Court orders more proceedings on waiver moves

The 7th Circuit Court of Appeals reversed summary judgment for state defendants in a lawsuit brought by Medicaid patients who claimed their move to a new waiver with a cap on expenses violates the Americans with Disabilities Act. The court said the way the patients spent their expenses constitutes an issue of material fact, and they may have been able to receive more services had they spent their money differently.

The case combined two appeals from the Southern District of Indiana where Judge Jane Magnus-Stinson granted summary judgment the defendants on plaintiffs’ claims their transfer from the Indiana Family and Social Services Administration’s Aged and Disabled Medicaid Waiver Program, where there is no limit on services, to the Family Supports Medicaid Waiver Program, where there is a cap, violated the ADA’s integration mandate. That mandate says “shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities.”

There are seven people who constitute the plaintiffs in the two cases. They claim that before their transition to the FS waiver they were able to enjoy 40 hours a week in community activities such as eating in restaurants, window shopping and visiting flea markets, but since their transfer that has to be cut to 10 to 12 hours per week due to the cap. Some plaintiffs have been moved back to waivers without a cap, but others remain.

Chief Judge Diane Wood wrote that the plaintiffs’ claims fall within the scope of the integration mandate under the Department of Justice’s interpretation. The FSSA’s action to switch waivers separates disabled and non-disabled persons and is a violation. The state argued the mandate only applies to people who have actually been institutionalized, but the 7th Circuit said that interpretation is too narrow. The state also argued that availability of another waiver is a safeguard against gaps in the care the patients now receive, but since the patients are ineligible for those other waivers, it makes no difference, the 7th Circuit ruled.

The plaintiffs argued for changes in the requirements for the A&D waiver and the Community Integration and Habilitation Medicaid Waiver to allow them to be placed on either of those, since those have no caps. The 7th Circuit said Indiana offered no evidence that changing these requirements would fundamentally alter their programs. “The state has made no showing that its criteria are ‘necessary for the provision’ of the relevant services in this case,” Wood wrote. “It cannot avoid the integration mandate by binding its hands in its own red tape.”

However, Wood wrote that patients do have a choice in how they spend their money under the waivers, and this creates a genuine issue of fact as to whether the policy has caused their isolation from the community.

The plaintiffs also were seeking class certification for all people who were moved from the A&D waiver to the FS waiver and are not on the other capless waiver who also require more services than the FS waiver provides. However, the 7th Circuit agreed with the District Court that this definition was too vague, despite “serious reservations.” Wood wrote the court did not know what the word “require” meant: if that was for medical purposes, community interaction or some other purpose.

The 7th Circuit remanded the case for further proceedings to determine if the waiver move violated the mandate.

The cases are Karla Steimel and Thomas Maertz, et al. v. John J. Wernert, Secretary of the Indiana Family and Social Services Administration, 15-2377; and Michael Beckem and Lois Beckem v. Indiana Family and Social Services Administration and John J. Wernert, Secretary of the Indiana Family and Social Services Administration, 15-2389.


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