Davis et al v. Shah, No. 6:2012cv06134 - Document 39 (W.D.N.Y. 2013)

Court Description: DECISION AND ORDER granting in part and denying in part 26 Motion for Summary Judgment; granting in part and denying in part 28 Motion for Summary Judgment. The parties cross-motions for summary judgment [#26][#28] are each granted-in-part and denied-in-part as follows: Plaintiffs motion [#26] is denied as to the home health services claim and the due process hearing claim, but is otherwise granted, while Defendants motion [#28] is granted only as to the home health services claim and the due process hearing claim, but is otherwise denied. Plaintiffs are entitled to permanent injunctive relief. The parties shall settle and submit a proposed Order concerning such injunctive relief within fourteen (14) days of the date of this Decision and Order.Signed by Hon. Charles J. Siragusa on 12/9/13. (KAP)

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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK __________________________________________ HARRY DAVIS, et al., Plaintiffs DECISION AND ORDER -vs12-CV-6134 CJS NIRAV SHAH, individually and in his official capacity as Commissioner of the New York State Department of Health, Defendant __________________________________________ APPEARANCES For Plaintiffs: Bryan D. Hetherington, Esq. Geoffrey A. Hale, Esq. Jonathan Feldman, Esq. Empire Justice Center One West Main Street, Suite 200 Rochester, New York 14614 Martha Jane Perkins, Esq. Sarah Jane Somers, Esq. National Health Law Program 101 E. Weaver Street, Suite G-7 Carrboro, North Carolina 27510 For Defendant: J. Richard Benitez, Esq. Office of the New York State Attorney General 144 Exchange Boulevard, Suite 200 Rochester, New York 14614 1 INTRODUCTION This is an action brought by Medicaid recipients to challenge New York State s decision to provide Medicaid payment for prescription footw ear and compression stockings to treat certain medical conditions but not others. Specifically, Plaintiffs challenge tw o provisions of the New York State Social Services Law : The first, § 365-a(2)(g)(iii), w hich provides Medicaid payment only for prescription footw ear used as an integral part of a low er limb orthotic appliance, as part of a diabetic treatment plan, or to address grow th and development problems in children; and the second, § 365-a(2)(g)(iv), w hich provides Medicaid payment only for compression stockings for pregnancy or treatment of venous stasis ulcers. Plaintiffs suffer from a variety of other illnesses for w hich prescription footw ear and compression stockings are medically necessary. Prior to the enactment of those provisions, New York s medicaid statute covered Plaintiffs orthopedic shoes and compression stockings. How ever, Plaintiffs are now excluded from such coverage because their medical conditions are not listed w ithin the tw o statutory provisions quoted above. Defendant maintains that the challenged provisions reflect a reasonable legislative compromise, w hereby, out of economic necessity, the State of New York limited the provision of optional items (orthopedic shoes and compression stockings) to persons w ith the most serious medical needs, rather than eliminating 2 coverage for such items altogether.1 How ever, Plaintiffs maintain that the challenged provisions violate the federal Medicaid Act, federal anti-discrimination law s and the U.S. Constitution. The Court previously granted Plaintiffs applications for preliminary injunctive relief and class certification. Now before the Court is Plaintiffs motion for summary judgment (Docket No. [#26]) and Defendant s cross-motion [#28] for summary judgment. BACKGROUND New York State participates in Medicaid, w hich is a jointly funded Federal and state medical assistance program that w as established by Title XIX of the Social Security Act [( SSA )] (42 USC §§ 1396 et seq.). Jennings v. Commissioner, N.Y.S. Dept. of Social Servs., 71 A.D.3d 98, 114, 893 N.Y.S.2d 103, 115 (2d Dept. 2010). In that regard, Title XIX of the Social Security Act, 42 U.S.C. [ §§ ] 1396 [et seq.], authorizes each state to participate in a cooperative federal-state program for medical assistance to the needy, know n as Medicaid, and to operate a medical assistance plan, subject to federal statutory and 1 The State of New York asserts, in conclusory fashion, that it prioritiz[ed] the allocation of Medicaid resources to those it determined to be at greatest need. Bick Aff. [#28-4] at ¶ 88. How ever, to the extent that Defendant is suggesting that the challenged legislative line-draw ing is based on medical necessity, the record does not support him. In that regard, Defendant has never claimed, in this litigation, that the conditions that are now covered are actually more serious than Plaintiffs conditions. See, e.g., Bick Affidavit [#28-4]. At most, Defendant indicates that the State chose to cover more-common serious conditions, w hile omitting coverage for lesscommon serious conditions as w ell as non-serious conditions. Id. Thus it w ould be more accurate to say that w hat the State actually did w as cut expenditures by restricting coverage to certain serious conditions, w hile eliminating coverage for other conditions, including some that are less-serious and some that are equally-serious. Defendant nevertheless contends that the State utilized a reasonable standard in denying coverage to Plaintiffs. Bick Aff. [#28-4] at ¶ 6. As discussed further below , the Court disagrees. 3 regulatory guidelines. If a state chooses to participate, it must adopt a statutory plan setting forth the coverage to be extended to recipients, including the terms upon w hich individuals w ill be eligible and it must extend benefits to those w ho are eligible for federally-funded financial assistance, such as recipients of Supplementary Security Income (SSI) for the aged, blind and disabled, know n as the categorically needy. Caldw ell v. Blum, 621 F.2d 491, 494 (2d Cir. 1980). New York s statutory plan for providing medical assistance for needy persons under the Medicaid program is set forth in Article 5, Title 11 of the New York Social Services Law ( NY Soc. Serv. Law ), § 363 et seq. As indicated above, the instant case involves NY Soc. Serv. Law § § 365-a(2)(g)(iii) & (iv), w hich, inter alia, set limits on payments for prescription footw ear and compression stockings. Specifically, the statute states, in pertinent part: 2. [Medical assistance] shall mean payment of part or all of the cost of medically necessary medical, dental and remedial care, services and supplies, as authorized in this title or the regulations of the department, w hich are necessary to prevent, diagnose, correct or cure conditions in the person that cause acute suffering, endanger life, result in illness or infirmity, interfere w ith such person' s capacity for normal activity, or threaten some significant handicap and w hich are furnished an eligible person in accordance w ith this title and the regulations of the department. Such care, services and supplies shall include the follow ing medical care, services and supplies, together w ith such medical care, services and supplies provided for in subdivisions three, four and five of this section, and such medical care, services and supplies as are authorized in the regulations of the department: *** (d) home health services provided in a recipient s home and prescribed by a physician . . . . *** (g) sickroom supplies, eyeglasses, prosthetic appliances and dental 4 prosthetic appliances furnished in accordance w ith the regulations of the department; provided further that: . . . (iii) prescription footw ear and inserts are limited to coverage only w hen used as an integral part of a low er limb orthotic appliance, as part of a diabetic treatment plan, or to address grow th and development problems in children; and (iv) compression and support stockings are limited to coverage only for pregnancy or treatment of venous stasis ulcers; McKinney s Soc. Serv. L. § 365-a(2)(g)(iii) & (iv) (West 2013) (emphasis added). New York State does not allow exceptions to [the aforementioned] defined benefit limitations concerning orthopedic footw ear and compression stockings. In that regard, the pertinent regulation states: (g) Benefit limitations. The department shall establish defined benefit limits for certain Medicaid services as part of its Medicaid State Plan. The department shall not allow exceptions to defined benefit limitations. The department has established defined benefit limits on the follow ing services: (1) Compression and surgical stockings are limited to coverage during pregnancy and for venous stasis ulcers. (2) Orthopedic footw ear is limited to coverage in the treatment of children to correct, accommodate or prevent a physical deformity or range of motion malfunction in a diseased or injured part of the ankle or foot; in the treatment of children to support a w eak or deformed structure of the ankle or foot; as a component of a comprehensive diabetic treatment plan to treat amputation, ulceration, pre-ulcerative calluses, peripheral neuropathy w ith evidence of callus formation, a foot deformity or poor circulation; or to form an integral part of an orthotic brace. 2 18 NYCRR § 505.5(g)(1) & (2) (emphasis added). 2 As the foregoing quotes illustrate, the statute and the implementing regulation use the terms orthotic appliance and orthotic brace interchangeably. 