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A Tale of Two Cases

Using Class Action Litigation to Protect Children’s Home Nursing Services

By Shannon Ackenhausen, Robert H. Farley Jr., & Jane Perkins

State budgets are strained, and hospital hallway.jpgMedicaid-funded services are under close scrutiny. In Illinois the issue of state spending is so contentious that state politicians could not agree on a budget for the 2016 fiscal year. Illinois has had no state budget and is operating under a temporary “stopgap” budget. In the midst of this tense political landscape, Illinois’s Medicaid program remains legally obligated to provide services. During the state’s budget impasse, many of the state’s financial obligations have been enforced judicially through existing consent decrees

The federal Medicaid Act requires Illinois to provide, among other services, medically necessary home nursing services to children under 21. Yet two federal class action lawsuits, alleging the state’s failure to comply with those legal requirements, have been filed in the past two years.

The first case, M.A. v. Norwood, concerns sweeping revisions of the eligibility criteria for children’s home nursing in Illinois. The state Medicaid agency hired a third-party contractor in 2014 to review the medical necessity of children’s nursing services. The contractor applied a new assessment process. The case alleges that this new assessment process violates several due process principles. For example, the new assessment process included a scoring tool that was not fully published, and thus applicants could not know the scoring methodology. Also, the third-party contractor’s medical director had the authority to revise medical-necessity determinations based on no apparent, ascertainable standard. Furthermore, the state Medicaid agency issued written notices of decision that did not indicate how or why decisions to reduce or terminate services were made.

Of the first 178 children reviewed under the new eligibility standard, 118 (66 percent) were found ineligible for home nursing, and 57 (32 percent) were found eligible for a reduced service level. Only three children (2 percent of children reviewed) came through the new eligibility process unscathed.

The state Medicaid agency issued written notices of decision that did not indicate how or why decisions to reduce or terminate services were made.

The second case, O.B. v. Norwood, resulted from the attorneys’ work on M.A. v. Norwood. Through their work with the plaintiffs and class members, attorneys found another serious barrier to services. Even when approved for services due to their complex medical needs, many children did not actually receive approved services. The state Medicaid agency has the ultimate legal responsibility to make sure that the services are delivered. However, the Illinois Medicaid agency designed a system in which it delegates care coordination to another governmental agency. This system does nothing to assure that the home nursing services are actually provided to medically complex children. Many children are forced to go without these medically necessary services.

Advocates feared that if this system were left unchecked, the few children who remained eligible for any amount of nursing services would not actually receive them. Therefore, almost six months after M.A. v. Norwood was filed, attorneys filed a second class action case, O.B. v. Norwood. This second class action alleges that the state Medicaid agency operates a flawed system that fails to arrange for approved, medically necessary services.

Though ongoing, the cases have resulted in some early successes. The plaintiffs in each case sought and were granted classwide injunctive relief prior to class certification. (However, the preliminary injunction in O.B. v. Norwood is being challenged in the U.S. Court of Appeals for the Seventh Circuit.) Here we describe the legal theories advanced in these cases, as advocates seek to protect these crucial services and the rights of children to remain safely and stably in their homes.

A Child’s Right to Medically Necessary Home Nursing Services

If enrolled in Medicaid, children under 21 have the right to receive medically necessary home nursing services. Home nursing services specifically fall under a part of the federal Medicaid Act known as the Early and Periodic Screening, Diagnostic, and Treatment mandate. States participating in Medicaid must comply with the mandate; it is a condition of federal spending for all states seeking federal Medicaid dollars. When a child needs home nursing services to “correct or ameliorate” a health condition, the state’s Medicaid agency must “provide for … arranging for” those services. It may not simply pay submitted claims or make per-member-per-month payments and take no further action.

Each state has a great deal of flexibility when administering its own Medicaid program. As a result, the names used to describe home nursing services vary from state to state. For example, the federal statute refers to home nursing as “private duty nursing.” In Illinois the terms “in-home shift nursing” and “in-home skilled nursing” are used interchangeably to describe the same service.

