U.S. District Judge James G. Carr’s entry of a consent decree settling the lawsuit in Ability Center of Greater Toledo v. Colbert,No. 3-10-cv-446-JGC (N.D. Ohio filed Dec. 7, 2011), represented the landmark culmination of a series of Ohio lawsuits that began in 1996. (Castle v. Tompkins, No. 2-96-CV-723 (S.D. Ohio filed July 23, 1996), and Gibson v. Tompkins, No. 2-96-CV-799 (S.D. Ohio filed Aug. 12, 1996) (consolidated lawsuits known collectively as Castle), brought by the Columbus Legal Aid Society, sought to deal with the same issues.) Ability Center, the most recent in the series and the only class action, was filed in March 2010 by Advocates for Basic Legal Equality (ABLE), an unrestricted legal services program with offices in Toledo and Dayton. Plaintiffs were several class representatives and the Ability Center of Greater Toledo, a Northwest Ohio advocacy agency serving people with disabilities, acting on behalf of a putative class of thousands of Ohioans who had applied or would apply for Medicaid as aged, blind, or disabled individuals (MA-D, or Medicaid for the disabled). Here we detail some of the history of the problems underlying Ohio’s administration of this particular Medicaid program, touch on the claims set forth in our complaint, and explain the evolving series of strategies employed to reach the comprehensive settlement that had eluded advocates for nearly fifteen years. We hope that some of the lessons we learned can be helpful to advocates around the country. With program resources at historically low levels, advocates need to litigate and resolve impact cases as quickly as possible.
Advocates had long sought to have no delay in applying for Medicaid for the disabled, and the Ohio Department of Job and Family Services had made many attempts to correct it. Its more recent attempts to overcome the problem were undone for good in October 2009 when the legislature passed H.B. 1 § 105.01, abolishing disability medical assistance (DMA), a state-funded program that had enabled poor people without insurance to obtain medical care if they were sick enough to be classified as “medication dependent” by their doctors (Ohio Rev. Code Ann. § 5115.10 (West 2006)). The disability medical assistance program had been slowly whittled away, beginning in 2003, and the program was defunded in the 2009–2010 state budget. Individuals who qualified for disability medical assistance had gained access to medical care that could generate medical evidence sufficient to establish their eligibility for Medicaid for the disabled. Without disability medical assistance, applicants for Medicaid for the disabled were left to seek assistance from one of eighty-eight county offices for job and family services on a variety of tasks that the county offices were not suited to perform: locating consultative examiners, scheduling and paying for consultative examinations, and obtaining medical records. The result was nothing less than a train wreck.
Federal law requires that states process applications for the Medicaid for the disabled program within ninety days (42 C.F.R. § 435.911(a)(1) (2012); see also Ohio Admin. Code § 5101:1-38-01(F)(2)(b) (2012)). When we filed Ability Center, some 21,833 applications were pending. Under the Ohio system, upon obtaining the medical information supporting the client’s application for benefits, the county agency was required to forward the file to a central disability determination area for a review of the evidence and a determination as to the applicant’s eligibility for Medicaid on the basis of disability. In 2006 this process was computerized so that files could be transmitted electronically into a system called eQuil (electronic quality information link). This system divides cases into four queues: deferred, medical review, nurse review, and psychiatric review. When Ability Center was filed, county agencies were taking an average of 144 days just to submit cases to the disability determination area—well over the ninety-day federal limit permitted. Once entered into eQuil, a case had an average processing time of 148 days in the deferred queue, 324 days in the medical review queue, 179 days in the nurse review queue, and 277 days in the psychiatric review queue.
In light of this state of affairs, any settlement would have to achieve three goals: (1) reduce the outstanding backlog and give relief to applicants who had been awaiting an eligibility determination for far longer than ninety days, (2) construct a new disability determination process that would solve the application delay problem and prevent a backlog from recurring, and (3) offer Medicaid applicants assistance in obtaining medical records and consultative examinations to support their applications. The settlement ultimately achieved met these three criteria. The Department of Job and Family Services began automatically enrolling in Medicaid any individuals whose applications had been pending for more than ninety days and will continue to enroll applicants whose applications exceed the ninety-day limit. The department also contacted all county offices for job and family services to make sure no applications were languishing there without having been forwarded for a disability determination.
