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Case 2:14-cv-07199-PD Document 7 Filed 12/23/14 Page 1 of 34

IN THE UNITED STATES DISTRICT COURT


FOR THE EASTERN DISTRICT OF PENNSYLVANIA
MELISSA MENDEZ, et al.
Plaintiffs
v.
BEVERLY D. MACKERETH, et al.

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Civ. A. No. 14-7199 (PD)

OPPOSITION TO PLAINTIFFS MOTION FOR A PRELIMINARY INJUNCTION

Gregory F. Cirillo
John J. Higson
Joshua D. Wolson
DILWORTH PAXSON LLP
1500 Market St., Suite 3500E
Philadelphia, PA 19102
(215) 575-7000 (telephone)
(215) 575-7200 (facsimile)
Counsel for Defendants

117992559_1

Case 2:14-cv-07199-PD Document 7 Filed 12/23/14 Page 2 of 34

TABLE OF CONTENTS
TABLE OF CONTENTS .............................................................................................................. i
BACKGROUND ........................................................................................................................... 2
A.

DHS Secures A Waiver For The Healthy Pennsylvania Program ................... 2

B.

Overview Of Healthy Pennsylvania .................................................................... 3

C.

The Transition From Traditional Medicaid To Healthy Pennsylvania ........... 6

D.

Plaintiffs Claims In This Case ............................................................................ 7

ARGUMENT ................................................................................................................................. 7
I.

THE COURT DOES NOT HAVE THE POWER TO ENTER A MASS


INJUNCTION, IN THE ABSENCE OF A CERTIFIED CLASS. ............................... 8

II.

PLAINTIFFS HAVE NOT SATISFIED THEIR BURDEN OF DEMONSTRATING


BY CLEAR EVIDENCE THAT THEY ARE ENTITLED TO THE
EXTRAORDINARY REMEDY OF A PRELIMINARY INJUNCTION. ................ 10
A.

Plaintiffs Will Not Succeed On The Merits Of Their Claims. ........................ 11


1.

2.

Plaintiffs cannot prove a due process violation. ................................... 12


a.

Plaintiffs have, at best, a marginal interest in the


services that DPWs changes will impact...................... 13

b.

Plaintiffs have not shown any risk of a deprivation of


their due process rights or that there is any value from
additional or substitute safeguards. .............................. 14

c.

Plaintiffs proposed additional or substitute notice


requirements would impose enormous additional fiscal
and administrative burdens on DHS. ............................ 18

The Court will have to defer to CMSs approval of the notices that
were sent and of DHSs methodology for determining medical frailty.
................................................................................................................... 19

B.

Plaintiffs Cannot Show That They Would Suffer An Irreparable Harm. .... 22

C.

Plaintiffs Proposed Injunction Would Harm The Commonwealth And Runs


Counter To The Public Interest. ........................................................................ 26
1.

Plaintiffs proposed remedy would cost the Commonwealth tens of


millions of dollars. ................................................................................... 26
i

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2.

III.

Plaintiffs proposed remedy would deprive people in their proposed


subclass of benefits that are newly available under Healthy PA PCO,
including prescription drug coverage. .................................................. 29

PLAINTIFFS PROPOSED REMEDY IS NOT TIED TO THE HARM THAT


THEY CLAIM. ............................................................................................................... 29

CONCLUSION ........................................................................................................................... 30

ii

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For more than a year, Pennsylvanias Department of Human Services (DHS)1 has
worked with the federal governments Centers for Medicare and Medicaid Services (CMS) to
negotiate approval for a program called Healthy Pennsylvania. Under that program, which
CMS has approved, Pennsylvania will expand the number of people eligible to receive Medicaid
services and make important changes to the services available to Medicaid recipients, including
the addition of a previously-unavailable prescription drug benefit for Pennsylvanias some of the
most needy residents. The Plaintiffs in this action want the Court to disrupt the carefullynegotiated compromise between DHS and CMS. There is no basis for the Court to take such a
drastic step. The evidence on which Plaintiffs base their extraordinary request for a preliminary
injunction takes the form largely of anecdotes and logical leaps. It is by no means the clear
evidence that the Supreme Court requires. See Mazurek v. Armstrong, 520 U.S. 968, 972 (1997).
In fact, Plaintiffs Motion is notable primarily for what it does not challenge. Plaintiffs
do not argue that the Commonwealth lacked authority to seek approval for the Healthy
Pennsylvania program, nor does it argue that CMS lacked the authority to approve it. Plaintiffs
also do not contend that Healthy Pennsylvania is substantively improper, or that CMS made
some error in approving Healthy Pennsylvania. Further, and perhaps most important, Plaintiffs
do not stand to lose their health coverage by any means they will remain in a coverage program
designed to meet their essential needs as mandated by the federal government.

Instead,

Plaintiffs only arguments focus on the process by which DHS has implemented an aspect of
Healthy Pennsylvania now that CMS has approved it. There is, however, no merit to Plaintiffs

Until recently, DHS was known as the Department of Public Welfare. References in this brief to DHS
include both the Department of Human Services and the Department of Public Welfare.

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challenges. They cannot show that they have suffered a due process violation, nor can they show
that they have suffered any irreparable harm.
In addition, Plaintiffs ignore entirely many of the collateral consequences of their
injunction demand.

First, while they might restore funding for transportation and dental

expenses, they would deprive themselves and many other members of their proposed class of a
new prescription drug benefit that is available to them under Healthy Pennsylvania. Second, the
relief that Plaintiffs seek from the Court would place DHS in violation of its agreement with
CMS. As a result, DHS could no longer obtain federal funding for the services that Plaintiffs
seek, and it would have to pay for those services entirely with state funds. The cost of paying for
such programs would be close to $500,000 every day, at a time that the Commonwealth faces a
budget deficit of more than $2 billion. If DHS were ordered to provide the services that
Plaintiffs demand, it would have to take the money from some other source. Plaintiffs would, in
effect, have the Court order DHS to rob Peter in order to pay Paul.
Ultimately, Plaintiffs own evidence demonstrates the flaw with the injunction that they
seek. The Declarations that Plaintiffs have submitted demonstrate that, to the extent that they
have a concern, channels exist to address those concerns. Given that impacted individuals can
have their cases heard on an individual basis to receive relief through existing channels, there is
no need for the Court to enter a mass injunction that would alter the status of nearly 50,000
individuals at the cost of many millions of dollars (in addition to the incredible administrative
burden), as Plaintiffs request.
BACKGROUND
A.

