Salazar v. Dc , 177 F. Supp. 3d 418 ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
OSCAR SALAZAR, et al.,
Plaintiffs,
v. Civil Action No. 93-452 (GK)
DISTRICT OF COLUMBIA, et al.,
Defendants.
MEMORANDUM OPINION
I. INTRODUCTION
The District of Columbia ("the District," "D. C." or
"Defendants") manages a large Medicaid program, see 42 u.s.c.
§ 1396 et ~' which provides healthcare benefits for eligible
children and adults. In 1993, Plaintiffs filed a Complaint alleging
various statutory and constitutional violations in the course of
the District's provision of these much-needed benefits for
children and low income adults.
In 1996, following a bench trial, the Court found the District
liable for violations of statutory provisions of the Medicaid
statute and other federal law: (1) the District did not process
and decide applications for Medicaid eligibility in a timely
manner; (2) the District did not provide adequate advance notice
before suspending or terminating benefits; (3) the District failed
to provide early and periodic screening, diagnostic and treatment
( "EPSDT") services for children under 21 years of age when
requested; and (4) the District did not adequately notify eligible
families regarding the availability of EPSDT services. See Salazar
v. District of Columbia, 954 F. Supp. 278, 324-34 (D.D.C. 1996).
On January 25, 1999, the Parties' negotiated, and the Court
entered, a Settlement Order memorializing the District's
I
obligations to remedy these violations. See Order Modifying the
i
Amended Remedial Order of May 6, 1997 and Vacating the Order of
March 27, 1997 [Dkt. No. 663) (referred to throughout as the
"Settlement Order"). Some elements of that Settlement Order remain
in place today.
On March 23, 2010, President Obama signed the Patient
Protection and Affordable Care Act of 2010, Pub. L. No. 111-148,
124 Stat. 119, et~' ("ACA"), ushering in major reforms in many
different areas of the American health care system, including far-
reaching changes to the District's Medicaid program.
The Court predicted that "implementation [of the ACA's
reforms] w [ould] undoubtedly be both rocky and fairly long in
coming." Amended Memorandum Opinion and Order of Oct. 17, 2013
at 6 [Dkt. No. 1886). That prediction has been borne out, but no
one -- neither the Parties nor the Court -- anticipated the scope
and difficulty of the problems that have arisen. Although the
District has devoted huge amounts of staff time and other resources
to, essentially, rewrite the Medicaid program to comply with the
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ACA, Plaintiffs have identified severe technical and logistical
problems in the processing of initial Medicaid applications and in
the Medicaid benefits renewal process. These problems have
affected thousands of Medicaid beneficiaries and have deprived
many District residents of necessary medical care to which they
are entitled.
In light of the severe backlogs in the processing of Medicaid
applications, delays in the Medicaid renewal process, and a number
of computer glitches caused by ACA-related changes to the
District's administration of the Medicaid program, Plaintiffs
filed, on December 22, 2015, a Motion for Preliminary Injunction
Concerning District of Columbia Medicaid Applications and Renewals
("Pls.' Mot. for P.I.") [Dkt. No. 2070), seeking preliminary relief
on behalf of Medicaid applicants and recipients in the District
who may be prejudiced by these implementation difficulties.
Plaintiffs' Motion seeks a two-pronged order requiring
1) that [the District] shall provisionally approve all
Medicaid applications pending over 45 days until a
final determination can be made; [and]
2) that [the District] shall continue the eligibility
of all Medicaid recipients due [to have their
Medicaid benefits] renewed or recertified[.]
See Proposed Order accompanying Pls.' Mot. for P.I. [Dkt.
No. 2070-1).
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On January 15, 2016, the District filed its Opposition to
Plaintiffs' Motion for a Preliminary Injunction ("Defs.' Opp'n to
P.I.") [Dkt. No. 2077], and on January 29, 2016, Plaintiffs filed
their Reply in Support of their Motion ("Pls.' Reply in Support of
P.I.") [Dkt. No. 2083].
On February 9, 2016, Plaintiffs chose to supplement their
request for preliminary relief with a Motion for Modification of
the Settlement Order ("Pls.' Mot. for Mod.") [Dkt. No. 2093], which
seeks relief on a permanent basis that is nearly identical to the
relief requested in their Motion for Preliminary Injunction.
Compare Proposed Order accompanying Pls.' Mot. for P.I. [Dkt. No.
2070-1] with Proposed Order Accompanying Pls.' Mot. for Mod. [Dkt.
No. 2093-5]. Plaintiffs' requests for relief are identical except
that the Proposed Order accompanying their Motion for Modification
adds one additional duty: "that during the time this Order is in
effect, [D]efendants shall report monthly on their compliance with
its terms." Proposed Order Accompanying Pls.' Mot. for Mod. at 2.
On February 26, 2016, the District filed its Opposition to
Plaintiffs' Motion for Modification ( "Defs.' Opp' n to Mot. for
Mod.") [Dkt. No. 2097]. On March 9, 2016, Plaintiffs filed their
Reply in Support of their Motion for Modification ("Pls.' Reply in
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Support of Mot. for Mod.") [Dkt. No. 2102]. On March 28, 2016, the
District filed its Surreply [Dkt. No. 2108] .1
Before Plaintiffs' second Motion was fully briefed, on
February 19, 2016, the Court held an on-the-record teleconference
with the Parties to discuss how best to resolve Plaintiffs'
Motions. Both Parties agreed with the Court that the two Motions
are deeply intertwined and best resolved concurrently. 2
Thus, on February 19, 2016, with the Parties' consent, the
Court decided to resolve the two Motions simultaneously.
Plaintiffs and the District rely to a large extent on the same
factual and legal arguments in support of their positions on the
Motion for Preliminary Injunction as they do with respect to the
Motion for Modification of the Settlement Order. See Pls.' Mot.
for Mod. at 2 (incorporating into Motion for Modification all
1 On March 14, 2016, the District filed a Motion to Strike New
Evidence Submitted in Plaintiffs' Reply Brief in Support of Their
Motion for Modification of the Settlement Order [Dkt. No. 2103].
The Court denied that Motion, and instead, permitted the District
to file a Surreply. See Order [Dkt. No. 2104].
2 Federal Rule of Civil Procedure 65(a), which governs preliminary
injunction motions, supports consolidated consideration of the
merits and a request for preliminary injunction. See Fed. R. Civ.
P. 65 (a) (2) ("Before or after beginning the hearing on a motion
for a preliminary injunction, the court may advance the trial on
the merits and consolidate it with the hearing."); see also United
States v. W. Elec. Co., 46 F.3d 1198, 1207 n.7 (D.C. Cir. 1995)
(" [A] trial court has inherent power to control the sequence in
which it hears matters on its calendar and to decide whether to
consolidate the proceedings on motions.").
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"briefing and evidence submitted in connection with [] Motion for
a Preliminary Injunction"); Defs.' Opp'n to Mod. for Mod. at 1.
Additionally, Plaintiffs request precisely the same relief in
their Motion for Preliminary Injunction and in their Motion for
Modification (with the one exception of a request for monthly
reports from the District, which appears only in the latter
Motion). Because Plaintiffs' two Motions rest on the same factual
and legal foundations and call for nearly identical relief, it is
clear that the merits question presented by the Motion for
Preliminary Injunction is the same as the question presented by
the Motion for Modification.
Although the District has made substantial progress since
Plaintiffs' initial filing on December 22, 2015, in addressing the
problems caused by changes in its administration of the Medicaid
program to comply with the ACA, it is clear from the Parties'
submissions that significant obstacles remain. These obstacles
stand between Medicaid eligible individuals and the healthcare to
which they are entitled. For that reason, as well as others,
Plaintiffs' Motion for Modification of the Settlement Order shall
be granted with certain modifications to the requested relief, and
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Plaintiffs' Motion for Preliminary Injunction shall be denied as
moot. 3
II. BACKGROUND
A. Prior Relevant Orders in This Case
In 1993, when Plaintiffs filed this class action the Plaintiff
class ultimately certified consisted of "a collection of several
sub-classes, with each sub-class consisting of Medicaid applicants
and recipients with a particular set of claims." Memorandum Opinion
at 2 [Dkt. No. 2046]. At the time of trial, the following sub-
classes remained:
All persons who have applied, have attempted to apply,
or will apply in the future during the pendency of this
litigation, for medical assistance pursuant to Title 19
of the Social Security Act ("Medicaid"), and all persons
who have received, are receiving, or will receive in the
future during the pendency of this litigation, Medicaid
in the District of Columbia with respect to the following
claims:
Any claims for declaratory, injunctive, or other relief
premised on an alleged delay in excess of 45 days in the
processing of Medicaid applications [Sub-class III]
Any claims for declaratory, injunctive, or other relief
premised on an alleged lack of advance notice of the
discontinuance, suspension or obligation to recertify
Medicaid benefits, after being found eligible [Sub-
class IV]
Any claims for declaratory, injunctive, or other relief
premised on an alleged lack of effective notice of the
3 The Court notes that both Parties submitted extremely
well-written briefs, which made its job a trifle easier.
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availability of early and periodic screening, diagnostic
and treatment ("EPSDT") services for children under 21
years of age, and/or an alleged lack of EPSDT services
for eligible children under 21 years of age [Sub-
class V] . 4
Order at 1-2 [Dkt. No. 100] (brackets in original) . ,
After years of litigation and some successful negotiation by
the Parties, on October 16, 1996, the Court issued a 58-page
Opinion setting forth extensive findings of fact and conclusions
of law. See Salazar, 954 F. Supp. 278. "In particular, the Court
ruled that Defendants had failed to process Medicaid applications
for non-disabled, non-foster care [non-public assistance]
applicants within 45 days, had terminated or suspended eligible
persons' benefits without adequate notice, had failed to provide
EPSDT services to eligible families, and had failed to notify those
eligible families about the availability of such services."
