United States District Court, Central District of Illinois, Danville Division
August 17, 1992
JESSE MCMILLAN, PAULA MALEK, AND MELVIN MCCULLOUGH, PLAINTIFFS,
AUDREY MCCRIMON AND PHIL BRADLEY, DEFENDANTS.
The opinion of the court was delivered by: Baker, District Judge.
The plaintiffs filed this class action against Audrey
McCrimon, Director of the Illinois Department of Rehabilitation
Services (DORS), and Phil Bradley, Director of the Illinois
Department of Public Aid (IDPA), alleging that the defendants'
refusal to accept and process applications for the Home
Services Program violates the Medicaid statute, 42 U.S.C. § 1396n,
its implementing regulations, 42 C.F.R. § 431.200 et
seq., and the Due Process Clause of the Fourteenth Amendment.
Along with the complaint, the plaintiffs filed a motion for a
preliminary injunction (docket # 5) and a motion for class
certification. (docket # 7) The court held a hearing on both
motions on July 7, 1992. At the hearing, the court granted the
plaintiffs' request for class certification and certified the
class under Fed.R.Civ.P. 23(b)(2).*fn1 After reviewing the
materials submitted at the hearing, the court ordered the
parties to file additional memoranda addressing specific
issues. (docket # 18) The parties submitted supplemental briefs
on August 3, 1992. For the reasons discussed below, the court
now grants the plaintiffs' request for a preliminary
The Home Services Program (HSP) is a Medicaid program
designed to prevent the unnecessary institutionalization of
disabled persons. Illinois enacted the HSP, found at section
3(g) of the Disabled Persons Rehabilitation Act, Ill.Rev.Stat.
ch. 23, para. 3434, as a waiver program under 42 U.S.C. § 1396n(c).
The HSP provides support services such as personal
care, housekeeping and delivered meals. IDPA has delegated
operational responsibility for the HSP to DORS which
administers two HSP programs: one to assist physically disabled
persons between the ages of 21 and 59 and another to aid
individuals with AIDS, ARC, or HIV infections. On February 14,
1992, DORS published an emergency rule in the Illinois
Register, providing that, as of February 3, 1992, DORS shall
not make applications for HSP services available. 16 Ill. Reg.
2688, 2694 (1992) (Exhibit A Attached to Plaintiffs' Brief in
Support of Preliminary Injunction). The authority for this rule
is the Emergency Budget Reduction Act of Fiscal Year 1992 which
the General Assembly enacted in January, 1992. Public Act
87-0838 (Exhibit D Attached to Plaintiffs' Brief in Support of
Preliminary Injunction). The amendment to the HSP statute
Notwithstanding any other provision of this Act to
the contrary, the Department is authorized to
limit services, to reduce or adjust payment rates,
and to modify eligibility criteria under this
subsection (g) as necessary to implement
contingency reserves under the Emergency Budget
Act of Fiscal Year 1992, to the extent permitted
by federal law. Any such modification, adjustment,
reduction or limitation shall expire on July 1,
See Ill.Rev.Stat. ch. 23, para. 3434(g) (1992). At the hearing,
the plaintiffs submitted a copy of a bill that amends paragraph
3434(g) and states: "Starting July 1, 1992, and for a period of
one year thereafter, the Department is authorized to suspend,
from time to time, the application process." Plaintiff's
Exhibit 1. (docket # 17) The regulations interpreting the HSP
are found at 89 Ill.Adm.Code 683.100 et seq. An amendment to
these regulations, effective July 1, 1992, states: "DORS shall
not make applications available to individuals wishing to apply
for services through HSP." 16 Ill. Reg. 11681, 11685 (1992)
(adding 89 Ill.Adm.Code 673.30). The amendments to the
regulations also provide that "applicants/preapplicants shall
not have the right to appeal . . . any action or inaction on
the part of DORS related to the refusal by DORS to take an
application." 16 Ill. Reg. at 11686 (adding 89 Ill.Adm.Code
The plaintiffs are severely disabled persons who are eligible
for Medicaid and who assert that, as a result of their
disabilities, they are at risk of institutionalization. The
plaintiffs claim that they would be able to avoid entering
nursing homes if they could apply for the Home Services Program
(HSP). In their complaint, the plaintiffs allege that the
State's refusal to accept HSP applications is not permitted by
federal law. The plaintiffs also contend that, under the
emergency rule, DORS is supposed to be gathering information on
all persons seeking HSP but "these `pre-applicants' are not
considered clients and have no right to appeal any action or
inaction of DORS. Many individuals have been discouraged from
even providing the pre-application level of information after
being advised there is no money available at the present time."