DHS Secures A Waiver For The Healthy Pennsylvania Program

Medicaid is the federal-state program under which the federal government furnishes
funding to states for the purpose of providing medical assistance to eligible individuals. See 42
2

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U.S.C. 1396a et seq. (the Medicaid Act). Pennsylvania administers Medicaid through
DHS. Although Medicaid ordinarily requires financial contributions from both the federal and
state governments, the Affordable Care Act (ACA) permits states to expand eligibility for
Medicaid and provides that the federal government will pay 100% of the costs for new services
in 2014, 2015, and 2016. See 42 U.S.C. 1396d(y)(1)(A). In addition, the ACA permits the
Secretary of Health and Human Services to authorize experimental, pilot or demonstration
projections that are likely to promote the objectives of the Medicaid Act. 42 U.S.C. 1315.
Pursuant to these provisions, on February 19, 2014, Pennsylvania submitted to the
Department of Health and Human Services (HHS) an application for the Healthy Pennsylvania
program as a Section 1115 waiver. Over the next six months, representatives of DHS and CMS
(which is a part of HHS) had extensive discussions about the Healthy Pennsylvania program, and
at CMSs behest, DHS made several changes to the program. (See Allen Declaration (Allen
Decl., attached hereto as Exhibit A). Then, in late August 2014, HHS approved a substantial
portion of Healthy Pennsylvania. Most importantly for present purposes, it approved DHSs
decision to eliminate dental coverage and transportation coverage from one of the programs
known as Healthy PA PCO, and DHSs decision to add a prescription drug benefit. Notably,
HHS expressly authorized DHS to forego the non-emergency transportation coverage for 2015,
but to add it again in 2016, after making revisions to the way that it is administered. HHS has
also approved the contracts that DHS has with private providers to offer insurance plans under
the Healthy PA PCO program. (See Id.)
B.

Overview Of Healthy Pennsylvania

Under the Healthy Pennsylvania program, Pennsylvania will offer six health plans. Three
of those, for children, pregnant women, and Medicare cost sharing, are not discussed in

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Plaintiffs papers and apparently are not relevant here. The other three programs are Healthy
Plus, Healthy, and Healthy PA PCO. Healthy Plus is available to anyone who is over the age of
65, and covers individuals disabled, pregnant, or determined to be medically frail. Healthy,
once approved by federal regulators, will be available to individuals who are not medically frail
and who are eligible for Medical Assistance, meaning that they qualify for Medicaid benefits
under federal Medicaid eligibility standards set forth in Pennsylvanias currently approved
Medicaid State Plan. Healthy PA PCO is available to individuals age 19 through 64 with income
at or below 133% of the federal poverty level who are not pregnant, not medically frail and not
otherwise eligible for Medical Assistance. Healthy PA PCO provides health care coverage to
participants through insurance plans that will provide essential health benefits that the ACA
requires, and CMS has approved the Commonwealths agreement with each of those insurance
plans for inclusion in Healthy PA PCO. (See Allen Decl.)
The assignment of a Healthy Pennsylvania participant turns on whether he or she is
determined to be medically frail. DHS has explained that consistent with the federally
defined standard medical frailty includes five categories: (a) disabling mental disorders; (b)
a diagnosis of an active chronic substance abuse disorders; (c) serious and complex medical
conditions; (d) physical or intellectual disability; and (e) a determination of disability based on
Social Security Administration criteria. (See Allen Decl.; Kelly Declaration (Kelly Decl.),
attached hereto as Exhibit B). Although Plaintiffs complain that DHS has not provided sufficient
detail about these categories, DHS has actually publicly provided significant detail about each
category. For example, disabling mental disorders include psychotic disorder, schizophrenia,
schizoaffective disorder, major depression, bipolar disorder, delusional disorder, and anxiety
disorder (such as obsessive compulsive disorder, post-traumatic stress disorder, or severe panic

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disorder). Serious and complex medical conditions include chemotherapy or radiation therapy
for cancer, hospice care, residency of a long-term-care facility or intermediate care facility (a
type of institutional setting), hemophilia, Gauchers disease, immune deficiency, HIV/AIDS,
sickle cell, cystic fibrosis or post-transplant of lung, heart, liver, pancreas, or small bowel,
ventilator dependent, receives dialysis treatments, or has 2 or more inpatient admissions within
12 months, 3 or more emergency room visits in six months, and four or more prescription
medications per month.
DHS has explained in public documents that it undertakes an annual process to determine
an individuals medical frailty. First, it analyzes claims data submitted to it by insurers annually
to identify individuals whose status might have changed based on the type of treatment that he or
she is seeking.

DHS does this automatically, without any submission from a particular

participant. DHS analyzes claims data using a program called the Chronic Illness and Disability
Payment System (CDPS), which is an industry-standard program that was developed at the
University of California San Diego. (See Allen Decl.; Kelly Decl.) Throughout their Motion,
Plaintiffs disparagingly refer to the process by which DHS makes the determination of medical
frailty as secret algorithms. (E.g., Mem. at 10.2) Contrary to Plaintiffs repeated assertions, there
is nothing mysterious or secret about the CDPS. It is widely used, there are public reports
available about the way that the software works, and anyone can acquire a copy.
Second, individuals can trigger a DHS review of their status. This can happen at any
time throughout the year, and a Healthy Pennsylvania participant need only complete a
designated form. (See Allen Decl.; Kelly Decl.) Moreover, each individual who is determined
eligible for Healthy Pennsylvania will be asked to complete a health screening form at annual

Citations to Mem. refer to the Memorandum of Law in Support of Plaintiffs Motion for a Preliminary
Injunction.

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renewal that permits DHS to identify individuals who are medically frail. (See Allen Decl.;
Kelly Decl.) When individuals make submissions to DHS, they are asked several questions.
These include questions with binary, yes-no answers that can trigger a determination of medical
frailty based on the definition of medical frailty. For example, a participant will be asked
whether she has been diagnosed with HIV/AIDS. An affirmative answer will trigger a finding of
medical frailty. Similarly, a participant will be asked whether she is currently undergoing
chemotherapy, which will also trigger a finding of medical frailty. However, in an effort to
capture even more of the population that might qualify as medically frail, DHS asks a series of
questions that, collectively, can trigger a determination of medical frailty. (See Allen Decl.;
Kelly Decl.) Those questions are not merely scored by an individual; they are reviewed by an
individual who makes a qualitative assessment. (See Allen Decl.; Kelly Decl.)
Third, DHS refers individuals who are determined to be medically frail to a clinical
validation team that reviews their records to confirm that they are, in fact, medically frail.
During the course of that determination, DHS provisionally qualifies each individual for the
Healthy Plus program, rather than the Healthy or Healthy PCO programs. (See Allen Decl.;
Kelly Decl.)
C.

The Transition From Traditional Medicaid To Healthy Pennsylvania

In early November 2014, DHS began sending pre-transition letters to Medicaid recipients
in Pennsylvania, alerting individuals to the fact that the medical assistance program under which
they were receiving health benefits was ending and noting the changes that were coming as part
of the Healthy Pennsylvania program. Among other things, the pre-transition letters encouraged
recipients to participate in a screening questionnaire, particularly if they had experienced a recent
change in their health. However, the pre-transmission letters did not make a determination about

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anyones status, and they therefore were not appealable. (See Webber Declaration (Webber
Decl., attached hereto as Exhibit C.)
In early December, DHS sent transition letters to individuals who receive medical
assistance. These transition letters informed each participant of the program into which he or she
had been assigned and provided information about a health screening questionnaire that
participants could complete in order to obtain a redetermination.
D.

