals’
medical needs. See, e.g., Kasich, 244 F. Supp. 3d at 685 (finding that the plaintiffs had stated a
claim that they were not afforded a meaningful choice when they had been on a waiting list for
at-home services for decades); Boulet, 107 F. Supp. 2d at 77 (concluding that “an option which
may not meet an individual’s needs [does not] constitute[] a meaningful choice as contemplated
by § 1396n(c)(2)”); Cramer, 33 F. Supp. 2d at 1352–53 (finding a violation of the statute where
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 33
individuals must choose between “(1) a Home and Community-Based Waiver option which
gives no assurance that the supports and services will meet individuals[’] needs, and (2) a hope
for a future [institutionalized care facility] placement” because the system “effectively
eliminat[es] a choice”). By alleging that the current budget methodology prevents them from
receiving medically necessary services at home, then, Plaintiffs have plausibly alleged that they
have been deprived of a choice between institutionalized and at-home care, in violation of
§ 1396n(c)(2)(C).
As a last point, § 1396n(c)(2)(C) only requires states to ensure that individuals are
offered “feasible alternatives” available “under [the] waiver.” But Plaintiffs’ pleadings suggest
that it may be feasible for them to receive additional services through a better funding
methodology—specifically, they note that the CLS rate, as of April 2015, was “17.4% lower than
the lowest average rate the State had told the federal government it expected to pay, and fully
31.3% lower than the rate that the State had said it expected to pay in 2014, the then-most-recent
year of the Habilitation Supports Waiver.” (Am. Compl., R. 146 at PageID #3734.) This
plausibly alleges that it was feasible for Defendants to enact a budget methodology that ensured
a higher rate than was ultimately implemented. Of course, Defendant Gordon may later show
that this alternative is not, in fact, feasible, for funding or other reasons. But at this point,
Plaintiffs have sufficiently alleged that feasible alternatives that provide them a meaningful
choice between institutionalized and at-home or community-based care exist and are not being
ensured by Defendant Gordon, in violation of § 1396n(c)(2)(C). Accordingly, we reverse the
district court’s dismissal of Plaintiffs’ claims under § 1396n.
III. Third-Party Beneficiary Claim
Plaintiffs next argue that Defendants Gordon, Terwilliger, and CMHPSM breached the
terms of the Waiver and the Department-CMHPSM contract implementing the Waiver by failing
to ensure that participants’ budgets are “sufficient to implement the IPOS” and are developed
“by costing out the services and supports using the rates for providers chosen by the participant
and the number of hours authorized by the IPOS.” (Am. Compl., R. 146 at PageID ##3801,
3803 (quoting Waiver at 125, 134).) Defendants argue that Plaintiffs cannot assert this claim as
third-party beneficiaries because they do not have a private right of action under the statute
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 34
underlying the Waiver and contract, because “the relevant waiver language does not support
Plaintiffs’ claim,” and because Plaintiffs did not show that Defendants’ conduct led to them
being denied any required services. The district court dismissed this claim, concluding that
“Plaintiffs concede . . . that this claim is inseparable from their statutory claims” and that,
because those claims failed, this one must also fail. (Dist. Ct. Op., R. 164 at PageID #4378
(citing Pls.’ Oral Arg. Ps., R. 153-1 at PageID #4220).) That conclusion is unjustified;
accordingly, we reverse the district court’s decision.
The district court reasoned that Plaintiffs had conceded that their third-party beneficiary
claim was inseparable from their statutory claims based on Plaintiffs’ argument that the court
should exercise supplemental jurisdiction over their third-party beneficiary claim because the
Waiver and Department-CMHPSM contract “are central to every claim in this action” and would
be impossible to separate into different suits in state and federal court. (Pls.’ Oral Arg. Ps.,
R. 153-1 at PageID #4220.) But this argument does not concede that Plaintiffs’ statutory and
third-party beneficiary claims must necessarily rise and fall together. Instead, Plaintiffs simply
assert that the third-party beneficiary claim is “so related to claims” over which the district court
had original jurisdiction “that they form part of the same case or controversy under Article III.”
28 U.S.C. § 1367(a). The simple fact that claims are part of the same case or controversy does
not mean that they are dependent upon one another. Thus, the district court erred in dismissing
these claims on that basis.
We could alternatively read the district court’s decision as declining to exercise
supplemental jurisdiction over these claims based on its dismissal of Plaintiffs’ federal law
claims. See United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726–27 (1966). But if that was
the basis for its dismissal, this decision is no longer justified, given that many of those federal
law claims were improperly dismissed.
Notably, the district court did not reach the merits of this claim. “Absent ‘exceptional
circumstances,’ we normally decline to rule on an issue not decided below.” Stoudemire v.
Mich. Dep’t of Corr., 705 F.3d 560, 576 (6th Cir. 2013) (quoting St. Marys Foundry, Inc. v.
Emp’rs Ins. of Wausau, 332 F.3d 989, 996 (6th Cir. 2003)). This case presents no exceptional
circumstances in this regard and this claim would benefit from further briefing. We therefore
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 35
reverse and remand to allow the district court to consider the merits of Plaintiffs’ claim in the
first instance.
IV. ADA and Rehabilitation Act Claims
In Counts V and VI, Plaintiffs argue that Defendants Gordon, Terwilliger, Cortes,
CMHPSM, and WCCMH have violated the “integration mandate” established under the ADA
and that all Defendants have violated a mirroring provision of § 504 of the Rehabilitation Act.
Defendants generally assert that they did not violate either provision because neither requires
them to provide integration to the extent Plaintiffs desire.12 The district court dismissed these
claims because Plaintiffs had not sufficiently shown that they were at risk of institutionalization
or effectively institutionalized at home and because Plaintiffs’ requested relief would require a
“fundamental alteration” of Defendants’ programs not available under either the ADA or § 504.
(Dist. Ct. Op, R. 164 at PageID ##4376–78.) Because Plaintiffs have plausibly stated a claim
that they were at serious risk of institutionalization and were unduly isolated in their homes as a
result of the change in budget methodology, we reverse the district court’s decision.
