T. v. Bowling

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA

CHARLESTON DIVISION

MICHAEL T., et al.,

Plaintiffs,

v. CIVIL ACTION NO. 2:15-cv-09655

BILL J. CROUCH, in his official capacity

as Secretary of the WEST VIRGINIA

DEPARTMENT OF HEALTH AND HUMAN

RESOURCES,

Defendant.

MEMORANDUM OPINION AND ORDER

Pending before the Court is Defendant’s Motion to Vacate or Modify Preliminary

Injunction Order. (ECF No. 155.) For the reasons stated herein, the Court GRANTS IN PART

the motion to the extent Defendant requests that the Court modify its previous memorandum

opinion and order entered on September 13, 2016, to lift the injunction and allow DHHR to begin

implementing the proposed service authorization system as to the named Plaintiffs.

I. BACKGROUND1

Plaintiffs in this case are recipients of West Virginia’s Intellectual/Developmental

Disability Home and Community Based Services waiver program (“I/DD Waiver Program”) and

are challenging reductions in their benefits beginning in 2015. Within West Virginia’s Medicaid

1 The factual and procedural backgrounds of this case were thoroughly explained in this Court’s memorandum opinion

and order entered on September 13, 2016. (See ECF No. 122 at 1–10.) This section summarizes the background of

the parties’ dispute from the Court’s previous iteration.

plan, administered by the West Virginia Department of Health and Human Resources’ (“DHHR”)

Bureau for Medical Services (“BMS”), the “intermediate care level services for individuals with

intellectual/developmental disabilities” program (“ICF/IDD Program”) is an included program

from the federally recognized optional services. (ECF No. 14 at 36 ¶ 225.) The ICF/IDD Program

provides for individuals with intellectual disabilities institutions that offer residential, health, and

rehabilitative services. (Id. at 36–37 ¶ 226; ECF No. 54 at 9.) See also 42 U.S.C. § 1396d(d). In

part because West Virginia has capped participation in the ICF/IDD Program at 509 individuals

since 1989, (ECF No. 54 at 9), the state implements an alternative option for individuals otherwise

eligible for the ICF/IDD Program to receive home and community based services instead. This

alternative program—the I/DD Waiver Program—is the subject of the current litigation.

The I/DD Waiver Program provides “an array of . . . services that an individual needs to

avoid institutionalization.” 42 C.F.R. § 441.300. (See also ECF No. 54 at 10.) Many of the

individuals enrolled in the program live with family members in their homes while others live in

an “[i]ntensively [s]upported [s]etting,” which involves one to four program members living

together in a residential or group home. (See id. at 11; ECF No. 115 at 76.) The I/DD Waiver

Program currently provides open slots for 4,534 eligible West Virginians and has a waiting list of

over 1,100 eligible individuals. (ECF No. 14 at 38–39 ¶¶ 238–239; see also ECF No. 155-2 at 2

¶ 2.) BMS, as the program’s administrator, contracts with APS Healthcare Inc. (“APS”)2 to help

administer the I/DD Waiver Program. (ECF No. 54 at 10–11.) BMS delegates various tasks to

APS, including “monitoring the member’s health and safety,” (id. at 11), “[e]nsuring each [I/DD

Waiver Program] participant’s medical eligibility is initially established and reestablished on an

2 According to the briefing, APS now operates under the corporate name Kepro. (See ECF No. 155-2 at 4 ¶ 7.) APS

will still be named throughout this memorandum opinion and order’s background section in reference to the old

authorization system while Kepro will be named when referring to DHHR’s newly proposed authorization system.

annual basis,” and conducting an “annual assessment of each program participant’s abilities and

needs,” (ECF No. 28-3 at 7). Contracted local service provider agencies ultimately provide

individual recipients with their waiver services. (ECF No. 14 at 41 ¶ 252.)

At the time the Court issued the current injunction in this case, an I/DD Waiver Program

recipient’s annual service authorization began with a calculation of their individual “budget” by

APS. (ECF No. 54 at 14.) APS would conduct an “annual assessment” for participants, which

included, in part, an interview with program members, their legal representatives, their case

managers, and other interested parties, (see ECF No. 38-3 at 73), and a compilation of data

regarding each participant’s “abilities, strengths, and support needs,” (id. at 7; see also ECF No.

54 at 14–15). APS applied a proprietary algorithm to the assessment’s results, producing an

individual budget from a multi-variable statistical analysis. (ECF No. 54 at 15; see also ECF No.

14 at 43 ¶ 265.) Due to the proprietary nature of the algorithm, “the exact factors it consider[ed],

the weight it accord[ed] to each factor, and its overall methodology in determining each member’s

budget [were] not publicly available information.” (ECF No. 122 at 5 (citing ECF No. 115 at 145–

50).) After a recipient’s individual budget was determined, APS would send a letter to that member

notifying him or her of the budget amount without explanation as to how that number was

determined. (ECF No. 54 at 15; see, e.g., ECF No. 108, Exs. 3, 4, 9, 13, 14, 20.)

Once notification of an individual’s budget was received, the member’s “interdisciplinary

team” (“IDT”), consisting of the member, a representative from the provider agency, and possibly

“the member’s guardian(s) and health care professionals,” met to create an “Individualized

Program Plan” (“IPP”). (ECF No. 51-1 at 8 ¶ 19; ECF No. 54 at 15.) The IPP detailed “each type

of service needed to meet that recipient’s individually-assessed safety, health, and care needs.”

(ECF No. 14 at 42 ¶ 257; see also ECF No. 54 at 15.) APS reviewed the completed IPP to ensure

compliance with BMS policies, and if the costs of the requested services fell within the APS-

calculated budget and complied with BMS policies, then “APS [would] approve service

authorization requests consistent with the [IPP].” (ECF No. 54 at 16.)

If an IPP determined that necessary services cost in excess of the APS-determined budget,

however, then “the service coordinator submit[ted] requests for authorization of services to

APS . . . .” (ECF No. 51-1 at 9 ¶ 21.) Before September 2014, “APS made independent

determinations to grant or deny these requests for funds in excess of the budget and ‘routinely

approved’ such ‘service authorization requests.’” (ECF No. 122 at 6 (citing ECF No. 51-1 at 9–

10 ¶ 22; ECF No. 14 at 44 ¶ 272).) Once BMS discovered in September 2014 that the I/DD Waiver

Program was exceeding its budget and that APS was “approving” IPPs “with service costs in

excess of the budgets,” (ECF No. 115 at 94–96; ECF No. 51-1 at 9 ¶ 22), BMS instructed APS to

“cease unilaterally approving” IPPs that included service costs in excess of the APS-calculated

budget. (See ECF No. 51-1 at 9 ¶ 22.) Thereafter, requests for funding in excess of the APS-

calculated budget required approval by BMS through a “second[-]level negotiation.” (Id. ¶ 21.)

