Case: Pediatric Specialty Care Inc. v. Arkansas Department of Human Services

4:01-cv-00830 | U.S. District Court for the Eastern District of Arkansas

Filed Date: Dec. 6, 2001

Closed Date: 2008

Clearinghouse coding complete

Case Summary

On December 6, 2001, a number of healthcare providers and members of the state's Medicaid-established Child Health Management Services (CHMS) program filed this suit in the United States District Court for the Eastern District of Arkansas. Proceeding under 42 U.S.C. § 1983 and the Medicaid Act against the director of the Arkansas Department of Human Services (ADHS), the plaintiffs asked the court for declaratory and injunctive relief, claiming that the state's proposal to remove certain CHMS p…

On December 6, 2001, a number of healthcare providers and members of the state's Medicaid-established Child Health Management Services (CHMS) program filed this suit in the United States District Court for the Eastern District of Arkansas. Proceeding under 42 U.S.C. § 1983 and the Medicaid Act against the director of the Arkansas Department of Human Services (ADHS), the plaintiffs asked the court for declaratory and injunctive relief, claiming that the state's proposal to remove certain CHMS programs from the state's Medicaid plan and to cease paying for them violated their substantive and procedural due process rights and the Medicaid Act. Specifically, the state intended to stop paying for CHMS early-intervention day treatment for children who don't have a serious medical problem, but are still considered at risk. Plaintiffs were represented by private counsel.

On the same day as they filed their complaint, plaintiffs sought temporary injunctive relief; the state opposed such relief and moved to dismiss the matter altogether for failure to state a claim. The Court (Judge William R. Wilson) held a four-day trial beginning a week after the complaint was filed, and then, on Dec. 19, 2001, permanently enjoined the state from implementing the proposed spending cuts. (The court denied the motion for temporary injunctive relief as moot.) The court held that the Medicaid Act mandated that the state's plan must specifically include in its services early-intervention day treatment. Judge Wilson announced his ruling from the bench; there is no written opinion. DHS appealed the decision to the 8th Circuit Court of Appeals that same day.

On July 15, 2002, the 8th Circuit Court of Appeals (Judges McMillian, Heaney, and Riley) affirmed that at-risk children have a federal right to early-intervention day treatment when a physician recommends it. However, it reversed the lower court's holding to the extent that it required CHMS early-intervention day treatment services to be specifically included in the state's Medicaid plan. All that is required, the appellate court held, is that the state plan pay part or all of the cost of treatments for conditions discovered by a screening process when those treatments meet the definitions set forth in the Medicaid Act. The case was remanded to the district court with orders to modify its injunction in light of the appellate court's holding, as well as to consider the plaintiffs' procedural due process claim, which the district court initially did not reach in its decision.

On July 30, 2002, Judge Wilson entered an amended injunction, which did not require the state to specifically include CHMS early-intervention day treatment services in the state plan, but did require it to pay for those services when prescribed by a physician. The state must also inform potential Medicaid recipients about these available services.

The district court then held a number of hearings on the plaintiffs' procedural and substantive due process claims. On Nov. 27, 2002, Judge Wilson issued an Order and Opinion holding for the plaintiffs on all three of their counts: that the state's proposed plan was in violation of the Medicaid Act; that the state violated plaintiffs' procedural due process by failing to conduct a study about the effect such a change in the program would have had on the efficiency, economy, quality of care, and access to care, as required by the Medicaid Act; and that the state's attempt to move the CHMS services off-plan for cost savings violated plaintiffs' substantive due rights because it "shocked the conscience."

On December 18, 2002, the Court issued a second Order extending its injunction to the federal Centers for Medicare & Medicaid Services (CMS), the federal regulatory authority for the Medicaid program, and ordered that CMS continue to pay federal matching funds to any state expenditure on early-intervention day treatment services, even though CMS was not a party to the suit.

The state moved to amend the court's judgment and raised the question of whether guidelines published by the Arkansas Foundation for Medical Care, Inc. (AFMC), the organization contracted by the state to determine the eligibility of CHMS participants, also violated their procedural and substantive due process rights. The plaintiffs requested to amend their complaint to make AFMC a party and directly challenge the legality of those access guidelines. And on Dec. 18, 2002, the Court granted their request. That same day, the state and CMS appealed the Court's Nov. 27, 2002, Order and Opinion to the 8th Circuit Court of Appeals.