Complaint. para. 25.
Motion for a Preliminary Injunction
The plaintiffs seek to have the court enjoin the defendants
1. Resume processing new applications for
assistance under the Home Services Program
pursuant to the regulations in place prior to
February 3, 1992.
2. Transfer all "pre-applications" received
since February 3, 1992 into active applications.
Brief in Support of Motion for Preliminary Injunction at 3.
(docket # 6) In deciding whether to issue a preliminary
injunction, the court must consider several factors: (1)
whether the plaintiffs will be irreparably harmed if the
injunction does not issue; (2) whether the plaintiffs have an
adequate remedy at law; (3) whether the plaintiffs have some
likelihood of success on the merits; (4) whether the threatened
harm to the plaintiffs outweighs the possible harm to the
defendants if the court grants the injunction; and (5) how the
plaintiffs' likelihood of success effects the balance of harms.
Roland Mach. Co. v. Dresser Indus., 749 F.2d 380
, 386-88 (7th
Cir. 1984). If the decision to grant or deny a preliminary
injunction will involve the public interest, then the court
must consider the public interest in the weighing process. Id.
To prevail on a motion for a preliminary injunction, the
plaintiff carries the burden of demonstrating each factor.
Somerset House, Inc. v. Turnock, 900 F.2d 1012, 1015 (7th Cir.
1990); Illinois Council on Long Term Care v. Bradley,
759 F. Supp. 1309, 1311 (N.D.Ill. 1991) (citing Kellas v. Lane,
923 F.2d 492, 493 (7th Cir. 1990)), aff'd, 957 F.2d 305 (7th Cir.
1992). However, the plaintiff's threshold burden is to satisfy
the first three factors. Ping v. National Educ. Ass'n,
870 F.2d 1369, 1371 (7th Cir. 1989). Once the plaintiff has met this
burden, "the inquiry then becomes a `sliding scale' analysis of
the harm to the parties and the public from the grant or denial
of the injunction and the actual likelihood of success on the
Inadequate Remedy at Law and Irreparable Harm
In their briefs and in the testimony of Paula Malek and Jesse
McMillan, the plaintiffs have demonstrated that, without the
ability to apply for and receive the HSP, they face
institutionalization in nursing homes. Paula Malek is a 31 year
old diabetic who received a kidney and pancreas transplant at
the University of Illinois Hospital in November, 1991. After
the transplant, Ms. Malek experienced an allergic reaction to
the anti-rejection drug. Her doctors transferred her to a
Pittsburgh hospital for treatment with an experimental drug.
Through the use of this drug, Ms. Malek's transplant stabilized
and she returned to Illinois. However, the allergic reaction
damaged her spinal cord and her vision; she is now a paraplegic
and only has limited vision in one eye. In addition, Ms. Malek
does not have control over her bowels and bladder.
Ms. Malek originally hoped to live in her mother's home in
Chicago after her release from the University of Illinois
Hospital. Because her mother leaves for work at 6:30 a.m. and
works all day, Ms. Malek was relying on the HSP to provide care
during the day. In June, 1992, Ms. Malek learned that DORS was
not accepting applications for the HSP. She and her mother
began searching for a nursing home for her to enter upon her
release. She testified at the hearing that most nursing homes
would not accept her because she required exceptional care.
Although she located one nursing home willing to accept her,
the nursing home would not protect the experimental drug which
she still receives from Pittsburgh. Instead, the nursing home
told her that she would have to keep the experimental drug
herself. In addition, she could not receive continued
rehabilitation at the nursing home, and she believed that she
would loose contact with her transplant surgeons. The prospect
of living in the nursing home caused her to suffer emotionally
and physically. To protect her transplants, Ms. Malek decided
to live with her mother.
Ms. Malek was released from the hospital a few weeks before
the hearing in this case. She testified that visiting nurses
and therapists provide care for her for a number of hours a
week. However, she is home alone for several hours a day.
Because she is confined to her wheel chair during those hours,
she faces serious risks of infection and complications.
Jesse McMillan, a 42 year old, suffers from Guillain-Barre
syndrome and is HIV
positive. He was in the hospital from December, 1991 until
April, 1992.*fn3 Guillain-Barre syndrome has weakened Mr.
