FELICIA F. NORWOOD and JAMES T. DIMAS, Defendants.
Case No. 17 C 2762
Joan B. Gottschall, United States District Judge
MEMORANDUM OPINION AND ORDER
*1 In this putative statewide class action, plaintiffs Alma Koss, Wanda Wente, Mary Small, and Lessie Harris1 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.
A. The Medicaid Act
Enacted 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 “medically needy”).
*2 “To 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).
Applicants 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. §§ 1396p, 1396r-5.
Plaintiffs 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 exceed—
(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 § 435.912(a).
Returning 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).
As with 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 the claim.”).
B. Factual Background
*3 The 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).
When 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 Christman.
Koss 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.
Wente 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.
Small 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.
Harris 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).
After 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).
*4 Plaintiffs 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.
Also, 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).
The 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. 2002))).
“If 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. 1stIndex, 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)).
Defendants 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.
*5 The 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 own name.
Bertrand 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 decision).
Instead, 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 succession.
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).
III. MOTION TO DISMISS
*6 Defendants move to dismiss the complaint in its entirety. The court first considers their contentions that the Medicaid Act provisions plaintiffs cite cannot be privately enforced via § 1983. Except as to the abandoned provision in Count III, the court determines that they can be. The court then considers defendants’ challenges to the individual counts and dismisses plaintiffs’ ADA and Rehabilitation Act claims.
A. Rule 12(b)(6) Standard
To survive a Rule 12(b)(6) motion to dismiss, a complaint must “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, (2007)); Katz-Crank v. Haskett, 843 F.3d 641, 646 (7th Cir. 2016) (quoting Twombly, supra). A complaint satisfies this standard when its factual allegations “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555–56; see also Atkins v. City of Chicago, 631 F.3d 823, 832 (7th Cir. 2011) (“[T]he complaint taken as a whole must establish a nonnegligible probability that the claim is valid, though it need not be so great a probability as such terms as ‘preponderance of the evidence’ connote.”); Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010) (“[P]laintiff must give enough details about the subject-matter of the case to present a story that holds together.”). When deciding a motion to dismiss under Rule 12(b)(6), the court takes all facts alleged by the plaintiff as true and draws all reasonable inferences from those facts in the plaintiff’s favor, although conclusory allegations that merely recite the elements of a claim are not entitled to this presumption of truth. Katz-Crank, 843 F.3d at 646 (citing Iqbal, 556 U.S. at 662, 663); Virnich v. Vorwald, 664 F.3d 206, 212 (7th Cir. 2011).
B. Private Enforceability of Medicaid Act
Defendants contend that none of the Medicaid Act provisions plaintiffs cite in Counts I– IV are privately enforceable. The Medicaid Act does not itself provide a statutory right of action for the provisions plaintiffs cite, so the question becomes whether they are “rights, privileges, or immunities” for which 42 U.S.C. § 1983 provides a vehicle for private enforcement. See, e.g., BT Bourbonnais Care, LLC v. Norwood, 866 F.3d 815, 820–21 (7th Cir. 2017); Planned Parenthood of Ind., supra, 699 F.3d at 968 (citing Gonzaga University v. Doe, 536 U.S. 273 (2002)). Three factors guide this inquiry: “(1) ‘Congress must have intended that the provision in question benefit the plaintiff’; (2) the asserted right must not be ‘so vague and amorphous that its enforcement would strain judicial competence’; and (3) ‘the provision giving rise to the asserted right must be couched in mandatory, rather than precatory, terms.’ ” Planned Parenthood of Ind., 699 F.3d at 972–73 (quoting Blessing v. Freestone, 520 U.S. 329, 340–41 (1997)) (numbering in Planned Parenthood of Ind.). Plaintiffs have persuaded the court these factors favor their positions except on Count III.
1. Counts I, II, and IV
As defendants point out, the Seventh Circuit has not issued a binding decision on this question. O.B. v. Norwood affirmed the entry of a preliminary injunction enforcing the reasonable promptness provision of the Medicaid Act at issue here, § 1396a(8). 838 F.3d 837, 841 (7th Cir. 2016). The parties do not appear to have raised the § 1983 issue in O.B., however, so O.B. does not settle the question definitively any more than Bertrand ex rel. Bertrand v. Maram, in which the Seventh Circuit “assume[d] that” § 1396a(a)(8) was privately enforceable under 42 U.S.C. § 1983 because the parties did not brief the question and because it was not jurisdictional. 495 F.3d 452, 457–58 (7th Cir. 2006) (citing Bruggeman ex rel. Bruggeman v. Blagojevich, 324 F.3d 906, 910–11 (7th Cir. 2003), which made the same implicit assumption) (explaining that the nonjurisdictional § 1983 question was not briefed). Even so, the court in BT Bourbonnais Care found O.B.’s preliminary injunction ruling significant enough to be mentioned when reaching the conclusion that another Medicaid Act provision was privately enforceable under § 1983. See 866 F.3d at 821. In view of the use of O.B. to bolster a § 1983 analysis of the Medicaid Act, a clear reason to reject the Seventh Circuit’s repeated assumption that § 1396a(a)(8) is privately enforceable is necessary. Id.
*7 Defendants offer none. They cite two decisions of district courts outside the Seventh Circuit holding that the reasonable promptness provision at issue here, 42 U.S.C. § 1396a(a)(8), is not privately enforceable under § 1983. The first of these cases, Bio-Medical Applications of North Carolina Inc. v. Electronic Data Systems Corp., 412 F. Supp. 2d 549, 552-55 (E.D.N.C. 2006), “assum[ed] arguendo that individual rights have been created” by § 1396a(a)(8) but concluded that it did “not support a private cause of action under 42 U.S.C. § 1983 by Medicaid providers....” Id. at 554. Here, the plaintiffs are not medical providers but people who applied for long-term care Medicaid benefits, so Bio-Medical Applications’ reasoning does not speak to the situation presented in this case. See BT Bourbonnais Care, 866 F.3d at 822. Also, the Fourth Circuit has since held that § 1396a(a)(8) “gives rise to a right enforceable under § 1983.” Doe v. Kidd, 501 F.3d 348, 356 (4th Cir. 2007). In defendants’ second case, the district court found no rights-creating language in the reasonable promptness provision because, as the court saw it, § 1396a(a)(8) “merely places certain conditions upon a state seeking Medicaid funding.” M.A.C. v. Betit, 284 F. Supp. 2d.1298, 1307 (D. Utah 2003). The Seventh Circuit recently scotched this notion, rejecting “the idea that plaintiffs are now flatly forbidden in section 1983 actions to rely on a statute passed pursuant to Congress’s Spending Clause powers.” BT Bourbonnais Care, 866 F.3d at 820–21.