Plaintiffs Claims In This Case

Despite the benefits that Healthy PA promises, Plaintiffs claim in this case that DHSs
assignment of them and members of a putative class to the Healthy PCO plan violates the due
process clause of the Fourteenth Amendment to the Constitution because the standards for those
assignments are supposedly not adequately disclosed to the Plaintiffs. (Compl. at 77-79.)3
Again, Plaintiffs do not complain about the legality of the program itself. Rather, they complain
that the process by which they were deemed not medically frail and the notice they received as
part of that determination violated due process. On December 22, 2014, they filed a motion to
proceed in forma pauperis, a motion for a preliminary injunction, and a motion for class
certification. As a remedy, Plaintiffs seek an Order to remain in programs which no longer will
exist as of January 1, 2015 or, alternatively, that 50,000 individuals automatically and without
evidence be deemed (by the Court presumably) to be medically frail, despite DHS
determinations to the contrary, and that they be placed in the Healthy Plus program.
ARGUMENT
Plaintiffs seek an extraordinary remedy, asking the Court to alter the carefully-negotiated
compromise between CMS and DHS that is Healthy Pennsylvania, but they offer very little

The Complaint has not yet been filed in this action. It is Exhibit 1 to Plaintiffs Motion to proceed in forma
pauperis.

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evidence to support their position. Indeed, a careful reading of their papers reveals that they rely
largely on anecdotes and logical leaps, rather than on the systematic evidence that they should
offer to justify an injunction that would alter the benefits that a class of approximately 50,000
people will receive from the government. The Court cannot enter the mass injunction that
Plaintiffs seek under the circumstances. At most, it can take up the case of Plaintiff Mendez, the
only named plaintiff who has been assigned to the Healthy PA PCO program. Moreover,
Plaintiffs failure of proof means that they cannot demonstrate any of the four elements for a
preliminary injunction. Even if they could make such a showing, the relief that they seek goes
well beyond the harm that they posit.
I.

THE COURT DOES NOT HAVE THE POWER TO ENTER A MASS


INJUNCTION, IN THE ABSENCE OF A CERTIFIED CLASS.
Plaintiffs want the Court to enter an injunction that would affect the Medicaid coverage

that DHS provides to all 50,000 people who have been assigned to Healthy PA PCO. They ask
the Court to do so even though no class has been certified and without even trying to show that
the anecdotal evidence that they offer is applicable to everyone in the program. Of course, it
cannot be the case that everyone who has been assigned to the Healthy PA PCO program is
medically frail, nor can it be the case that no one understood the letters that they received from
DHS. The Court therefore must reject the invitation to make Medicaid policy for an entire,
uncertified and likely disparate, class of people.
This Court cannot grant the mass preliminary injunction because there is no evidence that
everyone who will be impacted by such an injunction has been irreparably harmed nor is there
evidence that testifying Plaintiffs are similarly situated to all other Plaintiffs. See Adams v.
Freedom Forge Corp., 204 F.3d 475 (3d Cir. 2000) (reversing District Courts grant of a
preliminary injunction on the grounds that not every one of the plaintiffs testified or presented

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evidence of irreparable harm and that plaintiffs presented no evidence that strongly indicated
that all similarly situated [plaintiffs] necessarily risk some form of irreparable harm and thus they
could not be dealt with as a unit.); Byrd v. Aarons, Inc., No. CA 11-101, 2011 WL 2672009, at
*7 (W.D. Pa. June 16, 2011), report and recommendation adopted sub nom. Byrd v. Aarons
Inc., No. Civ. A. 11-101, 2011 WL 2672204 (W.D. Pa. July 8, 2011).

Indeed, although

plaintiffs are not required to show that every single member of the class will face irreparable
harm, neither is it sufficient to show that such harms might be experienced by a very few. One
cannot infer from the fact that a few members with unique problems might be able to meet the
standard that the impact is class wide. Cooper v. TWA Airlines, LLC, 274 F. Supp. 2d 231, 242
(E.D.N.Y. 2003).
Plaintiffs do not offer the specific evidence that is necessary. Clearly, they cannot offer
evidence from every member of their proposed class. Nor have they offered evidence that
strongly indicates that everyone who has been assigned to Healthy PA PCO faces a risk of
irreparable harm. Indeed, Plaintiffs own submission makes clear that they are all differently
situated. To start with, Plaintiffs suggest that many of them should have been deemed medically
frail and therefore enrolled in the Healthy Plus program. But they offer no evidence that
everyone in their proposed sub-class meets the definition of medical frailty, nor could they. In
addition, Plaintiffs posit a host of reasons why they might have been injured.

For some,

Plaintiffs claim that they did not receive a pre-transition letter or a transition letter at all. (Mem.
at 18.) For others, they claim that the recipient did not speak English and therefore could not
understand the letter. (Id. at 19, 24.) For others still, they claim that the recipient understood the
letter but was unable to speak to get through to a person at DHS. (Id. at 20.) Plaintiffs also base
their claims of injury on the reading comprehension levels of the members of their proposed

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class, without making any effort to account for differences among the 50,000 various members.
Mem. at 8.) These facts, scattered throughout Plaintiffs submissions, demonstrate an obvious
lack of consistent experience.
Aside from the multitude of experiences Plaintiffs cite, Plaintiffs infer that the experience
of a few applies to all members of their putative class. (Mem. at 9, 15, 19, 20, 28 (Many
recipients did not understand the pre-transition letter, [m]any Plaintiffs have urgent needs for
medical transportation and dental coverage, many Plaintiffs did not understand the notices,
many Plaintiffs did not undergo the health screening [and] many individuals who tried to reach
the numbers provided by DHS . . . found themselves unable to do so, [m]any individuals did
not receive the November 2014 pre-transition letter at all, and many of those who did receive it
did not understand it.)). However, they offer no evidence from which the Court can impute the
experience of the few declarants to all 50,000 members of their putative subclass. The Third
Circuit has specifically rejected this type of argument, noting that a conclusion that clear
evidence that most, but not all, individuals will be harmed was unacceptable. Adams, 204
F.3d at 487.
So too here. Plaintiffs have not satisfied the very heavy burden that they bear to permit
the Court to enter an injunction that would affect nearly 50,000 people based on the word of less
than 15. Therefore, the Court cannot enter a mass injunction that would impact individuals who
are not parties to this case.
II.