Plaintiffs assert that Defendants Gordon, Terwilliger, Cortes, CMHPSM, and WCCMH
have violated Title II of the ADA, 42 U.S.C. § 12132, which establishes that “no qualified
individual with a disability shall, by reason of such disability, be excluded from participation in
or be denied the benefits of the services, programs, or activities of a public entity, or be subjected
to discrimination by any such entity.” In Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 600
(1999), the Supreme Court recognized that one form of discrimination prohibited thereunder is
“unjustified institutional isolation of persons with disabilities.” See also 42 U.S.C. § 12101(a)(2)
(stating Congressional finding that “historically, society has tended to isolate and segregate
individuals with disabilities, and . . . such forms of discrimination against individuals with
disabilities continue to be a serious and pervasive social problem”). Accordingly, to implement
12
State Defendants also assert that they are entitled to immunity because Title II of the ADA only validly
abrogates a state’s Eleventh Amendment sovereign immunity insofar as the alleged ADA violation also violates the
Fourteenth Amendment. They therefore focus the majority of their ADA analysis on applying the test articulated in
United States v. Georgia, 546 U.S. 151 (2006), to show that their conduct does not also violate the Fourteenth
Amendment. This strategy is misguided. As addressed earlier, Plaintiffs do not state a claim against the Department
under the ADA, and Plaintiffs’ claim against Defendant Gordon is permitted under Ex parte Young.
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 36
§ 12132, the Attorney General promulgated a regulation known as the “integration mandate,”
which provides that public entities “shall administer services, programs, and activities in the
most integrated setting appropriate to the needs of qualified individuals with disabilities.”
28 C.F.R. § 35.130(d); see also Carpenter-Barker v. Ohio Dep’t of Medicaid, 752 F. App’x 215,
219 (6th Cir. 2018). The “most integrated setting” is one “that enables individuals with
disabilities to interact with non-disabled persons to the fullest extent possible.” Olmstead,
527 U.S. at 592 (quoting 28 C.F.R. pt. 35, App. A, p. 450 (1998)).
Alongside this, Plaintiffs also claim that all Defendants have violated § 504 of the
Rehabilitation Act, 29 U.S.C. § 794, which mirrors 42 U.S.C. § 12132 and is interpreted in
parallel with it.13 See Ability Ctr. of Greater Toledo v. City of Sandusky, 385 F.3d 901, 908 (6th
Cir. 2004). A regulation promulgated under § 504 similarly establishes that recipients of federal
funds “shall administer programs and activities in the most integrated setting appropriate to the
needs of qualified handicapped persons.” 28 C.F.R. § 41.51(d). Plaintiffs’ ADA and § 504
claims are “essentially one claim,” and we thus consider them in tandem. Carpenter-Barker,
752 F. App’x at 220.
Plaintiffs argue that Defendants have violated the ADA and § 504 in two distinct
manners.14 First, they contend that implementation of the current budget methodology places all
of the individual Plaintiffs at serious risk of institutionalization. Second, they assert that this
methodology has caused Plaintiffs Waskul and Wiesner to be effectively institutionalized in their
own homes. We address each theory in turn.
13
State Defendants contend that their conduct did not violate § 504 because discrimination was not the sole
motivation for their actions, because they had no discriminatory animus, and because Plaintiffs did not allege that
they were denied services based on a distinction between them and other similarly situated individuals. But such
showings are not required to state a claim for violation of the integration mandate, and so we are not persuaded by
this argument. See Ability Ctr. of Greater Toledo v. City of Sandusky, 385 F.3d 901, 908–09 (6th Cir. 2004) (noting
that the Supreme Court “indicated that Title II targets more than intentional discrimination” in Olmstead and that
Alexander v. Choate, 469 U.S. 287, 296–97 (1985), suggested that the Rehabilitation Act should be construed to
reach more than just conduct fueled by discriminatory intent).
14
Olmstead clarified that states are only required to provide community-based treatment for individuals
with disabilities when “the State’s treatment professionals determine that such treatment is appropriate.” 527 U.S. at
607. In this case, there is no dispute about whether such treatment is appropriate for the individual Plaintiffs.
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 37
Considering Plaintiffs’ first theory, courts have widely accepted that plaintiffs can state a
claim for violation of the integration mandate by showing that they have been placed at serious
risk of institutionalization or segregation. See, e.g., Radaszewski ex rel. Radaszewski v. Maram,
383 F.3d 599, 608, 615 (7th Cir. 2004) (finding that a plaintiff had stated a claim by showing that
defendants’ conduct “portend[ed]” future institutionalization); Fisher v. Okla. Health Care Auth.,
335 F.3d 1175, 1181–82 (10th Cir. 2003) (rejecting district court’s conclusion that the plaintiffs
could not state a claim for violation of the integration mandate because they were not presently
institutionalized and faced only the risk of institutionalization); Townsend v. Quasim, 328 F.3d
511, 515, 520 (9th Cir. 2003) (reversing summary judgment on a claim for violation of the
integration mandate brought by a plaintiff currently living at home who had been informed that
he would lose his benefits if he did not submit to institutionalization). We have agreed that
“cases applying Olmstead for the proposition that the risk of institutionalization can support a
valid claim of discrimination under the ADA . . . provide reasonable applications of Olmstead’s
holding.” Carpenter-Barker, 752 F. App’x at 221–22. Indeed, in Olmstead, the Supreme Court
reasoned that unjustified institutionalization or segregation constitutes discrimination because:
In order to receive needed medical services, persons with mental disabilities must,
because of those disabilities, relinquish participation in community life they could
enjoy given reasonable accommodations, while persons without mental
disabilities can receive the medical services they need without similar sacrifice.
527 U.S. at 601. Under this reasoning, individuals with disabilities are subjected to
discrimination when they are forced to choose between forgoing necessary medical services
while remaining in the community or receiving necessary medical services while
institutionalized—not just when they are actually institutionalized.
In accordance with this precedent, the Department of Justice put forward guidance in
2011 clarifying that “[i]ndividuals need not wait until the harm of institutionalization or
segregation occurs or is imminent” in order to bring a claim for violation of the integration
mandate. U.S. Dep’t of Justice, Statement of the Department of Justice on Enforcement of the
Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C. (last
updated Feb. 25, 2020) (hereinafter, “U.S. Dep’t of Justice, Statement on Olmstead”),
https://www.ada.gov/olmstead/q&a_olmstead.htm. Instead, Plaintiffs may show a sufficient risk
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 38
of institutionalization “if a public entity’s failure to provide community services or its cut to such
services will likely cause a decline in health, safety, or welfare that would lead to the individual’s
eventual placement in an institution.” Id. Courts have also looked to this guidance in reviewing
claims like Plaintiffs’. See, e.g., Steimel v. Wernert, 823 F.3d 902, 911 (7th Cir. 2016); Davis v.