This second-level negotiation involved BMS employees reviewing the recipient’s file, attached

materials, and an APS recommendation, as well as, if requested, meeting with the recipient and

interested parties before deciding whether to grant or deny the funding request.3 (ECF No. 115 at

88–89.)

Upon denial of a request for funding in excess of the APS-calculated budget via the second-

level negotiation, BMS sent the member a notice containing appeal rights. (ECF No. 54 at 16.)

To exercise his or her right to appeal the second-level denial, the member could request a fair

3 To highlight the effect that the second-level negotiation had on the number of approved IPPs when requested services

cost more than the APS-calculated budget, Patricia Nisbet, BMS Director of the Office of Home and Community

Based Services, provided in a declaration that 1,962 I/DD Waiver Program members were approved under these

circumstances in 2014 while only 466 similarly were approved in 2015. (ECF No. 51-1 at 10 ¶ 23.)

hearing before West Virginia’s Board of Review. (ECF No. 115 at 91–92; see also ECF No. 54

at 16.) The BMS and I/DD Waiver Program member could present arguments at the fair hearing

as well as any supporting documentation. (See ECF No. 115 at 92–94.) The Board of Review

then issued its decision affirming or reversing the second-level determination by BMS. (Id. at 94.)

If dissatisfied with that decision, the member retained the option of filing a final direct appeal to a

state circuit court. (Id.)

II. CURRENT INJUNCTION

Before addressing the legal standard under which Defendant’s motion must be analyzed,

the Court first will reflect on the current injunction’s purpose and the injustice that it was intended

to prevent. This Court’s memorandum opinion and order entered on September 13, 2016, granted

Plaintiffs’ request for a preliminary injunction and ordered Defendant “to reinstate the named

Plaintiffs’ individualized I/DD Waiver Program budgets to the amounts Plaintiffs received in 2014,

but only for those Plaintiffs that received a reduction in their individualized budgets after 2014.”

(ECF No. 122 at 32.) In that memorandum opinion’s discussion, the Court found that each of the

Winter factors weighed in favor of granting the preliminary injunction.4 (See id. at 14–32.) For

the purposes of the first Winter factor related to whether Plaintiffs were likely to succeed on the

merits, the Court focused on “Plaintiffs’ claim under 42 U.S.C. § 1983 that Defendant violated

Plaintiffs’ procedural due process rights by employing the APS Algorithm when determining

Plaintiffs’ benefits.” (Id. at 14.) The Court found that Plaintiffs have a protected property interest

in continuing to receive benefits from the I/DD Waiver Program and that “the procedures currently

4 As explained in the memorandum opinion, the current standard for imposing a preliminary injunction was established

by the Supreme Court in Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008), and requires a party

seeking this extraordinary relief to demonstrate that “(1) they are likely to succeed on the merits, (2) they are likely to

suffer irreparable harm, (3) the balance of hardships tips in their favor, and (4) the injunction is in the public interest.”

(ECF No. 122 at 12 (quoting Pashby v. Delia, 709 F.3d 307, 320 (4th Cir. 2013) (citing Winter, 555 U.S. at 20)).)

employed by Defendant present a serious risk of erroneous deprivations of Plaintiffs’ interest in

their benefits.” (See id. at 17–20.)

Specifically, the Court emphasized the most significant due process concerns related to the

APS Algorithm in the following passage:

The Court concludes that the APS Algorithm used by Defendant when determining

Plaintiffs’ individualized budgets does not employ ascertainable standards. The

record provides no information as to what factors are incorporated into the APS

Algorithm, how each factor is weighted, or the overarching methodology APS

utilizes in the APS Algorithm to create each I/DD Waiver Program member’s

individualized budget. In short, there is simply no way to determine how the APS

Algorithm generates each waiver recipient’s individualized budget. Further, absent

some indication of the basis for each Plaintiff[’s] benefits determination, Plaintiffs

cannot meaningfully challenge this determination. Indeed, in the letters APS sends

to recipients notifying them of their individualized budget, APS provides only the

budget amounts and does not include any individualized rationale for the recipient’s

budget allocation. Thus, Plaintiffs have a high likelihood of success in

demonstrating that these budget determinations by APS present a serious risk of

resulting in erroneous determinations and deprivations of Plaintiffs’ property

interest in their benefits.

(Id. at 20.) Beyond the secrecy surrounding the APS Algorithm and its inputs, the Court also

addressed concerns with the way BMS handled a recipient’s challenge to his or her budget

determination. (See id. at 20–24 (“This evidence indicates that—regardless of whether Defendant

has a stated policy to increase benefits at the second-level review stage to keep individuals safe

and healthy in the community—Defendant nonetheless eschews this policy in favor of affirming

the recipient’s budget, as determined by the APS algorithm.”).) Ultimately, the Court found that

“the lack of transparency surrounding the proprietary APS Algorithm renders Defendant’s

individualized budget determinations potentially—if not effectively—standardless.” (Id. at 23–

24.)

After finding that the procedure used by Defendant presented substantial due process

concerns, the Court went on to find little evidence “that Defendant would face any form of undue

burden by employing ascertainable standards when determining each waiver recipient’s budget”

and that Defendant did not have a legitimate interest in further use of the APS Algorithm. (Id. at

24.) As to the remaining Winter factors, the Court found that (1) Plaintiffs were likely to suffer

irreparable harm in the absence of an injunction, (2) “the harm to Plaintiffs’ health and safety

outweigh[ed] West Virginia’s financial concerns,” and (3) “the public interest in safeguarding

Plaintiff[s’] access to healthcare and needed services outweigh[ed] West Virginia’s fiscal

considerations” and federalism interests. (See id. 25–32.) Thus, Plaintiffs adequately

demonstrated a need for the preliminary injunction, and the Court ordered the extraordinary

equitable relief. (Id. at 31–32.)

Defendant filed the current motion on May 12, 2017, based on a change in circumstances

after developing a new service authorization system. (ECF No. 155.) Plaintiffs responded on May

31, 2017, pursuant to a Court order extending the deadline to file a response, (ECF No. 163), and

Defendant filed his reply brief on June 7, 2017, (ECF No. 167). As such, the motion is fully briefed

and ripe for adjudication.

III. LEGAL STANDARD

The prospective features of an injunction entered by a district court may be modified under

Federal Rule of Civil Procedure 60(b).5 See, e.g., Rufo v. Inmates of Suffolk Cty. Jail, 502 U.S.