PLAINTIFFS HAVE NOT SATISFIED THEIR BURDEN OF DEMONSTRATING


BY CLEAR EVIDENCE THAT THEY ARE ENTITLED TO THE
EXTRAORDINARY REMEDY OF A PRELIMINARY INJUNCTION.
As the Supreme Court has observed, a preliminary injunction is an extraordinary and

drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the
burden of persuasion. Mazurek, 520 U.S. at 972 (emphasis in original); see also Sovereign
10

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Order of Saint John of Jerusalem-Knights of Malta by Coleman v. Messineo, 572 F. Supp. 983,
988 (E.D. Pa. 1983) (A preliminary injunction is an extraordinary and drastic remedy. The
power to issue an injunction should be used sparingly, and relief should not be granted except in
rare instances in which the law, the facts, and equities are clearly in the moving party's favor.).
Plaintiffs come nowhere close to satisfying that burden here, as an analysis of each element of a
preliminary injunction makes clear.
Moreover, Plaintiffs ask the Court, at least in part, for a mandatory injunction. In
particular, Plaintiffs ask either for the Court to preserve the status quo or to order DHS to order
DHS to reassign every member of the putative subclass to the Healthy Plus program. The latter
option would be a mandatory injunction, as it would require DHS to act, rather than to refrain
from acting. When seeking a mandatory preliminary injunction, the burden on the plaintiff is
particularly heavy. Philadelphia Housing Authority v. U.S. Dept. of Housing, 553 F.Supp.2d
433. 436 (E.D. Pa. 2008). Thus, mandatory preliminary injunctions are normally granted only
in those circumstances when the exigencies of the situation demand such relief and the facts and
the law are clearly in favor of the moving party. Messineo, 572 F.Supp. at 989.
A.

Plaintiffs Will Not Succeed On The Merits Of Their Claims.

Plaintiffs claim due process violations, even though none of them will lose health
coverage at any time. Yet Plaintiffs have no evidence to back up their claims. Indeed, most of
their complaints are little more than armchair quarterbacking DHSs choices about exactly what
to say and how to say it.

All of DHSs statements were reasonably designed to provide

information to Healthy Pennsylvania participants, and each of them received the information to
which he or she was entitled. In addition, CMS reviewed each of DHSs notices, and the Court
owes deference to that review.

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1.

Plaintiffs cannot prove a due process violation.

Plaintiffs only causes of action focus on whether they received due process.. It bears
repeating that they are not challenging DHSs power to obtain a waiver for Healthy
Pennsylvania, they are not challenging HHSs grant of a waiver to DHS, and they are not
challenging the substantive design of any aspect of Healthy Pennsylvania. They also are not
suggesting that they will lose Medicaid coverage, because they will not.

Instead, their

complaints fall generally into two categories: (i) complaints that DHS has not disclosed its
methodology in determining whether to assign individuals to the Healthy Plus program or the
Healthy PA PCO; and (ii) complaints that DHS has not adequately notified the Plaintiffs and
other Healthy Pennsylvania participants about their rights under the Healthy Pennsylvania
program. Plaintiffs are wrong as a matter of fact and of law. Indeed, none of the issues that they
identify rises to the level of a due process violation.
Section One of the Fourteenth Amendment provides that no State shall deprive any
person of life, liberty, or property, without due process of law . U.S. Const. Amend. XIV,
1. The Supreme Court has held that the identification of the specific dictates of due process
generally requires consideration of three distinct factors: First, the private interest that will be
affected by the official action; second, the risk of an erroneous deprivation of such interest
through the procedure used, and the probable value, if any, of additional or substitute procedural
safeguards; and finally, the Governments interest, including the function involved and the fiscal
and administrative burdens that the additional or substitute procedural requirement would entail.
Matthews v. Eldridge, 424 U.S. 319, 335 (1976). Here, the none of these factors justifies the
extraordinary relief that Plaintiff seeks.

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a.

Plaintiffs have, at best, a marginal interest in the services that


DPWs changes will impact.

Plaintiffs claim a very strong interest in continuing to receive dental care and
transportation, as well as in a vague sense that they are treated fairly by the government.
(Mem. at 15-16.) Neither of these interests aids Plaintiffs cause, however. The services in
question dental care and non-emergency transportation are optional under Medicaid.4 That
means that DHS has a clear right to remove those services from its Medicaid plan without
violating the Medicaid Act. Indeed, Plaintiffs do not claim that the removal of those benefits
violates federal law; they just claim they needed more notice of the removal. While Plaintiffs
might have some interest in a change that alters benefits to which they were previously entitled,
that interest is necessarily limited, given that DHS has the right not to offer those services and
that HHS approved DHSs decision to change the coverage for the affected group.
There is also no basis for Plaintiffs assertion of a right to be treated fairly, a purely
subjective standard that would open the floodgates for federal lawsuits merely because someone
feels aggrieved.

Courts routinely reject the notion that citizens have a general interest in

ensuring that the government complies with the law. See, e.g., Hein v. Freedom From Religion
Found., Inc., 551 U.S. 587, 601 (2007) (describing basic constitutional principle that a
plaintiff raising only a generally available grievance about governmentclaiming only harm to
his and every citizens interest in proper application of the Constitution and laws, and seeking
relief that no more directly and tangibly benefits him than it does the public at largedoes not

The Affordable Care Act requires offered plans to include coverage for essential health benefits. The
definition of essential health benefits does not include non-emergency medical transportation or dental care for
adults. Instead, at minimum, plans must only include coverage for the following: ambulatory patient services;
emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services,
including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices;
laboratory services; preventive and wellness services and chronic disease management; pediatric services, including
oral and vision care. 42 U.S.C. 18022(b)(1).

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state an Article III case or controversy.) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555,
573-74 (1992)); Christie v. President of U.S., 532 F. Appx 88, 89 (3d Cir. 2013), cert. denied
sub nom., Christie v. Obama, 134 S. Ct. 1309 (2014), rehg denied, 134 S. Ct. 1928 (2014)
(There is no general, citizen standing to challenge government actions.) (citation omitted);
Common Cause of Pennsylvania v. Pa., 558 F.3d 249, 258 (3d Cir. 2009) (It is not enough to
assert a generalized, abstract grievance shared by a large number of similarly situated people.).
For the same reason, there cannot be a protected interest in ensuring that an individual feels like
he or she has been treated fairly. Indeed, if the law permitted anyone who feels aggrieved by
government action to bring suit, there would be a floodgate effect at the doors of federal
courthouses across the country. Notably, the only case that Plaintiffs cite for this novel right is a
decision from the District of New Hampshire nearly 40 years ago and that is readily
distinguishable from the case at hand. (Mem. at 16 (citing Baker-Chaput v. Cammett, 406 F.
Supp. 1134, 1140 (D.N.H. 1976)).5 That single outlier case does not establish the broad right
that Plaintiffs want this Court to adopt.
b.

Plaintiffs have not shown any risk of a deprivation of their due


process rights or that there is any value from additional or
substitute safeguards.

None of the supposed violations that Plaintiffs posit actually puts them at risk of a
violation of their due process rights, either with respect to the way that DHS disclosed its
methodology to determine medical frailty or with respect to the letters that DHS mailed.
DHS made public disclosures about the factors that it would consider to determine
medical frailty. CMS approved those factors, and the disclosures. Plaintiffs have not suggested
5

In Baker-Chaput, the sole criteria for eligibility for general public assistance was financial need and an
inability to support ones self. See Baker-Chaput, Id.at 1137. The court held that this was not sufficient to inform
plaintiff whether she was eligible for general assistance benefits or not. Here, in contrast, there are objective factors
which determine whether someone is medically frail and therefore eligible for the Healthy Plus program. Moreover,
there are various public touchstones that DPW has made publicly available for Medicaid applicants and recipients,
describing medical frailty.