5 In 2011, New York State enacted the statutory and regulatory amendments that Plaintiffs are challenging in this law suit, as part of an overall cost-cutting review of the State s Medicaid services. See, generally, Bick Aff. [#28-4]. In considering w hether to limit coverage for orthopedic shoes and compression stockings, the State observed that, [w ]ith respect to orthopedic footw ear, the Medicaid program w as paying for orthopedic footw ear even for Medicaid recipients w hose medical need for the footw ear w as marginal and could be met, in any event, w ith off-the-shelf footw ear. For example, in [fiscal year] 201011 alone, nearly half of the Medicaid payments made for orthopedic footw ear w ere for claims in w hich the recipient s primary diagnosis w as hammertoes or bunions[, w hich] are relatively common medical conditions. They are also relatively mild medical conditions. Alternatives to Medicaid funded orthopedic footw ear exist for patients w ith these complaints. Wide-toe shoes that w ould accommodate hammertoes and bunions are readily available off-the-shelf and are relatively inexpensive. With respect to compression and support stockings, a similar utilization problem prevailed. The Medicaid program w as paying for compression or support stockings to address relatively less serious and common complaints, such as varicose veins or to comfort aching legs. Bick Aff. [#28-4] at ¶ ¶ 66-68. The State contends that it chose to limit coverage to persons w ith a more-serious medical need for orthopedic shoes and compression stockings, such as diabetics, children, and pregnant w omen. Id. at ¶ ¶ 73-75. The State also considered that the related Medicare program imposed limits on orthopedic footw ear similar to those being challenged in this action, and that the Medicare program s policy w ith regard to compression stockings w as even more 6 restrictive than that being challenged here, since it only provided compression stockings for persons suffering from open venous stasis ulcers. Id. at ¶ ¶ 72-75. The State maintains that by making changes to its Medicaid statue, including the subject changes pertaining to orthopedic shoes and compression stockings, it saved $14.6 million, thereby avoiding other cuts in State Medicaid spending including the possible elimination of optional Medicaid services. Id. at ¶ 78. That is, the State chose to restrict the coverage of optional services, rather than eliminate them entirely. Plaintiffs do not suffer from the conditions covered by Soc. Serv. L. § 365a(2)(g)(iii) & (iv) or 18 NYCRR § 505.5(g). Instead, Plaintiffs suffer from conditions including multiple sclerosis, paraplegia, lymphedema, cellulitis, psoriatic arthritis, and trans-metatarsal amputation,3 for w hich their doctors have prescribed either orthopedic footw ear or compression stockings. Amended Complaint [#34] at ¶ ¶ 27. Because those medical conditions are not listed in the challenged statute or regulation, Plaintiffs are not eligible to receive prescription footw ear or compression stockings under the foregoing provisions, even though it is undisputed that such footw ear and stockings are medically necessary4 for Plaintiff s treatment. Plaintiffs maintain that, [w ]ithout these medically necessary treatments, [they] face a high 3 As mentioned above, Defendant has not specifically claimed that these conditions are less serious than the conditions covered under the statute. 4 There has been no attempt in this action to compare Plaintiffs conditions w ith those conditions covered under the statute in terms of medical necessity. 7 likelihood of hospitalizations to address life-threatening infections and other preventable conditions[, and that as] a result of Defendant s policy and regulation, [they] are likely to be institutionalized in nursing homes and rehabilitation centers in order to be treated for the very conditions the eliminated items w ould have prevented at much low er cost. Amended Complaint [#34] at ¶ 11.5 Plaintiffs further maintain that the State of New York never informed them personally of this change in coverage. Instead, Plaintiffs only learned of the change w hen shoe and stocking providers, w ho had been notified of the change in coverage by the State, refused to fill their orders. On March 14, 2012, Plaintiffs commenced the instant action. Plaintiffs maintain that Soc. Serv. L. § 365-a(2)(g)(iii) & (iv) or 18 NYCRR § 505.5(g) violate federal Medicaid and disability discrimination law s. Amended Complaint [#34] at ¶ 12. In that regard, Plaintiffs contend that the subject provisions violate four separate aspects of Title XIX: 1) the reasonable standards provision, 42 U.S.C. § 1396(a)(17); 2) the comparability requirement, 42 U.S.C. § 1396a(a)(10)(B); 3) the home health services requirement, 42 U.S.C. § § 1396a(a)(10)(A), 1396a(a)(10)(D) and 1396d(a)(4); and 4) the due process requirement, 42 U.S.C. § 1396a(a)(3), w hich incorporates the Fourteenth Amendment s Procedural Due Process Clause.6 Plaintiffs further contend that the challenged provisions discriminate against them on the basis of disability, in violation of Title II of the 5 While opposing Plaintiff s motion, Defendant has not challenged Plaintiffs factual assertions. 6 See, 42 C.F.R. § 431.205(d) ( The hearing system must meet the due process standards set forth in Goldberg v. Kelly, 397 U.S. 254 (1970), and any additional standards specified in this subpart. ). 8 Americans With Disabilities Act ( ADA ), and Section 504 of the Rehabilitation Act ( Section 504" ). The Complaint seeks declaratory and injunctive relief, attorney s fees, costs and disbursements on behalf of [a]ll current and future New York State Medicaid recipients for w hom Defendant has directly or indirectly failed to provide coverage for medically necessary orthopedic footw ear and compression stockings as a result of New York Soc. Serv. Law § 365-a(2)(g)(iii) and (iv) and regulations and policies promulgated thereto. Amended Complaint [#34] at ¶ 22. More specifically, Plaintiffs seek a declaratory ruling that, as detailed earlier, the subject New York statute and regulation violates the Medicaid Act, the ADA and Section 504. Plaintiffs also seek a permanent injunction prohibiting Defendant from implementing and enforcing New York Soc. Serv. Law § 365-a(2)(g)(iii) and (iv), and 18 N.Y.C.R.R. § 505.5(g)(1) and (2), and requiring him to issue appropriate notices to Medicaid suppliers and recipients. On May 3, 2012, the Court issued a Decision and Order [#15] granting preliminary injunctive relief on behalf of three Plaintiffs (Harry Davis, Rita-Marie Geary and Patty Poole). In granting such relief, the Court found, in pertinent part, that Plaintiff s w ere likely to succeed on their claim under the home health services provision, 42 U.S.C. § 1396a(a)(10)(D), since they [w ere] being denied coverage of medically-necessary equipment on the basis of their particular illness, w ithout any opportunity to request an exception. Decision and Order [#15] at p. 13. Significantly, though, w hile Defendant had opposed Plaintiffs motion for 9 preliminary injunctive relief, he did so primarily on technical grounds, and did not challenge Plaintiffs assertion that home health services included orthopedic shoes and compression stockings. As discussed further below , Defendant now denies that orthopedic shoes and compression stockings qualify as home health services. Instead, Defendant now argues that orthopedic shoes and compression stockings are prosthetics, w hich the State is not required to provide under the Medicaid Act s home health services provision. After the Court granted preliminary injunctive relief to three named Plaintiffs, the parties stipulated that Defendant w ould also provide medically-necessary orthopedic footw ear and compression stockings to other individuals, that Plaintiffs counsel brought to Defendant s attention, during the pendency of this litigation. See, Docket Nos. [#19] & [#30]. On October 1, 2012, Plaintiffs filed the subject motion [#26] for summary judgment. On November 7, 2012, Defendant filed the subject cross-motion [#28] for summary judgment. On November 28, 2012, Plaintiffs filed a reply/response [#31]. Defendant did not file a reply to [#31], though the Court had granted him an opportunity to do so. See, Scheduling Order [#22]. In November 2013, the Court also permitted the parties to submit supplemental briefings concerning the appropriate standard of review to be applied to the State s interpretation of the federal Medicaid law s. DISCUSSION 10 Plaintiffs are seeking summary judgment, granting them declaratory and permanent injunctive relief. Summary judgment may not be granted unless "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The underlying facts contained in affidavits, attached exhibits, and depositions, must be viewed in the light most favorable to the non-moving party. U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962). Summary judgment is appropriate only where, "after drawing all reasonable inferences in favor of the party against whom summary judgment is sought, no reasonable trier of fact could find in favor of the non-moving party." Leon v. Murphy, 988 F.2d 303, 308 (2d Cir.1993). To obtain a permanent injunction, a plaintiff must succeed on the merits and show the absence of an adequate remedy at law and irreparable harm if the relief is not granted. Roach v. Morse, 440 F.3d 53, 56 (2d Cir. 2006) (citations and internal quotation marks omitted). In opposition to Plaintiffs summary judgment motion, w hich seeks declaratory and permanent injunctive relief, 7 Defendant disputes the merits of Plaintiffs claims, but does not otherw ise challenge Plaintiffs entitlement to permanent injunctive relief if they succeed on those claims. That is, assuming arguendo that Plaintiffs can show their entitlement to judgment on the merits, Defendant has not disputed that Plaintiffs lack an adequate remedy at law or that they w ill suffer irreparable harm if a permanent injunction is not granted. 8 7 See, Plaintiffs Memo of Law [#26-2] at p. 25. 8 See, Defendant s Memo of Law [#28-1]. 11 Plaintiffs Claim Under the Home Health Services Provision, 42 U.S.C. § 1396a(a)(10)(D) The Medicaid Act, 42 U.S.C. § 1396a(a)(10)(A) and 42 U.S.C. § 1396d(a)(4), together require participating states to provide categorically needy persons w ith medical assistance, including nursing facility services. Participating states can also opt to provide nursing facility services to medically needy persons. Furthermore, 42 U.S.C. § 1396a(a)(10)(D) requires participating states to provide home health services to any person entitled to receive nursing facility services. 9 The applicable federal regulation indicates that home health services include [m]edical supplies, equipment, and appliances suitable for use in the home. 42 C.F.R. § 440.70(b)(3). Defendant admits that, [i]n New York, the State Medicaid plan provides payment for nursing facility services provided to the categorically needy as w ell as the medically needy, and that [t]he state must thus provide payment for home health services provided to the categorically needy and medically needy w ho are appropriate for such services. Def. Memo of Law [#28-1] at p. 5. It is undisputed that Plaintiffs are either categorically needy or medically needy. Defendant maintains, how ever, that 42 U.S.C. § 1396a(a)(10)(D) does not require New York to provide Plaintiffs w ith orthopedic shoes or compression stockings, because such shoes and stockings are not home health services, and specifically, they are not 9 Specifically, that section states: A state plan for medical assistance must . . . provide . . . for the inclusion of home health services for any individual who, under the State plan, is entitled to nursing facility services[.] 