Shah, 821 F.3d 231, 262–63 (2d Cir. 2016); Pashby v. Delia, 709 F.3d 307, 322 (4th Cir. 2013).
Even if not authoritative, the DOJ’s “views warrant respect” in this area. Olmstead, 527 U.S. at
598. And we need not decide whether the integration mandate is “genuinely ambiguous” as to
whether it protects those at serious risk of institutionalization such that the Department of
Justice’s interpretation of that regulation is entitled to deference under Auer v. Robbins, 519 U.S.
452, 461–62 (1997), see Kisor v. Wilkie, 139 S. Ct. 2400, 2414 (2019), because in this case,
Defendants do not dispute the DOJ’s interpretation of Olmstead or that Plaintiffs can sustain a
claim simply by showing that they are at serious risk of institutionalization. And we agree with
the Tenth Circuit that a contrary interpretation is unreasonable because the integration mandate’s
“protections would be meaningless if plaintiffs were required to segregate themselves by
entering an institution before they could challenge an allegedly discriminatory law or policy that
threatens to force them into segregated isolation.” Fisher, 335 F.3d at 1181. Plaintiffs may thus
state a claim by sufficiently alleging that they are at serious risk of institutionalization.
The district court properly recognized and accepted this possibility, but found that
Plaintiffs had not sufficiently alleged that they were at serious risk of institutionalization because
“this action was filed three years ago, but all of the individually named Plaintiffs still live at
home.” (Dist. Ct. Op., R. 164 at PageID #4376.) But while perhaps true, this fact says nothing
about whether Plaintiffs have been compelled to forgo necessary medical services in order to
remain in the community during that time. Nor does it reflect on the actual imminence of
Plaintiffs’ institutionalization—indeed, that could happen at any moment that Plaintiffs are
unable to sustain their own care. See U.S. Dep’t of Justice, Statement on Olmstead.
In fact, Plaintiffs did plausibly allege a serious risk of institutionalization. They
explained in particular that the current budget methodology caused them to have to substantially
rely on family members incapable of providing sustained, long-term care, thus placing them at
risk of institutionalization. For instance, according to the complaint, Plaintiff Schneider must
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 39
rely on his grandparents for “around 75 hours of CLS services per week, nearly 50% of the CLS
support required by [his] IPOS, because [he] . . . cannot find CLS providers to work at the
current rate.” (Am. Compl., R. 146 at PageID #3760.) Plaintiff Schneider’s grandparents are
aging and unwell. While not explicitly stated, the implication of this pleading is clear—should
Plaintiff Schneider’s grandparents no longer be able to care for him, he would be compelled to
submit to institutionalization. Similarly, Plaintiffs allege that Plaintiff Wiesner has been forced
to rely upon his guardian “to pay for the majority of [his] community activity and transportation
needs out of pocket,” causing her to “fall behind on her property taxes” and “putting her at risk
of foreclosure.” (Id. at #3765.) Plaintiff Wiesner’s guardian is “unable to work during the time
she has to stay home with [him],” purportedly at least forty hours a week, thus increasing her
financial strain. (Id. at #3766.) This prompts the reasonable inference that he, too, is at serious
risk of institutionalization if his guardian is unable to continue caring for him due to her dire
financial situation. Plaintiff Waskul, for his part, has allegedly suffered “decline[s] in health,
safety, or welfare” because he is unable to pay for his IPOS-required staff under the current
methodology, including depression, worsening scoliosis, and anger management issues. See
U.S. Dep’t of Justice, Statement on Olmstead. For the purposes of a motion to dismiss, these
facts suffice to show that Plaintiffs are at serious risk of institutionalization.
Turning to Plaintiffs’ second theory, we have not yet addressed whether individuals’
isolation at home may also violate the integration mandate. In considering Plaintiffs’ claim, we
find the Seventh Circuit’s decision in Steimel v. Wernert persuasive. The Steimel court
confronted a claim substantially similar to Plaintiffs’ and concluded that the Supreme Court’s
rationale in Olmstead also applied when individuals were isolated at home. 823 F.3d at 910. It
specifically noted that isolation at home would run counter to the “two evident judgments” the
Supreme Court saw in the integration mandate:
The first is that “institutional placement of persons who can handle and benefit
from community settings perpetuates unwarranted assumptions that persons so
isolated are incapable or unworthy of participating in community life.” The
second is that “confinement in an institution severely diminishes the everyday life
activities of individuals, including family relations, social contacts, work options,
economic independence, educational advancement, and cultural enrichment.”
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 40
Id. (citations omitted) (quoting Olmstead, 527 U.S. at 600–01). We agree that these concerns are
as present when individuals are confined in home settings because that situation “can just as
‘severely diminish[] the everyday life activities’ of people with disabilities.” Id. (alteration in
original) (quoting Olmstead, 527 U.S. at 601). Accordingly, we adopt Steimel’s analysis and
recognize that the isolation of individuals with disabilities in a home environment can also
violate the integration mandate.
Nevertheless, even accepting that home isolation might violate the integration mandate,
the district court found that Plaintiffs’ did not state a claim because they “have not alleged how
the current budgeting method has rendered them effectively institutionalized at home.” (Dist. Ct.
Op., R. 164 at PageID #4377.) Again, this elides the well-pleaded allegations of Plaintiffs’
complaint. According to Plaintiffs, Plaintiff Wiesner is only receiving eighty of the 120 CLS
hours his IPOS requires per week because he cannot afford to hire providers for the remaining
time. Because he must be accompanied by at least two CLS staff members in public, he must
use at least two service hours for every hour that he wishes to leave his home. This means that
Plaintiff Wiesner can be outside his home a maximum of forty hours a week, rather than the sixty
hours a week his IPOS would potentially allow. As a practical matter, it stands to reason that
Plaintiff Wiesner cannot use all forty hours outside the home if he needs to maximize the
proportion of his time that he has care. Moreover, Plaintiff Wiesner has allegedly been able to
hire only two CLS providers, rather than his IPOS-required three, leading to increased difficulty
scheduling out-of-home time. As a result of being “stuck at home more,” the complaint states,
Plaintiff Wiesner’s behavioral issues have worsened. (Am. Compl., R. 146 at PageID #3766.)