367, 380–93 (1992); see also Dombrowski v. Pfister, 380 U.S. 479, 492 (1965) (citations omitted)

(“[T]he settled rule of our cases is that district courts retain power to modify injunctions in light

of changed circumstances.”); Thompson v. U.S. Dep't of Hous. & Urban Dev., 404 F.3d 821, 825–

5 Rule 60(b) allows for relief from a judgment where “the judgment has been satisfied, released or discharged; it is

based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer

equitable . . . .” Fed. R. Civ. P. 60(b)(5). As the Supreme Court noted in Horne v. Flores, the “[u]se of the disjunctive

‘or’ makes it clear that each of the provision’s three grounds for relief is independently sufficient and therefore that

relief may be warranted even if petitioners have not ‘satisfied’ the original order.” 557 U.S. 433, 454 (2009). The

rule also allows for relief based on “any other reason that justifies relief.” Fed. R. Civ. P. 60(b)(6).

26, 830 (4th Cir. 2005). Pursuant to Rule 60(b)(5), which encompasses courts’ “inherent authority

to modify a consent decree or other injunction,”6 see Thompson, 404 F.3d at 826, 830, a court may

find that the injunction’s purpose and prospective application may no longer be equitable given a

“significant change in circumstances,” whether those be factual or legal changes. Rufo, 502 U.S.

at 380, 383 (noting that this standard is “less stringent” and “more flexible” than the Court’s

previous iterations of the rule for modifying injunctions). The Fourth Circuit has long held that

“an injunctive order may be modified or dissolved in the discretion of the court when conditions

have so changed that it is no longer needed or as to render it inequitable.” Tobin v. Alma Mills,

192 F.2d 133, 136 (4th Cir. 1951) (citations omitted); see also Alexander v. Britt, 89 F.3d 194, 197

(4th Cir. 1996) (“[A] district court’s task is to determine whether it remains equitable for the

judgment at issue to apply prospectively and, if not, to relieve the parties of some or all of the

burdens of that judgment on ‘such terms as are just.’”). “A court errs when it refuses to modify an

injunction or consent decree in light of such changes.” Agostini v. Felton, 521 U.S. 203, 215

(1997) (citation omitted); see also Nelson v. Collins, 700 F.2d 145, 146–47 (4th Cir. 1983)

(citations omitted) (“Because the district court substantially modified the original injunction

without finding that any change had occurred, we must vacate its order . . . . If the state fails to

prove such changes, the original injunction may not be disturbed.”).

Determining a change in circumstances necessitating relief from an existing injunction

involves a flexible test, and the party seeking relief bears the burden of showing such a change.

6 The Fourth Circuit noted in the following passage from Thompson that “[t]he hallmark of equity, of course, is its

flexibility:”

The essence of a court’s equity power lies in its inherent capacity to adjust remedies in a feasible

and practical way to eliminate the conditions or redress the injuries caused by unlawful action.

Equitable remedies must be flexible if these underlying principles are to be enforced with fairness

and precision.

404 F.3d at 830 (quoting Freeman v. Pitts, 503 U.S. 467, 487 (1992)) (citation omitted).

See Horne v. Flores, 557 U.S. 433, 450 (2009). District courts consider several factors when

deciding whether to modify or dissolve an injunction, including the following:

(1) the circumstances leading to entry of the injunction and the nature of the conduct

sought to be prevented; (2) the length of time since entry of the injunction; (3)

whether the party subject to its terms has complied or attempted to comply in good

faith with the injunction; (4) the likelihood that the conduct or conditions sought to

be prevented will recur absent the injunction; (5) whether the moving party can

demonstrate a significant, unforeseen change in the facts or law and whether such

changed circumstances have made compliance substantially more onerous or have

made the decree unworkable; and (6) whether the objective of the decree has been

achieved and whether continued enforcement would be detrimental to the public

interest.

Crutchfield v. U.S. Army Corps. of Eng’rs, 175 F. Supp. 2d 835, 844 (E.D. Va. 2001) (citing

Alexander, 89 F.3d at 197; Bldg. & Constr. Trades Council of Phila. & Vicinity v. NLRB, 64 F.3d

880, 888 (3d Cir. 1995); 42 Am. Jur. 2d § 312 (Injunctions); 12 James Wm. Moore et al., Moore’s

Federal Practice § 60.47[2][c] (3d ed. 1999)). The consideration of public interest may be

heightened in cases of public institutional reform. See Rufo, 502 U.S. at 392; see also Horne, 557

U.S. at 448 (“Such litigation commonly involves areas of core state responsibility . . . . Federalism

concerns are heightened when, as in these cases, a federal court decree has the effect of dictating

state or local budget priorities.”). While some courts have emphasized the importance of judgment

finality, most agree that this is more important in private litigation than institutional reform cases.

See 12 James Wm. Moore et al., Moore’s Federal Practice § 60.47[2][c] (3d ed. 2017) (collecting

cases); see also Rufo, 502 U.S. at 381 (noting that “the public interest is a particularly significant

reason for applying a flexible modification standard in institutional reform litigation because such

decrees reach beyond the parties involved directly in the suit and impact on the public’s right to

the sound and efficient operation of its institutions”).

The factors considered by a district court may vary depending on whether the relief sought

is a complete dissolution of the injunction or only a modification of the injunction. See 12 James

Wm. Moore et al., Moore’s Federal Practice § 60.47[2][c] (3d ed. 2017). For example, if a party

is seeking modification of an injunction, relief may be justified on a wide variety of circumstances

and should be “tailored to resolve the problems created by the change in circumstances.” Rufo,

502 U.S. at 391. Otherwise, if a party is seeking to set aside an injunction, then it must show that

the decree has served its purpose and that there is no longer any need for the injunction. See Bd.

of Educ. v. Dowell, 498 U.S. 237, 247 (1991) (noting that a finding that the school district “was

being operated in compliance with the commands of the Equal Protection Clause . . . and that it

was unlikely that the school board would return to its former ways” meant that the litigation’s

purposes “had been fully achieved”). Notably, simple compliance with an injunction’s terms, even

for an extended period, is not alone sufficient to justify the injunction’s termination. See SEC v.

Coldicutt, 258 F.3d 939, 941–45 (9th Cir. 2001) (finding that nine years of full compliance with

the injunction coupled with evidence that the defendant’s trading licenses expired and that she had

left the securities field did not amount to a change in circumstances requiring relief from the district

court’s injunction).

In addition to the standard set forth in subsection (5) of Rule 60(b), subsection (6) provides

that the Court may grant relief for “any other reason that justifies relief.” This catchall provision

“may be invoked in only ‘extraordinary circumstances’ when the reason for relief from judgment

does not fall within the list of enumerated reasons given in Rule 60(b)(1)–(5).” Aikens v. Ingram,

652 F.3d 496, 500 (4th Cir. 2011) (citing Liljeberg v. Health Servs. Acquisition Corp., 486 U.S.

847, 863 n.11 (1988)). “[I]t provides the court with a grand reservoir of equitable power to do

justice in a particular case and vests power in courts adequate to enable them to vacate judgments

whenever such action is appropriate to accomplish justice where relief might not be available under

any other clause in 60(b).” Compton v. Alton S.S. Co., Inc., 608 F.2d 96, 106–07 (4th Cir. 1979).