Memorandum Opinion of December 28, 1998 at 2 [Dkt. No. 653]
(summarizing findings detailed in Salazar, 954 F. Supp. 278).
In order to remedy these violations of the law and to avoid
further litigation, the Parties crafted and agreed upon the terms
of a Settlement Order, which the Court entered on January 25, 1999.
See Settlement Order at 1 [Dkt. No. 663] . Section II of the
Settlement Order detailed steps the District was to take to redress
problems related to the timely processing of initial applications
4 Claims corresponding to Sub-classes I and II were resolved before
trial. See Memorandum Opinion at 4 n.2 [Dkt. No. 2046].
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for Medicaid on behalf of members of Sub-class III. Settlement
Order ,, 6-16. In general, Section II required the District to
decide Medicaid applications and notify beneficiaries of its
decision within 45 days of receiving an application. Id. , 6(a).
The Settlement Order also provided that if the District
demonstrated compliance over three consecutive years, Section II
of the Order would terminate. Id. , 74.
On February 24, 2009, the District notified the Court that it
had satisfied the exit criteria for. Section II and represented
that Plaintiffs were in agreement with that position. See Consent
Motion to Vacate Sections II and IV of the Settlement Order of
January 22, 1999 [Dkt. No. 1443] . 5 The District therefore
requested, with Plaintiffs' consent, that the Court vacate
Section II. Id. The Court granted the District's Motion to Vacate
that same day. See Minute Order of Feb. 24, 2009.
Section III of the Settlement Order concerned the annual
recertification 6 of Medicaid benefits on behalf of Sub-class IV.
5 Section IV of the Settlement Order concerned the Eligibility
Verification System by which the District determined the Medicaid
eligibility of District residents. That Section was also vacated.
See Minute Order of February 24, 2009.
6 As Plaintiffs note, "recertification" of Medicaid benefits is
now generally referred to as "renewal." It is the process by which
Medicaid beneficiaries are annually subject to review of their
continued eligibility for Medicaid benefits based on income,
family status, and other factors. See Pls.' Ex. 23 at 009-010 [Dkt.
No. 2070-21]. This Memorandum Opinion uses "recertification" and
"renewal" interchangeably.
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See Settlement Order ~~ 17-28. At the time the Settlement Order
was issued, Medicaid required the District to provide annual
recertification forms to beneficiaries that they were required to
complete in order to retain their Medicaid benefits. Section III
required the District to mail recertification forms and various
notices to advise beneficiaries of their recertification status.
Id. ~ 17. Section III's requirements were specific, setting forth
a schedule which the District was required to adhere to and
language that the District was required to use. Id.Passage of the ACA in March of 2010 ushered in a host of
changes to the Medicaid program, including significant
modifications to the Medicaid re certification process. The ACA
requires the District to move to a "passive renewal" model in which
beneficiaries' eligibility is determined to the extent possible on
the basis of reliable information available to the District, such
as data available through the IRS or the Social Security
Administration. See 42 C.F.R. § 435.916. Section III of the
Settlement Order does not rest on the ACA's passive renewal model.
Instead, it assumes that Medicaid beneficiaries would have to
actively renew their benefits on an annual basis.
In light of the ACA' s October 1, 2013 effective date for
.significant changes to the Medicaid renewal process, see Amended
Memorandum and Order at 2 [Dkt. No. 1886], on September 20, 2013,
the District filed a Motion to Modify the Settlement Order [Dkt.
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No. 1870] pursuant to Federal Rule of Civil Procedure 60(b) (5).
The District asked the Court to relieve it from complying with
Section III entirely, contending that it could not implement the
ACA's passive renewal system while still bound by the conflicting
provisions of Section III. Motion to Modify the Settlement Order
at 1. Plaintiffs opposed the District's Motion, arguing that
limited modifications to Section III could address any apparent
conflicts between the ACA and Section III. Plaintiffs' Brief in
Opp'n at 1-2 [Dkt. No. 1876].
On October 17, 2013, the Court granted the District's Motion.
See Amended Memorandum Opinion and Order [Dkt. No. 1886]. The Court
found that "[t]here is simply no comparison between the statutory
framework that existed at the time this Court made its factual
findings in 1996 and what implementation of the ACA envisions[.]"
Moreover, many of the ACA' s renewal provisions "are in direct
conflict with the renewal process in Section III." Id. at 6.
Accordingly, the Court "conclude[d], pursuant to Fed. R. Civ. P.
60 (b) (5), that passage of the ACA has created a 'significant change
in circumstances' that justifies termination of the provisions of
Section III of the Consent Order." Id. at 5. Notably, Plaintiffs
declined to appeal the Court's termination of Section III.
Thus, following the termination of Section II.I, no provisions
of the Settlement Order relating to Medicaid application
processing or benefits renewal remained in effect. The only
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portions of the Settlement Order affecting programmatic elements
of the District's Medicaid program that remained in force related
to the delivery of EPSDT services. See Settlement Order Sections
V & VI.
Sections V & VI of the Settlement Order resolve the claims of
Sub-class V, which were premised on the lack of effective notice
of the availability of EPSDT services for children under 21 years
of age and the failure to provide those services. Order at 1-2
[Dkt. No. 100] . Section V sets forth detailed procedures for
providing and tracking the provision of EPSDT services through
entities that participate in the District's Medicaid program. See
Settlement Order Section V. Section VI sets forth similarly
detailed procedures for providing notice to eligible Medicaid
beneficiaries regarding the availability and nature of EPSDT
services. See id. Section VI.
In 2014, the District reported to the Centers for Medicare
and Medicaid Services ("CMS") that there were 98,350 children in
the District eligible for EPSDT services under Medicaid. Form CMS-
416, line la [Dkt. No. 2039-1]. As of October 2014, there were a
total of 247, 850 District residents on Medicaid. Pls. Ex. 61,
column 1 [Dkt. No. 2102-1] (figure reflects subtraction of certain
non-Medicaid beneficiaries included in the District's data). Thus,
children eligible for EPSDT services constitute a large portion of
the District's Medicaid population.
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B. ACA Implementation
Beginning on October 1, 2013, the District began processing
Medicaid applications pursuant to new eligibility rules
established by the ACA and its implementing regulations. See 42
U.S.C. § 1396a(e) (14); 42 C.F.R. §§ 435.603, 457.315(a). In order
to facilitate implementation of the ACA's new rules, the District
took steps to build a new, automated Medicaid application and
eligibility determination system called the DC Access System
( "DCAS") , which is intended to eventually entirely replace the
District's legacy system, called the Automated Client Eligibility
Determination System ( "ACEDS") . Schlosberg Deel. ~~ 14-15 [Dkt.
No. 2077-1] .
As required by ACA regulations, the District also implemented
a "no wrong door" approach to applications under which individuals
may apply for Medicaid benefits online through DCAS, on paper, by
telephone, or in person at D. C. Department of Human Services
("DHS") Economic Security Administration ("ESA") Service Centers
("Service Centers"). See 42. C.F.R. § 435.907(a). Finally, the
District took steps to establish a system for processing "passive
renewals" of Medicaid benefits, as required by the ACA. See
42 C.F.R. § 435.916.
These changes did not go smoothly. The Parties disagree as to
the scope of the problems that developed; however, it is clear
that thousands of Medicaid beneficiaries were affected by (1) the
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District's failure to process Medicaid applications within 45 days
in violation of 42 C.F.R. § 435.912(c) (3) and D.C. Code§ 4-205.26
(2014); and (2) the District's failure to timely renew Medicaid
benefits or to provide adequate notice to Medicaid recipients
before 'terminating their benefits in violation of federal law.
The roots of these failures are technical in nature, but the
facts below demonstrate the deeply personal calamity that befell
many Medicaid applicants and beneficiaries when they and their
children were unable to get the care to which they were entitled.
The number and narratives of affected District residents
demonstrate the gravity of the situation, as the following
information shows.
1. Initial Processing
The District of Columbia is required to make an eligibility
determination on all Medicaid applications within 45 days of
submission. 42 C.F.R. § 435.912(c) (3); D.C. Code § 4-205.26. 7
During 2015 and the beginning of 2016, the District failed to
comply with this duty.
Around March or April 2015, the District became aware that as
many as 12,000 applications were listed as pending in the DCAS
system for 45 days or more. Pl. Ex. 1 at 3 [Dkt. No. 2070-2]. The
7 The one exception is for applicants who apply for Medicaid on
the basis of disability, whose applications must be adjudicated
within 90 days. 42 C.F.R. § 435.912(c) (3) (i).
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District had previously been unaware of this backlog until staff-
members ran new queries as part of their backlog reports. Id.The District states that the 12,000 application figure
overstates the number of District residents who had actually been
denied Medicaid coverage. For instance, of the approximately
12,000 cases appearing on the report, around 15 percent already
had active Medicaid coverage. Schlosberg Deel. ~ 69. Another
quarter of these cases were applications that had been determined
to be ineligible, but the system simply had not closed them out.
Id. Even if these figures are accurate, approximately 7,000
applications - and people -- were affected.
In August 2015, the District reported that there were still
5,263 applications 8 that had been pending in DCAS for more than 45
days. Pl. Ex. 2 at DHCF 32 [Dkt. No. 2070-3]. District staff
"work[ed] overtime to resolve these cases as soon as possible,"
but as of November 23, 2015, there were still 5, 215 Medicaid
applications in_DCAS pending over 45 days. Pl. Ex. 21 Response
5 (c) &(d) [Dkt. No. 2070-19]. By December 2015, the District had
reduced the number of pending applications to 4,497. See Pl. Ex.