42 U.S.C.A. § 1396a(a)(10)(D) (West 2012). 12 [m]edical supplies, equipment, and appliances suitable for use in the home. 10 Instead, Defendant maintains, such shoes and stockings are prosthetics, as defined under federal law , w hich are not covered by 42 U.S.C. § 1396a(a)(10)(D). Defendant contends that orthopedic shoes and compression stockings do not fit within the federal government s understanding of medical supplies, equipment and appliances. On this point, Defendant admits that the phrase medical supplies, equipment and appliances is not defined in the federal Medicaid Act or regulations, but contends that the federal Centers for Medicare & Medicaid Services ( CMS ), an agency of the U.S. Department of Health and Human Services ( HHS ), has proposed a definition, which is intended to better align with the Medicare Program s definition of durable medical equipment found at [42 C.F.R. § ]414.202. Def. Memo of Law [#28-1] at 6 (citing 76 Federal Register at 41034). The proposed rule, which the Court is 10 Alternatively, Defendant contends that even if such shoes and stockings w ere [m]edical supplies, equipment, and appliances suitable for use in the home, that Plaintiffs w ould not be entitled to receive them because [n]one of the plaintiffs are recipients of home health services, in order for them to insist on mandatory medical supplies, equipment and appliances. Def. Memo of Law [#28-1] at p. 6. This argument lacks merit because it assumes that a beneficiary must first receive home health services before he can receive medical supplies, equipment and appliances, but in fact, medical supplies, equipment and appliances are themselves a type of home health services. See, 42 C.F.R. § 440.70(b); but see, Lankford v. Sherman, 451 F.3d 496, 504-505 (8th Cir. 2008) (Which can be read to suggest that the tw o things are separate: If a recipient receives home health services, the state also must provide medical supplies, equipment, and appliances suitable for use in the home as part of the program. ). The regulation, 42 C.F.R. § 440.70(b), lists four types of home health services that, in addition to medical supplies, equipment, and appliances, includes nursing service, home health aide service and physical therapy. The Court does not understand the applicable federal law to require that a beneficiary must receive one of those other types of home health services before he can receive medical supplies, equipment and appliances. Rather, as Plaintiffs correctly observe, [f]ederal law clearly obligates Medicaid participating states to cover home health services for recipients w ho are entitled to nursing facility care, not those w ho are in receipt of home health care. Pl. Memo of Law [#31] at p. 3. 13 required to give respectful consideration, 11 and with which Plaintiffs do not take issue, states, in pertinent part: We propose that supplies are defined as health care related items that are consumable or disposable, or cannot withstand repeated use by more than one individual. We propose that medical equipment and appliances are items that are primarily and customarily used to serve a medical purpose, generally not useful to an individual in the absence of an illness or injury, can withstand repeated use, and can be reusable or removable. 76 F.R. 41032-01, 2011 WL 2678714 (Jul. 12, 2011). Defendant contends that those definitions are very similar to the State s definitions for durable medical equipment and medical/surgical supplies. In that regard, Defendant states: The Department has long defined durable medical equipment as follows: Durable medical equipment means devices and equipment, other than prosthetic or orthotic appliances, which have been ordered by a practitioner in the treatment of a specific medical condition and which have all of the following characteristics: (i) can withstand repeated use for a protracted period of time; (ii) are primarily and customarily used for medical purposes; (iii) are generally not useful to a person in the absence of an illness or injury; and (iv) are usually not fitted, designed or fashioned for a particular individual s use. Where equipment is intended for use by only one person, it may be either custom-made or customized. *** The Department s regulations have long defined medical/surgical supplies as follows: Medical/surgical supplies means items for medical use other than drugs, prosthetic or orthotic appliances, durable medical equipment, or orthopedic footwear which have been ordered by a 11 See, Wisconsin Dept. of Health and Family Services v. Blumer, 534 U.S. 473, 497, 122 S.Ct. 962, 976 (2002) (Indicating that a proposed rule by the Secretary of Health and Human Services w arrant[ed] respectful consideration, and that reliance on the Secretary s significant expertise w as particularly appropriate in the context of a complex and highly technical regulatory program. ) (citations and internal quotation marks omitted). 14 practitioner in the treatment of a specific medical condition and which are usually: (i) consumable; (ii) nonreusable; (iii) disposable; (iv) for a specific rather than incidental purpose; and (v) generally have no salvageable value. McCloskey Aff. [#28-3] at ¶ ¶ 32, 34 (quoting 18 NYCRR § 505.5(a)(1)&(2)). Defendant contends that orthopedic shoes and compression stockings do not fit within those definitions. Defendant further indicates that the State s regulations contain a definition for orthopedic footwear that is separate from the definitions for durable medical equipment and medical/surgical supplies. See, id. at ¶ 35 (citing 18 NYCRR § 505.5(a)). Additionally, the State s provider manual lists prescription footwear separately from durable medical equipment and medical/surgical supplies. McCloskey Aff. [#28-3] at ¶ 35. Defendant further maintains that orthopedic shoes and compression stockings more clearly fall under the federal Medicaid regulations definition of prosthetic devices, which New York is not required to provide under 42 U.S.C. § 1396a(a)(10)(D). That definition states, in pertinent part: Prosthetic devices means replacement, corrective, or supportive devices prescribed by a physician or other licensed practitioner of the healing arts within the scope of his practice as defined by State law to (1) Artificially replace a missing portion of the body; (2) Prevent or correct physical deformity or malfunction; or (3) Support a weak or deformed portion of the body. 42 C.F.R. § 440.120(c). From this definition, Defendant maintains, the salient characteristics of prosthetic devices are that they are preventive, corrective or supportive. McCloskey Aff. [#28-3] at ¶ 25. 15 Defendant states that orthopedic shoes are similarly preventive, corrective and supportive. In that regard, the State defines orthopedic footwear, in pertinent part, as follows: Orthopedic footwear means shoes, shoe modifications, or shoe additions which are used as follows: in the treatment of children, to correct, accommodate or prevent a physical deformity or range of motion malfunction in a diseased or injured part of the ankle or foot; in the treatment of children, to support a weak or deformed structure of the ankle or foot; as a component of a comprehensive diabetic treatment plan to treat amputation, ulceration, pre-ulcerative calluses, peripheral neuropathy with evidence of callus formation, a foot deformity or poor circulation; or to form an integral part of an orthotic brace. 18 NYCRR § 505.5(a)(3)&(4) (emphasis added). Defendant indicates that compression stockings are similarly preventive and supportive, since [t]hey may prevent varicose veins from stretching and hurting and may prevent venous stasis ulcers. They may [also] comfort aching and tired legs by supporting a weak portion of the body. McCloskey Aff. [#28-3] at ¶ 43. Defendant further contends that the State s provider manual has long classified [compression stockings] as prosthetics. 12 Id. at ¶ 44. Plaintiffs do not dispute that prosthetics are optional services that fall outside of the home health services requirement, 42 U.S.C. § 1396a(a)(10)(D). However, they 12 Defendant explains that compression stockings are actually tw o types of stockings compression stockings, w hich are prescription custom-fitted stockings, and support stockings, also know n as surgical stockings, w hich are not custom fitted, and are sold over-the-counter. McCloskey Aff. [#28-3] at ¶ ¶ 39-40. Defendant contends that both types of stockings fall w ithin the federal definition of prosthetics, as explained above. How ever, Defendant indicates that w hile compression stockings are listed in the State s provider manual as prosthetics, support stockings are listed as medical/surgical supplies, not because they are supplies, but in order to make them more readily available to beneficiaries. Id. at ¶ 46-47 ( The sole reason that the Department s provider manual lists support stockings as medical/surgical supplies rather than as prosthetics is to enable pharmacies to dispense these items to medicaid recipients [rather than having the medicaid recipients have to obtain them from a medical equipment/supply dealer.] ). 