Pursuant to this standard, the question before the Court becomes whether the injunction entered

on September 13, 2016, has outlasted its efficacy and purpose. In other words, the Court must

determine whether DHHR’s proposed authorization system, which the agency is prepared to begin

implementing, removes the necessity for the previously ordered immediate and equitable relief.

IV. DISCUSSION

A. Defendant’s New Proposal

Defendant has notified the Court and carefully explained in Exhibit One attached to the

current motion that DHHR developed a “new service authorization system” set for implementation

that it believes satisfies the Court’s concerns expressed in the previous memorandum opinion and

order granting the preliminary injunction. (See ECF No. 155-1; ECF No. 156 at 6–12.) The

changes to the service authorization system include replacement of the proprietary algorithm with

matrices employing a number of clearly identified variables based on a combination of a member’s

living situation and answers to specific questions during the member’s annual assessment. (See

ECF No. 156 at 7.) In addition to the development of this matrix model, Defendant avers that

individual members will be able to review and check the accuracy of answers used in calculating

where they fall within the “budget matrix.” (See id. at 8.) Further, DHHR has updated its Budget

Letter that informs members of an “individualized rationale for the recipient’s budget allocation.”

(Id.) If the member believes there is a mistake in how the budget matrix was applied, then he or

she may challenge the calculation first “by bringing the error to DHHR’s attention,” and further

“by requesting a Medicaid Fair Hearing.” (Id. at 9.) Moreover, Defendant provides that DHHR

has created “a new Exceptions Process designed to evaluate and accommodate requests from

individuals who believe they require services beyond what can be purchased within the budget.”

(Id.) Lastly, Defendant states that “DHHR has revised and will further clarify its policies to make

clear that services in excess of the budget can be authorized when necessary to avoid a heightened

risk of institutionalization.” (Id. at 11 (citing ECF No. 155-1 at 10–11).)

Defendant states that the newly developed service authorization process, which he insists

is transparent, clear, and accurate, is based on an annual assessment conducted for each I/DD

Waiver Program member. (See ECF No. 155-1 at 2–3.) Kepro, formerly known as APS, will meet

with a member’s IDT to complete an Inventory for Client and Agency Planning (“ICAP”)

assessment related to the member’s “health, functionality, and behavior.” (Id. at 3.) That meeting

will also involve the completion of an Adaptive Behavior Assessment System II (“ABAS II”) form

and a “[s]tructured [i]nterview” that is “more robust and detailed” than before. (Id. at 3–4.) In

terms of how each individual’s budget will be calculated, Defendant provides the following:

1. Each year, each member receives a base budget range, determined by the member’s

setting;

2. Each member will receive additional funding if they exhibit one or more of the

traits identified as statistically significant through a regression analysis completed

by the Lewin Group.7 This will be determined by the annual ICAP assessment

responses, which is completed by Kepro at the annual assessment, with assistance

from the individual’s IDT Team and family. The IDT Team and the Family will

have the opportunity to review the form before it is used to develop the budget.

(Id. at 4.)

Based on the annual assessment and taking into consideration the individual’s living

situation, he or she is given a base budget range.8 (See id. Table 1.) Defendant states that the

7 Defendant notes that the Lewin Group is a national health care consulting firm that DHHR hired “to analyze the data

provided by these annual assessments and actual expenditures for each waiver member in 2016, in order to identify

characteristics that are statistically significant drivers of spending.” (ECF No. 156 at 6–7 (explaining that “[t]he Lewin

Group determined that the statistically significant variables driving spending are: an individual’s living situation;

Asocial Problem Behaviors; Externalized Problem Behaviors; Adaptive Behaviors for Motor Skills; and Adaptive

Behaviors for Personal Living Skills”); see also ECF No. 155-1 at 7–8; ECF No. 155-2 at 4 ¶ 7.)

8 Defendant presents the following table with the currently proposed base budget ranges:

budget ranges will be “based on a matrix that will be publicly available and is easily

understandable....” (ECF No. 156 at 5.) The information gained during Kepro’s annual

assessment allows for various “add-ons” at or below designated maximum amounts within four

categories: Externalized Problem Behavior; Asocial Problem Behavior; Adaptive Behavior: Motor

Skills; and Adaptive Behavior: Personal Living Skills.? (See ECF No. 155-1 at 5.) “In order to

YoUrH (Below 18) Living at Home with — 959 643 _ §33. 98] $18,895

ADULT: Living at Home with Family $38,283 - $44.231 $18.895

ADULT: Individual Support Setting (self $82.519 - $94.830 $18.895

directed services

ADULT: Waiver Group Home 4 People $78.540 - $85,687 $18.895

ADULT: Individual Support Setting 3 $104318 - $110,027 $18,895

ee Individual Support Setting 2 $123.279 - $128,562 $18.895

ADULT: Individual Support Setting 1 $176,731 - $182,507 $18,895

Person

(ECF No. 155-1 at 4.) Defendant notes that these budget ranges, in addition to the add-on values, see infra note 9,

will be “re-base[d] . . . after the first year of implementation, and then annually or bi-annually thereafter.” (Jd. at 8.)

This re-basing serves to “make the model even more accurate over time.” (/d.)

° Defendant explains in Exhibit One attached to the motion how, “of the hundreds of factors [the Lewin Group]

analyzed,” these four variables were chosen in addition to considering a waiver member’s living situation as follows:

To develop this model, Lewin analyzed spending data collected by DHHR for the 2016 IPP year,

and compared each individual’s spending with that individual’s setting, functionality, and

behavioral information, reported through the State’s yearly assessment tests. Using this data, Lewin

ran several regression models to identify the variables that were statistically significant in explaining

members’ spending patterns across the program.

(ECF No. 155-1 at 7.) The various add-on amounts available to waiver members are denoted in the following table:

13

provide full and clear transparency as to how each individual’s budget is calculated, DHHR plans

to release the base budgets and add-on amounts on its website, along with an explanation for how

the budgets are calculated... .” (Ud. at 8.)

The budget calculated by Kepro may not result in an individual’s final budget if the figure

is more than 20% above or below the individual’s “2016 IPP year’s spend.’”!? (See id. at 5-6.)

‘Externalized Problem Behavior,

-Asocial Problem Behavior,

_Adaptive Behavior: Motor Skills (0-$)

_Adaptive Behavior: Personal Living Skills (0-4)

(d. at 5.) Employing this chart in addition to the base budget range chart provided above, see supra note 8, Defendant

provides the following example:

[A]n individual who lives in a natural family setting, and exhibits “extremely serious externalized

problem behavior[],” and has a “motor skills” functioning level of 4, would have a budget equal to:

the base budget for living in a family home and the add-on amounts associated with “extremely

serious externalized problem behavior[]” and “motor skills Level 4.” This would yield a budget

range between $47,087 and $53,035. A waiver member receiving this budget will be able to spend

up to $53,035 in the waiver program, unless the member is authorized to receive additional services

through the Exceptions Process... .

