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Clinton L. v. Wos

United States District Court, M.D. North Carolina

August 28, 2014

CLINTON L., et al., Plaintiffs,
v.
ALDONA WOS, in her official capacity as Secretary of the Department of Health and Human Services, and PAMELA SHIPMAN, in her official capacity as CEO and Area Director of the Piedmont Behavioral Healthcare Local Management Entity, Defendants.

MEMORANDUM OPINION

N. CARLTON TILLEY, Jr., Senior District Judge.

This case involves the reduction of a state-funded service available to community-based individuals suffering from mental retardation and/or mental illness. Plaintiffs filed the instant action contending that the reduction would either cause their service providers to withdraw from providing the relevant service or to offer the service at a reduced level, thus placing them at risk of institutionalization in violation of Title II of the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12132, and Section 504 of the Rehabilitation Act, 29 U.S.C. § 794. Moreover, Plaintiff Timothy B., who, in addition to mental retardation and mental illness, suffers from deafness, separately claims that Defendants have failed to provide him effective, accessible communication or appropriate auxiliary aids in the delivery of services in violation of 28 C.F.R. § 35.160. Following thirty-nine days of evidence and argument, it is concluded that Plaintiffs have been unable to carry their burden as to each of their claims. This Memorandum Opinion states the Court's findings of fact and conclusions of law.[1]

I.

The North Carolina Department of Health and Human Services ("DHHS") uses both Medicaid and non-Medicaid (i.e., state and local) funds to provide mental health, developmental disability, and substance abuse services to qualifying individuals. See N.C. Gen. Stat. §§ 143B-137.1; 122C-112.1. Pursuant to N.C. Gen. Stat. § 122C-115.4, as well as contracts with the DHHS Division of Mental Health, Developmental Disabilities and Substance Abuse Services ("NCDMH") (DX-2) and the DHHS Division of Medical Assistance ("NCDMA") (DX-15), Piedmont Behavioral Healthcare ("PBH") operates as a local management entity ("LME") to manage those funds and to plan, develop, implement and monitor mental health and developmental disability services within its catchment area. See N.C. Gen. Stat. § 122C-115.4(b)(7); N.C. Gen. Stat. § 122C-115.4(a); DX-15.[2] As an LME, PBH does not provide services itself, but rather contracts with a network of providers who administer those services. DX-2; 10/10/13 Tr. at 8:22-9:3 (Yon).[3]

At issue in this case is PBH's decision, effective February 15, 2010, to reduce the reimbursement rate it pays to its service providers for Supervised Living services - a state-funded service available to individuals diagnosed with mental retardation and/or mental illness living in community settings who need 24-hour supervision and for whom care in a more intensive treatment setting is considered unnecessary on a daily basis (PX-201 at 2). See Doc. #1.[4] Prior to February 2010, PBH reimbursed providers in its network for Supervised Living services they provided to consumers living in one-, two- or three-person placements on a tiered basis.[5] A one-person placement (that is, a residential placement in which there is only one consumer) received a variable rate (see DX-1), a two-person placement (that is, a residential placement in which the consumer lives with one additional housemate) received a rate of $161.99 per day (see id.), and a three-person placement (that is, a residential placement in which the consumer lives with two additional housemates) received a rate of $116.15 per day (see id.). Effective February 15, 2010, as a result of state budget cuts, PBH reduced the reimbursement rate paid providers for the provision of Supervised Living services in one- and two-person placements to the same $116.15 per day rate it pays for Supervised Living services provided in three-person placements. See id.; 10/10/13 Tr. at 76:15-20 (Yon). Despite this reduced rate, providers remain eligible to receive a higher rate if they submit, and PBH approves, an Enhanced Rate Request. See 9/20/13 Tr. at 4:8-7:5 (Covert). Approved Enhanced Rate Requests are valid only for a temporary period, but, through review and re-approval, they can extend indefinitely. See id. at 8:20-9:1 (Covert), 28:15-29:4 (Covert).