8 A household with several members will sometimes submit a single
application, Pl. Ex. 21 Response 5(b) [Dkt. No. 2070-19]; thus,
the number of individuals affected by the backlog may be larger
than the application backlog figures. ·
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1 at 3 [Dkt. No. 2070-2] (figure combines pending and
stuck/malformed applications) .
The backlog of applications can be divided into two main
groups, based on the source of the problem.9 The first group of
backlogged applications, the "stuck/malformed" group, consisted of
approximately 1,970 cases as of December 2015. "A malformed case
is a case that did not generate all the information to create a
fully formed case when it was entered into the system [case worker
portal] because of a technical system issue." See Pl. Ex. 23 at 6
[Dkt. No. 2070-21]. As the District of Columbia Department of Human
Services explains, "[w]hat this means . [is that] [t]here are
individuals who are not get ting Medicaid that should be. " Pl. Ex. 2
at DHCF 34.
The second group of backlogged applications, the "case
processing backlog," consisted of 2,527 individuals as of December
2015. Pl. Ex. 1 at 3. The case processing backlog is a catch-all
category, which consists of applications that have not been
processed due to the District's inability to verify income,
residency, or some other type of required verification or due to
other "[computer] system performance issues." Id.9 In addition to the serious backlog of applications in the DCAS
system, as of August 2015, "there [wa] s a paper application
backlog" as well. Pl. Ex. 2 at DHCF 35 [Dkt. No. 2070-3]. However,
the Parties have not indicated the size of the paper application
·backlog.
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As of August 2015, over 1,500 applicants in the case
processing backlog had not been notified that their applications
could not be processed because of the District's inability to
verify some piece of information. Pl. Ex. 2 at DHCF 32. Plaintiffs
point out that since the backlog was discovered in March or April
of 2015, it is possible that, as of late December, 2015, many of
the backlogged applications had been pending for nine months or
longer.
In addition to the serious application backlogs, Plaintiffs
also describe significant hurdles facing Medicaid applicants as
they attempt to file their initial applications. Plaintiffs cite
evidence that documents scanned into the District's document
management system cannot always be found and must often be
resubmitted. See Pls. Ex. 42 at 20 [Dkt. No. 2070-40]. The
testimony of Medicaid advocates who assist Medicaid beneficiaries
on a daily basis demonstrates that lost or misplaced paperwork is
a substantial problem. See, ~, Loubier Deel., Pl. Ex. 27 ~ 9
[Dkt. No. 2070-25]; Bread for the City Deel., Pl. Ex. 24 ~ 11 [Dkt.
No. 2070-22]; Legal Aid Deel., Pl. Ex. 26 ~~ 5, 17 [Dkt. No.
2070-24] .
A review of DHS Service Centers conducted by Medicaid
advocates in February 2015 observed widespread problems with
document processing. See Legal Aid Deel., Pl. Ex. 26 ~~ 2(b)-(c),
7-15, 18. As part of this review, Medicaid advocacy organizations,
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including Plaintiffs' counsel, made 12 visits to three DHS service
centers in February 2015 and spoke with approximately 309 people
in line. Id. ~ 7. In March 2015, the DC Fiscai Policy Institute
and the Legal Aid Society of the District of Columbia provided
testimony to the District of Columbia City Council's Committee on
Health and Human Services that analyzed the data from these visits.
They testified that consumers were often required to "make return
trips to Service Centers to correct improper benefits terminations
and denials caused by ESA failing to process their paperwork." Pl.
Ex. 8 at 2 [Dkt. No. 2070-9].
Subsequent visits by these same organizations to the service
centers in June 2015 again found numerous individuals standing in
line to resubmit documentation they had already provided, many now
facing denial or termination of benefits due to Defendants' failure
to process the paperwork in the first instance. See Legal Aid
Deel., Pl. Ex. 26 ~~ 13 (a), (c), (d), (e), (g), (h); 15 (a), (c).
After Plaintiffs filed their Motion for Preliminary
Injunction on December 22, 2015, the District continued its efforts
to reduce the two backlog groups. It made impressive progress. "As
of February 24, 2016, zero individuals were in the case processing
backlog (down from 1,247 individuals on January 11, 2016), and as
of February 23, 2016, . 67 initial applications were affected
by the [stuck/malformed] issue (down from 1,408 on January 11,
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2016) ." Defs.' Opp'n to Mot. for Mod. at 3 (citing Second
Schlosberg Deel. ~~ 4-5 [Dkt. No. 2097-1]).
The District has attempted to make whole applicants who were
eventually determined to be Medicaid eligible: "Where a
beneficiary was determined eligible but had not received a
determination, the individual was notified and approved
retroactively to the date of the initial application along with
instructions on how to request reimbursement for any eligible out-
of-pocket expenses." Defs.' Opp'n to P.I. at 14 (citing Schlosberg
Deel. ~ 70) ~
The District also represents that many of the "root causes of
problems have been identified and will be resolved in an upcoming
update to DCAS," and that "in the meantime caseworkers have been
provided additional training and guidance to navigate any new or
remaining [stuck/malformed] cases while managers continue to
receive reports to track pending cases." Defs.' Opp'n to Mot. for
Mod. at 3 (citing Second Scholsberg Deel. ~ 6). "In addition, the
District has also implemented automated batch processes through
which initial applications [that do not require the verification
of additional information] . . . are automatically activated with
Medicaid coverage." Id. (citing Second Scholsberg Deel. ~ 7).
Finally, to provide a sense of scale, the District notes that
"[s]ince October 2013, over 33,000 new electronic applications for
Medicaid were process~d in DCAS on the same day they were
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submitted." Gov't's Opp'n to Mot. for P.I. at 7 (citing Schlosberg
Deel. ~ 99).
While the District's progre.ss in reducing the Medicaid
application backlogs is laudable, Plaintiffs argue that the
District has not "put in place a durable remedy to ensure that
Medicaid applications will be decided within 45 days." Pls.' Reply
in Support of Mot. for Mod. at 13. They note that "four of the
root causes for the stuck/malformed defect in the District of
Columbia computer system remain unresolved and that several new
applications are still affected by those defects every day." Id.(citing Second Schlosberg Deel. ~ 6; Defs.' Opp'n to Mot. for Mod.
at 3) .
Moreover, Plaintiffs contend that the issues of long Service
Center wait times, paperwork loss, and processing delays have not
been remedied. They set forth a particularly enlightening example
to sharpen their point:
On November 24, 2015, Ms. [Nurian] Flores Rivas
submitted an application for Medicaid benefits for her
two minor children and [received] a receipt for the
visit. [] Pl. Ex. 62 ~ 8 [Dkt. No. 2102-2] . . . . Over
three months later, she ha[d] received no written
decision. Even with the assistance of a Legal Aid lawyer,
Ms. Flores Rivas has received conflicting information
about the status of her application. [DCAS] Customer
Service found a record of application only for her son
and not for her daughter and also found an approval for
her son. The ESA Customer Service [representative], whom
she was told to contact next, saw no record of any
application for either her daughter or her son and no
record of any approval for her son. Id. ~ 8(e). [As of
March 9, 2016, after the date the District represented
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that it had eliminated the application backlogs], Ms.
Flores Rivas ha[d] not received a notice of DHS's
determination concerning her children's application[,]
and they [could not] access Medicaid benefits. Id. ~
8 ( g) .
Pls.' Reply in Support of Mot. for Mod. at 15.
The District responds to this particular example by
contending that individualized mistakes, rather than systemic
problems led the Flores Rivas children's loss of coverage. See
Defs.' Surreply at 6. It notes that "ESA records indicate that a
caseworker erroneously labeled the application [submitted by Ms.
Flores Rivas on November 24, 2015] as a recertific~tion instead of
an application. Ms. Flores Riva's son was approved for
Medicaid but the daughter was not approved because her application
was mislabeled." Id.The District's attempt to separate the mistakes of individual
District employees from the systemic issue plaguing the Medicaid
system is unconvincing. The two are interrelated. Just as the
complexity of the system increases the opportunity for individual
errors, individual errors combine to form systemic problems.
Accordingly, it is clear that despite its substantial
progress, the District has still not been able to entirely
remediate the problems that Plaintiffs document.
2. Benefit Renewals
In the 1996 merits Opinion, the Court held that "[t] he
District of Columbia is required, under federal law, to give
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Medicaid recipients timely and adequate notice of proposed action
to terminate, discontinue, or suspend their eligibility and to
provide an opportunity for a hearing if it takes such action."
Salazar, 954 F. Supp. at 326 (internal brackets and quotation marks
omitted).
Under the ACA' s implementing regulations, the District is
required to "passively" renew 10 the Medicaid benefits of Medicaid
beneficiaries "if able to do so based on reliable information
contained in the individual's account" or if such information is
otherwise available to the agency through federal and local
databases and other sources. See 42 C.F.R. § 435.916(a) (2). If
sufficient information is available to the agency to permit an
eligibility determination, the Medicaid recipient cannot be
required to take any action. Id. If sufficient information is not
available to passively renew an individual, the agency must mail
a form that contains the information already available to the
agency and ask the Medicaid recipient to complete the missing
portions and return the form by telephone, e-mail, online, or in
person. 42 C.F.R. § 435.916 (a) (3). The latter process is referred
to as "manual" renewal.
10 The "passive renewal" occurs when a Medicaid recipient's
benefits are renewed without the recipient having to provide any
additional information to the District.
-22-
•.
Ordinarily, if the information available to the District is
insufficient to establish ongoing Medicaid eligibility, the
beneficiary is sent a form 60 days prior to the renewal date.