This suggests that Plaintiff Wiesner is confined at home in a manner that does not enable him to
engage with non-disabled persons “to the fullest extent possible,” Olmstead, 527 U.S. at 592
(quoting 28 C.F.R. pt. 35, App. A, p. 450 (1998)), which in turn causes “decline[s] in health,
safety, or welfare” that could lead to institutionalization, U.S. Dep’t of Justice, Statement on
Olmstead.
Similarly, Plaintiffs allege that Plaintiff Waskul cannot hire sufficient staff under the
current budget methodology, and as a result, he must “go[] three weekdays (Monday through
Wednesday) without his normal community routine,” during which time he “is confined to his
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 41
home.” (Am. Compl., R. 146 at PageID #3753.) As previously discussed, Plaintiff Waskul has
allegedly suffered from depression, worsened scoliosis, and anger management issues due to his
reduced time in the community and with CLS providers.
In Steimel, the Seventh Circuit reversed the district court’s grant of summary judgment to
the state defendants based on the plaintiffs’ evidence that the state defendants’ policies resulted
in them only being able to leave their home for twelve hours a week. 823 F.3d at 918. To be
sure, Plaintiffs’ allegations in this case, as they stand, suggest that they may receive considerably
more time outside the home than the Steimel plaintiffs did. However, there is no numeric
threshold that distinguishes the “most integrated setting” from a less integrated one. As the
Olmstead Court clarified, the integration mandate does not impose a “standard of care” or
require “a certain level of benefits to individuals with disabilities.” Olmstead, 527 U.S. at 603
n.14 (quoting id. at 623–24 (Thomas, J., dissenting)). Instead, the question is whether Plaintiffs
are provided services in the setting “that enables [them] to interact with non-disabled persons to
the fullest extent possible.” Id. at 592. The more hours one is provided outside the home, the
less likely it is that one can show a violation of the integration mandate. But the simple fact that
Plaintiffs have more than twelve hours outside the home per week does not foreclose their claim
that they have been unjustifiably isolated within the home. As an initial matter, then, Plaintiffs’
factual allegations suffice to state a claim for violation of the integration mandate.
However, our inquiry again does not end here. Under the integration mandate, public
entities must “make reasonable modifications . . . necessary to avoid discrimination on the basis
of disability,” unless they “can demonstrate that making the modifications would fundamentally
alter the nature of the service, program, or activity.” 28 C.F.R. § 35.130(b)(7). The district court
concluded that “the relief sought here,” specifically “an overhaul of the budgeting method,”
would fundamentally alter Defendants’ programs. (Dist. Ct. Op., R. 164 at PageID #4377.) But
it did not justify that conclusion.
A plurality of the Olmstead Court opined that a state might show that a modification
requires fundamental alteration of its programs if “in the allocation of available resources,
immediate relief for the plaintiffs would be inequitable, given the responsibility the State has
undertaken for the care and treatment of a large and diverse population of persons with mental
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 42
disabilities.” 527 U.S. at 604 (plurality opinion). Defendants have not carried their burden to
make such a showing here. PIHP Defendants contend that the remedy Plaintiffs seek would be a
fundamental alteration because the prior budget methodology caused them to operate on a
deficit. But the facts alleged in Plaintiffs’ complaint give rise to the inference that an alteration
of the budget methodology is well within Defendants’ capacity to provide, given that the amount
they are spending under the current methodology is allegedly well below what the State had
committed to spend under the Waiver. Moreover, while Plaintiffs undoubtedly would like to
return to the previous budget method, that is not the only potential remedy here. The Steimel
court rejected the state defendants’ contention that it was not reasonable to require them to return
to a previous method of determining individuals’ eligibility for certain care because that method
was error-filled. 823 F.3d at 916. The court pointed out that “[w]hile that may be one of the
outcomes [the plaintiffs] will accept, it is not the only one.” Id. So too here—to show that
affording Plaintiffs relief would effect a fundamental alteration, Defendants must show that
alteration of the budget methodology generally would be inequitable.
Altogether, the facts alleged in Plaintiffs’ complaint suggest that they are at serious risk
of institutionalization and that they are unreasonably confined at home. Defendants have not
carried their burden to show that modifying their budget methodology would result in a
fundamental alteration of their programs. Thus, Plaintiffs have stated a plausible claim for
violation of the integration mandate under Title II of the ADA and § 504 of the Rehabilitation
Act. Accordingly, we also reverse the district court’s dismissal of these claims.
V. Michigan Mental Health Code, Mich. Comp. Laws §§ 330.1722(1) and (3)
In their final claim, Plaintiffs assert that Defendants WCCMH and CMHPSM violated
Michigan Compiled Laws § 330.1722 by subjecting them to “neglect.” Defendants respond that
they are entitled to governmental immunity under Michigan law and that, even if Plaintiffs could
overcome this immunity, they did not neglect Plaintiffs under that provision. The district court
found that Defendants WCCMH and CMHPSM were entitled to immunity under Michigan law
because Plaintiffs did not “allege[] that Defendants were grossly negligent with respect to
adjusting the budget” and that, in the alternative, Plaintiffs had insufficiently alleged that they
were subjected to non-accidental harm or not treated according to the standard of care. (Dist. Ct.
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 43
Op., R. 164 at PageID #4379.) The district court erred in so concluding, and Plaintiffs have also
stated a plausible claim for neglect under the Michigan Mental Health Code. We therefore also
reverse the district court’s decision as to this claim.
A. Immunity
First, we contend with the district court’s conclusion that Defendants were entitled to
immunity under Michigan Compiled Laws § 691.1407. It is true that Michigan Compiled Laws
§ 330.1722 “does not provide a statutory exception to governmental immunity for alleged abuse
of mental health patients.” de Sanchez v. Genoves-Andrews, 446 N.W.2d 538, 542 (Mich. Ct.