16 maintain that Defendant is mistaken in claiming that orthopedic shoes and compression stockings are prosthetics. Plaintiffs insist that such shoes and stockings are durable medical equipment, and thus covered by the home health services requirement. See, Pl. Memo of Law [#31] at pp. 4-9. In support of their position, Plaintiffs point to certain features of New York s Medicaid program, which, they argue, contradict Defendant s contention that orthopedic shoes and compression stockings are treated as prosthetics under state law. See, id. at p. 4 ( Defendant s regulations, written guidance to providers, and model contracts for Medicaid managed care organizations all clearly treat compression stockings and orthopedic footwear as Durable Medical Equipment (DME). As such, they fall squarely within the federal mandatory home health benefit[.] ). On this issue, Plaintiffs first point out that 18 NYCRR § 505.5, titled Durable medical equipment; medical/surgical supplies; orthotic and prosthetic appliances; orthopedic footwear, provides separate definitions for orthotic appliances and devices, orthopedic footwear and prosthetic appliances and devices. Pl. Memo of Law [#31] at p. 5. Because of that, Plaintiffs maintain, the regulation distinguishes orthopedic footwear from any sort of prosthetic appliances and devices and contradicts Defendant s current attempt to redefine these items as optional prosthetics. Id. On the other hand, the regulation also separately defines durable medical equipment and medical/surgical supplies, which undercuts Plaintiffs contention that orthopedic shoes fit under either of those categories. Plaintiffs next maintain that Defendant s policy guidance to [Medicaid] providers is at odds with the notion that orthopedic shoes and compression stockings are 17 prosthetics. Specifically, Plaintiffs refer to Defendant s provider manual, which covers DMEPOS, which is an abbreviation for medical supplies, durable medical equipment, orthopedic footwear, prosthetic and orthotic appliances and devices. Pl. Memo of Law [#31] at p. 5. According to Plaintiffs, this manual demonstrates that neither orthopedic footwear nor compression stockings are exclusively categorized as prosthetics. Rather, these items are variously subsumed within multiple subsections of Defendant s over-all DME[POS] policy. Id. at p. 6. Plaintiffs indicate that the manual does not include orthopedic shoes under the category of prosthetics, but does include some compression stockings in that category. Plaintiffs further maintain that the State s Model Contracts for Medicaid Managed Care and Managed Long Term Care distinguish orthopedic footwear [and orthotics] from prosthetics, and define prosthetics as appliances or devices which replace or perform the function of any missing part of the body. Pl. Memo of Law [#31] at pp. 6-7. Plaintiffs state that such definition does not fit orthopedic shoes or compression stockings, since such shoes and stockings do not replace any missing body part. Id. at p. 7.13 Plaintiffs thus contend that Defendant s own policies and documents distinguish orthopedic shoes and compression stockings from 13 That assertion, however, seems inconsistent with Plaintiffs description of the orthopedic shoes requested for Plaintiff Harry Davis, which seem to replace amputated sections of his feet. See, e.g., Complaint [#1] at ¶ 17 ( Plaintiff Davis is unable to walk without prescription molded shoes for the stumps that remain of his feet. ); Docket No. [#3-2] at ¶ ¶ 16-17 ( Plaintiff Harry Davis suffered a transmetatarsal amputation of both feet roughly ten years ago[.] . . . . As a result, Mr. Davis is left with stumps instead of feet. Mr. Davis requires specially molded shoes in order to walk. ) (citations omitted). 18 prosthetics. 14 Consequently, as framed by the parties, the issue is whether orthopedic shoes and compression stockings are home health services, in which case the State is required to provide them under 42 U.S.C. § 1396a(a)(10), or whether they are prosthetic devices, in which case the State is not required to provide them under that provision. The Court s prior Decision and Order [#15] granting preliminary injunctive relief provides no guidance on this point. In that regard, in their motion for summary judgment, Plaintiffs seek to rely on the Court s earlier ruling, in its Decision and Order granting preliminary injunctive relief, that orthopedic shoes and compression stockings are home health services. Plaintiffs state, in pertinent part: The Court has already found that, for purposes of the preliminary injunction, Plaintiffs have established the likelihood of success that the challenged statute and Defendant s challenged policies violated the home health requirement in 42 U.S.C. § 1396a(a)(10)(D). Pl. Memo of Law [#26-2] at p. 14. How ever, in its prior 14 Plaintiffs also assert, as part of their argument concerning the home health services provision, that it is well settled that a needed medical service may fall within multiple Medicaid service categories -mandatory services and optional services the state has elected to cover -- and that it must be covered if it does fall within one or more of those categories. Pl. Memo of Law [#31] at p. 8. For that proposition, Plaintiffs cite the following cases: Hern v. Beye, 57 F.3d 906, 910 (10th Cir. 1995), Conley v. Dept. of Health, 287 P.3d 452, 465-468 (Utah Ct. App. 2012) and Fred C. v. Texas Health and Human Services Commission, 924 F.Supp. 788, 791-792 (W.D. Tex. 1996). However, the Court does not find any of those cases to be on point or persuasive, with regard to the issue involving the home health services requirement. Hern v. Beye is inapposite because it involved a medical service that admittedly fell under a mandatory coverage category. Moreover, the issue in Hern was under what circumstances a state could deny coverage for a procedure that fell under a mandatory coverage category, not whether the service was mandatory. The Fred C. decision was vacated by the Fifth Circuit, at 117 F.3d 1416 (5th Cir. 1997), and in any event, asserted that home health care was an optional service, which the parties to this action do not maintain. Conley is a Utah state court decision that is obviously not binding on this Court, and, in any event, involved the reasonable standards and comparability requirements, not the home health services requirement (the defendant admitted that the service at issue met the definition of durable medical equipment). 19 Decision and Order, the Court did not perform any analysis in reaching its conclusion that orthopedic shoes and compression stockings w ere home health services. Instead, it merely made that finding based on Plaintiffs representations to that effect, and Defendant s failure to argue the point. 15 The Court noted, moreover, that it w as making its finding of likelihood of success w ithout prejudice to Defendant having an opportunity to revisit the issue after comprehensive briefing. Specifically, the Court stated that given the fact that Defendant had a very limited time to prepare a response to the motion [for preliminary injunctive relief], the Court does find, based on its analysis, that Plaintiffs have demonstrated a likelihood of success on their Section 1983 claim under 42 U.S.C. § 1396a(a)(10)(D), but makes this ruling w ithout prejudice to the parties re-visiting the issue later in the case after comprehensive briefing[.] Decision and Order [#15] at p. 12, n. 3. (internal quotation marks omitted). Accordingly, the Court s prior Decision and Order [#15] really does not provide any support for Plaintiff s contention that orthopedic shoes and compression stockings are home health services. Defendant interprets the federal Medicaid laws to indicate that orthopedic shoes and compression stockings are prosthetic devices, 42 U.S.C. § 1396d(a)(12), as defined by 42 C.F.R. § 440.120(c). Additionally, Defendant interprets the phrase, [m]edical supplies, equipment, and appliances suitable for use in the home, 15 Defendant s primary contention in opposing the application for preliminary injunctive relief w as that Plaintiff s could not sue under § 1983 to enforce the subject provisions of the Medicaid Act. The Court found to the contrary, and Defendants had not raised that issue again in connection w ith the summary judgment motions. 20 contained in 42 C.F.R. § 440.70(b)(3), to exclude orthopedic shoes or compression stockings. Plaintiffs are essentially asking the Court to review Defendant s interpretation of the federal Medicaid Act, and in that regard, one of tw o standards of review may apply the deferential standard or the de novo standard. The deferential standard is an outgrow th of the Chevron deference rule, 16 and applies w here the Secretary of HHS has agreed w ith a state s interpretation of the Medicaid Act. For example, in Perry v. Dow ling, 95 F.3d 231, 235-236 (2d Cir. 1996), the Second Circuit found that it w as appropriate to give deference to a state s interpretation of the Medicaid Act, for three reasons: 1) Medicaid is a joint federal-state program; 2) the Secretary of HHS had approved the state s Medicaid Plan; and 3) the Secretary had submitted a declaration concurring w ith the state s interpretation of the Medicaid Act. 17 In a subsequent decision, the Second Circuit 16 See, Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-844, 104 S.Ct. 2778, 2781-2782 (1984) ( When a court review s a[ ] [federal] agency' s construction of the statute w hich it administers, it is confronted w ith tw o questions. First, alw ays, is the question w hether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as w ell as the agency, must give effect to the unambiguously expressed intent of Congress. If, how ever, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its ow n construction on the statute, as w ould be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous w ith respect to the specific issue, the question for the court is w hether the agency' s answ er is based on a permissible construction of the statute. . . . If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling w eight unless they are arbitrary, capricious, or manifestly contrary to the statute. Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicit. In such a case, a court may not substitute its ow n construction of a statutory provision for a reasonable interpretation made by the administrator of an agency. ) (citations and footnotes omitted). Congress has not directly addressed the issue before the Court. 