McMillan's legs and arms and caused sensory loss. Although his
condition is improving and he is beginning to walk with a
walker, he still cannot stand and balance and has no strength
in his hands. Mr. McMillan does not anticipate being able to
return to his job as a manager of a Ponderosa Steak House for
a year. His only income now is social security disability
income. At this time, he needs assistance with all of his daily
needs. Because he cannot apply for the HSP, he relies on
volunteers to help him. However, his volunteer help has been
erratic, and he testified that he constantly worries that a
volunteer will not show up. Mr. McMillan also testified that he
would not be able to continue rehabilitation if he was in a
nursing home. Also, Cathy Schowengerdt, a social worker at
Covenant Medical Center in Champaign, testified that the fact
that Mr. McMillan is HIV positive made it difficult to place
him in a nursing home.
Richard Goodwin, who works for an advocacy organization for
disabled persons, testified that persons in nursing homes
usually do not receive rehabilitation and a person who does not
receive rehabilitation services is not likely to leave a
nursing home. The plaintiffs also submitted a copy of a letter
that McCrimon wrote to the Director of the Bureau of the
Budget, explaining why it is not cost effective to close HSP
intake. In the letter, McCrimon states: "Once placed in a
nursing home for more than a brief period it is very costly to
deinstitutionalize a person due to the rapid decay of support
systems, loss of living quarters, furniture etc. and a change
in . . . emotional attachments."
Based on all of this evidence, the court finds that the
plaintiffs have demonstrated that they will suffer irreparable
harm if the injunction does not issue. The possibility that the
plaintiffs would be forced to enter nursing homes constitutes
irreparable harm that cannot be prevented or fully rectified by
a judgment later. See Roland Mach., 749 F.2d at 386. The
plaintiffs also have shown the inadequacy of any remedy at law.
The nature of their claim — a claim against the state for
medical services — makes it impossible to say that any remedy
at law could compensate them.
Likelihood of Success
To establish some likelihood of success on the merits, the
plaintiffs only need to show that their chances of succeeding
are better than negligible. Roland Mach., 749 F.2d at 387.
Here, the plaintiffs allege that the State's refusal to accept
and process applications for the HSP violates
42 U.S.C. § 1396a(a)(8) and 42 C.F.R. Section 435.906. In addition, the
plaintiffs claim that the State is violating their rights under
the Due Process Clause of the Fourteenth Amendment.
Through Title XIX of the Social Security Act, 42 U.S.C.
Section 1396 et seq., commonly known as the Medicaid Act, the
federal government provides "financial assistance to States
that choose to reimburse certain costs of medical treatment for
needy persons." Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct.
2671, 2680, 65 L.Ed.2d 784 (1980). "Although participation in
the Medicaid program is entirely optional, once a State elects
to participate, it must comply with the requirements of Title
XIX" and the regulations issued by the Secretary of Health and
Human Services. Id.; Schweiker v. Gray Panthers, 453 U.S. 34,
36-37, 101 S.Ct. 2633, 2636-37, 69 L.Ed.2d 460 (1981); Smith v.
Miller, 665 F.2d 172, 175 (7th Cir. 1981); 42 U.S.C. § 1396a.
Under the Act, the states must provide certain services
to the "categorically needy." 42 U.S.C. §§ 1396a(a)(10) &
1396d(a)(1)-(5), (17) & (21). A participating state may also
elect to provide additional optional services to the
"categorically needy" and to other "medically needy" persons,
as defined by the Act. 42 U.S.C.
Sections 1396a(a)(10)(A)(ii) & (C) and 1396d(a). However, once
a state elects to offer optional services, "it is bound to act
in compliance with the Act and the applicable regulations in
the implementation of those services." Weaver v. Reagen,
886 F.2d 194, 197 (8th Cir. 1989); Clark v. Kizer, 758 F. Supp. 572,
575 (E.D.Cal. 1990) (optional services become part of state
Medicaid plan which is subject to the requirements of federal
law and federal regulations). Therefore, a state's discretion
in creating its Medicaid program is not unbridled. Weaver, 886
F.2d at 197.
The Medicaid Act includes detailed requirements with which a
state plan for medical assistance must comply to be approved
for federal funding. 42 U.S.C. § 1396a(a); State of Ohio
v. United States Department of Health and Human Servs.,
761 F.2d 1187, 1188 (6th Cir. 1985). Specifically, the Medicaid Act
provides that a state plan for medical assistance must "provide
that all individuals wishing to make application for medical
assistance under the plan shall have opportunity to do so, and
that such assistance shall be furnished with reasonable
promptness to all individuals." 42 U.S.C. § 1396a(a)(8).
In addition, the regulations state: "The agency must afford an
individual wishing to do so the opportunity to apply for
Medicaid without delay." 42 C.F.R. Section 435.906.