Scholsberg Deel. ~ 33. The form instructs the beneficiary to return
the form after adding the needed information. Id. If the
beneficiary does not return the form, the beneficiary is provided
30 days' notice that benefits will terminate if the form is not
returned before the renewal date. Id.; see also MAGI 30-day Notice,
Def s. Ex. D [Dkt. No. 2 077-4] . Recipients of this notice. are
advised of their appellate rights. Schlosberg Deel. at ~ 33; Defs.
Ex. D. However, when an individual fails to provide the needed
information on time, the District extends a 90-day grace period,
meaning that benefits will terminate at the end of the
certification period as required by law, but if a beneficiary
returns the completed form late, benefits can be restored
retroactive to the date of termination if the beneficiary's
information establishes that he or she remains eligible.
Schlosberg Deel. at ~ 33.
Another serious problem occurs because during the ongoing
transition from the District's legacy ACEDS system to the new DCAS
system, renewals cannot be done through DCAS directly. Instead,
-23-
data must be transferred from DCAS to ACEDS. These large-scale
data transfers did not perform as the District hoped. 11
In April 2015, the District began receiving reports from the
managed care organizations ("MCOs") that their enrollment numbers
were declining by the thousands, even when beneficiaries received
a passive renewal approval letter or timely returned the renewal
form. See Pls. Ex. 12 at DHCF 12 [Dkt. No. 2070-11]. The District
investigated the problem over the next several months and, by June,
it had identified 1,149 cases in which the information in DCAS was
not automatically transferring to ACEDS, meaning that Medicaid
recipients were listed as receiving benefits in DCAS and yet were
not actually receiving benefits in ACEDS. See Pl. Ex. 13 at 6 [Dkt.
No. 2070-12].
However, the people who were affected had to wait six months
for any benefits. The District contends that the MCOs' specific
concerns about declining enrollment were unfounded -- in fact, MCO
enrollment has increased by approximately 9% since the District
started using DCAS. Schlosberg Deel. ~ 98. However, the
11 Technological and organizational failures in the District's
administration of the Medicaid program have affected different
populations in disparate ways. For example, Medicaid beneficiaries
who are eligible on the basis of disability face different
obstacles than beneficiaries eligible on the basis of income. See
Pls.' Mot. for P.I. at 5-9; Defs.' Opp'n to Mot. for P.I. at 8-9.
However, these distinctions are not material to the outcome of
Plaintiffs' Motion or the relief Plaintiffs seek.
-24-
investigation that the MCOs' inquiry launched gave the District
the opportunity to find serious problems in the renewal system
that had developed and were unknown to the District.
In early October 2015, the District discovered that due to
the same stuck/malformed technological defect affecting initial
applications in DCAS, many renewal "cases were not populated
correctly in the [DCAS] system and thus lost coverage." See Pls.
Ex. 21 Response No. 2(d). As of October 26, 2015, the District had
identified 86 renewal cases that had lost coverage at the time of
renewal due to this defect and had only restored coverage to a
subset of these cases. See id. Response 2(c) (indicating
restoration of coverage to only 68 individuals) . Data provided at
a D. C. Medical Care Advisory Committee meeting on December 10,
2015, indicates that this defect affected 361 renewal cases (and
likely more individuals, as a case may include multiple members of
a household). Pl. Ex. 1 at 3. By December 10, 2015, 131 cases
remained to be reviewed to determine, in the first instance,
whether coverage had been lost. Pl. Ex. 1 at 3.
Of course, the long lines and wait times at ESA Service
Centers add difficulty to an already trying process. See, ~,
Pl. Ex. 25 ~ 8 [Dkt. No. 2070-23] ("We [Whitman Walker Health]
hear from consumers that they must line up as early as 4 am for an
opening time of 7: 45 am or 8 am in order to be seen .
-25-
Consumers reported to me . . that they wait for many (often more
than 4) hours to meet with a case worker to get help.").
Further technological errors have plagued what is supposed to
be an automatic renewal process. In May 2014, the District
discovered that DCAS had erroneously denied an unknown number of
individuals who had been granted asylum in the United States (who
are Medicaid eligible) the coverage to which they were entitled.
See Pl. Ex. 15 at 2, 5. However, the District points out that
technical problems that led to the error regarding asylum status
were fixed by November 2014. Schlosberg Deel. ~ 31.
Additionally, DCAS system defects led to the failure to
automatically account for certain life changes that can af feet
Medicaid coverage, such as the birth of a baby. The District has
recognized DCAS's "inability to accurately redetermine eligibility
once a life event has been reported due to system defects." E-mail
Communications between CMS and DHCF, January 2015, Pl. Ex. 16 at
DHCF 1850 [Dkt. No. 2070-15]; see also id. at DHCF 1955 ("We are
having major challenges with processing change [sic] in
circumstances for all reported changes.") . The District must
"manually add[] newborns and additional household members to the
case by using [its] old legacy system" to avoid a loss of coverage.
Id. at DHCF 1850. As of August 2015, the District reported "a
significant backlog in life event processing." E-mail
Communications Between DHS and DHCF, August to September 2015, Pl.
-26-
Ex. 17 at DHCF 51 [Dkt. No. 2070-16]. The District maintains that
because it has been manually processing life event changes "[n]o
individual has lost coverage due to such issues." Defs.' Opp'n to
Mot. for P.I. at 26 (citing Schlosberg Deel. ~ 94).
In addition to these technical errors, the District's failure
to process renewal paperwork in a timely manner has led to
confusion and the loss of coverage by Medicaid beneficiaries. Email
exchanges between the District and the Centers for Medicare and
Medicaid Services ("CMS") in January 2015, indicate that the
District was regularly taking 90 days to process renewals, which
CMS considered too long. Pl. Ex. 16 at DHCF 1847-1849; id. at 1849
("The agency should be working to process the returned form as
expeditiously as possible and . . the whole process ordinarily
should not take 90 days . . . . "); see also Pl. Ex. 17 at DHCF 47-
48 (referring to a "backlog renewal"). Individual examples
provided by several of the District of Columbia's most reliable
and experienced legal aid and public heal th organizations help
convey the severity of the problem:
One client [of the D.C. Legal Aid Society], a mother of
seven with severe disabilities, submitted her Medicaid
renewal form in January 2015. She got a notice in late
February stating that the form had not been received.
She then got a notice in early March stating that the
form had been received. She went to a [S]ervice [C]enter
in April to renew her SNAP benefits and was told that
there was nothing more that she needed to do to renew
her Medicaid. Then she received another notice in April
telling her that she needed to verify District residency
for herself and one of her children. The client had not
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recently moved, and all of her children live with her.
After Legal Aid got involved, the client's benefits were
restored in May 2015. The client and her son -- who both
have serious health conditions -- were unable to receive
needed treatment during the weeks that they went without
coverage.
Legal Aid Deel., Pl. Ex. 26 ~ 6 (e) [Dkt. No. 2070-24].
[Bread for the City] Patient I, a Spanish speaker who
managed to submit a timely renewal form, despite it being
sent in English, received verbal confirmation of
receipt, but was terminated in October 31, 2015, and [as
of December 22, 2015] remain[ed] without coverage[.]
Pls.' Mot. for P.I. at 23 (citing Pl. Ex. 24 ~ 19).
[Bread for the City] Patient J, who is incontinent,
completed and timely submitted her renewal form, but
nevertheless experienced a temporary loss in coverage
resulting in her going without needed incontinence
supplies, limiting her ability to fully function[.]
Pls.' Mot. for P.I. at 23 (citing Pl. Ex. 24 ~ 20).
[Bread for the City] Patient K, who suffers from prostate
cancer, submitted his renewal form and proofs twice, but
was left to cope with a demeaning situation because he
could not afford to pay for incontinence supplies out-
of-pocket during the lapse in coverage[.]
Pls.' Mot. for P.I. at 23 (citing Pl. Ex. 24 ~ 21) (internal
quotation marks omitted) .12
Lest the reader be getting exhausted reading all these numbers
and examples, s/he must constantly keep in mind that these are
12 See also Whitman-Walker Deel., Pl. Ex. 25 ~ 9 (a) (A Whitman-
Walker patient was informed by ESA staff that his form had been
received, yet his coverage was still terminated.); id. ~ 9(b) (A
Whitman-Walker patient was unable to access life-saving
medications after coverage was terminated following completion of
form at service center.).
-28-
real people -- poor and sick people and their children -- who are
being denied the health care and the dignity of receiving health
care to which they are entitled by law.
Plaintiffs' counsel represents that s/he also encounters
these types of improper terminations with some frequency among the
individuals that are represented. For example, the District failed
to renew the Medicaid coverage of Terri Jackson and her family,
despite the fact that they timely submitted a renewal form first
online and then at a service center. Accordingly, Ms. Jackson and
her family lost their Medicaid coverage.
Among other problems, this resulted in Ms. Jackson's Medicare
Part B premiums being withheld from her Social Security check for
six months. Jackson Deel., Pl. Ex. 32, ~~ 1-3, 8-12 [Dkt. No. 2070-
30]. Ms. Jackson's husband and son, who suffer from chronic health
conditions, also lost coverage, forcing Ms. Jackson to purchase
medications out-of-pocket for them and causing the family a great
deal of stress. Id. ~~ 6, 12; see also Declaration of Vera Edmonds
("Edmonds Deel."), Pl. Ex. 48 [Dkt. No. 2070-46] (Ms. Edmonds, who
timely mailed renewal forms for her family, found out her coverage
had lapsed when she went to the doctor following a car accident;
as a result, she has been unable to attend rehabilitation therapy
or pay for needed medication) .
For its part, the District states that it has reviewed each
of the foregoing individual cases, that all of them were resolved
-29-
in the first half of 2015. Defs.' Opp'n to Mot. for P.I. at 29.
The District also states that it reported the resolution of each
case to the relevant legal services providers in June of 2015. Id.
Moreover, the District claims that most of these cases were the
result of systemic problems that had already been fixed by the
time the legal service providers became involved. Schlosberg Deel.