(ECF No. 156 at 7.)

The Court notes that the calculation in the above example, based on the charts provided, appears incorrect.

A budget determined by “the base budget for living in a family home and the add-on amounts associated with

‘extremely serious externalized problem behaviors’ and ‘motor skills Level 4,’” (id.), actually yields a budget range

between $48,406 ($38,283 + $4,287 + $5,836) and $54,354 ($44,231 + $4,287 + $5,836). The calculation in

Defendant’s memorandum of law mistakenly incorporates the add-on amount associated with “moderately serious or

slightly serious externalized problem behavior” as opposed to “extremely serious externalized problem behavior.”

Nonetheless, the example illustrates how an individual’s situation is used to calculate his or her base budget under the

new system.

10 Defendant provides data showing that 35.2% of the waiver population will receive budgets under the new model

that are greater than 20% above their 2016 IPP spend amount. (See ECF No. 155-1 at 7.) This percentage of the

population would be assigned a budget capped at 120% of their 2016 IPP spend pursuant to the stop-gain policy.

14

This “stop-loss/stop-gain policy” assigns to a member a budget that is 80% of the 2016 IPP year

spend amount if the calculated budget would otherwise be less than that amount. (See id. at 5.)

Similarly, a member’s budget will be capped at 120% of the 2016 IPP year spend if the new budget

calculation yields an amount higher than that. (See id.) The stop-loss/stop-gain policy applies

year to year “so long as the member does not change his or her living setting or otherwise ha[s] a

significant change in circumstances.” (Id. at 6.) This policy takes into account the previous year’s

budget unlike the proprietary algorithm subject to the injunction, which Plaintiffs criticized in their

First Amended Complaint (“Complaint”) for “ignor[ing] the amount of benefits and services

authorized and provided in the immediately preceding budget year . . . .” (See ECF No. 14 at 42–

43 ¶¶ 262–263, 43–44 ¶¶ 268–269, 45 ¶ 275.)

Once an individual’s budget is finalized either by the matrix calculation or by the stop-

loss/stop-gain policy, the member will be sent a budget letter that sets out the budget amount and

“a short, clear explanation for how the budget was calculated.” (ECF No. 155-1 at 6; see also ECF

No. 155-1 at 13–16; ECF No. 156 at 5 (arguing that “notices will be revised to clearly identify the

factors that resulted in the individual’s budget”).) This budget letter will explain why a budget has

changed from the prior year, if it has, and what information from the ICAP assessment led to that

change. (ECF No. 155-1 at 6.) The budget letter will also explain the stop-loss/stop-gain policy

if it has been applied to a particular member’s budget, or it may explain why an individual has

become ineligible for the policy based on a changed setting or significant change in health

circumstances. (See id.) The budget letter will inform the individual that their ICAP assessment

is with their service coordinator and that they and their guardian have the right to review that

assessment and contact DHHR if they believe the budget determination is inconsistent with their

Conversely, the data shows that “6.8% of the population will receive budgets that are 20% or more below their 2016

spend. Any decreases in these members’ budgets will be capped at 20% under the stop-loss policy.” (Id.)

ICAP answers. (See id.; ECF No. 156 at 5 (noting that “waiver members, their families or

guardians, and service coordinators will have an opportunity to review and confirm the information

that was used in determining the budget”).) DHHR will retain the ability to “immediately review

. . . and correct any errors” brought to its attention by the individual if it agrees the inputs were in

error. (ECF No. 155-1 at 6.) This new budget letter appears to alleviate the concerns raised in

Plaintiffs’ Complaint that the form “do[es] not explain that DHHR is actually cutting the

recipient’s benefits; do[es] not specify the amount of the proposed cut; do[es] not state the facts

allegedly justifying the cuts . . . ; [and] do[es] not explain how a person might object to the

proposed reduction . . . .” (ECF No. 14 at 48 ¶ 294.)

After receipt of the budget letter, the process to develop each member’s IPP begins. (See

ECF No. 155-1 at 9.) If the IPP’s services are “within budget and otherwise compliant with DHHR

policies,” then DHHR will authorize the services developed by the IDT and/or member. (Id.) The

IDT and member must create two IPPs if the team believes that the member needs services in

excess of the calculated budget. (See id.) The first IPP must be within budget and compliant with

DHHR policies while the second should reflect “all the services that the IDT team believes the

member needs.” (Id.) Both IPPs are submitted to Kepro, and DHHR will evaluate requests for

specific services that the member may require but are unavailable within their budget. (See id.)

Members also may request additional services that they believe are necessary through the

“exceptions process.” (See id.; see also id. at 18–25; ECF No. 156 at 5 (“DHHR’s waiver policy

manual will be revised to clarify and explain that members may receive service[s] in excess of

their budget when necessary to avoid institutionalization . . . .”).) These requests “will be

considered and decided by a panel of at least three individuals employed by DHHR or its

contractor” with at least one individual who “will have medical training.” (See ECF No. 155-1 at

10.) Taking into consideration whether “the services are necessary to keep the member safe and

healthy in order to avoid a heightened risk of institutionalization during the IPP year,” the panel

will consider relevant documentation and rule on the request within fifteen days of submission.

(Id.)

A denial in whole or in part of services requested through the “exceptions process” will

result in a newly developed denial notice. (See id. at 27–30.) The notice includes “a specific and

individualized explanation for the reason or reasons” for the denial. (Id. at 10.) It will detail the

documentation reviewed by the panel as well as specific facts relied upon in reaching the decision.

(Id.) If the denied services were granted during the previous IPP year, then the notice will explain

why the current year’s decision departs from the previous year’s determination. (See id.) Lastly,

the notice will explain to the member that he or she has a right to appeal the decision through a

Medicaid Fair Hearing “and to continue to receive services at the previously-approved levels

throughout the appeal process if the request for a hearing is received within 13 days of receipt” of

the notice. (Id.; see also id. at 29–30.) The Medicaid Fair Hearing involves an appellate-type

review by the Board of Review, which may review challenges to “an error on the ICAP answers,

as input into the Kepro database,” or challenges to “the [exceptions process] Panel’s denial of an

individual’s request for additional services in excess of the budget.” (Id. at 10.) The Board of

Review only makes factual determinations; it “does not have the authority to second-guess or

overturn policy judgments made by DHHR and BMS . . . .” (Id. at 11.)

On September 15, 2017, Defendant’s counsel submitted a letter-form status report to the

Court informing that DHHR is “mov[ing] ahead with implementation of this new system . . . .”

