United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
B. Gottschall, United States District Judge
putative statewide class action, plaintiffs Alma Koss, Wanda
Wente, Mary Small, and Lessie Harris bring claims for prospective
injunctive and declaratory relief against the Secretary of
the Illinois Department of Human Services (“DHS”)
and the Director of the Illinois Department of Healthcare and
Family Services (“HFS”) under 42 U.S.C. §
1983; the Medicaid Act, 42 U.S.C. § 1396a et
seq., and its implementing regulations; Title II of the
Americans with Disabilities Act (“ADA”), 42
U.S.C. § 12132; the Rehabilitation Act, 29 U.S.C. §
794(a); and the Due Process Clause of the Fourteenth
Amendment. Plaintiffs' claims arise from delays in
processing and administering their applications to be
determined eligible for long-term Medicaid benefits used to
pay for the cost of their care in nursing facilities
(“NFs”) or Supportive Living Facilities
(“SLFs”). Compl. ¶ 2, ECF No. 1. The court
has three motions before it. Defendants move under Federal
Rule of Civil Procedure 12(b)(6) to dismiss the complaint for
failure to state a claim upon which relief can be granted.
Plaintiffs move for a preliminary injunction and to certify
their proposed classes. See Fed. R. Civ. P. 23(a)
and (b)(1) and (2). For the following reasons, the court
grants the motions in part and denies them in part. The court
enters a preliminary injunction requiring defendants to
presume that applicants for long-term care Medicaid benefits
be presumptively eligible after the expiration of the
deadlines to decide their applications set forth in governing
federal regulations. See 42 C.F.R. § 435.912.
The Medicaid Act
in 1965 as an amendment to the Social Security Act of 1935,
Medicaid is a joint federal-state program that provides
medical assistance to low income individuals. See 42
U.S.C. § 1396 et seq. Under the program,
“the Federal Government provides financial assistance
to States so that they may furnish medical care to needy
individuals.” Planned Parenthood of Ind., Inc. v.
Comm'r of Ind. State Dep't Health, 699 F.3d 962,
969 (7th Cir. 2012) (quoting Wilder v. Va. Hosp.
Ass'n, 496 U.S. 498, 502 (1990)); see also
Steimel v. Wernert, 823 F.3d 902, 907 (7th Cir. 2016).
Although the federal government does not require states to
participate in the Medicaid program, once they do, they
“must comply with federal statutes and
regulations.” Bertrand v. Maram, No.
05-CV-0544, 2006 WL 2735494, at *1 (N.D. Ill. Sept. 25, 2006)
(citing 42 U.S.C. § 1396a(a)(10)), aff'd sub
nom. Bertrand ex rel. Bertrand v. Maram, 495 F.3d 452
(7th Cir. 2007); accord Planned Parenthood of Ind.,
699 F.3d at 962 (quoting Collins v. Hamilton, 349
F.3d 371, 374 (7th Cir. 2003)); see also,
e.g., 42 C.F.R. §§ 440.210, 440.220
(listing mandatory services a participating state must
provide to the “categorically needy” and
ensure compliance with federal rules, participating states
must submit proposed Medicaid plans and any subsequent
amendments to the Centers for Medicare and Medicaid Services
(“CMS”) for approval.” Planned
Parenthood of Ind., 699 F.3d at 969 (citing Douglas
v. Indep. Living Ctr. of S. Cal., Inc., 565 U.S. 606,
610 (2012)). The Medicaid Act authorizes the federal
Secretary of Health and Human Services to withhold funds from
any state that does not comply with federal requirements. 42
U.S.C. §1396c; Planned Parenthood of Ind., 699
F.3d at 969 (citations omitted).
for long-term care Medicaid benefits must first be receiving
or be eligible for basic Medicaid benefits. They must also
submit additional financial information showing that they
meet eligibility criteria. See 89 Ill. Admin. Code
§§ 120.61, 120.64(k); 120.308 et seq.
(West 2018) (governing eligibility); 42 U.S.C. §§
invoke three provisions of the Medicaid Act which specify
what a state's plan “must” contain. 42 U.S.C.