Plaintiffs, all of whom are dually diagnosed with mental illness and developmental disability, lived in one- or two-person placements prior to the February 15, 2010 reimbursement rate reduction, and the providers serving each of the Plaintiffs received a reimbursement rate greater than $116.15 per day for the provision of Plaintiffs' Supervised Living services. Originally consisting of only Clinton L. and Timothy B., Plaintiffs filed this action on February 11, 2010, contending that the reduced reimbursement rate for Supervised Living services would force them into congregate placements and that, "[i]f and when Plaintiffs' placement in a congregate setting are [sic] determined to have failed (as is expected), it is believed that [] Plaintiffs will face forced institutionalization." Doc. #1, ¶¶ 56-58.[6] On that same day, Plaintiffs filed a Motion for Temporary Restraining Order and Preliminary Injunction seeking to "prohibit[] Defendants from implementing any reductions to the daily reimbursement rate for Supervised Living services." Doc. #4 at 1. Following a hearing on that Motion held on February 17, 2010, then-Chief United States District Judge James A. Beaty denied Plaintiffs' Motion as to Clinton L. without prejudice to refiling on the basis that Clinton's provider at the time determined that it would continue providing Clinton's Supervised Living services after the rate reduction. See Doc. #16 at 3-4. With respect to Timothy, Judge Beaty set a supplemental hearing on April 16, 2010 - the date up to which PBH agreed to maintain Timothy's pre-rate reduction rates. See id. at 4-6.

On April 7, 2010, Plaintiffs - by this time consisting of Clinton L., Timothy B., Vernon W., and Steven C.[7] - filed a Renewed Motion for Preliminary Injunction which again sought to "prohibit[] Defendants from implementing any current or planned reductions to the daily reimbursement rate for Supervised Living services... to preserve Plaintiffs' level of care and community placements in their own homes." Doc. #22 at 1-2. Judge Beaty held a hearing on Plaintiffs' Renewed Motion on April 14, 2010 (see Docket Entry dated April 14, 2010), and, on May 12, 2010, denied the Renewed Motion to the extent Plaintiffs sought to prohibit implementation of the reimbursement rate reduction, but granted it "to the extent that Plaintiffs request that [Defendants] be required to ensure that Plaintiffs are provided with community-based treatment as an alternative to institutionalization during the pendency of this suit." Doc. #36 at 12-13.[8] Accordingly, Plaintiffs have lived in community settings under the effects of the reduced Supervised Living reimbursement rate during the pendency of this action.[9]

II.

Plaintiffs' claims arise under Title II of the ADA and Section 504 of the Rehabilitation Act. See Doc. #139, ¶¶ 101-43. Title II of the ADA provides that "no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by such entity." 42 U.S.C. § 12132. Similarly, Section 504 of the Rehabilitation Act provides: "No otherwise qualified individual with a disability in the United States... shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance." 29 U.S.C. § 794. These provisions impose the same requirements on Defendants. See Pashby v. Delia , 709 F.3d 307, 321 (4th Cir. 2013) ("We consider [the plaintiffs'] Title II and section 504 claims together because these provisions impose the same integration requirements.") (citing Henrietta D. v. Bloomberg , 331 F.3d 261, 272 (2d Cir. 2003)); Birmingham v. Omaha Sch. Dist. , 220 F.3d 850, 856 (8th Cir. 2000) ("We have held that the enforcement, remedies, and rights are the same under both Title II of the ADA and § 504 of the Rehabilitation Act.").