Automatic enrollment will continue until a private vendor begins implementing a major redesign in the disability determination process for which advocates had been hoping since 1996. Instead of relying on county offices with limited resources, the department will contract with a private vendor to collect and develop medical evidence in order to help applicants establish that they have a disability which entitles them to Medicaid. The vendor will assist the applicants in locating an appropriate consulting physician if an examination or test is needed and provide transportation assistance if necessary for the applicant to get to the consultative appointment. The Department of Job and Family Services has requested proposals from prospective vendors and anticipates that the new system will begin on July 1, 2012.
Background: How We Got There
Some background on Ohio’s disability determination process is helpful in understanding some of our decisions in the case. Through its Department of Job and Family Services, the single state agency authorized to implement Medicaid rules and regulations, Ohio delegated portions of eligibility determinations, including acceptance of written applications for Medicaid benefits, to county Departments of Job and Family Services (Ohio Admin. Code § 5101:1-38-01.2 (2012)). Indeed, under state law “the county department of job and family services of each county shall establish the eligibility for medical assistance of persons living in the county” (Ohio Rev. Code Ann. § 5111.012 (West 2012)).
Determining Disability. Eligible applicants must meet income requirements and must apply for any Supplemental Security Income or social security disability benefits to which they may be entitled (Ohio Admin. Code § 5101:1-39-03(c)(5) (2012)). Once a Medicaid application is approved, medical assistance must be furnished with reasonable promptness to all eligible individuals (42 U.S.C. § 1396a(a)(8)). The Department of Job and Family Services must send applicants written notice of the decision on their applications; if eligibility is denied, the agency must give reasons for the action, the specific regulation supporting the action, and an explanation of the applicant’s right to a hearing (42 C.F.R. § 435.912 (2012)).
Critically, when our lawsuit was filed, the Department of Job and Family Services also was delegating to the county departments the duty of compiling medical records and paying for consultative examinations (Ohio Admin. Code § 5101:1-39-03(C) (2012)). Counties would submit the information, once collected, to the disability determination area (id.). The Department of Job and Family Services then approved, denied, or deferred disability determinations (42 C.F.R. § 435.541 (2012); Ohio Admin. Code § 5101:1-39-03(E)(1) (2012)). By law all the steps in this convoluted process had to be completed within ninety days (42 C.F.R. §435.911(a)(1) (2012); Ohio Admin. Code § 5101:1-38-01(F)(2)(b) (2012)).
Under the system in place when our lawsuit was filed, an application would be placed in the “deferred queue” if the disability determination area determined that additional medical evidence, diagnostic testing, or consultative examinations were required in order to complete the determination. If an application was placed in the “deferred queue” twice, the Department of Job and Family Services would require the applicant to submit a new application with the new application date as the date of onset of disability. This practice threatened to leave many applicants with unpaid medical bills.
History of Litigation over the Medicaid for the Disabled Program. Despite Ohio’s obviously unworkable system for making disability determinations, crafting a comprehensive settlement still was difficult. That Ohio could not meet federal timeliness standards, and that a number of lawsuits had been filed in response to this problem, is not surprising given the state’s unwieldy process for determining disability. In 1997 the Legal Aid Society of Columbus, in Castle, challenged the delay in processing applications for Medicaid for the disabled; this resulted in an agreement binding the Ohio Department of Human Services (predecessor of the Department of Job and Family Services) for eighteen months.
However, as the disability medical assistance program faded away and the eQuil system would not resolve the problem, advocates had no choice but to return to litigation. On December 11, 2008, on behalf of four individuals, the Legal Aid Society of Columbus filed, against the Department of Job and Family Services of Ohio County and of Franklin County, a lawsuit alleging illegal delays in the processing of applications for Medicaid for the disabled (Case v. Jones-Kelly, No. 2:08-CV-1171 (S.D. Ohio)). The state approved the applications of all of the plaintiffs and moved for summary judgment and judgment on the pleadings. Judge Algenon Marbley denied those motions and noted that the average waiting period for the processing of an application for Medicaid for the disabled was 258 days and that the delays in processing such an application “appear[ed] to be a systemic problem” (Opinion and Order at *15, Case v. Jones-Kelly, 2010 U.S. Dist. LEXIS 2221 (S.D. Ohio Jan. 5, 2010) (No. 2:08-CV-1171)). The county defendants took an interlocutory appeal of Judge Marbley’s determination that they were not immune from suit under the Eleventh Amendment, but the case settled before the Sixth Circuit heard argument (Case v. Lumpkin, No. 10-3046 (6th Cir. 2010)).