App. 1989). However, where “instead of seeking compensation to remedy [a civil] harm, the
plaintiff elects some other remedy,” such as “ask[ing] a court to enforce his or her rights under
the law” through declaratory or injunctive relief, governmental immunity is “inapplicable.” In re
Bradley Estate, 835 N.W.2d 545, 557 n.54 (Mich. 2013). Accordingly, Michigan courts have
simply found that “a tort claim for damages does not constitute ‘appropriate civil relief’ under
[§ 330.1722] . . . because [defendants] are entitled to the protection of governmental immunity
and [§ 330.1722] is not an exception to such immunity.” Dockweiler v. Wentzell, 425 N.W.2d
468, 471 (Mich. Ct. App. 1988) (emphasis added). Plaintiffs seek only declaratory and
prospective injunctive relief in this suit, and so Defendants WCCMH and CMHPSM are not
entitled to immunity.
B. Merits
Turning to the merits, the relevant provisions of the Michigan Mental Health Code
provide that “[a] recipient of mental health services shall not be subjected to abuse or neglect,”
and that those who are abused or neglected have “a right to pursue injunctive and other
appropriate civil relief.” Mich. Comp. Laws §§ 330.1722(1), (3). “Neglect” under the statute
means
an act or failure to act committed by an employee or volunteer of the department,
a community mental health services program, or a licensed hospital; a service
provider under contract with the department, a community mental health services
program, or a licensed hospital; or an employee or volunteer of a service provider
under contract with the department, a community mental health services program,
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 44
or a licensed hospital, that denies a recipient the standard of care or treatment to
which he or she is entitled under this act.
Id. § 330.1100b(21).
The “[s]tandard for mental health services” provision of the Michigan Mental Health
Code provides that “[a] recipient shall receive mental health services suited to his or her
condition,” and that they “shall be offered in the least restrictive setting that is appropriate and
available.” Id. §§ 330.1708(1), (3). Thus, if Defendants’ acts or failures to act denied Plaintiffs
mental health services suitable to their condition in the least restrictive setting, they are liable.
Michigan courts have interpreted § 330.1708 to cover an individual’s “mental health treatment
involv[ing] the implementation of [a] Behavior Treatment Plan . . . including [a] provision
regarding [the individual’s] movement in the community.” Estate Wrenn v. Spectrum Cmty.
Servs., Nos. 339594, 342320, 2019 WL 845711, at *3 (Mich. Ct. App. Feb. 21, 2019)
(per curiam). Plaintiffs alleged that Defendants WCCMH and CMHPSM fail to “provide CLS
participants with actual budgets tied to the services and supports listed in the IPOS,” and that
because of this the individual Plaintiffs are denied transportation, staff, and recreation
activities medically necessary to address their conditions. (Am. Compl., R. 146 at PageID
##3753, 3758–59, 3766, 3771–72, 3805.) This plausibly states a claim under the Michigan
Mental Health Code.
County Defendants respond that Plaintiffs have not identified any employee, volunteer,
or service provider associated with WCCMH who subjected the individual Plaintiffs to neglect,
and so they have not stated a claim because the definition of neglect requires one of these parties
to be the actor. PIHP Defendants rightly do not contest that CMHPSM is covered by this
definition. Of course, Plaintiffs allege that Defendants Cortes and Terwilliger—current or
former employees of WCCMH and CMHPSM, respectively—are responsible for the
implementation of the flawed budget methodology. Indeed, this allegation underlies all of their
claims against Defendants Terwilliger and Cortes. Accordingly, County Defendants’ argument
is unpersuasive.
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 45
Plaintiffs have sufficiently alleged that the action or inaction of Defendants WCCMH and
CMHPSM have denied them mental health services meeting the standard of care established in
Michigan’s mental health code. The district court’s dismissal of this claim was thus in error, and
this Court must reverse.
CONCLUSION
For these reasons, we REVERSE the district court’s decision and REMAND for further
proceedings consistent with this opinion.
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 46
_______________________________________________________
CONCURRING IN PART AND DISSENTING IN PART
_______________________________________________________
CHAD A. READLER, Circuit Judge, concurring in part, and dissenting in part. Save for
three instances where the majority opinion extends acts of Congress in an extra-legislative,
atextual manner, I agree that the complaint may proceed beyond the pleading stage.
Section 1396n(c)(2) of the Medicaid Act. Section 1396n(c)(2) does not grant Appellants
legal rights they can enforce via 42 U.S.C. § 1983. A statute creates individual rights only when
Congress has expressed a clear intent to do so. Gonzaga Univ. v. Doe, 536 U.S. 273, 286 (2002).
That intent will not be lurking in the shadows. For when Congress intends to create an
individual right, it does so expressly, in the light of day. See Estate of Cornell v. Bayview Loan
Servicing, LLC, 908 F.3d 1008, 1013 (6th Cir. 2018) (noting that statutory rights are only created
when Congress does so in “clear and unambiguous terms” (quoting Gonzaga, 536 U.S at 290)).
So “unless Congress speaks with a clear voice, and manifests an unambiguous intent to confer
individual rights, federal funding provisions provide no basis for private enforcement by
§ 1983.” Gonzaga, 536 U.S. at 280 (cleaned up).
That one can identify beneficiaries from a statute’s terms is not tantamount to a finding
that the statute creates individual rights in those beneficiaries. More than simply establishing
benefits, the statute must also include unambiguous, rights-creating language generating an
enforceable individual right. Harris v. Olszewski, 442 F.3d 456, 460 (6th Cir. 2006)
(“[A] claimant must demonstrate that the underlying statute creates enforceable rights because it
is rights after all, not the broader or vaguer benefits or interests, that may be enforced under the
statute.” (quotations omitted)). And where a statute’s focus is on a regulated entity, no
individual rights exist. Alexander v. Sandoval, 532 U.S. 275, 289 (2001) (“Statutes that focus on
the person regulated rather than the individuals protected create ‘no implication of an intent to
confer rights on a particular class of persons.’” (quoting California v. Sierra Club, 451 U.S. 287,
294 (1981))); see also Gonzaga, 536 U.S. at 284 (noting that statutes create an individual right
when there is an “unmistakable focus on the benefited class” (quoting Cannon v. Univ. of
Chicago, 441 U.S. 677, 691 (1979))).