~~ 90-91. The others were the result of routine processing errors
that are not indicative of systemic issues within DCAS. Id.
While the District is clearly doing its best to rectify errors
and to provide retroactive status to those who lost coverage, the
end result is that a significant number of very sick people, or
elderly people, or parents of children, are suffering from the
time their benefits lapse erroneously until the District can fix
the error and make benefits retroactive. In the interim, those
people may not be able to buy their cancer medicine, receive
necessary mammograms, or continue necessary physical therapy.
Plaintiffs next point out that the District often terminates
the Medicaid coverage of beneficiaries who, despite becoming
ineligible on one basis, remain eligible on another. Legal Counsel
for the Elderly reports recurring issues with the District
terminating Medicaid coverage based on recipients' slight change
in income, even when these same recipients are eligible for
Medicaid under another coverage category. See Pl. Ex. 30 ~~ 5-8
[Dkt. No. 2070-28]. When these individuals experience a loss of
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coverage, they are unable to access needed medical care, such as
personal care aide services, and are at an increased risk of
institutionalization. Id. ~ 6.
For example, when Fonda Carroll's husband died and she became
eligible for a widow's benefit, she lost her Medicaid coverage,
which she had obtained due to a disability, because she was
considered over-income. Carroll Deel., Pl. Ex. 31 ~~ 1-6, 9 [Dkt.
No. 2070-29]. Although Ms. Carroll was eligible for Medicaid under
a different category (as a childless adult under 65) despite her
income increase, she was not screened for eligibility under that
category prior to termination. Instead, her coverage was
terminated and she was informed that she should re-apply through
DCAS. Id. ~~ 10-11. As of December 22, 2015, she had a pending
Medicaid application, but while waiting for a determination, she
could not obtain needed doctor's appointments or her Chronic
obstructive pulmonary disease medication because she cannot afford
the hundreds of dollars to pay for even a single inhaler. Id.,
~~ 12-13.
The District responds to this particular example, noting that
it had insufficient information to establish that this individual
was eligible for a different coverage category. Schlosberg Deel.
~ 97. On April 8, 2015, Ms. Carroll received a 30-day notice to
terminate her Medicaid benefits because she was over income. Id.
In addition, Ms. Carroll received general correspondence from the
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District specifically advising her to file an application through
DCAS so that she could be considered for eligibility under other
Medicaid coverage groups and informing her that she could apply in
person, on line and over the telephone. Schlosberg Deel. at ~ 97.
According to the District's records in ACEDS, Ms. Carroll received
a total of three such communications. Id. Eventually, she did file
the correct application, and her Medicaid coverage in the childless
adults category began on December 1, 2015. Id.
Additionally, the District claims that it does consider
whether individuals who lose their Medicaid eligibility on one
basis might still be eligible on another. The problem, it contends,
is that the District often lacks sufficient information to
automatically grant benefits on new grounds. Schlosberg Deel.
~ 95. In such cases, the District requests that the beneficiary
submit any missing information needed to establish eligibility.
Id. If the information is received prior to the beneficiary's
renewal date, and the information establishes eligibility in a
different coverage group, the beneficiary will not experience a
lapse in coverage. If not, the beneficiary will lose coverage
(although benefits may be restored retroactively to the date
coverage was lost during the 90-day grace period) . Id.
As noted above, " [t] he District of Columbia is required, under
federal law, to give [Medicaid] recipients timely and adequate
notice of proposed action to terminate, discontinue, or suspend
-32-
their eligibility and to provide an opportunity for a hearing if
it takes such action." Salazar, 954 F. Supp. at 326 (internal
quotation marks and citation omitted). However, Plaintiffs respond
that the District has failed to send renewal forms notifying
recipients of the need to renew.13
Bread for the City's medical director, Dr. Randi Abramson,
explains that "DHS frequently terminates Medicaid coverage without
providing recipients with any notice that they are required to
renew their coverage" and recounts the stories of several
individuals who had their Medicaid coverage terminated without
receiving any advance notice of the need to renew. Pl. Ex. 24,
~~ 13-14 [Dkt. No. 2070-22] i id. ~ 15 (Patient F, who never
received a renewal form and found out her coverage had been
terminated at doctor's office, was unable to receive needed
13 Plaintiffs also contend that the District fails to send
appropriate notices upon a lapse in coverage, but the District
notes that it does in fact send notice of its intent to terminate
30 days prior to the scheduled termination date. Pls.' Mot. for
P.I. at 30; Defs.' Opp'n to P.I. at 29. ACA implementing
regulations require that the District provide "timely and adequate
notice of proposed action to terminate, discontinue, or suspend
their eligibility" at least 10 days before the proposed
termination. 42 C.F.R. § 435.919(a). Thus, the 30-day notice
complies with these regulations.
Plaintiffs point out that if a beneficiary returns a renewal
form but loses coverage because of the District's failure to timely
process the form, then the beneficiary has not received adequate
notice of termination. The real problem faced by the hypothetical
Medicaid beneficiary Plaintiffs describe is the unlawful
termination of Medicaid coverage, not the concomitant lack of
notice.
-33-
•.
mammogram) i. id. ~ 16 (Patient G, who never received a renewal form,
had coverage terminated and could not obtain needed orthopedic
care); id. ~ 17 (Patient H, who never received a renewal for~ for
herself and her son, found out their coverage was terminated when
she attempted to obtain medication) .
In October 2015, the District discovered a computer error
that garbled the mailing addresses of Medicaid recipients from May
to October 2015, preventing many recipients from receiving the
renewal form. Pl. Ex. 1 at 3. The renewal forms that the District
is supposed to send to each Medicaid beneficiary in advance of
termination have unique codes that must be provided during the
renewal process. Thus, if a Medicaid recipient cannot access the
renewal code because they never received the renewal form on which
it appeared, they must go to great lengths to obtain a replacement
form or face an indefinite period without coverage. See Pl. Ex. 24
~ 15 (Patient F was only able to activate coverage after visiting
a service center twice to obtain her existing renewal form) ; id.~ 16 (Patient G is still unable to renew because he cannot obtain
his renewal code); id. ~ 17 (Patient H remains without coverage
because she is unable to reach DCAS to obtain the necessary renewal
form and code) .
As with the initial application backlogs discussed above, the
District has made substantial progress with respect to the issue
of passive renewals. In February 2016, the District processed
-34-
benefits renewals for approximately 7, 000 Medicaid recipients
whose eligibility is determined by their income. Of those, the
District was able to passively renew 59% of the beneficiaries.
Second Schlosberg Deel. ~ 12. Moreover, as of February 26, 2016,
the District had reduced the number of renewals affected by the
stuck/malformed issue to zero and was "not aware of any issue
causing a backlog of renewals, nor [wa] s it aware of any issue
that is impeding the processing or mailing of notices." Def s. '
Opp'n to Mot. for Mod. at 3-4 (citing Second Schlosberg Deel. ~~
13, 16).
The District also notes that the response rate for
beneficiaries who received renewal notices in 2015 was 86.3%, which
compares favorably to a historical rate of 60%. Schlosberg Deel.
~ 100. Finally, the District notes that
[s]ince August 2015, in addition to tracking notices,
[it] has implemented an enhanced quality oversight
protocol. On a daily basis, [the District] receives a
sample from the daily batch of notices from [DCAS] prior
to mailing. Each sample is reviewed for accuracy,
correct notice logic, and adherence to policy
guidelines. If there are issues, the notice in question
is put on hold until the technical issues are resolved.
If there are no issues, the batch of notices is released
and the notices are sent to the recipients.
Second Schlosberg Deel. ~ 17.
However, Plaintiffs point out that even the District's recent
numbers reflect that some Medicaid beneficiaries are still losing
coverage at the renewal stage. Plaintiffs also point out that the
-35-
District cannot currently accept renewals submitted on-line, which
will lead to additional loss of Medicaid coverage. Second
Schlosberg Deel. ~ 12. Some Medicaid recipients have had difficulty
renewing their benefits over the telephone. See Whitman-Walker
Deel. Pl. Ex. 25 ~ 10 [Dkt. No. 2070-23] ("ESA Customer Service
Line Staff indicate that they are not authorized to complete the
renewal process over the phone but customers must walk into a
service center"); Declaration of Albert Tillman, March 4, 2016,
Pl. Ex. 66 ~ 6; L. Jackson Deel., Pl. Ex. 71 ~~ 5-.7. Thus, the
long lines at service centers and paperwork processing issues
already discussed are likely to lead to future losses in coverage.
Plaintiffs again provide a wealth of individual narratives to
demonstrate ongoing barriers that Medicaid beneficiaries face in
renewing their coverage. Several of these narratives are
consistent with the District's story of progress -- that is, issues
affecting the individuals described were, in fact, resolved by the
date of the District's Opposition, February 26, 2016.
For example, the Declaration of Jocelyn Blier describes the
situation of one Medicaid beneficiary who sent her Medicaid
recertification form to the District in December of 2015. Pls.'
Ex. 64. In early February, she received a notice that the District
had not received her recertification form. Id. According to
Plaintiffs' counsel, when asked about this, the District stated
that the processing backlog had prevented timely processing of the
-36-
beneficiary's form; however, by the end of February, the District
had succeeded in processing the form and the beneficiary never
experienced a loss of coverage. Id.With respect to this particular case, the District states
that it never received a recertification form in December 2015,
and denies that this individual was affected by any renewal
backlog. Defs.' Surreply at 9-10. The District states that when it
did not receive a renewal form in December 2015, it sent the
appropriate 30-day notice on January 29, 2015. Id. The District
.1
agrees with Plaintiffs that this individual never experienced a
loss of coverage. Id.Other narratives, however, demonstrate the presence of
renewal issues beyond February 26, 2016, the date at which the
District believed that it had rectified the lion's share of
systemic renewal problems.