17 See, id. ( When the federal-statute interpretation is that of a state agency and no federal agency is involved, deference is not appropriate. See Turner v. Perales, 869 F.2d 140, 141 (2d 21 indicated that it might also be proper to accord such deference in a situation w here the Secretary s approval of the state s interpretation of the Medicaid Act w as implicit, and based only on the Secretary s approval of the state s Medicaid Plan. Community Health Center v. Wilson-Coker, 311 F.3d 132, 140 (2d Cir. 2002). In that case, how ever, the Second Circuit cautioned that district courts should consider w hether the Secretary s approval of a state plan actually indicates that the Secretary considered and agreed w ith the state interpretation being challenged: The district court therefore should consider w hether to defer to the implicit judgment of the Secretary that a state plan complies w ith federal law . In making this determination, the district court should bear in mind . . . [that] [d]eference, how ever, even at it s highest levels, is not a rubber stamp. In assessing the reasonableness of CMS s decision, the district court may consider the materials submitted by [the state] in support of its plan, and the factors considered by CMS in evaluating those materials. Id., 311 F.3d at 140 (citations omitted). In this case, the Court finds that the deferential standard of review is appropriate. On this point, CMS has approved New York s Medicaid Plan, including various amendments w hich contain references to the challenged legislation concerning orthopedic shoes and compression stockings. Moreover, there is evidence that CMS actually considered such legislation, and agreed that it w as Cir.1989) (per curiam). . . . [How ever,] [i]n these circumstances [involving Medicaid, a joint federal-state program ], in w hich the state has received prior federal-agency approval to implement its plan, the federal agency expressly concurs in the state' s interpretation of the statute, and the interpretation is a permissible construction of the statute, that interpretation w arrants deference. ) (citations omitted). 22 consistent w ith the Medicaid Act. In that regard, an affidavit from New York s Acting Director of Operations, Office of Health Insurance Programs, indicates that the State submitted a proposed plan amendment to CMS, specifically addressing the change in coverage for orthopedic shoes and compression stockings, and that CMS informed the state that it w as not necessary to submit the proposed amendment, since the State had the inherent authority to limit such coverage. See, Bick Aff. [#28-4] at ¶ 56 ( CMS advised the Department that it w as not required to submit for CMS s approval a proposed plan amendment that reflected these benefit limits because such changes in medical necessity criteria w ere w ithin the State s purview . ). Presumably, if the proposed changes in coverage violated the home health services provision, CMS w ould have said so. Since it did not, the Court gives substantial deference to CMS s interpretation of the federal Medicaid Act and concludes that the challenged provisions do not violate 42 U.S.C. § 1396a(a)(10)(D). As mentioned above, the second possible standard of review w hich the Court could apply is the de novo standard, pursuant to w hich, a court considers w hether the state agency s actions are consistent w ith federal law . See, Turner v. Perales, 869 F.2d at 141 (Indicating that under de novo review of a state s interpretation of a federal statute, the question is w hether the state law and implementing regulations are consistent w ith federal law . ). Alternatively, even assuming arguendo that the appropriate standard of review w as de novo, the Court w ould nevertheless find that the subject legislation is consistent w ith the Medicaid 23 Act and therefore does not violate the home health services provision. Plaintiffs argument on this point is largely devoted to pointing out apparent inconsistencies, in the State s ow n documents, such as provider manuals, as to how the State categorizes orthopedic shoes and compression stockings, for supply and billing purposes.18 Plaintiffs spend relatively little time attempting to argue that Defendant s categorization of orthopedic shoes and compression stockings as prosthetics is inconsistent w ith the federal Medicaid Act. On that point, Plaintiffs argue only that the challenged legislation is bad from a policy standpoint, since it w ould be more cost effective to provide orthopedic shoes and compression stockings to Plaintiffs in order to prevent them from developing more serious ailments that might require hospitalization.19 Apart from that, Plaintiffs contend that orthopedic shoes and compression stockings fit w ithin the broad definition of medical equipment and appliances proposed by CMS, discussed above. 20 How ever, the Court agrees w ith Defendant that orthopedic shoes and compression stockings may be properly categorized as prosthetic appliances, w hich are not 18 See, Pl. Memo of Law [#31] at p. 6 ( Contrary to Defendant s assertion, neither orthopedic footw ear nor compression stockings are exclusively categorized as prosthetics. Rather, these items are variously subsumed w ithin multiple subsections of Defendant s over-all DME policy. ). The Court does not view these inconsistencies as necessarily helpful to Plaintiff s claim, since the issue is not whether the State s documentation is perfectly consistent, but rather, whether the State is violating the Medicaid Act by failing to provide home health services as defined by the Secretary. 19 See, e.g., Pl. Stmt. of Facts ¶ 28 ( Compression stockings offer a cost-effective w ay to prevent far more complicated and expensive treatments and hospitalizations. ). 20 See, Pl. Memo of Law [#31] at p. 7 ( Notably, the orthopedic footw ear and compression stockings at issue here indisputably meet the proposed CMS definition: they serve a primarily medical purpose, are not useful in the absence of an illness or injury, can w ithstand repeated use, and can be reusable or removable. ) 24 covered by the home health services provision, 42 U.S.C. § 1096a(a)(10)(D). More specifically, the Court agrees w ith Defendant that orthopedic shoes and compression stockings conform to the more-specific definition of prosthetic devices set forth at 42 C.F.R. § 440.120(c), since both are corrective or supportive devices that correct physical deformity or malfunction or support a weak or deformed portion of the body. Consequently, Defendant s assertion, that orthopedic shoes and compression stockings are not home health services, appears consistent with the Medicaid Act. Additionally, the Court notes that at least one other federal court decision, as well as one other federal regulation, treat orthopedic shoes as a category of prosthetic appliances. See, Budnicki v. Beal, 450 F.Supp. 546, 551 (D.C.Pa. 1978) ( Before April 9, 1977, Pennsylvania provided prosthetic devices, including orthopedic shoes, to only categorically needy recipients. ); 38 C.F.R. § 17.150 (listing orthopedic shoes under the heading Prosthetic and similar appliances ). For all of these reasons, the Court alternatively finds, under de novo review, that Plaintiffs have not shown that Defendant s challenged interpretation is inconsistent with the Medicaid Act. Defendant is therefore entitled to summary judgment on this claim. Plaintiffs Claim Under the Reasonable Standards Provision, 42 U.S.C. § 1396a(a)(17) Plaintiffs alternatively maintain that the challenged provisions violate the Medicaid Act s reasonable standards provision, 42 U.S.C. § 1396a(a)(17), since they eliminat[e] coverage for compression stockings and orthopedic footwear without an opportunity to obtain an individualized determination of medical necessity. Amended Complaint [#34] at ¶ 152. Plaintiffs contend that the challenged provisions are 25 arbitrary and unreasonable, for the following reasons: The State s policy will cover orthopedic shoes for someone with diabetes and peripheral neuropathy, but not peripheral neuropathy without diabetes; a patient with swelling in his or her legs so severe that venous stasis ulcers have already developed will get compression stockings, but a patient with lymphedema who has already suffered massive cellulitic infection that required surgical treatment at Defendant s expense will not even when Defendant s own health policy strongly recommends use of compression stockings to treat the condition. Such distinctions have nothing to do with medical necessity, are improperly based solely on diagnosis or condition, and therefore violate the reasonableness requirement in 42 U.S.C. § 1396a(a)(17). Pl. Memo of Law [#26-2] at pp. 17-18; see also, Pl. Memo of Law [#31] at p. 11 ( Defendant s policy regarding coverage of compression stockings and orthopedic footwear only for those few Medicaid beneficiaries who meet one of the limited coverage categories based solely on diagnosis and condition clearly violates 42 C.F.R. § 440.230(c) ). Essentially, Plaintiffs maintain that where two groups of people both need a particular medical service provided under Medicaid, the state cannot provide the service to one group, but not to the other, based on diagnosis. In response, Defendant agrees that the provision of orthopedic shoes and compression stockings is subject to the Medicaid Act s reasonable standards provision. However, Defendant indicates that the challenged legislation is permissible under 42 C.F.R. § 440.230(d). In that regard, the subject regulation states: § 440.230 Sufficiency of amount, duration, and scope. (a) The plan must specify the amount, duration, and scope of each service that it provides for (1) The categorically needy; and (2) Each covered group of medically needy. 26 (b) Each service must be sufficient in amount, duration, and scope to reasonably achieve its purpose. (c) The Medicaid agency may not arbitrarily deny or reduce the amount, duration, or scope of a required service under §§ 440.210 and 440.220 to an otherwise eligible beneficiary solely because of the diagnosis, type of illness, or condition. (d) The agency may place appropriate limits on a service based on such criteria as medical necessity or on utilization control procedures. 42 C.F.R. § 440.230 (West 2013). Defendant maintains that in the instant case, the state has a legitimate interest in conserving limited Medicaid resources, and that it has articulate[d] a rational basis for [having] prioritize[d] certain diagnoses and conditions over others. Def. Memo of Law [#28-1] at p. 12.21 Defendant further suggests that although New York has opted to provide prosthetic services, the fact that such services are optional under the Medicaid Act should provide the state w ith more leew ay to limit coverage, under 42 U.S.C. § 440.230. See, Def. Memo of Law [#28-1] at p. 8 ( The language of the regulation also suggests that states have greater flexibility in limiting coverage of optional services based on diagnosis. ). 22 Significantly, Defendant does not deny that Plaintiffs have a legitimate medical 21 Defendant explained w hy the State prioritized the covered diagnoses over other, lessserious ones (i.e., less medically necessary ones), such as hammertoes, bunions and varicose veins, but he did not explain w hy the State decided not to cover other serious conditions such as those from w hich Plaintiffs suffer. At most, the record suggests that the State opted to cover w hat it perceived to be the most commonly-occurring conditions. 