In April 2010 Southeastern Ohio Legal Services filed a lawsuit in the Southern District of Ohio against defendant Douglas E. Lumpkin and other Department of Job and Family Services officials regarding the delay in processing four individuals’ applications for Medicaid for the disabled (Russell v. Lumpkin, No. 2:10-CV-0314 (S.D. Ohio)). The following month Southeastern Ohio Legal Services filed a second case, which was consolidated with Russell (Marks v. Lumpkin, 2:10-CV-0482 (S.D. Ohio)). All of the cases eventually settled, with all plaintiffs being approved for Medicaid for the disabled (Consent Decree, Russell v. Lumpkin (S.D. Ohio May 14, 2010) (No. 2:10-CV-0314)).
We drew two conclusions from these cases: the state was not processing applications for Medicaid for the disabled in compliance with federal law, and repeated efforts through litigation to force compliance had resulted in relief for individual plaintiffs but failed to correct the state’s systemic failings. Moreover, the bifurcated state and county roles in disability determination meant that applicants’ access to medical examinations, and other assistance needed to establish disability (and therefore entitlement to Medicaid), varied widely. As a result, while thousands of low-income disabled individuals waited for their applications to be processed, these individuals were not receiving desperately needed medical care.
The Settlement—Critical Decisions and Lessons Learned
In the end we were able to reach our settlement goals in this case because we did not waver from a consistent message about what was essential for a settlement. We did change strategies as we evaluated benchmarks on the likelihood of success with various settlement approaches. However, ultimately the triggering event that changed the course of settlement negotiations was an indication from the court that it would rule favorably on our motions for class certification and preliminary injunctive relief.
Lesson 1: Take Control of the Message and the Agenda. From the beginning, the attorneys on both sides recognized that Ohio and its Department of Job and Family Services were out of compliance with federal law governing the timeliness standards for processing applications for Medicaid for the disabled. The long history of litigation over the program was meaningful in this sense, but recognition of the problem did not mean that resolution was imminent.
In November 2010 the parties attempted to resolve the case through negotiation, with the intention of finalizing a consent decree before January 1, 2011. At the time this date was critical because the gubernatorial administrations were about to change, with Republican John Kasich replacing Democrat Ted Strickland. The new governor likely would appoint a new state agency director, who in turn would put a new administrator in charge of the Medicaid program. Republican Attorney General–Elect Mike DeWine would replace Democrat Attorney General Richard Cordray. No one involved in the case knew what interest the Department of Job and Family Services would have in settling the case after January 1, 2011, or what approach the lawyers handling the case for the state would take.
By the holidays the parties had recognized that a consent decree could not be reached without resolving the problem of developing medical evidence to support individual applications for Medicaid for the disabled. We suggested the concept of “provisional eligibility” to make every applicant for Medicaid for the disabled eligible for benefits on the ninety-first day after filing the application. This “provisional eligibility” would continue until a proper disability determination could be made on the basis of all of the medical evidence. But the defendant determined that such an approach was not feasible financially—no one wanted to commit the incoming administration to spending the $30 million to $40 million that the department estimated the proposal would cost over two years. Even worse, no one at the department or the attorney general’s office would have a good estimate of what budgetary resources might be available for at least three months. With control of the agenda slipping away, we decided we had to act.
Lesson 2: File Motions to Require the Court to Attend to Your Issues. In the fall of 2010 we filed motions for class certification and class injunctive relief. Defendant’s motion to dismiss also was pending. However, the court held these motions in abeyance while settlement discussions were occurring. When we were not going to resolve the financial issues on “provisional eligibility,” we scheduled a status conference, during which we successfully argued that the court should move forward with a briefing schedule for plaintiffs’ motions for class certification and preliminary injunctive relief. The court’s order encouraged the parties to continue good-faith settlement negotiations in anticipation of clarity on budget issues.
This was a critical point: convincing the court to move forward on our substantive motions led to an indication that the court was leaning toward granting class certification and some form of class injunctive relief; convincing the court also helped maintain our overall forward momentum. In any litigation against a state agency, the path to settlement often is lengthened by the difficulty of getting someone with decision-making authority to focus on the case and make its resolution a priority. That was especially true amid the change of administrations and agency players. This case was a reminder that, even when all parties agree that a settlement can and should take place, aggressive tactics may be needed to make that settlement a reality.