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 47
Section 1396n(c)(2) fails to clear this high bar. To start, the section’s focus is on the
regulated state, not the beneficiaries. As a lead up to § 1396n(c)(2), § 1396n(c)(1) explains that
“[t]he Secretary may by waiver provide that a State plan” include “medical assistance” to cover
“the cost of home or community-based services . . . approved by the Secretary [of Health and
Human Services].” 42 U.S.C. § 1396n(c)(1). Section 1396n(c)(2) in turn instructs the Secretary
how to regulate states seeking a waiver: “A waiver shall not be granted under this subsection
unless the State provides assurances satisfactory to the Secretary . . . .” 42 U.S.C. § 1396n(c)(2).
The provisions that follow go on to list the duties placed upon a participating state. It must
implement safeguards to protect the health and welfare of the participants, demonstrate financial
accountability, and inform individuals of their healthcare options. Id. In some respects, each of
these state-owed duties may result in benefits to individuals participating in a state’s Medicaid
program. But that is merely an ancillary result of a state’s compliance with federal law, well
short of the “unmistakable focus” required to demonstrate congressional intent to create
individual rights. Gonzaga, 536 U.S. at 284 (quoting Cannon, 441 U.S. at 691).
Confirming this reading of § 1396n(c)(2) is the remedy Congress employed for statutory
violations. Should a state breach its assurances to the Secretary, the Secretary can strip the
state’s federal funds. See 42 U.S.C. § 1396n(f)(1); Armstrong v. Exceptional Child Ctr., Inc.,
575 U.S. 320, 328 (2015) (“[T]he sole remedy Congress provided for a State’s failure to comply
with Medicaid’s requirements . . . is the withholding of Medicaid funds by the Secretary of
Health and Human Services.”). By including this “express” remedy, Congress surely “intended
to preclude others,” including the enforcement of statutory requirements by individuals.
Armstrong, 575 U.S. at 328 (quoting Sandoval, 532 U.S. at 290); see also Gonzaga, 536 U.S. at
280 (“[T]he typical remedy for state noncompliance with federally imposed conditions is not a
private cause of action for noncompliance but rather action by the Federal Government to
terminate funds to the State.” (citation omitted)); Nasello v. Eagleson, --- F.3d ---, 2020 WL
5905070, at *2 (7th Cir. Oct. 6, 2020) (holding that a similar section of the Medicaid Act does
not authorize suits by individuals, and noting that individuals dissatisfied with a state’s program
could “ask the responsible federal officials to disapprove a state’s plan or withhold
reimbursement”).
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 48
In these ways, today’s case tracks Gonzaga. There, the Supreme Court determined that
the Family Educational Rights and Privacy Act (FERPA), which protects students from
educational institutions mishandling their personal information, did not create individual rights
enforceable via § 1983. Gonzaga, 536 U.S. at 276. That was so, the Supreme Court explained,
because FERPA “speak[s] only in terms of institutional policy and practice, not individual
instances of disclosure.” Id. at 288. The statute thus “lack[s] the sort of rights-creating language
critical to showing the requisite congressional intent to create new rights,” and does not “confer
the sort of individual entitlement that is enforceable under § 1983.” Id. at 287 (citations and
quotations omitted). FERPA’s remedial provisions, which instruct that “the Secretary of
Education . . . ‘deal with violations’ of the Act,” likewise cut against the creation of individual
rights. Id. at 289 (citation omitted). And comparing FERPA to § 1396n(c)(2), the similarities
ring out. Both statutes speak in terms of institutional policies (not individual rights), and both
contain express remedies that do not involve individuals.
If all of this is not enough to show why § 1396n(c)(2) fails to create individual rights,
consider further the fact that the statute is “judicially unadministrable.” Armstrong, 575 U.S. at
328. In Armstrong, the Supreme Court held that a broad statutory directive for state “payments
that are ‘consistent with efficiency, economy, and quality of care,’ all the while ‘safeguarding
against unnecessary utilization of care and services,’” undermines the suggestion that the
Medicaid Act provisions at issue could be privately enforced. Id. (quoting 42 U.S.C.
§ 1396a(a)(30)(A)) (cleaned up). Having utilized such a “judgment-laden standard,” Congress
no doubt intended to make administrative remedies exclusive. Id. at 328–29; see also Westside
Mothers v. Olszewski, 454 F.3d 532, 543 (6th Cir. 2006) (noting that “broad and nonspecific”
language in the Medicaid Act “suggests that § 1396a(a)(30) is concerned with overall
methodology rather than conferring individually enforceable rights on individual Medicaid
recipients” (quotations and citations omitted)). Similar “judgment-laden” standards are at play
here. Even more so, in fact. It is little exaggeration to say that § 1396n(c)(2)(A)’s references to
“necessary safeguards,” “adequate standards for provider participation,” “health and welfare of
individuals,” and “financial accountability” are exceedingly difficult concepts for courts to
administer. See Westside Mothers, 454 F.3d at 543 (noting a court has “little expertise” in the
“interpretation and balancing of [the Medicaid statute’s] general objectives” (citation omitted)).
No. 19-1400 Waskul, et al. v. Washtenaw Cnty. Community, et al. Page 49
Not so for the Secretary, who enjoys “significant expertise” in overseeing Medicaid’s “complex
and highly technical regulatory program.” See Thomas Jefferson Univ. v. Shalala, 512 U.S. 504,
512 (1994) (citation omitted). At day’s end, all signs point to the absence of individual rights-
creating language in § 1396n(c)(2).
Section 12132 of the Americans with Disabilities Act. Appellants’ contention that they
are “at risk” of institutionalization is an insufficient basis for pleading violations of the ADA (or
by extension, the Rehabilitation Act). The ADA’s text simply does not reach that far. And more
than anything when it comes to statutory interpretation, we must respect the text Congress writes.
The ADA instructs that “no qualified individual with a disability shall, by reason of such
disability, be excluded from participation in or be denied the benefits of the services, programs,
or activities of a public entity, or be subjected to discrimination by any such entity.” 42 U.S.C.
§ 12132. To implement this provision of the ADA, the Attorney General, at Congress’s
instruction, promulgated a regulation known as the “integration mandate,” a critical aspect of
which states that a “public entity shall administer services, programs, and activities in the most
integrated setting appropriate to the needs of qualified individuals with disabilities.” 28 C.F.R.
