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K.B. v. Michigan Department of Health and Human Services

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

May 24, 2019

K.B. BY MOTHER, NEXT FRIEND, AND GUARDIAN T.B., ET. AL., Plaintiffs,
v.
MICHIGAN DEPARTMENT OF HEALTH AND HUMAN SERVICES, NICK LYON, RICHARD SNYDER, Defendants.

          ORDER DENYING DEFENDANTS' MOTION FOR RECONSIDERATION

          Thomas L. Ludington, United States District Judge.

         On June 6, 2018, Plaintiffs filed a complaint against Defendants the Michigan Department of Health and Human Services, Nick Lyon, and Richard Snyder. Compl., ECF No. 1. Plaintiffs are Michigan children and their families who claim that Defendants are providing them with inadequate mental health care. Id.

         On September 7, 2018, Defendants filed a motion to dismiss Plaintiffs' claims. ECF No. 17. The order was granted in part and denied in part. ECF No. 29. Defendants then filed a motion for reconsideration of the Court's order. ECF No. 31. Defendants contend that the Court “misunderstood” the legal responsibilities of Prepaid Inpatient Health Plans and local County Medical Health Service Programs. Id. at 1.

         I.

         A.

         Plaintiffs bring their claim as a class action on behalf of “[a]ll current or future Michigan Medicaid beneficiaries under the age of 21 with a behavioral, emotional, or psychiatric disorder who are or may be eligible for, but are not receiving, home and community-based services.” ECF No. 1 at 12. Plaintiffs contend that Defendants' failure to provide adequate mental health care services in their homes and communities have required some Plaintiffs to enter institutions (such as psychiatric hospitals and juvenile delinquency facilities) while the other Plaintiffs are at risk of requiring institutionalization in the future. Id. at 3.

         Nationally, the Medicaid program is funded through joint contributions by federal and state governments. Id. at 15. If a state wishes to participate in the Medicaid program and receive federal funding, it must comply with certain requirements. Id. at 16. One of these requirements is that it provide Early and Periodic Screening, Diagnosis, and Treatment services (“EPSDT”) for eligible individuals. Id. The state of Michigan receives Medicaid funds to assist in its facilitation and provision of health services. Id. at 15.

         Defendant the Michigan Department of Health (the “Department”) is responsible for facilitating the Medicaid program throughout Michigan. Id. To assist in this, the Department has contracted with ten Prepaid Inpatient Health Plans (“PIHPs”) and local County Medical Health Service Programs (“CMHSP”) to provide health services. Id. at 17. Plaintiffs contend that the PIHPs are not fulfilling Medicaid's requirements and as such, the Department should be held responsible.

         B.

         In their complaint, Plaintiffs raise six claims against Defendants for violating the following: the federal Medicaid EPSDT Mandate, the federal Medicaid reasonable promptness requirement, the Americans with Disabilities Act, Section 504 of the Rehabilitation Act, the due process provisions of the Medicaid Act, and due process rights under the Fourteenth Amendment. In deciding Defendants' motion to dismiss, the Court dismissed Count II and a portion of Count I of Plaintiffs' complaint. ECF No. 32. The balance of Plaintiffs' allegations remain intact.

         In their motion for reconsideration, Defendants contend that the Court should have dismissed Counts V and VI which contain allegations of Defendants' violations of Plaintiffs' rights to notice and a hearing. ECF No. 31. Specifically, Count V provides:

242. The Medicaid Act requires that participating states provide an opportunity for a fair hearing for any individual whose requests for Medicaid services have been denied or not provided with reasonable promptness. 42 U.S.C. § 1396a(a)(3).
243. The Defendants have failed to establish and maintain customs, policies, and practices to provide Plaintiffs and members of the Plaintiff Class with adequate written notice of reductions, terminations, and denials of Medicaid funded intensive home and community-based mental health services and their rights to a pre-termination or reduction fair hearing, in violation of 42 U.S.C. § 1396a(a)(3), which is enforceable by the Plaintiffs pursuant to 42 U.S.C. § 1983.

ECF No. 1 at 57.

         The complaint cites to 42 U.S.C. §1396a(a)(3) which provides that a “State plan for medical assistance must -- provide for granting an opportunity for a fair hearing before the State agency to any individual whose claim for medical assistance under the plan is denied or is not acted upon with reasonable promptness.” The federal regulation 42 C.F.R. §431.210 requires the State to give the individual notice of this opportunity for a hearing. The notice must contain:

(a) A statement of what action the agency, skilled nursing facility, or nursing facility intends to take and the effective date of such action;
(b) A clear statement of the specific reasons supporting the intended action;
(c) The specific regulations that support, or the change in Federal or State law that ...

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