22 The Court does not agree w ith that proposition. See, Bontrager v. Indiana Family and Social Services Administration, 697 F.3d 604, 608-612 (7 th Cir. 2012) (Giving no indication that once a state decides to provide an optional dental service, the previously-optional nature of the service has any bearing on the analysis under 42 C.F.R. § 440.230(d)), cert. den., 133 S.Ct. 2002 (2013). 27 need, for orthopedic shoes and/or compression stockings, that is at least as great as that of the persons entitled to receive those items under the statute. Nor does Defendant dispute that if Plaintiffs are denied those services, they may end up w ith more serious medical issues that the State w ill have to treat. Rather, Defendant contends that based upon budget concerns, the State may decide to provide medically necessary services to certain beneficiaries, but not others, based on diagnosis. Defendant indicates that it adopted the challenged categories in an effort to w eed-out persons w ith certain less-serious conditions, such as bunions and varicose veins,23 and to provide services to the majority of people [w ith more serious conditions] w ho need [them]. Bick Aff. [#28-4] at ¶ 73 (emphasis added)24 ; see also, id. at ¶ 73 ( [C]overing orthopedic footw ear for diabetics w ill continue to provide footw ear to the majority of people w ho need it. ) (emphasis added). Defendant does not dispute, though, that such limitations have resulted in persons, including Plaintiffs, w ith equally-serious conditions, such as chronic venous insufficiency ( CVI ), being left uncovered. 25 The issue before the Court is w hether such a policy runs afoul of the reasonable standards provision. 23 For example, Defendant states that in 2010-2011, approximately 18% of New York s Medicaid claims for stockings w ere for people w ith varicose veins. Bick Aff. [#28-4] at ¶ 70. 24 See, Bick Aff. [#28-4] at ¶ 75 ( [T]he Department determined to cover . . . compression stockings for pregnant w omen w ith severe varicosities and edema. It determined also to cover compression stockings only w hen used for the treatment of open venous ulcers. These tw o diagnoses pregnancies w ith severe varicosities and edema and open ulcers account for 25 percent of all Medicaid payments for compression and support stockings. ) (footnotes omitted). 25 See, Bick Aff. [#28-4] at ¶ 70 (Indicating that in 2010-2011, approximately seven percent (7% ) of claims for stockings w ere for people w ith CVI. 28 The Court finds that it does. In that regard, Defendant does not dispute that orthopedic shoes and compression stockings are medically necessary for Plaintiff s medical conditions. Nor has Defendant show n that the persons currently eligible for such services are more medically needy than Plaintiffs. Defendant is therefore not relying upon that portion of 42 C.F.R. § 440.230(d) w hich permits states to place limits on services based on medical necessity. Instead, it seems clear that Defendant is relying upon that regulation s reference to utilization control procedures. In other w ords, Defendant maintains that a classification, based on diagnosis, that serves a majority of persons needing a service, but fails to serve others w ho are equally needy, is a valid utilization control procedure. How ever, the Court cannot find any authority to support that view .26 To the contrary, the law on this point is that utilization control procedures, w hile not defined in the statute, consist of prior authorization process[es], or similarly designed [processes] to control access, prevent fraud, or streamline efficiency, or resource[s] to determine the medical necessity of a procedure. Bontrager v. Indiana Family and 26 Defendant cites the cases Casillas v. Daines, 580 F.Supp.2d 235, 244 (S.D.N.Y. 2008) and Ravenw ood v. Daines, No. 06-CV-6355-CJS, 2009 WL 2163105 (W.D.N.Y. Jul. 17, 2009), both of w hich involved attempts to obtain Medicaid-funded gender reassignment surgery. Alternatively, the plaintiffs in those actions sought comparable types of surgeries, that w ere provided for specific illnesses. For example, they sought surgical testical removal, as a component of gender reassignment surgery, since such surgery w as covered for men w ith testicular cancer. In both actions, the complaints w ere dismissed. How ever, neither of those cases is on point, since under the statute being challenged in them, no one w as entitled to receive gender reassignment surgery, and the state had provided various safety reasons w hy such surgery w as expressly excluded from coverage. Essentially, the state determined that gender reassignment surgery w as not medically necessary. In the instant case, certain persons are able to obtain medically-necessary orthopedic shoes and compression stockings, but certain persons are not, based solely on diagnosis. 29 Social Services Administration, 697 F.3d at 611. The subject provisions do not fall under any of those categories, and in any event, they deny coverage of medicallynecessary services based solely on diagnosis. Consequently, the subject provisions violate the Medicaid Act s reasonable standards provision. See, 42 C.F.R. § 440.230(c) ( The Medicaid agency may not arbitrarily deny . . . a required service . . . to an otherwise eligible beneficiary solely because of the diagnosis, type of illness, or condition. ). Plaintiffs are therefore entitled to summary judgment on this claim. Plaintiffs Claim Under the Comparability Requirement, 42 U.S.C. § 1396a(a)(10)(B) Plaintiffs maintain that the challenged legislation also violates the Medicaid Act s comparability requirement because it discriminates betw een Medicaid recipients based on medical condition. Amended Complaint [#34] at ¶ 154. The pertinent section of the Medicaid Act states that the medical assistance made available to any individual described in subparagraph (A) (i) shall not be less in amount, duration, or scope than the medical assistance made available to any other such individual, and (ii) shall not be less in amount, duration, or scope than the medical assistance made available to individuals not described in subparagraph (A)[.] 42 U.S.C. § 1396a(a)(10)(B). [T]he comparability mandate prevents discrimination against or among the categorically needy [and] applies equally to mandatory and optional medical services. Lankford v. Sherman, 451 F.3d at 505. In opposition, Defendant denies that the subject legislation violates the Medicaid Act, for the same reasons discussed above in the section pertaining to the 30 reasonable standards requirement. That is, Defendant contends that the State s decision not to cover illnesses, besides those listed in the statute and regulations, is permissible under 42 C.F.R. § 440.230(d), as a utilization control procedure. Def. Memo of Law [#28-1] at pp. 8-12. How ever, for the same reasons already discussed, the Court disagrees, and finds that the challenged provisions violate the comparability provision, 42 U.S.C. § 1396a(a)(10)(B). Accordingly, Plaintiffs are entitled to summary judgment on this claim. Plaintiffs Claim Under the Due Process Provision, 42 U.S.C. § 1396a(a)(3) Plaintiffs maintain that Defendant violated the Medicaid Act s due process provision by failing to give them personal notice, of the change in coverage pertaining to orthopedic footw ear and compression stockings, or an opportunity for a hearing. Amended Complaint [#34] at ¶ 160. The pertinent statute section states that [a] State plan for medical assistance must . . . provide for granting an opportunity for a fair hearing before the State agency to any individual w hose claim for medical assistance under the plan is denied or is not acted upon w ith reasonable promptness[.] 42 U.S.C. § 1396a(a)(3). The issue before the Court is w hether this provision requires a state to provide individual notice, and an opportunity for a hearing, to beneficiaries w henever it amends its Medicaid law s to restrict those beneficiaries access to services. To the extent that Plaintiffs contend they w ere entitled to a hearing, the Court disagrees. See, Rosen v. Goetz, 410 F.3d 919, (6 t h Cir. 2005) (Explaining 31 that 42 C.F.R. § 431.220(b) does not require a hearing, in the absence of a factual dispute, w hen a state eliminates coverage under a Medicaid program); see also, Washington v. DeBeaugrine, 658 F.Supp.2d 1332, 1335 (N.D.Fla. 2009) ( [W]hen a state validly changes its law in a w ay that, w ithout factual dispute, ends a person' s benefits, no hearing is required. ) (citing Rosen v. Goetz, 410 F.3d 919, 926 (6th Cir.2005)). In that regard, Plaintiffs have not claimed, much less show n, that they w ere actually denied a hearing on any factual matter pertaining to coverage under the challenged provisions. 27 Nor have they identified any factual issue requiring a hearing. Instead, Plaintiffs dispute is w ith the legality of those provisions, under w hich they are clearly not covered. See, Amended Complaint [#34] at ¶ 10 ( None of the Plaintiffs meet any of the listed exceptions. ). A hearing w ould have served no purpose, since Plaintiffs admit that they are not presently covered by the challenged New York statute, and they have not identified any factual issue relating to coverage. Consequently, 42 C.F.R. § 431.220(b) obviated the requirement for a hearing. Plaintiffs maintain, though, that pursuant to 42 C.F.R. § § 431.206 & 431.210, they w ere still entitled to notice that their coverage w as being 27 In a memo of law , Plaintiffs counsel argues that Plaintiffs must . . . be given the opportunity to challenge Defendant s actions and argue that they, in fact, meet one or more of the available exceptions under w hich coverage is available. Pl. Memo of Law [#31] at p. 17. How ever, that is not one of Plaintiffs claims in this action, and in any event the record is devoid of any suggestion that any Plaintiff actually qualifies for coverage under the exceptions, or that he w as denied the opportunity for a hearing on such issue. Rather, the Amended Complaint admits that Plaintiffs are not covered. Amended Complaint [#34] at ¶ 10 ( None of the Plaintiffs meet any of the listed exceptions. ) (emphasis added). Consequently, Plaintiffs argument on that point lacks merit. 