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Indiana Association of Homes for the Aging Incorporated v. Indiana Office of Medicaid Policy and Planning

June 29, 1995

INDIANA ASSOCIATION OF HOMES FOR THE AGING INCORPORATED, ET AL.,

PLAINTIFFS-APPELLANTS,

v.

INDIANA OFFICE OF MEDICAID POLICY AND PLANNING, ET AL.,

DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division.

No. 93 C 965--John D. Tinder, Judge.

Before KANNE and ROVNER, Circuit Judges, and SHABAZ, District Judge. *fn1

SHABAZ, District Judge.

ARGUED APRIL 20, 1995

DECIDED JUNE 29, 1995

PROCEDURAL HISTORY

This is an appeal from the order of the United States District Court for the Southern District of Indiana, Indianapolis Division, John D. Tinder, presiding. Plaintiffs/Appellants Indiana Association of Homes for the Aging, Inc. et al. brought an action against Defendants/Appellees Indiana Office of Medicaid of Policy and Planning et al. ("Indiana") in the district court alleging violations of the Omnibus Budget and Reconciliation Act of 1987 ("OBRA 87") concerning the administration of Indiana's Medicaid program for funding nursing homes. The district court granted summary judgment in favor of Indiana on claims VI and IX of Plaintiff's complaint.

BACKGROUND

In OBRA 87, Congress made significant changes to Medicaid's nursing home provisions. Before enactment of OBRA 87 Medicaid financed nursing homes were certified as either Skilled Nursing Facilities ("SNFs") or as Intermediate Care Facilities ("ICFs"). 42 U.S.C. sec. 1396r (prior to amendment). Facilities that provided care for patients who required the services of a registered nurse or a licensed practical nurse were certified as SNFs. Those facilities that provided services for patients who needed care beyond that of room and board, but did not require the care of registered nurses were certified as ICFs. OBRA 87 changed the two-tiered program for nursing homes in favor of a single standard for all nursing homes termed "nursing facilities". 42 U.S.C. sec. 1396r. OBRA 87 required that all nursing homes increase their standards to provide care for all patients, those formerly requiring skilled nursing care and those requiring intermediate care. OBRA 87 established a single standard of care for all nursing home residents. Instead of residents receiving skilled or intermediate care as defined by statute and regulation, all residents receive care that allow them "to attain or maintain [their] highest practicable physical, mental, and psychosocial well-being." 42 U.S.C. sec. 1396r. States were ordered to amend their plans to conform to these new requirements.

Indiana responded by amending its plan to provide for one certification for all nursing homes, termed "nursing facilities". See Indiana's Approved OBRA 87 State Plan Amendment, TN 90-8 at 60. Indiana pursuant to OBRA 87 provides care "to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident." Indiana, however, did not change its method to reimburse nursing facilities and continues to reimburse them based on whether a patient requires skilled nursing care or intermediate care. A nursing facility receives a slightly higher rate for a patient requiring more expensive skilled nursing care and a slightly lower rate for a patient requiring intermediate care. See 405 I.A.C. 1-14.1-2(n), -9. The payment rates do not affect the actual care received by the patients. Indiana Assoc. of Homes for the Aging Et al. v. Indiana Office of Medicaid Policy and Planning, Et al., IP 93-965-C (1994).

The Health Care Financing Administration ("HCFA"), the agency of HHS entrusted with administering the Medicaid system, approved Indiana's plan which provided the single certification for "nursing facilities", but retained the reimbursement methods based on the level of care classification. Appellants wrote to HCFA, about their concerns that Indiana had not complied with OBRA 87 requirements because it retained a reimbursement plan that utilized former level of care classifications. HCFA responded in writing that it had carefully reviewed the amended plan and found it to be in compliance with OBRA 87. HCFA stated that OBRA 87 changed only the certification of nursing homes and the level of care they must provide, but did not address the reimbursement systems developed by the states.

Appellants then commenced an action in the district court challenging the payment methods based on the level of care criteria. The district court agreed with HCFA's findings and granted Indiana's motion for summary judgment on those claims. Certain remaining claims are scheduled for trial in September, including the Boren amendment claims.

STANDARD OF REVIEW

We review the district court's grant of summary judgment de novo, drawing all reasonable inferences in favor of the nonmoving party. Illinois Health Care Ass'n. v. Bradley, 983 F.2d 1460, 1462 (7th Cir. 1993); Williams v. Anderson, 959 F.2d 1411, 1413 (7th Cir. 1992). We will uphold the entry of summary judgment "if there is no genuine issue as to any material fact and if the moving party is ...


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