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that they would have done anything differently, or that the outcome of their determinations
would have changed, if DHS had made additional disclosures. Indeed, Plaintiffs positions are
largely contradictory in this respect. On the one hand, they claim that their level of reading
comprehension is so poor that they cannot understand the one-page letters that DHS mailed to
them. On the other hand, they argue that they need detailed public disclosures about the
methodology that DHS employs in making determinations of medical frailty. In reality, DHS
has provided a great deal of information about its methodology, and no additional disclosure
requirement would further protect a Plaintiff against an erroneous determination. Rather, the
protections that Plaintiffs need are procedural, and they exist, in the form of a right to an appeal
and the right to ask DHS, at any time, for a requalification. Those protections also include
DHSs annual requalification process, which happens automatically.
Plaintiffs argue that DHS should have shared the standards that affect eligibility with
public benefits recipients themselves. (Mem. at 18.) DHS did just that when it published the
basis on which it would make a medical frailty determination. Due process does not require
more.
Plaintiffs arguments also fail with respect to the letters that DHS sent. In the Medicaid
context, a notice must contain:
(a) A statement of what action the State . . . intends to take;
(b) The reasons for the intended action;
(c) The specific regulations that support, or the change in Federal or
State law that requires, the action;
(d) An explanation of
(1) The individuals right to request an evidentiary hearing if
one is available, or a State agency hearing; or

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(2) In cases of an action based on a change in law, the


circumstances under which a hearing will be granted; and
(e) An explanation of the circumstances under which Medicaid is
continued if a hearing is requested.
42 C.F.R. 431.210. The state agency must also send the notice at least ten (10) days before the
date of action. 42 C.F.R. 431.211. Both the pre-transition letters and the transition letters
satisfy these standards.
In the pre-transition letters that were sent to consumers who would likely be enrolled in
the Healthy PA PCO program, DPW explains that the individual will likely begin to receive
Healthy PA PCO benefits and describes the coming changes. Indeed, in the pre-transition letters,
participants are told that there will be upcoming changes in Medical Assistance coverage
brought on by the Commonwealths new Healthy Pennsylvania initiative. (See Exhibits K,
L, M to the Hayes Declaration (Hayes Decl.), at 1.6) It advises consumers that the coverage
that participants are receiving may change as of January 1, 2015. (Id.) It includes a list of
services that will be covered under the new plan. Notably, dental and transportation are not on
that list. It also explains the reasons for the change the change in law to make Healthy
Pennsylvania the process by which Medicaid benefits are administered in Pennsylvania and the
basis for DHSs determination a review of the information in the individuals records that DHS
has on file. The letters also tell consumers what steps they can take, including filling out a health
screening questionnaire to obtain a redetermination. It also tells consumers how to choose an
approved plan under the PCO. It also informs consumers how they can seek DHSs further
review. Notably, the pre-transition letter did not include a notice of a right to appeal because the

Citations to Hayes Decl. refer to the Declaration of Louise Hayes, filed in Support of Plaintiffs Motion for
Preliminary Injunction at Docket No. 4.

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letter was not a final action. These simple, one-page letters provide all of the information that
federal law requires.
The transition letters also provide relevant information in a clear, easy-to-understand
format that satisfies federal law. They explain the action that DHS has taken it has placed the
recipient in the Healthy PA PCO program. It also explains the legal basis for the change and
explains the impact of the change. Moreover, it specifically explains what to do if the recipient
do[es] not agree with our decision. Again, these letters provide straightforward information,
and it is not clear that any additional information would have changed the outcome.
Plaintiffs repeatedly point to evidence of problems that some of them encountered during
the process of questioning or challenging their enrollment in the Healthy PA PCO program.
However, in any program involving hundreds of thousands of determinations, there are going to
be errors, and there are going to be frustrations with customer service. Plaintiffs, however, have
not identified any way in which the changes that they posit would in any way prevent those
normal errors. Nor have they put forth any evidence to suggest that the isolated errors that they
have identified actually indicate some sort of systemic problem.
Plaintiffs argue that they were entitled to an individualized explanation of the reason for
DHSs determination. (Mem. at 23-24.) However, the cases that Plaintiffs cite for that point are
off the mark. This is not a case where DHS has made a quantitative calculation that it can share
with the Plaintiffs. Instead, this is a case where DHS made a qualitative determination that
Plaintiffs and other individuals are not medically frail. It has shared that determination in its
letters, and that is the explanation for the action that DHS has taken, as the Third Circuit
requires. Ortiz v. Eichler, 794 F.2d 889, 892 (3d Cir. 1986); see also Adams v. Harris, 643 F.2d
995, 998-99 (4th Cir. 1981) (rejecting due process challenge to SSI reconsideration denials that

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did not contain individualized medical or vocational reasons for each denial where notices set
forth steps to be taken for further review). DHSs determinations complied with federal law and
with the Constitution, and the Court should reject Plaintiffs suggestion that due process requires
ever more detail.
c.

Plaintiffs proposed additional or substitute notice


requirements would impose enormous additional fiscal and
administrative burdens on DHS.

The final balancing factor under Mathews requires the Court to consider the
governments interest, including the function involved and the fiscal and administrative burdens
that the additional or substitute procedural requirement would entail. Mathews, 424 U.S. at
335. Here, Plaintiffs would impose on DHS an almost infinite administrative burden, which
would come at great cost and at the expense of anything resembling efficient implementation of
a vital government program.
DHS has been clear about what will lead it to conclude that an individual is medically
frail.

Indeed, it has provided an objective list of conditions that will result in a per se

determination of medical frailty. Plaintiffs complaints effectively focus on people who do not
fall into one of those per se categories.

For those individuals, DHS makes a qualitative

assessment, based on the information that it can gather. There is no way for DHS to disclose
publicly how it will address every situation that it might encounter. Plaintiffs request for more
extensive disclosure would impose on DHS the obligation to hypothesize situations that it might
encounter and make a preliminary determination about how it would deal with those situations.
That is an impossible burden.
Similarly, the myriad of complaints that Plaintiffs raise about the pre-transition and
transition letters that DHS mailed would also impose an impossible burden on DHS. For
example, Plaintiffs complain that DHS mailed letters in English and Spanish, but not in other
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languages.

(Mem. at 19, 21.)

Obviously, adding additional language would dramatically

increase the costs and administrative burdens on DHS, both to prepare the letters and to keep
track of who gets a letter in which language. Similarly, Plaintiffs complain that DHS did not
provide a more detailed statement of its reasoning for determining that individuals are not
medically frail. However, DHS was faced with the task of making hundreds-of-thousands of
determinations. This was not a case where those determinations were quantitative; they were
qualitative. If DHS had to prepare an individual written explanation for every person who was
deemed not to be medically frail, the process would never be completed, and DHS personnel
could never focus on the actual provision of medical assistance under Medicaid. To the extent
an individual disagrees, he can appeal, or ask for a re-review. Indeed, it is notable that one of
Plaintiffs own declarants pursued a remedy and received relief. (Daniels Decl. 8.) Simply
put, the burdens that Plaintiffs propose to impose would be so dramatic that the Constitution
cannot possibly require them, but the process exists to accommodate individual concerns.
2.