Larry Campbell, who suffers from liver disease, high blood
pressure, and diabetes, received notice from the District that he
needed to submit additional information by February 14, 2016 or
risk termination of his Medicaid benefits on February 28, 2016.
Declaration of Larry Campbell, March 7, 2016, Pl. Ex. 70 ~~ 3-6.
Mr. Campbell submitted a renewal form before the due date. Id. Yet
on March 2, 2016, he received a notice informing him that his
Medicaid coverage will be terminated in April 2016, leaving him
-37-
without access to needed medical care. Id. However, the notice
provided no reason for the termination. Id.The District claims that although Mr. Campbell submitted the
proper renewal form, he failed to also submit a "required Medical
Examination Report at that time. /1
Defs.' ·Surreply at 11. After
being informed that his benefits would be terminated on April 1,
2016, "Mr. Campbell then submitted the completed form, and his
coverage has been extended through September 2O16 . /1 Id. The
District does not address Plaintiffs' assertion that the notice of
termination failed to provide a reason for the termination.
In late January, Leslie Jackson received multiple notices
warning that her Medicaid benefits as well as the benefits of her
minor son, who suffers from a severe form of epilepsy, would be
terminated. L. Jackson Deel., Pl. Ex. 71 , , 3-9, 15. The multiple
forms contained inconsistent information concerning the date the
renewal form was due. Id. On February 5, 2016, Ms. Jackson renewed
her son's coverage over the phone, and on February 8, 2016, she
confirmed that coverage had been renewed. Id. ,, 5-6. Yet on
February 9, 2016, Ms. Jackson received a termination notice from
the District stating that her son's coverage would end at the end
of the month for failure to submit information required for
renewal. Id. , 7.
Ms. Jackson had a number of additional interactions with
District personnel that left her unsure of whether she and her son
-38-
would continue to obtain their Medicaid benefits. Id. ~ 8-14. As
late as March 8, 2016, the District continued to provide inaccurate
information that appears to be the product of either computer
errors, processing backlogs, or both. On that date, Ms. Jackson
received yet another termination notice from the District stating
that her son's Medicaid coverage would be terminated on March 21,
2016 for failure to return a form with information necessary for
renewal. Id. ~ 15.
With respect to Ms. Jackson's own benefits, the District
states that she is, in fact, no longer Medicaid eligible. Defs.'
Surreply at 8. "When the District attempted to re-determine Ms.
Jackson's eligibility in February 2016, available records
suggested that she remained over income and that her coverage might
terminate unless she was eligible under another coverage
category." Id. The District sent her notice of its findings and
asked her to complete a questionnaire to determine her eligibility
under non-income-based categories. Id. Based on her responses, Ms.
Jackson was found to be ineligible for Medicaid but was eligible
for a cost-sharing program called Qualified Medicare Beneficiary.
Id. Thus, the District concludes, "the system has functioned for
[Ms. Jackson] as it should." Id.The situation of Ms. Jackson's son, on the other hand,
resulted from the District's mistakes. The multiple notices that
Ms. Jackson received about her son's Medicaid benefits "were the
-39-
result of an error by a caseworker who [mistakenly] . opened
a new case for the son" rather than adding him to Ms. Jackson's
case, "resulting in two cases for the same individual." Id. at 7.
On February 9, 2016, the son's renewal of benefits was recorded in
only one of the two duplicate cases, and a termination notice was
automatically generated for the case that was not renewed. Id. at
7-8.
The District construes what happened to Ms. Jackson's son as
another individualized error that does not signal system problems.
However, as noted at the conclusion of the previous section, it is
impossible to separate individual mistakes from the systemic
problems facing the District's Medicaid beneficiaries. The bottom
line is that whether it is an "individualized error" or a "system
problem," it is the beneficiary who is suffering
On the basis of the facts stated above, it is clear that a
significant number of Medicaid beneficiaries have been harmed by
the District's failure to efficiently send and process benefits
renewal forms.
C. Relief Requested
In light of the forgoing facts, Plaintiffs request that the
Court modify the Settlement Order so that
• [the District] shall provisionally approve all
Medicaid applications pending over 45 days until a
final determination can be made; .
-40-
• [the District] shall continue the eligibility of all
Medicaid recipients due to be renewed or recertified;
• these remedies shall remain in place until [the
District] demonstrate[s] to the Court, based on
substantial evidence, that [its] technology and
business processing systems for making timely
eligibility determinations on applications[] and
providing adequate notice to Medicaid recipients and
applicants of the decisions on renewals and
applications are functioning as required to ensure
and protect the rights of Medicaid recipients and
applicants under the Due Process Clause of the Fifth
Amendment of the United States Constitution, Title
XIX of the Social Security Act, 42 u.s.c. 1395, et
~' and accompanying regulations, 42 C.F.R. 430, et
seq., and the Patient Protection and Affordable Care
Act of 2010, Pub. L. No. 111-148, 124 Stat. 119, et
~ ( "ACA") , and its implementing regulations; . . .
• [the District] may move to terminate [these remedies]
anytime [it] can make the demonstration [] described
[above] ; and . .
• during the time [these remedies are] in effect, [the
District] shall report monthly on [its] compliance
with [their] terms.
Proposed Order Accompanying Pls.' Mot. for Mod. at 1-2.
III. STANDARD OF REVIEW
Plaintiffs' Motion for Modification of Settlement Order is
governed by Federal Rule of Civil Procedure 60(b). As Plaintiffs
point out several times in tp.eir briefs, Paragraph 71 of the
Settlement Order provides that "either party shall have the right
to move the Court for a modification of this Order at any time for
any reason." Settlement Order ~ 71. The Settlement Order's very
next paragraph clarifies that " [i] n determining motions for a
-41-
modification of this Order under paragraphs 70 and 71 above, the
general body of federal law governing motions to modify orders in
contested matters pursuant to Rule 60(b) of the Federal Rules of
Civil Procedure shall apply." Settlement Order , 72.
Plaintiffs rest their Motion for Modification upon Rule
60 (b) 's fifth subsection, which provides in relevant part that
"the court may relieve a party or its legal representative from a
final judgment, order, or proceeding [when] applying it
prospectively is no longer equitable [.]" Fed. R. Civ. P. 60 (b) (5).
The District claims that Rule 60 (b) (5) is inapplicable to
Plaintiffs' Motion because Plaintiffs seek to modify provisions of
the Settlement Order that are not prospectively applicable. See
Twelve John Does v. District of Columbia, 841 F.2d 1133, 1138 (D.C.
Cir. 1988). ("an order or judgment may be modified under .
Rule 60(b) (5) only to the extent that it has 'prospective
application. '") .
In the District's view, Plaintiffs' Motion for Modification
seeks to reinvigorate Sections II & III of the Settlement Order,
which were terminated by this Court's Orders of February 24, 2009
and October 18, 2013. Thus, the Government contends, Plaintiffs'
Motion seeks relief from those termination Orders, which have no
prospective application. "[A]n order or judgment has prospective
application within the meaning of Rule 60 (b) (5) [only if] it is
executory or involves the supervision of changing conduct or
-42-
conditions." Id. at 1139 (internal quotation marks omitted)
(emphasis added). The Government argues that the Court's Orders
terminating Sections II & III of the Settlement Order are neither
executory nor involve the supervision of changing conduct or
conditions. In fact, termination of Section II & III meant the end
of the Court's supervision of conduct related to those Sections.
Contrary to the District's assertions, however, Plaintiffs
disclaim that they are seeking to revive Sections II & III of the
Settlement Order, and "[i] nstead, [] seek modification of the
Settlement Order, granting additional injunctive relief, based on
the new factual circumstances." Pls.' Reply in Support of Mod. for
Mod. at 3. They note that the Settlement Order has prospective
application, and thus may be modified under Rule 60(b) (5), because
sections of the Settlement Order relating to early and periodic
screening, and diagnostic and treatment services ( "EPSDT") very
clearly require the supervision of changing conduct or conditions.
Id. (citing Settlement Order ~~ 36, 41, 47, 79); see also Pls.'
Mot. for Mod. at 17, 18. The modifications Plaintiffs propose are
within the sphere of the Settlement Order's prospectively
applicable EPSDT provisions because "it is common sense that a
child cannot obtain any EPSDT service when he or she lacks Medicaid
eligibility." Pls.' Reply in Support of Mod. for Mod. at 9-10.
Courts applying Rule 60(b) "must strike a 'delicate balance
between the sanctity of final judgments and the incessant
-43-
command of a court's conscience that justice be done in light of
all the facts.'" Twelve John Does, 841 F.2d at 1138 (quoting Good
Luck Nursing Home, Inc. v. Harris, 636 F.2d 572, 577 (D.C. Cir.
1980)).
As our Court of Appeals has stated, "[t]he power of a court
of equity to modify a decree of injunctive relief . . is long-
established, broad, and flexible." United States v. W. Elec. Co.,
46 F.3d 1198, 1202 (D.C. Cir. 1995) (internal citations and
quotation marks omitted) (quoting New York State Ass'n for Retarded
Children, Inc. v. Carey, 706 F.2d 956, 967 (2d Cir. 1983), cert.
denied, 4 64 U.S. 915 ( 1983) (Friendly, J.) ) . "At the request of
the party who sought the equitable relief, a court may tighten the
decree in order to accomplish its intended result." Id. (citing
United States v. United Shoe Machinery Corp., 391 U.S. 244, 252
(1968)). Thus, Rule 60 (b) (5) is merely "a codification of the
universally recognized principle that a court has continuing power
to modify or vacate a final decree[.]" Id. (quoting 11 Charles A.