Children’s Home Nursing Services in Illinois

In Illinois naming conventions can cause further confusion. For example, Illinois divides children into two groups when it administers home nursing services. The first group comprises children enrolled in traditional Medicaid. Once approved for home nursing, they are called “NPCS [nursing and personal care services] recipients.” The second group comprises children enrolled in Medicaid through a waiver program. These groupings can create confusion among parents and advocates alike. However, the legal rights and remedies concerning home nursing services are the same for every child enrolled in Medicaid.

Illinois accepts applications for home nursing services only if a child’s treating physician supports their medical necessity. Yet the state’s new eligibility standard appears to disregard the physician’s recommendation. The eligibility standard often yielded a drastically different medical-necessity determination when compared to the treating physician’s recommendation and, in many cases, the state’s own previous eligibility determination.

If a child is approved for home nursing services, Illinois subcontracts certain aspects of its nursing program. However, as alleged in both cases, the state’s Medicaid agency is the single state agency bearing ultimate responsibility for compliance with the Medicaid Act. As O.B. v. Norwood also alleges, compliance with the Medicaid Act requires Illinois to provide or arrange for all medically necessary nursing services.

When states violate the Early and Periodic Screening, Diagnostic, and Treatment mandate, they often violate other legal rights, too. For example, the failure to approve, provide, or arrange for medically necessary home nursing services can create a serious risk of institutionalization. Accordingly, both M.A. and O.B. allege violations of the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act. Furthermore, as alleged in O.B. v. Norwood, the mere approval of services followed by a perennial failure to provide these services violates the Medicaid Act’s reasonable-promptness requirement, that is, approved medical assistance must be provided within a reasonable time frame.

The Children at the Forefront of This Litigation

In each case the named plaintiffs exemplify the plight of dozens, if not hundreds, of medically fragile children in Illinois.

M.A. v. Norwood. At the time of filing, named plaintiff M.A. was 8. M.A.’s medical needs are severe and chronic. M.A.’s diagnoses include Cornelia De Lange syndrome and sleep apnea. M.A. has both visual and hearing impairments. M.A. cannot walk or sit up independently. M.A’s respiratory issues require nebulizer breathing treatments every four hours and more frequently when M.A. has difficulty breathing. M.A. has severe developmental delays and ongoing seizure-like activity. M.A.’s only means of nutrition is a gastronomy tube.

For six consecutive years, since M.A. was about 2, the state Medicaid agency approved home nursing services. Despite the recommendation of M.A.’s treating physician and no apparent evidence of medical improvement, the state Medicaid agency sent a written notice that M.A.’s nursing services would be reduced from 60 to 0 hours per week.

Crucial information required by the Medicaid Act and by due process principles was not included on the notice. For example, the notice did not have any individualized, supportive explanation. The notice also lacked any information about the right to assistance pending appeal. Furthermore, the notice did not reference the new assessment process that Illinois used to reach its decision.

O.B. v. Norwood. O.B. was not yet 2 when the case was filed. O.B.’s medical history is complex, even at such a young age. O.B. has been diagnosed with, among other conditions, Down syndrome, lung disease, and cardiac abnormalities. O.B. is ventilator-dependent. Neither O.B. nor M.A. can accept oral nutrition.

O.B. was admitted to the hospital in August 2014. After seven months, which seemed endless to O.B.’s parents, O.B. was medically ready for discharge in March 2015. However, O.B. required approximately 126 hours per week of home nursing services to be safely cared for at home. Because the state Medicaid agency did not provide those necessary services, O.B. remained inpatient and separated from family until February 2016. Since being discharged home, O.B. still has not received adequate nursing services with any consistency.

Early Successes for the Plaintiffs and Class Members

In class action litigation, the named plaintiffs such as M.A. and O.B. exemplify many essential elements of the case, in particular, the risk of irreparable harm. One goal of these plaintiffs and their attorneys was to protect as many putative class members as possible as quickly as possible. Therefore the attorneys in each case filed a motion for a temporary restraining order and a preliminary injunction and a motion for class certification at the same time as they filed the complaint.

Due to the risk of irreparable harm, motions for injunctive relief generally move through the docket more quickly than motions for class certification. Attorneys in each case argued that federal courts have the authority to grant preliminary injunctive relief to both plaintiffs and class members prior to class certification. This authority can be exercised through either provisional class certification or the court’s general equity powers.