The plaintiffs argue that the State's refusal to accept and
process applications for the HSP violates these provisions. In
response, the defendants claim that the provisions of section
1396a(a)(8) and section 435.906 only apply to the initial
application for Medicaid and not to persons who are already in
receipt of assistance and are seeking additional benefits.
According to the defendants, the plaintiffs already have
Medicaid cards and, therefore, had an opportunity pursuant to
these provisions to apply for assistance. The provisions do not
apply to the application process necessary to participate in
the HSP. At the hearing, the administrator of the HSP stated
that he believed that § 1396a(a)(8) only applied to
applications for Medicaid, not to applications for the HSP.
Therefore, the first issue that the court must address is
whether the requirements of section 1396a(a)(8) apply to
applications for benefits beyond the initial application for
Medicaid. For two reasons, the court finds that this section
applies to more than the initial Medicaid application.
First, the term "medical assistance," as used in section
1396a(a)(8), is defined in other provisions of the Medicaid
Act. Section 1396d(a) defines "medical assistance" as payment
of part or all of the costs of twenty-four listed types of
services. 42 U.S.C. § 1396d(a). Also, section 1396n(c),
the waiver provision under which the State enacted the HSP,
states that "[t]he Secretary may by waiver provide that a State
plan approved under this subchapter may include as `medical
assistance' under such plan payment for part or all of the cost
of home or community-based services."
42 U.S.C. § 1396n(c)(1). Based on these two provisions, "medical
assistance" includes additional services and benefits under a
state's medicaid plan. Therefore, the court concludes that
section 1396a(a)(8)'s requirement that the state plan provide
all individuals the opportunity "to make an application for
medical assistance under the plan" must extend beyond the
initial application for Medicaid eligibility to services and
benefits provided to Medicaid eligible persons.
Second, courts have interpreted the second clause in section
1396a(a)(8) — "such assistance shall be furnished with
reasonable promptness to all eligible individuals" — as
applying to benefits beyond the initial application for
Medicaid. For example, in Clark, the court applied the timely
care provision in section 1396a(a)(8) to the provision of
dental care which is a benefit that a Medicaid recipient may
obtain after the initial eligibility determination. 758 F. Supp.
at 575, 580 (states have the option to cover dental care for
adults). The court held that "42 U.S.C. § 1396a(a)(8)
requires that dental care be provided `with reasonable
promptness' to all eligible individuals." Id. at 580. See also
Linton v. Carney, 779 F. Supp. 925 (M.D.Tenn. 1990) (Tennessee's
limited bed policy violated section
1396a(a)(8) by causing extended delays in access to long term
nursing home care); Morgan v. Cohen, 665 F. Supp. 1164, 1177
(E.D.Pa. 1987); Doe v. Pickett, 480 F. Supp. 1218 (S.D.W. Va.
1979). In Smith, the plaintiffs challenged the IDPA's failure
to set specific time standards for processing requests for
prior approval of medical and dental treatments under section
1396a(a)(8). 665 F.2d at 174.*fn4 Although it is possible to
distinguish between the type of Medicaid benefits involved in
Smith and in this case, Smith at least indicates that the
timely care clause in section 1396a(a)(8) applies to more than
the initial Medicaid eligibility determination. This
interpretation of the second clause as covering the provision
of specific benefits supports the plaintiffs' argument that
section 1396a(a)(8) applies to applications for benefits beyond
the initial application for Medicaid.*fn5
The next issue is whether section 1396a(a)(8) specifically
applies to applications for benefits provided under a waiver
program such as the HSP. 42 U.S.C. § 1396n(c) allows a
participating state to apply for a waiver from the Secretary of
Health and Human Services to permit the state to include as
"medical assistance" payment for part or all of the cost of
home or community-based care assistance. Martinez v. Ibarra,
759 F. Supp. 664, 665 (D.Colo. 1991). If the Secretary approves
a waiver under this section, the state may provide home or
community-based services to individuals who would otherwise
require the level of care provided in a hospital or nursing
facility or an intermediate care facility for the mentally
retarded. 42 U.S.C. § 1396n(c)(1); Beckwith v. Kizer,
912 F.2d 1139, 1140 (9th Cir. 1990). The Illinois HSP is a waiver
program under 42 U.S.C. § 1396n(c) designed to provide
the home care services listed in section 1396n(c)(4)(B). See
Defendants' Supplemental Brief at 3. (docket # 19)
As a waiver program, the HSP is not a service which the
Medicaid Act requires a state to provide to certain
individuals. See 42 U.S.C. § 1396a(a)(10)(A). Instead, it
is an optional service which the state has elected to provide
as part of its plan for medical assistance. The State asserts
that it can refuse to accept applications for the HSP due to
the fact that it is an optional service under the Medicaid Act.