§ 1396a(a). The first two concern eligibility
determinations. In Count I, plaintiffs cite 42 U.S.C. §
1396a(a)(8), which requires a plan to “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 eligible individuals.” Under
§1396a(a)(3), cited in Count II, a plan is required to
“provide for granting an opportunity for a fair hearing
before the State agency to any individual whose claim for
medical assistance under the plan is denied or is not acted
upon with reasonable promptness.” To flesh those
statutory provisions out, plaintiffs rely on 42 C.F.R. §
435.912, a federal regulation interpreting the Medicaid Act:
[(c)](3) Except as provided in paragraph (e) of this section,
the determination of eligibility for any applicant may not
(i) Ninety days for applicants who apply for Medicaid on the
basis of disability; and
(ii) Forty-five days for all other applicants.
. . . .
(e) The agency must determine eligibility within the
standards except in unusual circumstances, for example-
(1) When the agency cannot reach a decision because the
applicant or an examining physician delays or fails to take a
required action, or
(2) When there is an administrative or other emergency beyond
the agency's control.
42 C.F.R 435.§ 912(c)(3), (e); see also §
to statutory language, the Medicaid Act provision at issue in
Count III concerns not applications for assistance but
payments for Medicaid claims. It requires a plan to
provide for claims payment procedures which (A) ensure that
90 per centum of claims for payment (for which no further
written information or substantiation is required in order to
make payment) made for services covered under the plan and
furnished by health care practitioners through individual or
group practices or through shared health facilities are paid
within 30 days of the date of receipt of such claims and that
99 per centum of such claims are paid within 90 days of the
date of receipt of such claims data with respect to the
recipient and provider of a service and the nature of the
service for which payment is claimed, to ensure the proper
and efficient payment of claims and management of the program
42 U.S.C. § 1396a(a)(37).
the foregoing provisions of the Medicaid Act, plaintiffs
invoke an implementing regulation. The regulation they cite
requires payments, with exceptions no party contends apply
here, to be made “within 12 months of the date of
receipt.” 42 C.F.R. §447.45(d)(4) (West 2018);
see also Id. § 447.45(d)(1)-(3) (setting
shorter deadlines for certain categories of claims); §
447.45(d)(5) (“The date of receipt is the date the
agency receives the claim, as indicated by its date stamp on
complaint alleges, and the evidence introduced with respect
to the preliminary injunction motion shows, that receiving
long-term care Medicaid benefits in Illinois is a two-step
process. First, DHS makes an eligibility determination. A
favorable eligibility determination does not start funds
flowing to the applicant's NF or SLF, however. For
payments to begin, the beneficiary must be processed as
“admitted” in an HFS computer system called
“MEDI.” Decl. of Jane Blankenship ¶ 5, Sept.
1, 2017, ECF No. 47-2. Plaintiffs cite monthly DHS reports
showing that thousands of applications remain pending in one
of those two states-pending a decision on admission or deemed
eligible but not yet admitted-for more than 90 days.
See Long Term Care Report for SNF/SLF, ECF No. 9 Ex.
A tbls. 1, 2 (as of Apr. 3, 2017).
the complaint was filed, on April 12, 2017, plaintiffs ranged
in age from 68 to 90 years old. Compl. ¶¶ 11-14.
Each lived in an NF or SLF which participates in
Illinois' Medicaid program. Id. Plaintiff Berta
Christman has voluntarily dismissed her claims. ECF No. 20 at
1. The following paragraphs summarize the complaint's
allegations regarding the individual plaintiffs except
first applied for long-term care Medicaid benefits in August
2015. Compl. ¶ 54. She submitted allegedly missing
documents the next month, and she had yet to receive a
determination on her first application when the complaint was
filed. Id. She filed a second application in June
2016. Id. In July 2016, DHS deemed her eligible for
basic benefits retroactive to May 2016. Id. As a
result, Koss alleges that the SLF at which she has lived
since August 2015 has yet to be paid for the care it is
providing her, as has her ophthalmologist. Id.
Koss' ophthalmologist would not treat her due to the
nonpayment, according to the complaint, and Koss became blind
as a result. Id.
applied for long-term care Medicaid benefits in October 2016.
Compl. ¶ 55. Three times in the next five months DHS
asked her to provide additional documents (many of which she
alleges she had already provided). Id. She had not
received a decision when the complaint was filed.
Id. She alleges that she had not been able to pay
fully for her the care she is receiving from the NF where she
resides or pay for other medical expenses such as ambulance
fees and medication copayments. Id.
submitted her application for long-term care Medicaid
benefits in December 2015 or January 2016. Compl. ¶ 56.