The Court will have to defer to CMSs approval of the notices that
were sent and of DHSs methodology for determining medical frailty.

At its heart, Plaintiffs action challenges the Secretary and DHSs authority to implement
Healthy Pennsylvanias PCO benefits.

DHS has implemented Healthy Pennsylvania PCO

through a combination of a state plan amendment under Section 1902 of the Social Security Act
and a demonstration project under Section 1115. See 42 U.S.C. 1396a. Specifically, in August
2014, CMS approved Pennsylvanias application under Section 1115 for the Healthy
Pennsylvania project. (See Allen Decl.) The approval noted that some of the benefits would be
implemented through a state plan amendment (SPA).

(Id.)

In November 2014, DHS

submitted the Notices to CMS for comment, and incorporated CMSs substantial edits into the

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final version of the Notices. On December 17, 2014, CMS approved SPA PA-14-0049, which
contained Healthy Pennsylvanias PCO.
Section 1902 of the Social Security Act sets forth the statutory requirements that a SPA
must satisfy to be eligible to receive federal medical assistance under Medicaid. See 42 U.S.C.
1396a. CMS is the division of HHS tasked with ensuring that state plans comply with those and
other requirements of the Medicaid Act. Christ the King Manor, Inc. v. Secy U.S. Dept of
Health & Human Servs., 730 F.3d 291, 297 (3d Cir. 2013). Once a State submits their proposed
plans to CMS, the agency reviews each plan, make[s] a determination as to whether it conforms
to the requirements for approval, 42 U.S.C. 1316(a)(1), and approve[s] any plan which
fulfills the conditions specified in Medicaid, 42 U.S.C. 1396a(b). See Christ the King Manor,
Inc., 730 F.3d at 297.
Furthermore, Section 1115 of the Social Security Act allows the Secretary of Health and
Human Services (Secretary) to waive requirements of a states Medicaid plan for any
experimental, pilot, or demonstration project which, in the judgment of the Secretary, is likely to
assist in promoting the objectives of [Medicaid].... 42 U.S.C. 1315(a)(1). Similar to State
Plan, States submit waiver requests under Section 1115 to CMS, which then makes a
determination and approves such requests.
Challenges to administrative agency actions like the Plaintiffs are analyzed under the
Administrative Procedure Act. Under the Administrative Procedure Act, courts may only set
aside agency action which is arbitrary, capricious, an abuse of discretion or otherwise not in
accordance with law, or which is conducted, without observance of procedure required by law .
. . . Nazareth Hosp. v. Secy U.S. Dept of Health & Human Servs., 747 F.3d 172, 181 (3d Cir.
2014) (quoting 5 U.S.C. 706(2)(A) & (D)) (emphasis added). The Third Circuit has explicitly

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held that SPA approvals are ... the type of agency action that warrants Chevron deference.
Christ the King Manor, Inc., 730 F.3d at 307. Deference, based on the Chevron, U.S.A. Inc. v.
Natural Res. Def. Council, Inc. 467 U.S. 837 (1984) requires a two-step analysis: First, we
determine whether Congress has directly spoken to the precise question at issue. If it has, we
must effectuate the intent of Congress. If not, we must determine whether the agencys
construction of the statute is permissible. Pa. Dept of Public Welfare v. U.S. Dept of Health
and Human Servs., 647 F.3d 506, 511 (3d Cir. 2011) (DPW) (internal quotations and citations
omitted). Similarly, in applying the arbitrary and capricious standard to challenges to the
Secretarys approval of a Section 1115 waiver program, the Third Circuit has consistently held
that such review is limited to whether the Secretary rationally found the program likely to
advance the objectives of Medicaid. Nazareth Hosp., 747 F.3d at 181 (emphasis added) (citing
C.K. v. New Jersey Dep't of Health & Human Servs., 92 F.3d at 185)); see also G. v. Hawaii, 676
F. Supp. 2d 1006, 1013 (D. Haw. 2009) (considering Medicaid beneficiaries action against the
State of Hawaii for implementation of a Section 1115 waiver program under the arbitrary and
capricious standard). The applicable standard of review for such a challenge is a narrow one.
C.K. v. New Jersey Dep't of Health & Human Servs., 92 F.3d 171, 185 (3d Cir. 1996) (quoting
Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 824, 28
L.Ed.2d 136 (1971)). [I]f the Secretary determines that an experimental waiver project is likely
to advance the goals of Medicaid, she has significant authority to determine the precise scope of
the project. Nazareth Hosp., 747 F.3d at 181; see also 42 U.S.C. 1315(a)(1)-(a)(2).
Here, Plaintiffs will not succeed on the merits of their challenge to the administrative
implementation of the Healthy Pennsylvania program. Quite simply, Plaintiffs cannot overcome
the deference that must be given to CMSs approval of Healthy Pennsylvania PCO benefits.

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CMS has found that the Healthy Pennsylvania PCO benefits comply with Medicaid. Likewise,
CMSs review of the Notices must be accorded deference because DHS implemented CMSs
comments into the Notices. Plaintiffs will not be able to prove that their evaluation of the
Notices is superior to that of CMS.
Indeed, Plaintiffs had their chance to stop implementation of Healthy Pennsylvania PCO
benefits by convincing CMS of their position through the notice and comment process. The
Affordable Care Act required CMS to establish a process to provide for public notice and
comment on the State level and at the Federal level once an application for a demonstration is
received by the Secretary. 77 F.R. 11678-01; see also 42 C.F.R. 431.416(b). Indeed, CMS
maintains the comments on its website. CMS Public Comments for Healthy Pennsylvania
Demonstration, https://public.medicaid.gov/connect.ti/public.comments/view?objectId=1852995
(last visited Dec. 22, 2014).
B.

Plaintiffs Cannot Show That They Would Suffer An Irreparable Harm.

Plaintiffs claim that DHSs actions in making critical decisions affecting their health
care without telling them

how or why will cause them irreparable harm. (Mem. at 27.)

Plaintiffs allege irreparable harm based on three premises. First, they speculate that the Healthy
PA PCO benefits plan will result in the quick deterioration of plaintiffs health. (Id. at 29.)
Second, they claim that DHS made a determination as to their medical-frailty status without
identifying the methodology used or basis for the determination. (Id. at 7-13; 27-30.) Third,
Plaintiffs allege that the pre- and post-transition letters gave inadequate notice of the change in
benefits and did not properly articulate how to appeal the determination. (Id.) At best, these
unsupported and internally inconsistent claims are speculative and irrelevant to the Courts
focus. And given the fact that Plaintiffs could have availed themselves, and continue to be able