In what is commonly referred to as the "integration mandate, " regulations implementing Title II of the ADA require that a public entity administer its services in "the most integrated setting appropriate" to meet the needs of qualified individuals with disabilities. 28 C.F.R. § 35.130(d). Plaintiffs' claims regarding the February 2010 rate reduction to the Supervised Living reimbursement rate allege a violation of the integration mandate as addressed in Olmstead v. L.C. ex rel. Zimring , 527 U.S. 581 (1999). In Olmstead, the United States Supreme Court held that the unjustified institutionalization of individuals with disabilities is a form of discrimination under the ADA. Id. at 597. Although the plaintiffs in Olmstead resided in institutions at the time of filing suit and complained of the state's failure to provide services that would enable them to enter into the community, institutional placement is not a prerequisite to pursuing an Olmstead claim. See Fisher v. Oklahoma Health Care Auth. , 335 F.3d 1175, 1181 (10th Cir. 2003) ("[N]othing in the Olmstead decision supports a conclusion that institutionalization is a prerequisite to enforcement of the ADA's integration requirements."); see also Pashby , 709 F.3d at 322 (citing same). Rather, as in this case, community-based individuals may pursue a claim on the theory that a public entity's reduction or elimination of a necessary service places them at risk of institutionalization. See, e.g., Pashby , 709 F.3d at 322; Marlo M. ex. rel. Parris v. Cansler, 679 F.Supp.2d 635, 637-38 (E.D. N.C. 2010).

At a basic level, this analysis is complicated by the need to consider what is an "institution" or an "institutionalization."[10] "Nowhere in Title II, its implementing regulations, or in Olmstead is there a definition of what constitutes an institution' or community-based' setting." Disability Advocates, Inc. v. Paterson , 598 F.Supp.2d 289, 320 (E.D.N.Y. 2009). "While it is clear that, where appropriate for the patient, both the ADA and the [Rehabilitation Act] favor integrated, community-based treatment over institutionalization, ' Olmstead and lower courts considering Olmstead claims have typically confronted situations in which the institutional' or community-based' nature of particular settings was not in dispute." Id. at 320-21 (quoting Frederick L. v. Department of Pub. Welfare , 364 F.3d 487, 491-92 (3d Cir. 2004)).

Here, however, whether hospitals, crisis respite centers, intermediate care facilities for the mentally retarded ("ICFMRs"), prisons, or large congregate facilities qualify as "institutions, " and whether admissions/incarcerations of various lengths and for various reasons in those facilities qualify as "institutionalizations, " is relevant to the inquiry, and it is necessary to give additional substance to those terms. In examining various descriptions of "institutions" in this context, there is some consistency as to the defining qualities. Plaintiffs' expert, Dr. James Bodfish, [11] testified to his view of institutions as follows:

Those would be congregate settings, so very large living settings. Living with individuals who you don't choose to live with. Living primarily, if not exclusively within a disabled community as opposed to a non-disabled community.
Institutional settings [are] also associated with diminished opportunity to be in greater proximity to have interactions with one's family.

9/24/13 Tr. at 187:14-22 (Dr. Bodfish). At least one district court decision analyzing qualities representative of an institution similarly focused on the size, isolation, segregation and lack of choice common to those facilities. See Disability Advocates, Inc. v. Paterson , 653 F.Supp.2d 184, 199 (E.D.N.Y. 2009) ("The court uses the term institution' as defined by... one of [the plaintiffs'] experts, who explained that: [An] [i]nstitution, in my mind, and in my experience, and in the literature, is a segregated setting for a large number of people that through its restrictive practices and its controls and individualization and independence limits a person's ability to interact with other people who do not have a similar disability."). Moreover, this view comports with proposed rules offered by the Centers for Medicare & Medicaid Services ("CMS"):

We note that home and community-based settings do not include nursing facilities, institutions for mental diseases, intermediate care facilities for the mentally retarded, hospitals, or any other locations that have the qualities of an institutional setting as determined by the Secretary. In considering whether a setting has the qualities of an institutional setting, we will exercise a rebuttable presumption that a setting is not a home and community-based setting, and will engage in heightened scrutiny, for any setting that is located in a building that is also a publicly or privately operated facility that provides inpatient institutional treatment, or in a building on the grounds of, or immediately adjacent to, a public institution, or disability specific housing complex.... Other characteristics that could cause CMS to consider a setting as "institutional" or having the qualities of an institution would include, but not be limited to, settings which are isolated from the larger community, do not allow individuals to choose whether or with whom they share a room, limit individuals' freedom of choice on daily living experiences such as meals, visitors, and activities, or limit individuals' opportunities to pursue community activities.