DHS asked for more information from Small in April 2016,
which she provided in in June. Id. In December 2016,
her NF was notified by phone that her application had been
denied, but she has received no written communication from
defendants regarding her application. Id. Small has
been unable fully to pay for her prescription medication and
the nursing care she is receiving. Id.
applied for long-term care Medicaid benefits in September
2015. Compl. ¶ 57. DHS requested more documents in
October and December 2015, and DHS approved her application
nearly six months later in or around May 2016. See
Id. Nonetheless, DHS had yet to finish processing her
application by properly updating its records to show her as
admitted to the NF where she has been residing since August
2015. Id. The NF cannot get paid by Medicaid for the
services it is providing to Harris as a result. Id.
(alleging that her status was “pending admission”
for long-term care services).
the complaint and the pending motion for class certification
were filed, Defendants processed the four named
plaintiffs' applications and deemed them admitted to
their facilities on their original application dates.
See Decl. of Jeff Maddox ¶ 9, June 19, 2017,
ECF No. 28-1 Ex. A (averring that DHS approved Wente's
application on June 12, 2017); Decl. of Danielle Kinney
¶ 13, Aug. 25, 2017, ECF No. 47-1 Ex. A. (averring that
Small's admission was processed on July 19, 2017, with
her admission date backdated to August 2015); Decl. Jane
Blankenship ¶ 14, Sept. 1, 2017, ECF No. 47-2 Ex. B
(averring that Harris' admission was processed on June
12, 2017, and backdated to June 2015); id. ¶ 20
(averring that Koss' admission was processed on August
30, 2017, and backdated to May 2015). Wente has since passed
away. Pls.' Reply Supp. Mot. to Certify 4, ECF No. 52
(giving no date).
Procedural History and Similar Cases
moved for class certification two days after they filed their
complaint. Compare ECF No. 7, with ECF No.
1. The parties have agreed to forego a preliminary injunction
hearing and submit the motion for a decision on the papers.
Judge Bucklo has thirteen cases brought by Illinois
applicants and admittees seeking long-term care Medicaid
benefits before her. Defendants moved to transfer this action
to Judge Bucklo as related, see N.D. Ill. L.R. 40.4,
but she denied the motion because she did not have a putative
statewide class before her and so the transfer would have
interfered with the prompt resolution of the cases before
her, including an approaching preliminary injunction hearing.
See Minute Entry, ECF No. 64 at 1, Doctors
Nursing & Rehab. Ctr. v. Norwood, 16-cv-09837 (N.D.
Ill. Aug. 18, 2017). Judge Bucklo has issued three opinions
in these cases addressing issues very similar to those raised
here. See Doctors Nursing & Rehab. Ctr., LLC v.
Norwood (“Doctors Nursing II”),
2017 WL 3838031 (N.D. Ill. Sept. 1, 2017) (partially granting
motion for preliminary injunction); Heritage Operations
Grp., LLC v. Norwood, 322 F.R.D. 321 (N.D. Ill. 2017)
(granting healthcare provider's motion to certify a class
narrower than the class proposed here); Doctors Nursing
& Rehab. Ctr., LLC v. Norwood (“Doctors
Nursing I”), 2017 WL 2461544 (N.D. Ill. June 7,
2017) (denying defendants' motion to dismiss complaint
for failure to state a claim).
court finds it prudent to address defendants' mootness
argument first. See, e.g., McMahon v. LVNV
Funding, LLC, 744 F.3d 1014, 1016 (7th Cir. 2014). As
plaintiffs note, defendants have not moved separately to
dismiss this action as moot, but they contend that class
certification is inappropriate because the named
plaintiffs' claims are moot. See ECF No. 47 at 8-9.
Plaintiffs brief the question in their reply. Even without
the back-and-forth briefing on mootness, the court would be
obligated to raise the question on its own because mootness
is a jurisdictional doctrine. See, e.g.,
Wernsing v. Thompson, 423 F.3d 732, 743, 744-45 (7th
Cir. 2005) (considering mootness because “not only may
the federal courts police subject matter jurisdiction sua
sponte, they must” (quoting Hay v. Ind. State
Bd. of Tax Comm'rs, 312 F.3d 876, 879 (7th Cir.
an intervening circumstance deprives the plaintiff of a
personal stake in the outcome of the lawsuit, at any point
during litigation, the action can no longer proceed and must
be dismissed as moot.” Campbell-Ewald Co. v.
Gomez, 136 S.Ct. 663, 669 (2016) (quoting Genesis
Healthcare Corp. v. Symczyk, 569 U.S. 66, 72 (2013)).