(ECF No. 168.) DHHR provided the following timeline by which it plans to abide:

Date Action

November 15, 2017 DHHR issues notice to the public for

changes to the I/DD Waiver Policy

Manual to implement the proposed

new service authorization system

December 15, 2017 - January 31, 2018 DHHR reviews and considers public

comments

February 1, 2018 DHHR finalizes and publishes

changes to the I/DD Waiver Program

Manual

February 1 - March 31, 2018 DHHR works with KEPRO to put in

place practices and procedures to

implement the new service

authorization system

April 1, 2018 DHHR begins evaluating waiver

members and calculating their service

authorization levels pursuant to the

new system, based on anchor dates

90 days after evaluation Waiver members begin receiving

services pursuant to service

authorization levels developed under

the new system

July 1, 2018 DHHR adds 50 new slots to the I/DD

Waiver Program

(Id. at 1–2.) DHHR recognized its responsibility to continue providing the named Plaintiffs in this

case their 2014 service authorization levels, if necessary, pursuant to the current injunction. (Id.

at 2.)

B. Analysis

A review of the new authorization system reveals that the proposal does not appear to suffer

from similar due process infirmities and, therefore, does not promote the injustices that this Court’s

injunction was designed to remedy.11 The Court found in its prior memorandum opinion that

Plaintiffs in this case have both a substantial and self-evident private interest in receiving

appropriate benefits through the I/DD Waiver Program. (See ECF No. 122 at 18 (citation

omitted).) The Court further found that “the procedures currently employed by Defendant present

a serious risk of erroneous deprivations of Plaintiffs’ interest in their benefits” because the factors

incorporated into the APS algorithm, including the weight assigned to each factor, and the

methodology used in calculating benefits were unclear. (See id. at 18–19 (noting that the record

was absent a description of “what specifically is included in either the ‘assessment tools’ or the

‘statistical analysis’” as well as what variables in the algorithm were “statistically significant”).)

The authorization system that DHHR now proposes first assigns members a base budget

range from a publicly available matrix with defined setting categories and dollar ranges based on

answers provided during each member’s annual assessment, where the ICAP, the ABAS II, and

the structured interview are completed. (See ECF No. 155-1 at 3–4.) Then, a single dollar amount,

up to $18,895, may be added to the base budget range figures according to the add-ons for which

the individual qualifies. (See id. at 4–5.) The categories of available add-ons are derived from the

ICAP survey and applied as needed directly based on answers provided by the member, their

guardians, and the IDT.12 (See id.) The Lewin Group chose these categories as inputs for the add-

11 “[T]he Due Process Clause provides that certain substantive rights—life, liberty, and property—cannot be deprived

except pursuant to constitutionally adequate procedures.” Cleveland Bd. of Educ. v. Loundermill, 470 U.S. 532, 541

(1985). “The essential requirements of due process . . . are notice and an opportunity to respond.” Id. at 546.

12 ICAP’s website confirmed that the variables included in the add-on chart, see supra note 9, are part of the ICAP

questionnaire and used to calculate each participant’s ICAP Service Score. See ICAP Service Score, Inventory for

Client and Agency Planning, http://icaptool.com/icap-information/icap-service-score/ (last visited July 27, 2017). The

website provides the following as to problem behaviors, which discusses the two problem behavior categories within

DHHR’s “add-ons” chart:

These four dimensions (the description of specific problem behaviors, frequency of occurrence,

severity, and the usual management response by others) represent the primary bases for evaluating

the effects of problem behavior on the individual, his/her peers, and his environment. This

information is necessary for developing individual plans, as well as for planning service intensity.

The ICAP yields normed numeric scores that vary by age for problem behaviors in three areas

ons chart based on a statistical regression analysis; these categories were determined to be the four

“statistical drivers of spending” in addition to an individual’s setting, which is the basis for the

initial base budget range before add-ons. (See id. at 8; ECF No. 156 at 6–7; ECF No. 167 at 7 n.1.)

Unlike before, members will know exactly which statistically significant variables affect their

budget level and the dollar amount associated with each variable. (Compare ECF No. 155-1 at 7–

8 (detailing why the five variables considered in the budget determination were selected), with

ECF No. 115 at 83 (providing Patricia Nisbet’s testimony that she was unaware of the individual

variables considered within the proprietary algorithm or how they were weighted).)

The funding levels denoted in the base budget matrix and the add-ons chart are

ascertainable standards that provide Plaintiffs a definitive basis on which to challenge any

miscalculation. See Prestera Ctr. for Mental Health Servs., Inc. v. Lawton, 111 F. Supp. 2d 768,

779 (S.D. W. Va. 2000) (citations omitted) (“Due process further requires that decisions regarding

entitlements to government benefits must be made according to ‘ascertainable standards’ that are

applied in a rational and consistent manner.”). First, Plaintiffs can establish for themselves based

on their setting which base budget range they are eligible to receive. In turn, they also know how

their base budget range will be affected by future setting changes. While Plaintiffs contest the two

inputs considered when determining the base budget level, (see ECF No. 163 at 12 (“[I]n actuality,

the only individual information DHHR’s base budget calculation use[s] to determine the amount

of medical assistance benefits a class member will receive is the person’s age and the “Setting”

(internalized, externalized, and asocial) as well as a total score. Scores range from +10 (good) to -74

(extremely serious) with an average of 0 and a standard deviation of 10.

Id. (emphasis added). However, the Court notes that while information is available as to how the adaptive behaviors

are assigned, such as the motor skills and personal living skills categories in DHHR’s “add-ons” chart, the website did

not provide any information related to DHHR’s four adaptive behavior sub-category breakdowns. Presumably, DHHR

itself has created the four levels within each of the two adaptive behavior categories by dividing the range of possible

scores into the four separate levels, but it is unclear from the record exactly how the assigned level of each individual’s

adaptive behavior add-ons are determined. Nevertheless, Plaintiffs do not raise this specific issue in the response.

category in which that person lives.”)), they do not argue that they are unable to calculate their

own base budget level. In other words, Plaintiffs do not appear to contest that the base budget

matrix represents “ascertainable standards.”

Moreover, Plaintiffs can determine via their ICAP answers how much additional funding

they should be awarded based on three factors: what categories of add-ons they qualify for, the

specific dollar amounts associated with each, and the maximum additional funds allowed. Put

simply, each Plaintiff, along with his or her guardians and IDT, will have the ability to establish

what budget range DHHR should assign before the agency puts a budget letter in the mail.13 This

is remarkably different than Plaintiffs’ previous inability to predict what dollar figure would result

from a seemingly arbitrary and secret proprietary algorithm for which inputs and methodologies

were unknown. For these reasons, the Court does not find support for Plaintiffs’ argument that the

proposed system “would eschew the legislated and publicly adopted ‘person-centered planning

process’ required by both federal and DHHR regulations, in favor of a bureaucratic construct to

prevent class members from receiving Medicaid benefits in the amount, duration, and scope

needed to meet their needs and achieve the purpose of the waiver program.” (Id. at 21.) The

setting is selected by the individual from various options, add-ons are determined based on the