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to avail themselves, of multiple avenues of relief, they cannot possibly meet their burden to
receive the extraordinary relief they seek from the Court.
In order for a movant to be granted a preliminary injunction, a clear showing of
immediate irreparable injury is required. Louis v. Bledsoe, 438 Fed. Appx. 129, 131 (3d. Cir.
2011) (citing Continental Group, Inc. v. Amoco Chemicals Corp., 614 F.2d 351, 359 (3d. Cir.
1980)). This requirement is met if a plaintiff demonstrates a significant risk that he or she will
experience harm that cannot adequately be compensated after the fact by monetary damages.
Adams v. Freedom Forge Corp., 204 F.3d 475, 484-85 (3d Cir. 2000) (citing Franks GMC
Truck Center, Inc. v. General Motors Corp., 847 F.2d 100, 10203 (3d Cir. 1988)). This is not
an easy burden. Id. The claimed injury cannot be uncertain or speculative. Abdul-Akbar v.
McKelvie, 239 F.3d 307, 322 (3d. Cir. 2001). Further, where there is no possibility of irreparable
harm, the Third Circuit has held that there is no need to reach the question of whether a plaintiff
is reasonably likely to succeed on the merits. Bennington Foods LLC v. St. Croix Renaissance,
Group, LLP, 528 F.3d 176, 179 (3d. Cir. 2008). Absent a showing of an immediate threat of
injury, Plaintiffs preliminary injunction cannot be granted.
As a preliminary matter, key to this analysis is the fact that no one is losing health
insurance. Despite their best attempts to paint a picture of government heavy-handedness, even
the Plaintiffs cannot allege otherwise. Thus, their sweeping contention that the loss of medical
benefits and subsequent inability to obtain care constitutes irreparable harm (Mem. at 29) is
irrelevant to the issues before this Court. Not only are Plaintiffs not losing health insurance, but
they are not even claiming that DHSs changes will require them to forego medical care. As
such, Plaintiffs have failed to meet their heavy burden of establishing irreparable harm. See
Adams, 204 F.3d at 486 (district court erred in granting a preliminary injunction on the basis that

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the purported class of plaintiffs would have to forego medical care and thus suffer irreparable
harm when only a small percentage of the plaintiffs testified, and that even among those who
did, many did not present any evidence (or even make an assertion) that they would have to
forego medical care or other necessities if the proposed change were to take effect).
Plaintiffs attempt to further support their Motion by claiming the array of services
authorized under Healthy PA PCO are inadequate for their needs and that this will cause
irreparable injury. Yet Plaintiffs own declarations do not support this broad claim. Other than
worries over the change to their benefits, the declarations contain no reference to, and certainly
do not articulate, what exactly will be jeopardized under the Healthy PA PCO. Additionally,
these contentions are based solely on their personal opinion, even though DHS and CMS have
determined that the services will be adequate.
Moreover, sweeping and unsupported statements such as Plaintiffs cannot otherwise
afford [dental coverage and transportation to their medical appointments] on their income of less
than $205 per month, (Mem. at 15), or that [w]ithout the ability to get to doctors
appointments, Plaintiffs health may deteriorate quickly (Mem. at 29), cannot salvage their
irreparable harm claim. It is based solely on speculation and worry about the impact of the lack
of routine dental care and non-emergency transport. While those concerns might be
understandable, they do not show irreparable harm for 50,000 people.
Plaintiffs evidence is anecdotal, highly-individualized, and internally contradictory.
Though they assert that a lack of transparency and inadequate notice violate their due process
rights, Plaintiffs themselves admit that these procedures were not the same for all purported class
members. Some individuals simply had their claims data analyzed by DHS (Mem. at 7), while
others were sent a pre-transition letter and asked to complete a questionnaire (Mem. at 7-8).

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Of those that actually completed the questionnaire and had their answers analyzed again, some
were deemed medically frail, while others were not (Mem. at 10-11), and of those that were not,
only some took advantage of the appeals process. (Mem. at 11.) By the very nature of their
argument, Plaintiffs alleged harms are specific to their circumstances and level of engagement.
Finding one irreparable harm across the vast swath of 50,000 purported Plaintiffs, the vast
majority of whom this Court has no information on or testimony from, is impossible.
Plaintiffs also cannot claim to be irreparably harmed when there are multiple ways in
which they can appeal or challenge their classification. Specifically, there are three ways in
which plaintiffs could seek further relief: (1) at any time, Plaintiffs could have, and still can,
simply resubmit their questionnaire; (2) Plaintiffs could directly appeal their classification; and
(3) annually, there is an automatic review of Plaintiffs status. As irreparable harm cannot be
found unless the alleged injury is likely, Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22
(2008) (citation omitted) (plaintiffs seeking preliminary relief to demonstrate that irreparable
injury is likely in the absence of an injunction.), Plaintiffs cannot prevail as the appeal and
review process renders any alleged injuries unlikely.
Plaintiffs contentions that these avenues of appeal are insufficient is anecdotal and
highly individualized, and they offer no evidence that would allow this Court to find such issues
exist across the 50,000 purported class members. Moreover, it is directly contradicted by their
own declarations. See (Daniels Decl.; J.F. Decl.; Eden Decl.) As the appeals processes are
effectual and accessible, any injuries claimed by plaintiffs are speculative at best. As speculative
injuries are not the kind of harm preliminary injunctions were meant to address, Dziewa v. Pa.
Interscholastic Athletic. Assn, No. CIV.A. 08-5792, 2009 WL 113419, at * 7 (E.D. Pa. 2009),

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and because there are numerous avenues through which plaintiffs can challenge or appeal their
classification, plaintiffs cannot demonstrate that their alleged injuries are likely.
C.

Plaintiffs Proposed Injunction Would Harm The Commonwealth And Runs


Counter To The Public Interest.
1.

Plaintiffs proposed remedy would cost the Commonwealth tens of


millions of dollars.

The preliminary injunction that Plaintiffs seek would put DHS in the position of
providing services that CMS has not approved, either in the current programs (which will go
away on January 1) or through Healthy Plus. Either way, if DHS provides services that CMS has
not approved, then it cannot obtain a federal payment for those services. As a result, complying
with the injunction that Plaintiffs seek would cost DHS nearly $500,000 every day. Although
Plaintiffs minimize the significance of these costs, their sheer scale weighs heavily against the
entry of a preliminary injunction, particularly because Pennsylvanias General Assembly has not
appropriated money for such expenses and the Commonwealth faces a budget deficit of
approximately $2 billion.
DHS has received approval from CMS for the SPA that implements the Healthy
Pennsylvania program.

That approval is significant because, among other things, it is the

mechanism that permits DHS to receive payments from the federal government for the costs
incurred. In this context, it is vital because the Affordable Care Act will pay 100% of DHSs
additional Medicaid costs for the next two years. But that will only be true if DHS adheres to the
agreement that it has with CMS. If DHS provides services that differ from the services that CMS
has approved, it must fund them itself. If DHS had to maintain the current programs for all
50,000 individuals assigned to the Healthy PA PCO program, it would cost between $150
million and $175 million per year, or between $400,000 and $479,000 per day. (Id.)