Wright, et al., Federal Practice & Procedure§ 2961 (1994)).
"A consent decree[,]" such as the Settlement Order at issue
here, "no doubt embodies an agreement of the parties and thus in
some respects is contractual in nature." Rufo v. Inmates of Suffolk
Cty. Jail, 502 U.S. 367, 378 (1992). However, the Supreme Court
has made clear that agreements embodied in a consent decree remain
"subject to the rules generally applicable to other judgments and
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decrees." Id. "A consent decree, in other words, is subject to
modification to the same extent as if it had been entered as a
final judgment after a full trial." W. Elec. Co., 46 F.3d at 1205.
In Rufo·, the Supreme Court set forth the test for determining
whether modification of a consent decree is warranted under Rule
60(b) (5). 502 U.S. at 383. Emphasizing the flexibility provided by
Rule 60(b) (5), the Court held that "a party seeking modification
of a consent decree bears the burden of establishing that a
significant change in circumstances warrants revision of the
decree." Id. at 383.
"Ordinarily, . modification should not be granted where
a party relies upon events that actually were anticipated at the
time it entered into a decree." Id. at 385. However, "Rule 60(b) (5)
does not foreclose modifications based on developments that, in
hindsight, were things that 'could' happen. . The focus of
Rule 60(b) (5) is not on what was possible, but on what the parties
and the court reasonably anticipated." w. Elec. Co., 46 F.3d at
1205.
"Once a moving party has met its burden of establishing either
a change in fact or law warranting modification of a consent
decree, the District Court should determine whether the proposed
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modification is suitably tailored to the changed circumstance."
Rufo, 502 U.S. at 391. 14
IV. ANALYSIS
A. Significant Change in Circumstances
Based on the extensive evidence submitted by Plaintiffs, it
is clear that circumstances have changed significantly since entry
of the Settlement Order. Given the numerous case histories
presented by Plaintiffs, there is no question that many of the
class members are being irreparably harmed by their inability to
obtain Medicaid benefits, even though the District is acting with
the best of intentions to comply with the ACA.
The narratives set forth above clearly demonstrate that
numerous Medicaid-eligible residents of the District were denied
benefits to which they were entitled due the District's failure to
timely process initial applications, failure to deliver adequate
and timely renewal notices, and failure to efficiently process
14 In the alternative, Plaintiffs put forth Rule 60 (b) (6) as grounds
for their Motion. Rule 60(b) (6) is a catch-all provision, which
permits relief "from a final judgment, order, or proceeding for
. . . any other reason that justifies~relief." Subsection (6) is
only applicable when .none of the five other grounds for relief
under Rule 60(b) are available. Salazar v. District of Columbia,
633 F.3d 1110, 1116 (D.C. Cir. 2011). The Supreme Court has held
that relief under 60 (b) (6) may be granted only under "extraordinary
circumstances," Ackermann v. United States, 340 U.S. 193, 199, 202
(1950), and our Court of Appeals has noted "that a more compelling
showing of inequity or hardship is necessary to warrant relief
under subsection ( 6) than under subsection ( 5) [,]" Twelve John
Does, 841 F.2d at 1140.
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renewal requests. These changed circumstances, which violate the
Constitution and the ACA, affect members of the Plaintiff class.
See Salazar v. D.C., 954 F. Supp. 278, 326 (D.D.C. 1996); 42 C.F.R.
435.912(c)(3); Order at 1-2 [Dkt. No. 100]. Accordingly,
modification of the Settlement Order to address these violations
is warranted.
The District's significant progress in reducing the
processing time for the backlogs and stuck/malformed errors in the
month of February 2016 does not change the conclusion that changed
circumstances warrant relief. Before Plaintiffs filed their Motion
for Preliminary Injunction, the District had made only moderate
progress in reducing the application backlogs between April of
2015, when they were first discovered, Schlosberg Deel. ~ 66 [Dkt.
No. 2077-1], and December 2015. At the end of this nine-month
period, there were still close to 5,000 Medicaid applications in
the backlog. Pl. Ex. 1 at 6 [Dkt. No. 2070-2].
Since the filing of Plaintiffs' initial Motion on December
22, 2015, the District has been able to resolve all of the
thousands of remaining cases in just over one month's time. While
the District's progress is commendable, the timing of it suggests
that Court oversight has been a boon rather than a hindrance.
Moreover, the Court has no assurance that the significant problems
(and violations of the law) that arose will not arise again.
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In order for relief to be proper under Rule 60 (b) ( 5) , the
cited change in circumstances cannot have been anticipated or
foreseen by the parties. See Agostini v. Felton, 521 U.S. 203,
215-216 (1997). The District contends that the troubled
implementation of the ACA' s reforms were foreseen by both the
Parties and the Court. See, ~, Amended Memorandum Opinion and
Order of Oct. 17, 2013 at 6 [Dkt. No. 1886] (predicting that
"implementation [of the ACA's reforms] w[ould] undoubtedly be both
rocky and fairly long in coming").
However, despite the District's contentions, no one could
have predicted the magnitude of the problems that attended the
ACA's implementation. Indeed, the Memorandum Opinion cited
immediately above related only to portions of the Settlement Order
dealing with Medicaid benefits renewal procedures, but as is now
clear, the problems facing Medicaid-eligible residents go far
beyond renewal procedures and affect initial applications, as well
as the basic administration of the program.
More importantly, the relevant inquiry with respect to the
foreseeability of changed circumstances is not whether the Parties
or the Court anticipated the changes at any point, but instead,
whether the circumstances "actually were anticipated at the time
[the Parties] entered into a decree." Rufo, 502 U.S. at 385.
Needless to say, no one did or could have anticipated, in 1999
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when the Settlement Order was entered, the passage of the ACA, no
less its complexity and its reforms to our health care system.
The District claims that the relief Plaintiffs request would
essentially reinstate Sections II and III of the Settlement Order.
This, the District contends, would deprive it of the sunset
provisions that it had negotiated in Section II and substitute for
a foregone appeal with respect to Section III. See EEOC v.
Local 40, 76 F.3d 76, 81 (2d Cir. 1996) ("If we were to enforce
this consent decree against Local 40 twelve years after its
expiration, we would be depriving the union of the benefit of its
bargain."); cf. Twelve John Does, ·841 F.2d at 1141 ("Indeed, it is
a commonplace that Rule 60(b) (6) may not be used as a substitute
for an appeal not taken.") . Additionally, the District contends
that the Court lacks jurisdiction to restore terminated portions
of a consent decree.
Plaintiffs have expressly disclaimed that they seek to
reinstate Sections II and III of the Settlement Order. As they put
it, "Plaintiffs do not seek to relitigate terminated provisions of
the settlement order." Pls.' Reply in Support of Mod. for Mod. at
2 (capitalized in original). "Instead, [P]laintiffs seek
modification of the Settlement Order, granting additional
injunctive relief, based on the new factual circumstances." Id. at
3 (emphasis added). Accordingly, the District's concerns regarding
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reinstatement of terminated provisions of the Settlement Order are
misplaced .1s
The District also notes that courts overseeing institutional
reform consent decrees must interpret Rule 60(b) in a manner that
ensures that "'responsibility for discharging the State's
obligations is returned promptly to the State and its officials'
when the circumstances warrant. 11
Horne v. Flores, 557 U.S. 433,
450 (2009) (quoting Frew v. Hawkins, 540 U.S. 431, 442 (2004)).
The District objects that the modifications Plaintiffs propose
would further hamstring its efforts to run its Medicaid program
and would delay the prompt return of authority to District
officials.
However, Plaintiffs' proposed relief itself makes provision
for allowing the District to be free of the proposed remedy as
15Before disclaiming, in their Reply, any reliance on Sections II
and III, Plaintiffs asserted in their Motion for Modification that
a footnote in the 2013 Order terminating Section III indicates the
Court's intention to retain broad jurisdiction over the District's
processing of Medicaid applications and renewals. See Salazar v.
D.C., 991 F. Supp. 2d 34, 38 (D.D.C. 2013) ("members of the
plaintiff class can also contact Plaintiffs' counsel, as they have
been doing over the years, to obtain legal assistance"). Plaintiffs
read too much into this footnote. As the District points out, the
footnote mentions no further oversight role for the Court in these
areas. The footnote only serve to reaffirm the right of Plaintiffs'
counsel to represent residents of the District who are inquiring
about their Medicaid eligibility, as counsel has done admirably
for many years. Thus, the jurisdictional foundation of Plaintiffs'
Motion must rest upon the grounds confirmed in their Reply: the
Settlement Order's prospectively applicable EPSDT provisions.
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soon as it "demonstrate [s] to the Court, based on substantial
evidence, that [the District's]" systems and processes will comply
with applicable law. 16 Proposed Order Accompanying Pls.' Mot. for
Mod. at 1-2. The proposed relief further provides that "[the
District] may move to terminate [these remedies] anytime [it] can
make the demonstration [] described [above.] " Id. Accordingly,
Plaintiffs' proposed relief is consistent with the goal of
restoring responsibility over local management functions as
quickly as possible.
Finally, the District contends that modification of the
Settlement Order is unwarranted because the changed circumstances
are unrelated to the remaining portions of the Settlement Order,
which relate to the delivery of EPSDT services to children:
16 The full provision reads as follows:
[T]hese remedies shall remain in place until defendants
demonstrate to the Court, based on substantial evidence,
that defendants' technology and business processing
systems for making timely eligibility determinations on
applications, and providing adequate notice to Medicaid
recipients and applicants of the decisions on renewals
and applications are functioning as required to ensure
and protect the rights of Medicaid recipients and
applicants under the Due Process Clause of the Fifth
Amendment of the United States Constit~tion, Title XIX
of the Social Security Act, 42 u.s.c. 1395, et~, and
accompanying regulations, 42 C.F.R. 430, et ~, and
the Patient Protection and Affordable Care Act of 2010,
Pub. L. No. 111-148, 124 Stat. 119, et~ ("ACA"), and
its implementing regulations; . .