In M.A. v. Norwood the court exercised its general equity powers to grant a temporary restraining order to the putative class and later a preliminary injunction to the certified class. Those orders restricted the state’s ability to reduce nursing services further and instructed the state Medicaid agency to restore previously reduced services. In reaching these decisions, the court focused primarily on due process, citing deficient written notices and an unpublished eligibility standard.

Similarly the court in O.B. v. Norwood granted a preliminary injunction to the putative class through its general equity powers. The court focused on undisputed facts: the state Medicaid agency approved a certain service level based on medical necessity and then failed to provide those services. The court ordered the state Medicaid agency to take immediate and affirmative steps to arrange for approved levels of medically necessary nursing services. (As noted above, the preliminary injunction in O.B. v. Norwood is on appeal in the Seventh Circuit.) The court certified the class approximately two months after granting the preliminary injunction.

Connecting with Clients and Cocounsel

The litigation team in M.A. v. Norwood consisted of private attorney Robert H. Farley, Jr., attorneys from the Legal Council for Health Justice, and other private attorneys, some working pro bono. In particular, Winston & Strawn LLP has supported the case with a pro bono team of three attorneys, one paralegal, and administrative staff. In O.B. v. Norwood Farley and the Legal Council for Health Justice brought attorneys from the National Health Law Program onto the litigation team.

Individual clients and eventual class members originally connected with Farley and the Legal Council for Health Justice in two different ways, one based on reputation and the other on a medical-legal partnership.

Farley has been advocating and litigating to protect the rights of disabled children for over 20 years. Clients often reach him through word-of-mouth or referrals from former clients. In the lead-up to filing M.A. v. Norwood, numerous families had contacted Farley because of his reputation. They told him similar stories of their children’s services being reduced or terminated under the state’s new assessment process.

The Legal Council, by contrast, operates several medical-legal partnerships in the Chicago area, including the Chicago Medical-Legal Partnership for Children. Among the Legal Council’s medical partners are numerous pediatric providers who often have longstanding treatment relationships with a child and communicate frequently with the child’s family. When a family runs into a barrier to accessing health care, the medical-legal partnership allows a member of the medical team (doctor, nurse, social worker, or case manager) to refer the family to the Legal Council for assistance. Before joining the litigation team in M.A. v. Norwood, the attorneys at the Legal Council received approximately 19 individual referrals due to service reductions and terminations. Each family presented a nearly identical written notice of decision and described a similar experience with the new assessment process.

The plaintiffs wanted to obtain relief for as many children and families as possible.

After Farley filed M.A. v. Norwood in April 2015, the Legal Council for Health Justice contacted him and extended an offer to assist the plaintiffs. At first he told the Legal Council that he did not see the need for a cocounsel. However, as discussions between Farley and the Legal Council continued, the Legal Council demonstrated a unique perspective. By representing these children in administrative hearings, the Legal Council identified federal law violations not in the original complaint. After the Legal Council joined the cocounseling team, a member of its board of directors, Bryce Cooper, engaged his firm, Winston & Strawn LLP, to support the case. Cooper worked with the firm’s pro bono department to gather an exceptional team of attorneys and staff—including Ray Perkins, Alexandra Schaller, and Alissa Hodgson—to support the case. The strength of this cocounseling team has benefited the plaintiffs.

Attorneys from the Legal Council for Health Justice consulted with the National Health Law Program due to its vast expertise in litigating complex Medicaid issues. Everyone agreed that the litigation team for the second case, O.B. v. Norwood, would be stronger if the National Health Law Program were part of it.

The attorneys opted to file class actions in these cases because the issues in each case were systemic and too vast to take on in a meaningful way through individual cases. The need was overwhelming, and the individual cases were strikingly similar. Furthermore, the plaintiffs wanted to obtain relief for as many children and families as possible.

Class action litigation is an intense, demanding, and immensely time-consuming undertaking. Assembling a cocounseling team to handle a class action has many benefits. First, the attorneys can share their expertise and court strategies. Second, class actions are labor-intensive, and having a team of quality lawyers to deal with all facets of the case helps immensely. Third, having a cocounseling team in place for one case can ease the work of gathering a team for a second case should additional issues surface. Building a cocounseling team with the requisite resources and expertise has been critical to the advancement of both M.A. and O.B.

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