The court recognizes that a state has broad discretion in
administering its Medicaid program. Smith, 665 F.2d at 178.
Moreover, when a state includes an optional service in its
plan, the state is free to set the level of care it will offer
above the minimal requirements of the Medicaid Act. King v.
Sullivan, 776 F. Supp. 645, 651 (D.R.I. 1991). However, as
stated above, once a state elects to offer optional services,
it must comply with the requirements of the Medicaid Act in
providing those services. Weaver, 886 F.2d at 197. In Eder v.
Beal, the Third Circuit rejected Pennsylvania's argument that
it should be allowed to terminate an eyeglass program because
it was an optional program. 609 F.2d 695, 701-02 (3rd Cir.
1979). The court stated that the optional status of the program
had no effect on its holding. Specifically, the court held:
"The fact that these programs are nominally `optional' does not
mean that a state may terminate them without restraint. Rather,
as we have previously indicated, once a state elects to
participate in an `optional' program, it becomes bound by the
federal regulations which govern it." Id. Although Eder
addressed the requirement of notice before the termination of
benefits, the court finds its reasoning persuasive in this
case. The fact that the HSP is an optional service
does not exempt it from the requirements of section
Both parties point out that section 1396n(c)(3) allows the
Secretary to waive certain uniform requirements of the Medicaid
Act, such as the requirements relating to statewideness,
comparability, and income. 42 U.S.C. § 1396n(c)(3);
Beckwith, 912 F.2d at 1140. This section does not allow a
waiver of the requirements of section 1396a(a)(8), however. In
addition, the State waiver request to the Secretary did not
mention limiting applications for the HSP.
The plaintiffs also assert that the defendants are violating
their due process rights by refusing to accept applications for
the HSP. The court will avoid addressing the constitutional
issue unnecessarily because the plaintiffs have a reasonable
likelihood of succeeding on the merits of the Medicaid Act
argument. See McGill v. Duckworth, 944 F.2d 344, 347 (7th Cir.
Balance of Harms
Because the plaintiffs have met their threshold burden of
demonstrating the first three factors, the inquiry now becomes
a "`sliding scale' analysis of the harm to the parties and the
public from the grant or denial of the injunction and the
actual likelihood of success on the merits." Ping, 870 F.2d at
1371. In this analysis, "[t]he more likely the plaintiff is to
win, the less heavily need the balance of harms weigh in his
favor; the less likely he is to win, the more need it weigh in
his favor." Roland Mach., 749 F.2d at 387. The plaintiffs have
a reasonable likelihood of success on the merits and have
demonstrated that they face great harm if the court denies the
injunction. If Paula Malek remains at home with her current
level of home care, she risks infections and other
complications stemming from her confinement to a wheel chair.
If placed in a nursing home, she may loose control over her
experimental medication, contact with her surgeons, and the
rehabilitation services that she now receives.
At the hearing, Carl Hamilton, the Administrator of the Home
Services Program, testified that DORS currently has a waiting
list for the HSP. If the court granted an injunction, DORS
would have to take services away from the 13,000 existing
clients to fund the application process. The application
process and the appeals process would deplete the HSP fund, and
Mr. Hamilton predicted that it would run out by December,
forcing all HSP clients to enter nursing homes. The defendants
also argue that the public has a greater interest in a balanced
state budget than in a program which benefits a limited portion
of the population.
Although the issuance of the injunction may deplete the
State's limited HSP budget, providing nursing home care to the
plaintiffs would be even more costly. See Letter from Audrey
McCrimon to Joan Walters, Director, Bureau of the Budget,
Plaintiffs' Exhibit 4; 42 U.S.C. § 1396n(c)(2)(D);
Beckwith, 912 F.2d at 1140 (to qualify for a proposed waiver,
state must show that costs of home care would be less than the
costs of institutional care). Thus, the harm to the plaintiffs
from the denial of an injunction outweighs the harm to the
defendants. In addition, it is not clear where the public
interest lies in this case. The public interest in a balanced
state budget may be outweighed by an interest in avoiding more
costly institutionalization of the plaintiffs. Based on this
"sliding scale" analysis, the court concludes that the
plaintiffs' have made the showing necessary to receive a
IT IS THEREFORE ORDERED that the plaintiffs' motion for a
preliminary injunction (docket # 5) is allowed. The defendants
are restrained and enjoined from refusing to accept and process
applications from the plaintiff class for the Home Services
Program described in this order.
No security is required of the plaintiffs. They lack the
ability to provide security.