Proposed Order Accompanying Pls.' Mot. for Mod. at 1-2.
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•.
[W]hether an initial application for Medicaid benefits
is processed within 45· days has no bearing on the
District's ability to achieve an adequate participant
ratio for well-child visits, to advise children or their
caretakers regarding the need for and importance of
EPSDT services, to train providers of EPSDT services, or
its ability to offer transportation and scheduling
assistance as required by Sections V and VI of the
Settlement Order. Nor can plaintiffs advance any
reasonable argument that the District's compliance with
its EPSDT obligations is frustrated by an alleged lack
of advance notice before terminating Medicaid benefits
in the context of renewal.
Defs.' Opp'n to Mot. for Mod. at 8.
Plaintiffs, however, provide a simple and convincing response
to this argument: ~[I]t is common sense that a child cannot obtain
any EPSDT service when he or she lacks Medicaid eligibility." Pls.'
Reply in Support of Mod. for Mod. at 9-10. Moreover, children make
up a substantial proportion of the District's Medicaid population.
In 2014, there were 98,350 children eligible for Medicaid, Form
CMS-416, line la [Dkt. No. 2039-1], and as of October 2014, there
were a total of 247,850 people on DC Medicaid, Pl. Ex. 61, column
1 [Dkt. No. 2102-1]. Thus, issues affecting initial applications
and renewals are clearly related to portions of the Settlement
Order concerning EPSDT services.
For all of these reasons, significant changes in facts and
law warrant modification of the Settlement Order.
B. Suitably Tailored Relief
Once a court has determined that .a change in circumstances
warrants revisions to a consent decree, it must consider whether
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the relief requested is suitably tailored to those changes. Rufo,
502 U.S. at 391. "A change in circumstances is not a free pass to
rewrite a consent decree; rather 'the focus should be on whether
the proposed modification is tailored to resolve the problems
created by the change in circumstances.'" Keepseagle v. Vilsack,
118 F. Supp. 3d 98, 127 (D.D.C. 2015) (quoting Rufo, 502 U.S. at3 91) .
The District contends that the relief Plaintiffs seek is not
suitably tailored because it would provide assistance to
individuals beyond the population that receives EPSDT benefits.
Defs.' Opp'n to Mot. for Mod. at 8 n.3. The District's argument
construes the Court's power to amend consent orders too narrowly.
The Supreme Court has stated that "[o] nee a court has
determined that changed circumstances warrant a modification in a
consent decr~e, the focus should be on whether the proposed
modification is tailored to resolve the problems created by the
change in circumstances." Rufo, 502 U.S. at 391. The "problems
created by the change in circumstances" that brought about
Plaintiffs' Motion are not limited to the delivery of EPSDT
services. True, Plaintiffs rely exclusively on the EPSDT
provisions of the Settlement Order to demonstrate that the Order
itself has prospective application, but the "problems created" by
the District's implementation of the ACA's provisions include the
denial of coverage to eligible adults as well as children. It is
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in the public interest to ensure that those children and adults do
not lose the vital services provided by Medicaid coverage under
the ACA.
Put differently, Plaintiffs have shown that changed
circumstances have led the District to violate its obligations to
adjudicate Medicaid applications within 45 days and to renew
Medicaid benefits in accordance with the ACA's implementing
regulations and due process. The general thrust of the remedies
that Plaintiffs propose are suitably tailored to resolve those
problems. That is what Rufo requires. That is all Plaintiffs ask
for.
The District also contends that because it has made
significant progress in resolving the problems that led Plaintiffs
to file their Motions (by eliminating all known backlogs and
reducing the number of stuck/malformed applications to 67), the
relief requested is unnecessary.
However, the first prong of relief Plaintiffs request does
nothing more than address the systemic problems that arose during
the District's implementation of the ACA and may well arise again.
The first prong would simply require provisional approval of
Medicaid applications pending longer than 45 days until a final
determination can be made. If the District complies with the law
by reaching f irial determinations within 45 days (as it claims to
have done in the month for February 2016), this relief will impose
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no additional burden at all. It is, accordingly, suitably tailored
to respond to the District's failure to timely process Medicaid
applications.
By contrast, the second prong of relief requested by
Plaintiffs, which would indefinitely continue the benefits of all
Medicaid recipients due to be renewed or recertified, does indeed
sweep too broadly. See Proposed Order Accompanying Pls.' Mot. for
Mod. at 1-2 ("[the District] shall continue the eligibility of all
Medicaid recipients due to be renewed or recertified").
The narratives detail that many Medicaid beneficiaries lost
access to benefits to which they were entitled because of the
District's failure to send appropriate renewal forms or to
efficiently process renewals. However, the District notes that
Plaintiffs' request to continue the benefits of all Medicaid
recipients due to be renewed or recertified contains no end date
or provision for terminating the benefits of M~dicaid recipients
whose ongoing eligibility cannot be verified or who are simply no
longer eligible for Medicaid. Thus, the requested relief "would
virtually eliminate the District's ability to terminate coverage
for individuals who are not eligible or entitled to Medicaid
benefits at heavy costs to the District's taxpayers." Defs.' Opp'n
to Mot. for Mod. at 16.
Although the situation faced by many beneficiaries due to
renew their benefits is indeed dire, that does not justify
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obligating the District to indefinitely continue the Medicaid
benefits of individuals who may no longer be eligible to receive
them. Simply put, if the Court were to impose the second prong of
Plaintiffs' requested remedy, the District would be required to
continue providing benefits to individuals required to recertify
even if it knew that such individuals no longer qualified for
Medicaid. Such a result cannot be justified, and thus, it is clear
that the second prong of Plaintiffs' requested relief is not
suitably tailored to resolve the problems discussed above.
However, despite the unsuitability of the second prong as
requested, a slight modification will provide the necessary
tailoring. The second prong of relief shall read as follows:
[The District] shall continue the eligibility of all
Medicaid recipients due to be renewed or recertified for
90 days after each recipient's renewal or
recertification deadline unless [the District] ha[s]
affirmatively determined that the recipient is no longer
eligible for Medicaid[.]
Order Accompanying This Memorandum Opinion at 2.
As modified by the Court, this relief will adequately remedy
the problem of Medicaid recipients losing benefits due to the
District's failure to effectively provide and efficiently process
renewal forms. Medicaid recipients will maintain the full value of
their benefits during the 90-day grace period, rather than lose
their access to health care for reasons beyond their control. At
the same time, the District -- and by extension, the District's
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taxpayers -- will not be saddled with the burden of indefinitely
furnishing benefits to individuals who may no longer be Medicaid
eligible.
The final provisions of Plaintiffs' request enhance the
suitability of the foregoing remedies. The proposed relief
provides that the substantive remedies shall remain in place until
the District demonstrates by substantial evidence that its
processes will ensure the rights of Medicaid eligible residents of
the District. Proposed Order Accompanying Pls.' Mot. for Mod. at
1-2. The Proposed Order also provides that the District may move
to terminate the imposed relief any time it can make the required
demonstration of non-eligibility. Id. All of these provisions
combine to ensure that the relief imposed will last no longer than
is necessary to cure the "problems created by the change in
circumstances." Rufo, 502 U.S. at 391. 17
The District contends that Plaintiffs' requested relief is
likely to lead to waste and abuse of Medicaid resources. The Court
recognizes that there may be some instances of fraud and abuse of
the system. However, there is no way to know the scope of such
incidents. Moreover, the modification of the second prong of relief
17Plaintiffs request that the Court order the District to submit
monthly reports regarding its compliance with the remedies
imposed. Such reports would be unnecessarily burdensome and shall
not be required.
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discussed above will significantly reduce any likelihood of fraud
or abuse by limiting the period that the District must provide
benefits to individuals whose ongoing eligibility is unknown.
Finally, the equities -- balancing the District's concerns about
wasted resources against the needs of children and low-income
adults for medical care to which they are entitled -- clearly favor
granting the relief which will be ordered.
For all of these reasons, the Court concludes that Plaintiffs'
proposed amendments to the Settlement Order -- incorporating the
Court's alterations are "suitably tailored." 1 8
18 In its Opposition to Plaintiffs' Motion for Preliminary
Injunction, the District argues that the Preliminary Injunction
should not be granted because the United States is a necessary
party to the present controversy because the relief requested would
necessarily bind the United States as well as the District. See
Fed. R. Civ. P. 65(d) (2) (injunction issued by federal court may
bind only the parties, their agents, servants, employees and
attorneys, and other persons who are in active concert or
participation with any of the aforementioned) ; see also Fed. R.
Civ. P. 19. This, the District argues, is because federal funds
may be available to the District under 42 C.F.R. 250(b) (2) or 42
C.F.R. 435.1002(c) to offset the costs of compliance with the
injunction.
The District makes no reference to this particular argument in
its briefs on the Motion for Modification, which leaves unclear
whether it meant to preserve the argument. In any case, Plaintiffs
have a satisfactory answer: " [P] laintif f s seek relief only from
[The District], not from CMS or any other party." Pls.' Reply in
Support of P.I. at 6. The fact that the District may eventually be
reimbursed for its costs of complying with this Court's Order does
not automatically make the federal reimbursing agency, CMS, a
necessary party to this proceeding. The District offers no
authority to the contrary.
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V. CONCLUSION
For the forgoing reasons, Plaintiffs' Motion for Modification
of the Settlement Order shall be granted. An Order shall accompany
this Memorandum Opinion.
April 4, 2015 Glay~ler
United States District Judge
Copies to: attorneys on record via ECF
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