13 The Court noted in the previous footnote that the record is not clear how the adaptive behavior ICAP scores within

the motor skills and personal living skills categories translate into four different levels, but the Court assumes that

DHHR divides the range of possible scores into a distinct range for each of the four levels. Nevertheless, while

Plaintiffs challenge the definitions of “extremely or very serious” and “moderately serious or slightly serious” within

the problem behavior categories, (see ECF No. 163 at 21–22; see also ECF No. 163-6 at 2 ¶ 7 (“[T]he factors used to

determine eligibility for the ‘add-ons’ are vague, and thus we cannot be certain that our calculations are accurate at

this time. For example, we do not know how DHHR will differentiate between ‘extremely or very serious’ and

‘moderately or slightly serious’ with regard to a member’s ‘externalized problem behavior.’”)), they do not challenge

how the adaptive behavior scores from the ICAP fit into the four levels associated with motor skills adaptive behavior

and personal living skill adaptive behavior. Rather, they generally challenge how the add-ons are determined. (See

ECF No. 163 at 22 (“The ‘add on’ proposal does not provide ‘ascertainable standards’ since one must guess at the

meaning and application of it to individual circumstances, and it provides no factual basis by which a recipient may

judge whether their exclusion was erroneous.”).) Again, Defendant states that the application of the various add-on

categories is determined by the individuals’ ICAP answers, (see ECF No. 155-1 at 4–5), and the Court is not persuaded

that the add-on categories are wholly standardless like the previously used algorithm as Plaintiffs argue.

individual’s specific ICAP answers, and protocols are in place for participants to register

grievances or complaints regarding the way the individual budget is determined.

In addition to the procedure for initially calculating each individual’s budget level, the

proposed method for challenging that budget level appears to comport with the requirements of

due process and affords Plaintiffs the opportunity to meaningfully challenge that determination.

With regard to the authorization system subject to the Court’s injunction, Defendant argued that

DHHR would “‘make exceptions’ and increase a recipient’s budget ‘where additional services are

necessary to keep individuals safe and health in the community, and out of institutions.’” (ECF

No. 122 at 21 (citing ECF No. 101-1 at 3–4 ¶ 8; ECF No. 51-1 at 9 ¶ 21).) The Court previously

found that the record and, in particular, BMS’s second-level review practice did not support that

assertion. (See id. at 21–22 (noting that the policy manual provided that recipients must purchase

services within the budget and that BMS rejected any funding request beyond an assigned budget

unless there was a change in circumstances occurring after the budget determination).)

Defendant now represents, and the Court finds, that the proposal remedies this defect in

both form and effect. (See ECF No. 156 at 9–12; ECF No. 155-1 at 9–11.) Plaintiffs and their

IDTs initially can challenge an assigned budget calculation based on factual discrepancies between

the member’s living situation, ICAP answers, and the actual variables and amounts applied in the

calculation. After review of the budget letter, Plaintiffs and their representatives may contact

DHHR directly with any disputes. Even beyond this initial procedure, a member requiring services

outside the assigned budget may create two IPPs for submission to Kepro and evaluation by

DHHR, one of which will reflect all services the individual believes is necessary regardless of the

assigned budget.

Further, DHHR plans to implement a new “exceptions process” for individuals “who

believe they require services beyond what can be purchased within the budget.” (ECF No. 156 at

9.) A member will no longer be required to show “‘a change in the recipient’s need for benefits

that occurs after’ the individualized budget determination.” (Id. at 10 (quoting ECF No. 122 at

21).) The standard used by the three-person exceptions panel will be whether “the services are

necessary to keep the member safe and healthy in order to avoid a heightened risk of

institutionalization.” (Id.) This allows exceptions to be made on a case-by-case basis as opposed

to the previous practice of not allowing exceptions if the request involved spending more than the

individual’s allocated budget. Plaintiffs contend that the new “exceptions process” does not allow

members to obtain clinically-appropriate services that are medically necessary, (see ECF No. 163

at 22, 23), but this argument does not comport with a reading of DHHR’s new proposal.14 (See

ECF No. 155-1 at 9–10 (“In determining whether to grant additional services as requested, the

[exceptions] panel will apply the following standard: are the services [] necessary to keep the

member safe and healthy in order to avoid a heightened risk of institutionalization during the IPP

year?”).) Moreover, if the panel either denies in whole or in part an individual’s exceptions

request, DHHR will send a revised denial letter with information regarding what documents were

considered and a specific and individualized rationale for the decision. (Compare id. at 10–11,

with ECF No. 108-16 (providing a 2015 notice of denial with a blanket explanation: “Your

assessed annual budget would have been exceeded or has been exceeded and therefore this request

is denied.”).) Plaintiffs retain the ability to appeal an unfavorable decision through a Medicaid

14 Plaintiffs also challenge the exceptions process on the ground that it “would not allow class member[s] to obtain

clinically-appropriate services if doing so would exceed [] across-the-board caps imposed on class members residing

in a family home.” (ECF No. 163 at 23 (emphasis in original).) As Defendant notes in his memorandum of law in

support of the current motion, however, these service caps are specified in DHHR’s federally approved 1915(c) waiver

application and “are not part of this litigation” as Plaintiffs’ Complaint does not challenge them. (See ECF No. 156

at 12 & n.1; ECF No. 167 at 21–22 & n.6.)

Fair Hearing. Finally, “DHHR has revised and will further clarify” policies that allow services in

excess of the budget to be authorized “when necessary to avoid a heightened risk of

institutionalization.” (ECF No. 156 at 11 (stating that “the Board of Review may grant specific

services that require funding in excess of the budget if such services are necessary to avoid

institutionalization” regardless of the panel’s decision at the “exceptions process” stage (emphasis

in original)).)

In sum, the Court is convinced that the due process injustices inherent in the old system

addressed by the injunction are not repeated in DHHR’s proposed authorization system. Initial

budget determinations are individualized and based on transparent and discernible standards in

stark contrast to the old system. Plaintiffs may alert DHHR directly if they notice an error in the

budget calculation such as the misapplication of a particular input. After receiving a detailed

budget letter, Plaintiffs may take advantage of the exceptions process if they believe that their

required services are not adequately covered by their budget. Plaintiffs’ ability to navigate the

exceptions process is open and obvious on many fronts, and there is no evidence that service

requests in excess of a base budget will be denied in a blanket manner as in the old system.

Moreover, if Plaintiffs receive an unfavorable outcome from the panel that reviewed their case

during the exceptions process, Plaintiffs may choose to appeal that decision and request a Medicaid

Fair Hearing in front of the Board of Review as detailed in the updated denial notices. The Board

of Review has the authority to overturn factual determinations previously made and to grant

services requiring funding beyond an individual’s initial budget. All these procedures are outlined

in the letters and notices that DHHR transmits to members as well as DHHR’s updated policy

manual. As such, the proposed system does not appear susceptible to the “high risk of arbitrary

and erroneous benefits determinations” that due process forbids. (See ECF No. 122 at 23–24

(citing Town of Castle Rock v. Gonzales, 545 U.S. 748, 792 (2005) (Stevens, J., dissenting)).)