“A case becomes moot only when it is impossible for a
court to grant any effectual relief whatever to the
prevailing party.” Chapman v. 1st Index,
Inc., 796 F.3d 783, 785 (7th Cir. 2015) (quoting
Knox v. Serv. Emps. Int'l Union, Local 1000, 567
U.S. 298, 307 (2012)).
say that the mootness analysis in another putative class
action brought under § 1396A(a)(8), Bertrand ex rel.
Bertrand v. Maram, 495 F.3d 452 (7th Cir. 2007),
requires denial of the motion for class certification and,
the court assumes by extension, dismissal of this suit. In
Bertrand, two plaintiffs applied to be enrolled in
Illinois' Medicaid program providing residential
habilitation services for people with developmental
disabilities. Id. at 453. Their applications were
denied on the ground that they did not meet the program's
eligibility criteria. Id. at 454. One of the
plaintiffs, Christopher Bertrand, reapplied. Id.
While the plaintiff's motion for class certification was
pending, his second application met with success, and the
state began providing services to him. Id.
Seventh Circuit held that Bertrand's individual and class
claims were moot because the district court denied his motion
for class certification, and he did not challenge that ruling
on appeal. Id. at 456 (emphasizing that “the
suit never became a class action”). The
Bertrand court reasoned as follows:
In a handful of situations, exemplified by Deposit
Guaranty National Bank v. Roper, 445 U.S. 326 (1980),
and Primax Recoveries, Inc. v. Sevilla, 324 F.3d
544, 546-47 (7th Cir. 2003), class certification may follow
the defendant's actual or attempted satisfaction of the
would-be representative's demand; the Court explained in
Deposit Guaranty National Bank that this proviso is
essential to prevent defendants from buying off all potential
class representatives by meeting their demands, one at a
time, and thus preventing effectual relief to a larger class
of victims. Nothing of the sort occurred here-and, to repeat,
no class has been certified, so even if Bertrand had
been furnished . . . services for strategic reasons this
would not justify allowing him to continue litigating in his
controls the individual mootness questions here but not the
separate question of whether this putative class action
remains live despite the mootness of the named
plaintiffs' claims. See U.S. Parole Comm'n v.
Geraghty, 445 U.S. 388, 402 (1980) (“A plaintiff
who brings a class action presents two separate issues for
judicial resolution. One is the claim on the merits; the
other is the claim that he is entitled to represent a
class.”). Plaintiffs' filing of the motion for
class certification here preceded the asserted satisfaction
of the named plaintiffs' claims. Unlike in
Bertrand, the named plaintiffs have not abandoned
their efforts to obtain class certification. Because this
court has not yet decided the motion for class certification,
Bertrand is inapposite. See Bertrand, 495
F.3d at 456 (stressing twice that the district court denied
class certification and that no party appealed that
as Bertrand acknowledged, the following general rule
governs in this case's current posture:
[T]he mooting of the named plaintiff's claim in a class
action by the defendants satisfying the claim does not moot
the action so long as the case has been certified as a class
action, or . . . so long as a motion for class certification
has been made and not ruled on, unless . . . the movant has
been dilatory. Otherwise the defendant could delay the action
indefinitely by paying off each class representative in
Espenscheid v. DirectSat USA, LLC, 688 F.3d 872, 874
(7th Cir. 2012) (quoting Primax Recoveries, 324 F.3d
at 546-47 (ellipses in original); see also Susman v.
Lincoln Am. Corp., 587 F.2d 866, 870 (7th Cir. 1978).
Plaintiffs can hardly be said to be dilatory; they moved for
class certification two days after they filed their complaint
and months before defendants took further action on their
applications. ECF No. 7. It remains reasonable to believe
that a live controversy exists between defendants and at
least one member of the proposed class of thousands of
individuals whose applications have been pending for more
than 90 days. See Geraghty, 445 U.S. at 396
(“It is clear that the controversy over the validity of
the Parole Release Guidelines is still a ‘live' one
between petitioners and at least some members of the class .
. . .”); see also ECF No. 9 Ex. A, Tbl. 1. As
a result, under the rule explained in Primax, each
plaintiff retains her “interest in the case for
purposes of [her] ability to serve . . . as a class
representative.” McMahon v. LVNV Funding, LLC,
744 F.3d 1010, 1019 (7th Cir. 2014).