§ 35.130(d) (2016).
Together with the text of the ADA, the Supreme Court has interpreted the integration
mandate to prohibit the unwarranted institutionalization of disabled individuals. Olmstead v.
L.C. ex rel. Zimring, 527 U.S. 581, 600 (1999). In the two decades that followed Olmstead,
however, some lower courts (as does the majority opinion today) have extended that holding to
find an ADA violation when a state’s Medicaid plan places disabled individuals “at risk” of
institutionalization. See, e.g., M.R. v. Dreyfus, 663 F.3d 1100, 1117–18 (9th Cir. 2011). Where,
one might ask, have courts found that prohibition? Not in the text of the ADA nor the
integration mandate. Instead, courts have seized upon a Department of Justice guidance
document instructing that the “serious risk of institutionalization” is sufficient to establish an
ADA claim. U.S. Dep’t of Justice, Statement of the Department of Justice on the Integration
Mandate of Title II of the ADA and Olmstead v. L.C.,
http://www.ada.gov/olmstead/q&a_olmstead.htm (last updated Feb. 25, 2020) [hereinafter “DOJ
Guidance”]; see, e.g., Pashby v. Delia, 709 F.3d 307, 322 (4th Cir. 2013) (“Because Congress
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instructed the DOJ to issue regulations regarding Title II, we are especially swayed by the DOJ’s
determination that the ADA and the Olmstead decision extend to persons at serious risk of
institutionalization or segregation and are not limited to individuals currently in institutional or
other segregated settings.” (quotations omitted)).
Doing so violates numerous aspects of current-day administrative law. One, the DOJ
guidance is explicitly non-binding. See DOJ Guidance (explaining that the “guidance document
is not intended to be a final agency action [and] has no legally binding effect,” and thus does
“not establish legally enforceable responsibilities beyond what is required by the terms of the
applicable statutes, regulations, or binding judicial precedent”). That fact alone dramatically
undercuts its use as an interpretive North Star. See Cement Kiln Recycling Coal. v. EPA,
493 F.3d 207, 228 (D.C. Cir. 2007) (noting that non-binding disclaimers are “relevant to the
conclusion that a guidance document is non-binding”). Two, the DOJ has independently
disavowed using guidance documents to create binding standards. See Prohibition on the
Issuance of Improper Guidance Documents Within the Justice Department, 85 Fed. Reg. 50951
(Aug. 19, 2020) (to be codified at 28 C.F.R § 50) (instructing that guidance documents do not
“create binding standards by which the [DOJ] will determine compliance with existing
regulatory or statutory requirements”). That admission is understandable, as an agency’s
guidance document, unlike its formal rules and regulations, does not traverse the lengthy notice-
and-comment period that tests an agency’s proposal against the views of others. See Christensen
v. Harris County, 529 U.S. 576, 587 (2000) (“[W]e confront an interpretation contained in an
opinion letter, not one arrived at after, for example, a formal adjudication or notice-and-comment
rulemaking. Interpretations such as those in opinion letters—like interpretations contained in
policy statements, agency manuals, and enforcement guidelines, . . . lack the force of law . . . .”);
see also Dismas Charities, Inc. v. U.S. Dep’t of Justice, 401 F.3d 666, 680 (6th Cir. 2005)
(noting that “the primary purpose of Congress in imposing notice and comment requirements for
rulemaking [is] to get public input so as to get the wisest rules”).
The DOJ Guidance, in other words, has little practical effect here, by the DOJ’s own
admission. Reference to agency guidance might be appropriate where, as the majority opinion
notes in separately concluding that the ADA reaches claims brought by those purportedly
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institutionalized at home, the guidance squarely supports what the agency rule already
establishes. Compare 28 C.F.R. § 35.130(d) (explaining that individuals should receive care in
the “most integrated setting”), with DOJ Guidance (defining what constitutes an “[i]ntegrated
setting”); accord Steimel v. Wernert, 823 F.3d 902, 912 (7th Cir. 2016) (explaining that the
“most integrated setting” requirement is not satisfied when individuals effectively are forced to
remain in their homes due to their disabilities and reasoning that “[i]f [the text of the regulation]
stick[s] a knife in the state’s argument, the DOJ guidelines twist it”). But that is not the case for
claims centered on the risk of institutionalization, when an “at risk” provision is nowhere to be
found in the ADA or the accompanying regulation.
Nor, at all events, is there reason to defer to agency guidance when the text of the ADA
and the integration mandate are unambiguous on the point. See Kisor v. Wilkie, 139 S. Ct. 2400,
2414 (2019) (noting that “the possibility of deference can arise only if a regulation is genuinely
ambiguous,” and adding that “when we use that term, we mean it—genuinely ambiguous”). On
that front, it bears noting that neither the ADA nor the mandate make any mention of
institutionalization, let alone the risk of institutionalization. See 42 U.S.C. § 12132; 28 C.F.R.
§ 35.130(d). With Kisor now the controlling standard on deference to agency interpretation, one
would not expect the majority opinion to invoke Auer v. Robbins, 519 U.S. 452 (1997). See
Kisor, 139 S. Ct. at 2426 (Gorsuch, J., concurring) (observing that Kisor “has transformed Auer
into a paper tiger”). Nor, for this same reason, do the pre-Kisor cases relied upon in the majority
opinion carry weight in a post-Kisor world. See, e.g., Steimel, 823 F.3d at 911 (employing the
pre-Kisor standard that “we defer to an agency’s interpretation of its own regulation unless the
agency’s interpretation is plainly erroneous or inconsistent with the regulation or there is reason
to suspect that the agency’s interpretation does not reflect the agency’s fair and considered
judgment on the matter in question” (quotations and citation omitted)); Davis v. Shah, 821 F.3d
231, 263 (2d Cir. 2016) (citing Auer for the proposition that “DOJ’s interpretation . . . is
controlling unless plainly erroneous or inconsistent with the regulation” (quotations and citation
omitted)).
Embracing DOJ guidance to cover those “at risk” of institutionalization also creates a
practical interpretive problem. What, after all, does it mean to say an individual is “at risk” of
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institutionalization? There is no articulable definition in the ADA, the mandate, or Olmstead.
