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Waskul v. Washtenaw County Community Mental Health

United States District Court, E.D. Michigan, Southern Division

November 22, 2016

Derek Waskul, et. al., Plaintiffs,
v.
Washtenaw County Community Mental Health, et. al., Defendants.

          U.S. Magistrate Judge Anthony P. Patti

          ORDER DENYING PLAINTIFFS' MOTION FOR A PRELIMINARY INJUNCTION [8]

          Arthur J. Tarnow, Senior United States District Judge

         Plaintiffs filed a Motion for a Temporary Restraining Order and Preliminary Injunction on March 30, 2016 [8]. This motion sought to enjoin Defendants from refusing to reinstate the pre-May 2015 levels of funding and services to Plaintiffs, and to all other Community Living Support (CLS) service recipients, until lawful individual plan of service meetings were conducted, and CLS service recipients were provided adequate notice of proposed cuts with a meaningful opportunity to be heard. They further seek to preliminarily and permanently enjoin Defendant Washtenaw County Community Mental Health (WCCMH) from imposing a rate reduction, new budget calculation, and unilateral hours reductions; and to further preliminarily and permanently enjoin Defendant WCCMH from denying participants their right to procedural due process. Defendants Cortes and WCCMH responded on April 18, 2016 [20], and Plaintiffs replied on April 26, 2016 [27]. Defendant Lyon responded on April 20, 2016 [21], and Plaintiffs replied on April 26, 2016 [25]. Defendants Terwilliger and Community Mental Health Partnership (CMHP) responded on April 20, 2016 [22], and Plaintiffs replied on April 26, 2016 [26].

         For the reasons stated below, Plaintiffs' Motion for a Preliminary Injunction [8] is DENIED.

         Procedural History

         A hearing was held on May 19, 2016. At this hearing, the Court ordered the parties to produce a consent order that applied to all CLS participants, allowed for outside monitoring, and that, if additional services are requested, they would go through the IPOS process to determine their medically necessary, and if so, the total budget would increase. Neither side was able to reach an agreement regarding the terms of a proposed consent order. The Court held an evidentiary hearing on the Motion on August 1, 2016 and September 20, 2016. Plaintiffs and Defendants filed supplemental briefs on October 10, 2016. [50]; [51]; [52]; [53].

         Factual Background

         The named Plaintiffs include four individuals suffering from various forms of developmental disabilities. Their guardians are suing on their behalf. Washtenaw Association for Community Advocacy (WACA) is also a Plaintiff, bringing this action on its own behalf, as well as on behalf of its members that have been affected directly by Defendants' alleged unlawful policies and practices. Defendants include Washtenaw County Community Mental Health (WCCMH), Community Mental Health Partnership of Southeast Michigan (CMHP), and employees of County and State Health Departments who are being sued in their official capacity.

         Michigan's state Medicaid plan provides for home and community-based services for approved beneficiaries under a waiver, referred to as a Habilitation Supports Waiver (HSW), for those who would otherwise require treatment in a facility. This Community Living Support (CLS) program is predicated upon the participant's right to self-determination, to structure his or her own plan of service according to medical need. Washtenaw County Health Organization (WCHO) was the Prepaid Inpatient Health Plan (PIHP) that provided Plaintiffs' Medicaid-funded mental health specialty service and support. WCHO contracted with Community Support and Treatment Services (CSTS) to provide these services in the Washtenaw area. WCHO subsequently was dissolved around October 1, 2015. At that time, CSTS changed its name to Washtenaw County Community Mental Health (WCCMH), became the county mental health agency, and assumed the responsibilities of WCHO, including providing notices of fee reductions and defending appeals of these reductions before an ALJ. Additionally, Defendant Community Mental Health Partnership (CMHP) became Washtenaw County's PIHP in January 2014.

         In 2008, CLS service recipients received a single, all-inclusive rate that included payment for budget items including, inter alia, staff salary, transportation, equipment, supply material, community activities, and staff training. [20-5]. In 2012, WCHO altered the budget process for CLS participants and included, alongside the previous 2008 all-inclusive budget method, additional funding for staff training, transportation, goods and activity costs, in addition to amount of community living support hours that participants had previously received. [20-7]. In effect, this duplicated funding for the line items, as their cost was also included in the all-inclusive CLS budget rate set in the 2008 method.

         In April 2015, CLS participants were provided a letter explaining that the budget would be cut, commencing in May. Participants were informed that the CLS rate would be set at $13.88; their level of services would remain the same, but the amount participants could pay their staff might be affected. [20-8]. Participants were not notified of any hearing rights in this letter, which Defendants admit was an error. [See 20-7; 48 at 97, ¶¶12-14]. On May 15, 2015, because of a budgetary crisis, CLS funding was in fact cut. This reduction set CLS participants back to a single, all-inclusive rate, identical to the method employed in 2008.

         On June 4, 2015, the Michigan Department of Health and Human Services, (MDHHS), sent notice to WCCMH that its decision reducing CLS participants' provider rate did not conform to the approved budget authority in the HSW application, and requested that WCCMH retroactively restore the CLS rate to the level of May 15, 2015 for all those affected by this action. Starting in late June 2015, Defendant WCCMH began incorporating the budget reductions into CLS participant individual plans of service (IPOS). When participants were given these new IPOS, they were provided notice of their right to a hearing under a notice of “adequate action.” [8, Exhibit F].

         Named Plaintiffs appealed and while Defendant WCCMH did restore the rate to the May 15, 2015 amount, it did not restore the prior method of calculating this rate, leaving the actual total of the Plaintiffs' CLS budgets capped, resulting in a budget inadequate to cover medically necessary transportation and community living service, per named Plaintiffs' affidavits. [27, Pg ID 511-517; Pg ID 542-544; Pg ID 546-552]. As of August 1, 2016, the CLS rate for all participants was increased by 6%, resulting in the current Medicaid rate being of $14.72. [48 at 102 ¶¶19-25; 103 ¶¶1-12].

         Plaintiffs present the following claims: failure to provide procedural due process rights under 42 U.S.C. § 1983; violation of the statutory right to be heard under the Medicare Act; violation of the Social Security Act, through the failure to authorize services in the amount, scope, or duration required to reasonably achieve its purpose; violation of the Social Security Act's right to receive services with reasonable promptness; and violation of Michigan Mental Health Code 330.1722(1), which provides that no recipient of mental health services shall be subject to abuse or neglect.

         Plaintiffs seek to enjoin Defendants from refusing to reinstate the pre-May 2015 levels of their funding and services, and to all other Community Living Support (CLS) service recipients, until lawful individual plan of service meetings are conducted, and CLS service recipients are provided adequate notice of proposed cuts and an opportunity to be heard. They further seek to preliminarily and permanently enjoin Defendant Washtenaw County Community Mental Health (WCCMH) from imposing the rate reduction, new budget calculation, and unilateral ...


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