Throughout 2003 and 2004, the plaintiffs were granted permission to amend their complaint a number of times, which eventually culminated in a fifth amended complaint filed on Jan. 4, 2005. Meanwhile, on April 16, 2004, the 8th Circuit issued an opinion on the state's and CMS's appeal. It affirmed the lower court's holding that the state violated plaintiffs' procedural due process rights, but reversed district court's decision that the state violated substantive due process rights. It also reversed the district court's enjoining of CMS because the agency wasn't a party to the underlying suit.

Plaintiffs moved to compel ADHS and AFMC to reveal the names of the peer reviewers responsible for determining when and whether CHMS services are medically necessary. On Nov. 29, 2004, the district court granted the motion. The next month, AFMC appealed the decision to the 8th Circuit Court of Appeals.

During this period, the district court also considered damages claims against defendants who were current or past high-level supervisors of ADHS. They all moved for summary judgment, asserting qualified immunity. ADHS contended that it was entitled to absolute immunity under the 11th Amendment because it was an agency of the state of Arkansas. On Feb. 7, 2005, the district court (Judge Wilson) denied all but one of the defendant's motions for summary judgment on the grounds of qualified immunity. It was silent as to the ADHS's 11th Amendment claim. The state and remaining defendants appealed to the 8th Circuit Court of Appeals.

On April 17, 2006, the 8th Circuit Court of Appeals issued opinions on both outstanding appeals: AFMC's appeal regarding disclosure of the peer supervisors, and the qualified and absolute immunity claims of the individual defendants and ADHS. The appellate court held that the relevant Medicaid regulations did not require AFMC to reveal the names of its peer supervisors, and so reversed the district court on that count. With regard to the immunity claims, it affirmed the district court's decision rejecting the qualified immunity claims, but ordered that it dismiss ADHS from the suit on 11th Amendment grounds.

The remaining individual defendants who were not granted qualified immunity appealed to the Supreme Court of the United States. Apparently the parties settled, because on June 25, 2007, the Supreme Court vacated the judgment because it had become moot. Selig v. Pediatric Specialty Care, Inc., 551 U.S. 1142 (2007).

On Nov. 11, 2008, back in district court, the remaining plaintiffs entered a stipulation of dismissal with the defendants because both sides agreed to an undisclosed settlement agreement. The court then dismissed the case with prejudice.

Summary Authors

Andrew Junker (10/2/2014)

People

For PACER's information on parties and their attorneys, see: https://www.courtlistener.com/docket/5129650/parties/pediatric-specialty-v-arkansas-human-svc/


Judge(s)

Heaney, Gerald William (Minnesota)

Miller, Brian S. (Alaska)

Wilson, Billy [William] Roy [Jr.] (Arkansas)

Attorneys(s) for Plaintiff

Banks, Charles A. (Arkansas)

Bowen, Martin W. (Arkansas)

Freno, Lori (Arkansas)

Kaplan, Philip E. (Arkansas)

Attorneys(s) for Defendant

Hopkins, Breck G. (Arkansas)

Pence, Richard M. Jr. (Arkansas)

Rainwater, Michael R. (Arkansas)

Judge(s)

Heaney, Gerald William (Minnesota)

Miller, Brian S. (Alaska)

Wilson, Billy [William] Roy [Jr.] (Arkansas)

Attorneys(s) for Plaintiff

Banks, Charles A. (Arkansas)

Bowen, Martin W. (Arkansas)

Freno, Lori (Arkansas)

Kaplan, Philip E. (Arkansas)

Attorneys(s) for Defendant

Hopkins, Breck G. (Arkansas)

Pence, Richard M. Jr. (Arkansas)

Rainwater, Michael R. (Arkansas)

Thalheimer, Lee S. (Arkansas)

Documents in the Clearinghouse

Document

4:01-cv-00830

Docket

Pediatric Specialty Care Inc v. Arkansas Department of Human Services

Nov. 13, 2008

Nov. 13, 2008

Docket
1

4:01-cv-00830

Complaint

Pediatric Specialty Care Inc v. Arkansas Department of Human Services

Dec. 6, 2001

Dec. 6, 2001

Complaint

01-03971

Appellate Court Opinion (06/10/2002) [affirming DCt's injunction]