Lesson 3: Establish a Clear Litigation Plan, But Be Willing to Change It. Settlement negotiations were complex, involving new programs, new funding, and developing creative options that would permit the state to recognize our clients’ Medicaid eligibility pending the completion of the state’s review of their applications, including acquiring and reviewing medical information. These factors compelled us to evaluate and modify our strategies at various points in the lengthy negotiations.
After the court denied defendant’s motion to dismiss in February 2011, settlement discussions recommenced. The main barrier to developing a new disability determination process, and thus to settlement, still was financial. Not until July 6, 2011, during another court-ordered status conference, did the defendant confirm that the state agency had secured adequate funding to implement a new process to develop and collect applicants’ medical information. On July 8, 2011, the court ordered further proceedings held in abeyance pending the filing of a further status report by September 1, 2011, to give the parties time to renew and possibly complete settlement negotiations.
This order was a mixed blessing. We needed the time to negotiate, but once more the court took some of the pressure off the defendant. Still, we continued to negotiate a consent decree that would put into place a new system to collect medical evidence to support a Medicaid application and to provide consultative examinations. This resulted in an agreement that the state would request proposals and seek to contract with a new entity to provide these services uniformly throughout the state. The new system contemplated by the request for proposals would remove gathering medical information from the counties and create a statewide organization to provide these services. So far so good, but we still were not finished.
Lesson 4: Repeat Lessons 1, 2, and 3 as Needed. Despite the parties’ agreement on a new system that would develop medical evidence and financing for that system in the state budget, we could not get the case settled. The state could not or would not promise when the new system would begin operating. Meanwhile, putative class members continued to suffer under the old, convoluted system. With each passing month, more pending applications would go beyond the ninety-day limit. The state appeared willing to run out the clock without giving these class members any relief until the new system went into operation some time in 2012.
In September we reached the date set by the court for yet another status conference. We reinstated the motions for class certification and classwide injunctive relief. By this time, for nearly nine months, the court had seen us wait patiently for the state to solve a problem acknowledged by everyone. The court also had ruled fairly decisively in our favor on defendant’s motion to dismiss. By our final settlement conference in October, no one could argue that we could not meet the requirements for a preliminary injunction or that our duty to our clients did not demand that some immediate relief for class members be included in the settlement.
We returned to the idea of “provisional eligibility.” This time, with the new program for developing medical evidence set for 2012, short-term provisional eligibility made sense and would be less costly. Once we were able to get the state to commit to “provisional eligibility,” we could finalize a consent decree.
Epilogue: Consent Decree and Enforcement
Since the entry of our consent decree on December 7, 2011, some 7,000 individuals have been enrolled in Medicaid pending a complete evaluation of their eligibility. The number of pending applications in eQuil has been reduced to 4,315, with an average age of all active cases at 123 days. Counties now take an average of only 46 days to submit applications in eQuil.
One of the more difficult barriers to immediate relief for those whose applications had been pending for more than 90 days was that many of the counties, where applications were required to be filed, had not processed the applications, and some were unaware of the number of applications that were simply lying around county offices awaiting processing. We initially worked very closely with the Department of Job and Family Services to develop clear guidelines directing county offices to identify immediately all applications that had not been processed and those that had been filed for more than ninety days. We also communicated frequently with advocates throughout the state to explain the consent decree and to attempt to identify Medicaid applications pending for more than ninety days without an initial determination. These steps identified additional applicants who were then enrolled in Medicaid, pending a complete determination.
We continue to work with the state agency to provide names of unenrolled class members or applicants who in unusual circumstances received no determination on their applications or access to assistance to develop medical support. With continuing cooperation we have reached the point of having some degree of confidence that most class members are now enrolled in Medicaid. We have been able to resolve all of the enforcement issues that have arisen thus far by direct negotiation with the department. The new agency responsible for processing, obtaining, and providing medical assistance is set to be in operation on July 1, 2012.
We have found that our four lessons have served us well in monitoring implementation of the consent decree, too. Keeping control of the agenda, pushing when we need to, and remaining flexible have helped us work through some of the issues that have developed. We expect to keep them in mind and repeat as necessary as the new system for gathering and developing medical evidence is implemented this year.