32 terminated. The first of those regulations states, in pertinent part: a) The agency must issue and publicize its hearing procedures. (b) The agency must, at the time specified in paragraph (c) of this section, inform every applicant or beneficiary in w riting (1) Of his right to a hearing; (2) Of the method by w hich he may obtain a hearing; and (3) That he may represent himself or use legal counsel, a relative, a friend, or other spokesman. (c) The agency must provide the information required in paragraph (b) of this section (1) At the time that the individual applies for Medicaid; (2) At the time of any action affecting his or her claim; (3) At the time a skilled nursing facility or a nursing facility notifies a resident in accordance w ith § 483.12 of this chapter that he or she is to be transferred or discharged; and (4) At the time an individual receives an adverse determination by the State w ith regard to the preadmission screening and annual resident review requirements of section 1919(e)(7) of the Act. 42 C.F.R. § 431.206 (emphasis added). The second regulation states: A notice required under § 431.206(c)(2), (c)(3), or (c)(4) of this subpart must contain-(a) A statement of w hat action the State, skilled nursing facility, or nursing facility intends to take; (b) The reasons for the intended action; (c) The specific regulations that support, or the change in Federal or State law that requires, the action; (d) An explanation of (1) The individual' s right to request an evidentiary hearing if one is available, or a State agency hearing; or (2) In cases of an action based on a change in law , the circumstances 33 under w hich a hearing w ill be granted; and (e) An explanation of the circumstances under w hich Medicaid is continued if a hearing is requested. 42 C.F.R. § 431.210. The Court agrees w ith Plaintiffs that these provisions envision the State giving notice to beneficiaries w hen coverage is altered or eliminated due to a change in the law . That is true even w here, as here, the beneficiary may not be entitled to a hearing, due to the lack of any factual issue. Defendant denies that Plaintiffs w ere entitled to a notice, but his argument, as to both the notice and hearing aspects of Plaintiffs due process claim, is cursory, consisting of a single paragraph,28 in w hich he cites three cases for support: Rosen v. Goetz, cited above, Knapp v. Armstrong, No. 1:11 cv 00307 BLW, 2012 WL 640890 at * 5 (D.Idaho Feb. 26, 2012) and M.R. v. Dreyfus, 767 F.Supp.2d 1149, 1166-1167 (W.D.Wa. 2011). How ever, Rosen v. Goetz does not support Defendant on this point, since in that case the defendant actually gave notice to beneficiaries that it w as eliminating Medicaid coverage, and the issue related to the adequacy of such notice. The court in Rosen v. Goetz did not indicate that the defendant could have dispensed w ith notice altogether. The Court is similarly unpersuaded by Knapp v. Armstrong, w hose actual holding on this point is only that Medicaid participants are not guaranteed a hearing before implementation of an across-the-board measure aimed at cost-cutting. Id., 2012 28 See, Def. Memo of Law [#28-1] at pp. 12-13. 34 WL 640890 at * 5 (emphasis added). Moreover, w hile the Knapp decision refers to notice in passing, it does not actually analyze the issue of notice. The other decision cited by Defendant, M.R. v. Dreyfus, w as reversed by the Ninth Circuit, at 663 F.3d 1100 (9 t h Cir. 2011), and is also factually inapposite, since in that case the State of Washington sent the affected Medicare recipients a service reduction notice. See, id., 767 F.Supp.2d at 1166; see also, id. at 1155 ( This litigation ensued shortly after DSHS sent out the service reduction notices. ). The plaintiffs in that action argued that the notice they received should have provided additional information. Id., 767 F.Supp.2d at 1166. The M.R. v. Dreyfus decision does include language that Plaintiffs are not entitled to notice or hearing rights for an across-the-board budget reduction, but that appears to be an over-broad statement, since the decision actually only discussed the right to a hearing, not the separate right to notice. See, Id. at 1166-1167 (emphasis added). In summary, the authority cited by Defendant does not support the idea that a state can discontinue Medicaid coverage w ithout giving the affected beneficiaries any notice w hatsoever, such as happened in the instant case. Compare, Pashby v. Delia, 709 F.3d 307, 315 (4 t h Cir. 2013) (In a case involving a similar state-w ide reduction in Medicaid services, the State of North Carolina sent w ritten notices to the affected beneficiaries: Before IHCA Policy 3E w ent into effect, the DHHS mailed letters informing approximately 2,405 individuals including the named Appellees and certified class members that they no longer met the eligibility requirements for in-home PCS and w ould cease to receive the service as of June 1, 35 2011. ). Accordingly, Plaintiffs are entitled to summary judgment on the notice aspect of their due process claim. Plaintiffs Discrimination Claims Under the ADA and Section 50429 Lastly, Plaintiffs maintain that the challenged provisions violate the integration mandate and methods of administration provisions of the ADA and Section 504.30 In that regard, the ADA s31 integration mandate, 28 C.F.R. § 35.130(d), states that [a] public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals w ith disabilities. Plaintiffs maintain that the challenged provisions violate that mandate, because unless the State provides orthopedic shoes and compression stockings to them, they face a risk of unnecessary institutionalization. See, Pl. Memo of Law [#26-2] at pp. 23-24. 32 More 29 Title II of the ADA provides, in relevant part, that no qualified individual w ith a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity. 42 U.S.C. § 12132. To prove a violation of Title II, a party must therefore establish: (1) that he is a qualified individual w ith a disability; (2) that he w as excluded from participation in a public entity' s services, programs or activities or w as otherw ise discriminated against by a public entity; and (3) that such exclusion or discrimination w as due to his disability. These requirements apply w ith equal force to plaintiffs' Rehabilitation Act claims. M.K. ex rel. Mrs. K. v. Sergi, 554 F.Supp.2d 175, 194-195 (D.Conn. 2008) (citations omitted). 30 See, Pl. Memo of Law [#26-2] at pp. 23-25; Pl. Memo of Law [#31] at pp. 18-19. 31 Section 504 of the Rehabilitation Act and the ADA impose identical requirements. Rodriguez v. City of New York, 197 F.3d 611, 618 (2d Cir. 1999). 32 See, id. at p. 24 ( Plaintiff Wallach has already resided in a nursing home, and could very w ell be forced to return there w ithout the services necessary to maintain her health in the community. Defendant s failure to cover their treatments has already rendered Plaintiffs Davis and Poole virtually home bound, isolating them from the community in violation of Olmstead, the ADA and Section 504. ). 36 specifically, Plaintiffs maintain that if they cannot obtain orthopedic shoes and compression stockings, they w ill develop more serious medical problems, and they w ill likely end up in hospitals or nursing homes, w hich w ould violate the integration mandate. Additionally, the ADA s methods of administration provision, 28 C.F.R. § 35.130(b)(3), states: (3) A public entity may not, directly or through contractual or other arrangements, utilize criteria or methods of administration: (i) That have the effect of subjecting qualified individuals w ith disabilities to discrimination on the basis of disability; (ii) That have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the public entity' s program w ith respect to individuals w ith disabilities; or (iii) That perpetuate the discrimination of another public entity if both public entities are subject to common administrative control or are agencies of the same State. 28 C.F.R. § 35.130(b)(3).33 Plaintiffs contend that the challenged provisions also violate that regulation by utilizing methods of administration that subject [them] to discrimination on the basis of disability, including risk of unnecessary institutionalization, and by failing to account for individual medical necessity in the denial of coverage for orthopedic footw ear and compression stockings that w ould enable [them] to remain in the community. Amended Complaint [#34] at 29. With regard to both the integration mandate 33 This regulation pertains to the ADA. Plaintiffs maintain that the challenged provisions violate similar provisions relating to Section 504 28 C.F.R. § 41.51(b)(3)(i) & 45 C.F.R. § 84.4(b)(4). See, Pl. Memo of Law [#26-2] at p. 25, n. 12. 37 and methods of administration aspects of their claim, the Court understands Plaintiffs to be arguing, in part, that the challenged provisions are discriminatory because they unfairly treat some Medicaid recipients better than others, solely on the basis of diagnosis. Defendant opposes these claims, and contends that a state s decision as to how to best allocate funds among disabled persons cannot be considered discrimination. In that regard, Defendant states, in pertinent part: Absent invidious classifications, a State s decision about allocating limited public w elfare funds is not discrimination. Dandridge v. Williams, 397 U.S. 471, 487 (1970).34 When there are many competing demands for public assistance and only limited public funds, States must necessarily engage in a process of line-draw ing in extending benefits. United States R.R. Ret. Bd. v. Fritz, 449 U.S. 166, 179 (1980);35 accord, Shw eiker v. Wilson, 450 U.S. 221, 243 (1981) ( [T]he apportionment of scarce benefits for public w elfare requires painful but unavoidable line-draw ing. ).36 Where that line is draw n w ill necessarily disappoint some individuals w ho may desire and w ho could benefit from prosthetics (such as orthopedic footw ear and compression/support stockings), but that decision is a policy choice for legislative, rather than judicial, consideration. Fritz, 449 U.S. at 179. The ADA requires only that a particular service provided to some [non-disabled people] not be denied to disabled people. Doe v. Pfrommer, 148 F.3d 73, 83 (2d Cir. 1998). 34 Dandridge involved a challenge to Maryland s w elfare law s under the Equal Protection Clause, not the ADA or Section 504. 35 Fritz involved a Fifth Amendment Due Process Clause challenge to the Railroad Retirement Act of 1974. The decision did not involve the ADA or Section 504. Fritz, 101 S.Ct. at 459. 36 Although Defendant s brief does not indicate it, this citation is to the dissenting opinion in Schw eiker. Moreover, Schw eiker did not involve the ADA or Section 504, and the legislation being challenged in that case did not differentiate among persons solely on the basis of disability. 