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When attempting to balance the possibility that particular individuals may not receive
certain medical services against the certain, and often dire, fiscal consequences faced by a state
that is compelled to provide those services, numerous courts have held that both the balance of
the harms and the public interest counseled against an injunction. The United States District
Court for the District of Kansas confronted this difficult equation in Kansas Hospital Association
v. Whiteman, 835 F.Supp. 1556 (D. Kan. 1993), affd, 36 F.3d 1106 (10th Cir. 1994). In
Whiteman, an uncertified class of potential Medicaid patients and a group of hospitals challenged
a proposed state regulation increasing the Medicaid copayment for hospital admission from $25
to $325. Id. at 1559-60. The plaintiffs sought a preliminary injunction barring implementation
of the new regulation. Id. at 1560. The court, however, found that the speculative nature of that
harm [possible non-receipt of care in some instances] must be weighed against the certainty of
the budgetary impact on the state if the preliminary injunction were to be granted. Id. at 1564
(emphasis in original). The court held that the certain impact of the requested injunction on the
states budget and Medicaid costs warranted denying the injunction. Id. at 1565. In affirming
the district court, the Tenth Circuit reasoned: The [lower] court found that the impact of a
preliminary injunction would be certain and immediate.

Due to budgetary constraints

established by the Kansas legislature, other reductions in the SRS budget would likely have to be
found resulting in cuts to other programs. 36 F.3d at *2.
This case presents an even more compelling, and more severe, set of fiscal circumstances
requiring the denial of the requested injunction. 4. By transitioning the uncertified class of
Plaintiffs from the GA-MA program to Healthy Pennsylvania, DHS will recognize a cost-savings
of approximately $82 million in FY 14-15 and $363 million in FY 15-16. (See Spishock
Declaration (Spishock Decl.), attached hereto as Exhibit D.) In addition to this significant cost

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reduction, the transition, in the judgment of DHS, will actually improve the benefits that the
proposed class will receive. Thus, unlike Whiteman, this is not merely a case involving a
judgment about costs. Rather, DHS concluded that it could achieve cost-savings while also
improving the quality of services, viewed as a whole, for the individuals at issue.
Whiteman, moreover, is not alone in recognizing the importance in this context of a
states fiscal consequences, and the incidental effects on the public at large, where a plaintiff
asks a court to second-guess agency decision-making and to impose considerable, unanticipated
costs on carefully formulated Medicaid budgets. See Illinois League of Advocates for the
Developmentally Disabled v. Illinois Dept. of Human Services, No. 13 C 1300, -- F.Supp.2d --,
2014 WL 3605633, at **24-25 (N.D. Ill. July 21, 2014) (finding plaintiffs interests in
placements in particular types of programs for developmentally disabled individuals did not
outweigh states interest, and therefore the publics interest, in right to administer its budget and
make policy decisions with the goals of easing burdens on taxpayers while efficiently serving the
greatest number of citizens); M.R. v. Dreyfus, No. C10-2052Z, 2011 WL 31553, at *11 (W.D.
Wash. Jan. 5, 2011) (DSHS has conducted a comprehensive review to determine how to best
accomplish its fiscal goals, and it has applied its expertise in weighing the competing interests of
the various clients it serves. The court is in no position to substitute its judgment for that of
DSHS concerning which programs will be least affected by budget curtailments.); see also
Frederick L. v. Dept. of Public Welfare, 364 F.3d 487, 498 (3d Cir. 2004) (noting, in context of
fundamental alteration defense analysis, that the judiciary is not well-suited to superintend the
internal budgetary decisions of DPW or evaluate its physical plant needs).

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2.

Plaintiffs proposed remedy would deprive people in their proposed


subclass of benefits that are newly available under Healthy PA PCO,
including prescription drug coverage.

Plaintiffs want the Court to preserve the status quo by preventing DHS from
implementing the Healthy PA PCO program and instead preserving the Medicaid programs that
exist currently. Even if that were technically possible and it is not, given the substantial efforts
that DHS has made to update its systems for the transition to Healthy Pennsylvania there would
be no basis for such an injunction because it would cause substantial public harm. Although
Plaintiffs repeatedly characterize the implementation of Healthy PA PCO as a cut in services
(e.g., Mem. at 3), the reality is not that simple. In fact, while members of the Healthy PA PCO
program stand to lose some services, they also stand to gain others that were not previously
available to them. Most notable among those services is a prescription drug benefit that DHS
and CMS have determined is more important than the transportation or dental services about on
which Plaintiffs focus. Depriving tens of thousands of Pennsylvanians of a prescription drug
benefit that the federal government will fund cannot possibly be in the public interest.
III.

PLAINTIFFS PROPOSED REMEDY IS NOT TIED TO THE HARM THAT


THEY CLAIM.
Plaintiffs want the Court to undo a carefully-negotiated compromise between HHS and

DHS, and to order substantive changes to the Medicaid services that DHS provides to
approximately 50,000 people, based not on anything substantive, but rather on alleged failures of
disclosure. As discussed above, DHSs disclosures were constitutionally adequate. However,
even if they were not, if a constitutional violation is found, the task is to correct, by balancing of
the individual and collective interests, the condition that offends the Constitution. Resident
Advisory Bd. v. Rizzo, 564 F.2d 126, 145 (3d Cir. 1977). Thus, [o]nce a constitutional violation
is found, a federal court is required to tailor the scope of the remedy to fit the nature of the

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violation. Id. (internal quotations omitted). In short, the federal equitable remedy must cure
the constitutional defect but the dosage must not exceed that necessary to effect the cure. Id.
Plaintiffs proposed injunction goes well beyond the problem about which they have filed
suit. If the Court were to find that DHS did not make adequate disclosures, the remedy is not to
move all 50,000 people into the Healthy Plus program an order that would effectively
determine that all 50,000 people are medically frail and entitled to a higher level of Medicaid
service. Instead, the remedy is to cure the disclosure problem. For example, Plaintiffs complain
that some people did not receive notice in a timely manner, and they somehow lost a right of
appeal. (Mem. at 12.) If that is the case, then the remedy is to reset the time to appeal; it is not
to second-guess the determination itself. Similarly, Plaintiffs complain that some people did not
receive a notice at all. Again, the remedy for such a failure, if they can prove that it violates due
process, is to reissue the notice. It is not to change the substantive decision. Plaintiffs proposed
Order is wildly overbroad, it is not tailored to the violations that they posit, and the Court
therefore must reject it.
CONCLUSION
For the foregoing reasons, the Court should not substitute its judgment about the proper
Medicaid services available to 50,000 Pennsylvanians in lieu of the carefully-negotiated program
that DHS and HHS have approved. It should therefore deny Plaintiffs Motion.

John J. Higson
Gregory F. Cirillo
John J. Higson
Joshua D. Wolson
DILWORTH PAXSON LLP
1500 Market St., Suite 3500E
Philadelphia, PA 19102
(215) 575-7000 (telephone)
(215) 575-7200 (facsimile)
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Case 2:14-cv-07199-PD Document 7 Filed 12/23/14 Page 34 of 34

CERTIFICATE OF SERVICE
I, John J. Higson, hereby certify that on this 23rd day of December, 2014, I caused a true
and correct copy of the foregoing Opposition to Plaintiffs Motion for a Preliminary Injunction to
be filed with the Courts CM/ECF system and therefore to be served upon all counsel of record.

/s/ John J. Higson


John J. Higson

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