Pediatric Specialty Care Inc v. Arkansas Department of Human Services

U. S. Court of Appeals for the Eighth Circuit

293 F.3d 472

June 10, 2002

June 10, 2002

Order/Opinion
41

4:01-cv-00830

Amended Injunction [removing language that state had to include CHMS program services in its Medicaid plan]

Pediatric Specialty Care v. Arkansas Dept. of Human Services

July 30, 2002

July 30, 2002

Order/Opinion
59

4:01-cv-00830

Order

Pediatric Specialty Care v. Arkansas Dept. of Human Sevices

2002 WL 34236910

Nov. 27, 2002

Nov. 27, 2002

Order/Opinion
76

4:01-cv-00830

Amended Complaint

Pediatric Specialty Care Inc v. Arkansas Department of Human Services

Jan. 6, 2003

Jan. 6, 2003

Complaint
95

4:01-cv-00830

Second Amended Complaint

Pediatric Specialty Care Inc v. Arkansas Department of Human Services

June 23, 2003

June 23, 2003

Complaint

03-01015

03-02616

03-01483

Appellate Court Opinion (04/16/2004) [aff'ing DCt's injunction; rejecting DCt's finding of substantive due process violation]

Pediatric Specialty Care Inc v. Arkansas Department of Human Services

U. S. Court of Appeals for the Eighth Circuit

364 F.3d 925

April 16, 2004

April 16, 2004

Order/Opinion
150

4:01-cv-00830

Order

Pediatric Specialty Services v. Arkansas Department of Human Services

April 28, 2004

April 28, 2004

Order/Opinion
144

4:01-cv-00830

Third Amended Complaint

Pediatric Specialty Care Inc v. Arkansas Department of Human Services

May 14, 2004

May 14, 2004

Complaint

Resources

Docket

See docket on RECAP: https://www.courtlistener.com/docket/5129650/pediatric-specialty-v-arkansas-human-svc/

Last updated May 29, 2022, 3:27 a.m.

ECF Number Description Date Link Date / Link
267

ORDER denying 262 Motion to Compel . Signed by Judge William R. Wilson Jr. on 9/14/05. (dac )

Sept. 14, 2005

Sept. 14, 2005

RECAP
285

ORDER denying 275 Motion for Attorney Fees w/o prejudice and may be refiled after the Supreme Court renders a decision on the other issues before the Court. Signed by Judge William R. Wilson Jr. on 3/16/07. (mkf)

March 16, 2007

March 16, 2007

RECAP
330

ORDER DISMISSING CASE with prejudice. Signed by Judge Brian S. Miller on 11/13/08. (bkp)

Nov. 13, 2008

Nov. 13, 2008

RECAP

Case Details

State / Territory: Arkansas

Case Type(s):

Public Benefits/Government Services

Special Collection(s):

Olmstead Cases

Key Dates

Filing Date: Dec. 6, 2001

Closing Date: 2008

Case Ongoing: No

Plaintiffs

Plaintiff Description:

Plaintiffs are a number of healthcare providers and members of Arkansas's Medicaid-established Child Health Management Services program.

Plaintiff Type(s):

Private Plaintiff

Public Interest Lawyer: No

Filed Pro Se: No

Class Action Sought: No

Class Action Outcome: Not sought

Defendants

Arkansas Department of Human Services, State

Defendant Type(s):

Hospital/Health Department

Jurisdiction-wide

Case Details

Causes of Action:

42 U.S.C. § 1983

Medicaid, 42 U.S.C §1396 (Title XIX of the Social Security Act)

Constitutional Clause(s):

Due Process

Availably Documents:

Trial Court Docket

Complaint (any)

Injunctive (or Injunctive-like) Relief

Non-settlement Outcome

Any published opinion

Outcome

Prevailing Party: Mixed

Nature of Relief:

Injunction / Injunctive-like Settlement

Attorneys fees

Source of Relief:

Settlement

Litigation

Form of Settlement:

Voluntary Dismissal

Order Duration: 2007 - 0

Content of Injunction:

Preliminary relief granted

Issues

General:

Habilitation (training/treatment)

Juveniles

Public benefits (includes, e.g., in-state tuition, govt. jobs)

Wait lists

Disability:

Mental impairment

Benefit Source:

Medicaid