38 Def. Memo of Law [#28-1] at p. 13 (some internal quotation marks omitted). From this statement and from the cases that Defendant has cited, the Court understands Defendant s argument to be that the State s exercise in line-draw ing betw een Medicaid recipients is permissible as long as it is rationally-related to a legitimate governmental objective. How ever, the Court disagrees and finds that Plaintiffs are entitled to judgment on this claim. In that regard, at the outset, the Supreme Court has indicated that [u]njustified isolation . . . is properly regarded as discrimination based on disability, under the ADA and Section 504. Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 597, 119 S.Ct. 2176, 2185 (1999). 37 Plaintiffs maintain, and Defendant does not dispute, that the elimination of coverage for orthopedic shoes and compression stockings for Plaintiffs may result in them being institutionalized. 38 When a state s policies lead to discrimination against the disabled, w hich includes unjustified isolation, the state must make reasonable modifications, unless such modifications w ould fundamentally alter the service, program or 37 [In Olmstead] the Court held that the w ord discrimination as used in [42 U.S.C.] § 12132 includes not only disparate treatment of comparably situated persons but also undue institutionalization of disabled persons, no matter how anyone else is treated. Amundson v. Wisconsin Dept. of Health Servs., 721 F.3d 871, 874 (7 th Cir. 2013) (emphasis in original). 38 Because Congress instructed the DOJ to issue regulations regarding Title II, w e are especially sw ayed by the DOJ' s determination that the ADA and the Olmstead decision extend to persons at serious risk of institutionalization or segregation and are not limited to individuals currently in institutional or other segregated settings. Pashby v. Delia, 709 F.3d at 322 (emphasis added, citation omitted). 39 activity being offered. Olmstead, 119 S.Ct. at 2188. On that point, the pertinent regulation states: A public entity shall make reasonable modifications in policies, practices, or procedures w hen the modifications are necessary to avoid discrimination on the basis of disability, unless the public entity can demonstrate that making the modifications w ould fundamentally alter the nature of the service, program, or activity. 28 C.F.R. § 35.130(b)(7). Plaintiffs essentially maintain that the State should accommodate them by continuing to provide them orthopedic shoes and compression stockings.39 In opposing that request, Defendant references the financial reasons that prompted the challenged changes in coverage, but does not specifically argue that modifying the Medicaid program, to include coverage of orthopedic shoes and compression stockings for Plaintiffs, w ould fundamentally alter the program. See, Def. Memo of Law [#28-1] (Containing no such argument). 40 39 It appears that modification of a program s eligibility requirements can constitute a reasonable accommodation under the ADA and Section 504. See, Pashby v. Delia, 709 F.3d at 323-324 (Plaintiffs w ere disabled individuals w ho w ere able to reside outside of institutions because of services provided by the State of North Carolina; w hen the state restricted those services to persons w ith more severe disabilities, the plaintiffs faced the threat of institutionalization, and requested that the State accommodate them by modifying the Medicaid program s requirements. The Fourth Circuit Court of Appeals gave no indication that such a modification w ould have been an unreasonable accommodation. To the contrary, the Court held that the State of North Carolina had failed to make out a successful fundamental alteration defense, and that the plaintiffs w ere likely to succeed on the merits of their ADA and Rehabilitation Act claims. ). 40 In any event, see also, Pashby v. Delia, 709 F.3d 307, 323-324 (4 th Cir. 2013) ( We join the Third, Ninth, and Tenth Circuits in holding that, although budgetary concerns are relevant to the fundamental alteration calculus, financial constraints alone cannot sustain a fundamental alteration defense. ). 40 Instead, Defendant maintains that this is a level-of-benefits claim that is not covered by Olmstead or the integration mandate. See, Def. Memo of Law [#281] at p. 14. In support of this argument, Defendant refers to the follow ing language from the Olmstead decision: We do not in this opinion hold that the ADA imposes on the States a standard of care for w hatever medical services they render, or that the ADA requires States to provide a certain level of benefits to individuals w ith disabilities. We do hold, how ever, that States must adhere to the ADA' s nondiscrimination requirement w ith regard to the services they in fact provide. Olmstead, 119 S.Ct. at 2188, n. 14 (citation omitted). Relying upon this statement, Defendant maintains that Plaintiffs are not really complaining about discrimination, but rather, they are impermissibly attempting to force the State to provide them w ith a certain level of benefits. See, Def. Memo of Law [#28-1] at p. 14 (Stating that Olmstead addresses only discrimination, not [the] level-ofbenefits claims that exist here. ). How ever, the Court disagrees. In the Court s view , the above-quoted language from Olmstead refers to situations in w hich Medicaid-recipients are attempting to force the state to provide them w ith benefits that it does not provide to anyone. As to this issue, in Rodriguez v. City of New York, cited earlier, a case in w hich the plaintiffs w ere seeking a Medicaid benefit called safety monitoring, the Second Circuit stated, in pertinent part: The ADA requires only that a particular service provided to some not be denied to disabled people. . . . [T]he services that New York 41 provides to the mentally disabled are no different from those provided to the physically disabled. Neither group is provided w ith independently tasked safety monitoring. Hence, w hat appellees are challenging is not illegal discrimination against the disabled, but the substance of the services provided. Thus, New York cannot have unlaw fully discriminated against appellees by denying a benefit that it provides to no one. *** Appellees place much reliance on the Supreme Court s recent decision in [Olmstead]. . . . The portion of the [Olmstead] opinion most relevant to the instant dispute w as the Court s statement that it w as explicitly not holding that the ADA imposes on the States a standard of care for w hatever medical services they render, or that the ADA requires states to provide a certain level of benefits to individuals w ith disabilities. Olmstead does not, therefore, stand for the proposition that states must provide disabled individuals w ith the opportunity to remain out of institutions. Instead, it holds only that States must adhere to the ADA s nondiscrimination requirement w ith regard to the services they in fact provide. Appellees w ant New York to provide a new benefit, w hile Olmstead reaffirms that the ADA does not mandate the provision of new benefits. Rodriguez, 197 F.3d at 618-619 (citations and internal quotation marks omitted). 41 Here, Defendant s reliance on Olmstead is misplaced, since it misses the point that Defendant is already providing orthopedic shoes and compression stockings to certain Medicaid recipients. Therefore, this is not a situation w here Plaintiffs are demanding that the State provide them w ith a benefit that it is not 41 Rodriguez involved an optional benefit under New York s Medicaid Plan. See, Rodriguez, 197 F.3d at 613 ( New York has opted to include personal-care services, w hich are not federally required. ). Although the Court in that case found no ADA/Section 504 violation, it appears that the optional nature of the benefit had no bearing on that determination. That is, it appears that if the Court had found that New York w as discriminating, it w ould have found an ADA/Section 504 violation even though the service w as optional. 42 providing to anyone else. Rather, this is a situation w here Plaintiffs are demanding that the State not discriminate against them in that regard, solely on the basis of diagnosis. Olmstead directs that States must adhere to the ADA' s nondiscrimination requirement w ith regard to the services they in fact provide. Olmstead, 119 S.Ct. at 2188, n. 14 (citation omitted). Moreover, it is w ellaccepted that a State may commit discrimination by treating one type of disabled person w orse than another type of disabled person. See, e.g., Amundson v. Wisconsin Dept. of Health Servs., 721 F.3d at 874 ( [P]laintiffs contention that they are being treated w orse than persons w ith other disabilities is ripe. If Wisconsin buys the best available care for persons w ith visual impairments, but pays only for mediocre care for the developmentally disabled, then plaintiffs have a theory of discrimination[.] . . . [A]fter Olmstead several appellate courts have concluded that discrimination among persons w ith different disabilities can state a good claim. ) (Easterbrook, C.J.) (citations omitted); see also, Rodriguez v. City of New York, 197 F.3d at 618 (` Indicating that providing services to the mentally disabled that w ere different from those provided to the physically disabled w ould amount to illegal discrimination against the disabled. ). Defendant has not really addressed this aspect of Plaintiffs claim. Consequently, the Court finds that Plaintiffs are entitled to summary judgment on their ADA/Section 504 claims. CONCLUSION The parties cross-motions for summary judgment [#26][#28] are each granted-in-part and denied-in-part as follow s: Plaintiffs motion [#26] is denied as 43 to the home health services claim and the due process hearing claim, but is otherw ise granted, w hile Defendant s motion [#28] is granted only as to the home health services claim and the due process hearing claim, but is otherw ise denied. Plaintiffs are entitled to permanent injunctive relief. The parties shall settle and submit a proposed Order concerning such injunctive relief w ithin fourteen (14) days of the date of this Decision and Order. So Ordered. Dated: Rochester, New York December 9, 2013 ENTER: /s/ Charles J. Siragusa CHARLES J. SIRAGUSA United States District Judge 44

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