Nor does the majority opinion provide one. One could theoretically define “at risk” with some
temporal connection to actual institutionalization—for example, one is “at risk” of
institutionalization if she is expected to be institutionalized in the next few months, perhaps even
a year. But setting aside the fact that such a standard has no textual mooring, even that generous
articulation would not help Appellants. After all, as revealed at oral argument, Appellants have
been claiming a risk of institutionalization for over four years. Yet none have been
institutionalized.
Whether one is in fact institutionalized is a bright-line determination that can be fairly
and uniformly applied by those who sit on the federal bench. See Daunt v. Benson, 956 F.3d
396, 424–25 (6th Cir. 2020) (Readler, J., concurring) (discussing the advantages of bright-line
rules). But absent any textually articulated standards, how are we to decide when a benefits
formula places individuals “at risk” of being institutionalized? That hazy approach is a surefire
recipe for unequal and unpredictable application of the law, an unattractive option for litigants
and courts alike. Antonin Scalia, The Rule of Law as a Law of Rules, 56 U. Chi. L. Rev. 1175,
1179 (1989) (“Even in simpler times uncertainty has been regarded as incompatible with the
Rule of Law.”). And it is likely why Congress never intended for judges to make this
determination to begin with.
Extending the ADA in this manner has yet one more unwelcome feature: It permits
claims by individuals who are not seeking to remedy discriminatory conduct, but instead simply
seek more Medicaid funding. Olmstead, however, expressly “disavowed” reading the ADA to
“impose[] on the States” a duty to “provide a particular level of benefits to disabled persons.”
Radaszewski ex rel. Radaszewski v. Maram, 383 F.3d 599, 608 (7th Cir. 2004) (citing Olmstead,
527 U.S. at 603 n.14)). Consider the allegation before us today: Appellants allege that
Washtenaw County’s funding methodology is insufficient to satisfy the needs set forth in
Appellants’ individual plans of service, placing them at a risk of institutionalization. Absent
actual segregation from the public or institutionalization, this sort of claim, at bottom, is simply a
request for more Medicaid funding, something the ADA does not permit.
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The majority opinion nonetheless believes its understanding of the ADA is necessary lest
the landmark law risks losing its bite. But the more customary practice is that a definitive harm,
not just the “risk” of one, is needed before legal action is ripe. See Spokeo, Inc. v. Robins, 136 S.
Ct. 1540, 1547–49 (2016). At the very least, the risk of harm must be “certainly impending.”
See Huff v. TeleCheck Servs., 923 F.3d 458, 463 (6th Cir. 2019) (quoting Clapper v. Amnesty
Int’l USA, 568 U.S. 398, 409 (2013)). Rather than rewriting the ADA to cover premature claims,
why not wait until institutionalization is at least “certainly impending” before allowing an ADA
claim? And to ensure the law maintains its force, why not rely on the settled practice of securing
a preliminary injunction to “preserve the relative positions of the parties until a trial on the
merits”? Tri-County Wholesale Distribs. v. Wine Grp., Inc., 565 F. App’x 477, 480 (6th Cir.
2012) (quoting Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 F.3d
535, 542 (6th Cir. 2007)).
One can understand why a fair-minded judge might want to extend the ADA’s reach to
cover those at risk of institutionalization. But as has long been true, our job remains to “say what
the law is,” no more, and no less. Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803).
Expanding the ADA in this manner must come from Congress’s drafting pen, in conjunction
with supporting regulations enacted by the Attorney General.
Section 1396a(a)(10)(B) of the Medicaid Act. Finally, as to Count III, the majority
opinion assumes, without deciding, that § 1396a(a)(10)(B) applies to Appellants’ sufficiency-of-
funding claims. In light of this “assumption,” the majority opinion’s application of
§ 1396a(a)(10)(B) has no controlling force beyond today. Nor, I might add, does it have support
in the statutory text. As explained in § 1396a(a)(10)(B), a state’s medical assistance “shall not
be less in amount, duration, or scope than the medical assistance made available to any other
such individual.” 42 U.S.C. § 1396a(a)(10)(B). By its terms, then, § 1396a(a)(10)(B) applies
only to the comparison of medical services between disabled individuals. See Schott v.
Olszewski, 401 F.3d, 682, 686 (6th Cir. 2005) (“Under the Act, states must provide comparable
medical assistance to all Medicaid recipients . . . .” (citing § 1396a(a)(10)(B))); Rodriguez v. City
of New York, 197 F.3d 611, 616 (2d Cir. 1999) (“Section 1396a(a)(10)(B)[’s] . . . only proper
application is in situations where the same benefit is funded for some recipients but not others.”).
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So for Appellants to state a claim under § 1396a(a)(10)(B), they must allege they are receiving
fewer benefits as compared to others.
Appellants make no such allegation. They describe their claim as a “Medicaid statutory
claim under 42 U.S.C. § 1396a(a)(10)(B) for Defendants’ failure (caused by the May 2015
change in budgeting procedures) to pay for services in the amount, scope, and duration needed to
reasonably achieve their purpose.” No mention there of a comparison of benefits. Nor during
oral argument, where Appellants conceded they are not making a comparability argument.
Rather, Appellants take issue with the underlying method of calculating their respective
Medicaid allotments. But the budgeting method at issue applies equally to all disabled
individuals seeking benefits from Washtenaw County. It is thus difficult to see how a claim
under § 1396a(a)(10)(B) is cognizable as a means for challenging an allegedly improper (yet
uniform) benefits formula.
* * * * *
One final point deserves mention. In Count IV, Plaintiffs tie together §§ 1396a(a)(8) and
(a)(10)(A) of the Medicaid Act to allege a violation of their asserted right to receive medical
support services with reasonable promptness. From the pleadings, however, it is not entirely
clear whether Plaintiffs object to the promptness with which those services are provided or to the
budgeting methodology employed by Washtenaw County to fund those services. The former
may give rise to a cognizable claim. See 42 U.S.C. § 1396a(a)(8). But if Plaintiffs’ “grievance
concerns not the time at which these ongoing benefits are paid but the amount of those benefits,”
their claim is not cognizable under § 1396a(a)(8). Nasello, 2020 WL 5905070, at *2 (“It would
not be appropriate for a federal court to turn a statute about the timing of benefits into a statute
about the level of benefits.”). Forthcoming proceedings will likely reveal the precise nature of
Plaintiffs’ claim.