While Plaintiffs challenge the proposed authorization system through a due process lens at

times, the majority of their response and its attached exhibits seem to dispute the impact of the

dollar figures involved in the proposal. The Court understands Plaintiffs’ concerns that an

overhaul to the I/DD Waiver Program’s budget authorization system may lead to decreased

budgets for certain individuals within the program. However, the Court’s decision to enjoin

Defendant from using the proprietary algorithm and accompanying process did not focus on or

consider the budget amounts assigned to the named Plaintiffs in 2015 versus the previous year.

(See ECF No. 122 at 23 (“To be clear, the Court is not stating that the substance of the benefits

determinations for Plaintiffs is impermissible under the Due Process Clause.”).) Nor could the

Court’s decision take into account the dollar figures themselves because the injunction was based

on Plaintiffs’ likelihood of success on the merits of their procedural due process claim, which “is

simply a guarantee of fair procedures—typically notice and an opportunity to be heard.” See Mora

v. City of Gaithersburg, 519 F.3d 216, 230 (4th Cir. 2008) (citations omitted); see also Matthews

v. Eldridge, 424 U.S. 319, 335 (1976) (citation omitted). Further, the Court is convinced by

Defendant’s argument that the evidence proffered by Plaintiffs supporting the proposition that the

new system will affect significantly and negatively the class members in this case is based partly

on statistical flaws that empirical methodologies typically seek to avoid. (See ECF No. 167 at 20–

21 n.5.)

Nevertheless, the Court emphasizes that its role in analyzing the constitutional adequacy

of an institutional process is different from an evaluation of the state agency’s reasons for making

certain decisions. Due process in this context is concerned with the procedures and not the

substance of the state’s decisions. “The quality of an agency’s reasoning is decidedly not a process

issue.” Lightfoot v. District of Columbia, 448 F.3d 392, 401 (D.D.C. 2006) (citing Motor Vehicle

Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50–51 (1983)). Thus, Plaintiffs’

argument that the new authorization system will decrease their I/DD Waiver Program budgets

across the board, (see ECF No. 163 at 14–15), cannot be the focus—regardless of its truth—in

deciding whether to modify or vacate the current injunction, which was based in part on a finding

that Plaintiffs were likely to succeed on their claim under procedural due process. As the Supreme

Court emphasized in Horne, “structural and managerial improvements” may constitute a relevant

change in circumstances for purposes of modifying or vacating an injunction because the “adopted

policies . . . ameliorated or eliminated many of the most glaring inadequacies discussed by the

district court.” 557 U.S. at 465–66, 468 (citation omitted). Based on the new authorization system,

which DHHR presumably has begun implementing with regard to the unnamed members of the

class, (see ECF No. 168), the Court finds that the deficiencies discussed within its previous

memorandum opinion and order enjoining Defendant do not exist within the new and improved

authorization system.

Because the procedural due process concerns addressed by the preliminary injunction have

been alleviated, it is no longer equitable based on the reasons stated in the Court’s previous

memorandum opinion and order to require Defendant to continue providing to the named Plaintiffs

the budget amounts they received in 2014 if those Plaintiffs received a budget reduction after that

year. Defendant has complied with the injunction to this point, which was put in place over one-

and-a-half years ago. There is no indication that the faulty conditions of the old system will recur

as the new system is in the process of being implemented for all I/DD Waiver Program members.

Thus, continued enforcement of the extraordinary and prospective relief previously ordered is

against the public interest, particularly in light of the fact that continued enforcement will delay or

preclude DHHR from adding new slots to the I/DD Waiver Program. (See ECF No. 156 at 15.)

For those reasons and pursuant to Federal Rule of Civil Procedure 60(b)(5), the Court finds that

Defendant has met his burden of showing a change in circumstances necessitating relief from the

existing injunction, see Horne, 557 U.S. at 450, and grants in part Defendant’s motion to modify

the previous memorandum opinion and order entered on September 13, 2016, (ECF No. 122), to

allow the preliminary injunction to expire for the named Plaintiffs as set forth below. See Rufo,

502 U.S. at 380–93; Dombrowski, 380 U.S. at 492; Thompson, 404 F.3d at 825–26, 830; see also

infra Section V.

The Court notes that while the discussion has focused on the procedural due process

infirmities in the old system—as that was the basis for the injunction—Plaintiffs also argue in the

response that the preliminary injunction should remain in place because they are likely to succeed

on their claims pursuant to the Americans with Disabilities Act (“ADA”) and Rehabilitation Act,

even under the new system. The briefing in the record regarding Plaintiffs’ claims under the ADA,

Rehabilitation Act, and other federal statutes and regulations only analyzes the likelihood of

success on those claims under the old system that DHHR has abandoned. Consequently, the record

is undeveloped as to whether it would remain equitable for the injunction to apply prospectively

based on Plaintiffs’ likelihood of success on the merits of their other claims. Because the Court

has modified its previous memorandum opinion and order in a way that leaves the injunction in

place for each named Plaintiff until an adequate annual assessment can be conducted before his or

her next anchor date, see infra Section V, time remains for Plaintiffs to file a renewed motion for

preliminary injunction, if necessary, based on the new system.

V. CONCLUSION

For these reasons, the Court GRANTS IN PART Defendant’s Motion to Vacate or Modify

Preliminary Injunction Order, (ECF No. 155), to the extent Defendant requests that the Court lift

the injunction to allow DHHR to begin implementing the proposed service authorization system

as to the named Plaintiffs. The motion is otherwise DENIED. The Court further MODIFIES its

memorandum opinion and order entered on September 13, 2016, (ECF No. 122), as follows: the

preliminary injunction will expire individually as to each named Plaintiff on the individual’s first

anchor date!> following this memorandum opinion and order’s entry unless the anchor date falls

within ninety days of entry in which case the preliminary injunction will expire on the individual’s

second anchor date subsequent to this order’s entry.'° Defendant is further ORDERED to provide

the Court with an updated status report as to the new system’s implementation within thirty days

of this memorandum opinion and order’s entry.

IT IS SO ORDERED.

The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and any

unrepresented party.

ENTER: March 26, 2018

‘5 A recipient’s “anchor date” is “the anniversary of that recipient’s admission to the program.” (ECF No. 29 at 11.)

‘6 According to Defendant’s description of the new system, Kepro will conduct an annual assessment of each

individual approximately ninety days before his or her anchor date. (See ECF No. 155-1 at 3.) Therefore, the nature

of the expiration ensures that a named Plaintiff will continue receiving the benefits of the preliminary injunction until

Kepro, the member, and his or her IDT have had adequate time to conduct the annual assessment prior to the anchor

date.

28