Medicaid Program; State Plan Home and Community-Based Services, 5-Year Period for Waivers, Provider Payment Reassignment, and Setting Requirements for Community First Choice, 77 Fed. Reg. 26362-01, 26379 (proposed May 3, 2012).

Furthermore, in examining Olmstead and its progeny, it becomes clear that, although the term "institution" may commonly refer to a large number of general facilities in normal parlance, the "institutions" that are relevant to the instant action are facilities for the treatment of mental health and/or developmental disabilities. Indeed, as noted, Plaintiffs' claims spawn from the integration mandate of Title II of the ADA and its requirement that a public entity "administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 C.F.R. § 35.130(d) (emphasis added). At the heart of any such a claim is the argument that an individual is at "significant risk" of entering an "institution" because a lack of services in the community makes the "institution" the only facility sufficiently able to maintain the individual's health and safety. To hold, as Plaintiffs urge, that certain facilities not focused on providing mental health or developmental disability treatment, such as prisons, qualify as an "institution" for purposes of the instant claims loses sight of the regulatory language and significant precedent that focus on where services are available.[12] Accordingly, for the purposes of applying the relevant standard in this context, an "institution" is a large, congregate facility for the treatment of mental health and/or developmental disabilities that exhibits qualities such as isolation, segregation and lack of personal choice and which is exemplified by the large, congregate facilities run by the state of North Carolina as defined in statutes and also by intermediate care facilities for the mentally retarded and hospitals.

However, not every admission to such a facility can be considered an "institutionalization." The length of admission and the reasons for the institutional placement must be considered. As an initial matter, it would seem clear that a hospital admission for a medical necessity unrelated to the mental health or developmental disabilities suffered by Plaintiffs is irrelevant to Plaintiffs' ADA and Rehabilitation Act claims. Similarly, a future risk of admission to a nursing facility for unrelated medical conditions would not weigh on Plaintiffs' claims.

As to length of admission, as Defendants' expert, Dr. Bonny Forrest, [13] noted in her Expert Report, there is a "need to separate out sporadic or brief periods of hospitalization or institutionalization, which are not unusual for this population, from situations that create the significant risk of long-term institutionalization." DX-33 at 14. In her Report, Dr. Forrest went on to describe the relevant issue as whether Plaintiffs are at risk "of being institutionalized long-term, " id., and during the course of trial, she testified to a definition of institutionalization that involved placement in a facility without a plan to return to the community (see 10/30/13 Tr. at 157:15-17 (Dr. Forrest)). In a similar vein, Plaintiffs' expert, Dr. Bodfish, testified:

In my opinion, risk of institutionalization refers to the risk that an individual, against their will, will be placed out of a community integrated setting, and will be living and receiving services in an institution or congregate setting.

9/24/13 Tr. at 191:4-8 (Dr. Bodfish) (emphasis added); see also 10/4/13 Tr. at 53:25-54:2 (Dr. Bodfish) ("In terms of my my task, my final task in terms of risk of institutionalization, I would see that as a risk for a longer out of the home placement"). Moreover, in "Definitions relating to institutional status" (albeit in a section of the Code of Federal Regulations addressing "Federal Financial Participation") CMS has defined "[i]n an institution" as referring "to an individual who is admitted to live there and receive treatment or services there that are appropriate to his requirements." 42 C.F.R. § 435.1010 (emphasis added). Accordingly, the institutionalization at issue would focus on the long-term placement of an individual in an institution for the treatment of his/her mental health or developmental disability.

Simply demonstrating any risk of institutionalization is insufficient, however. The Department of Justice ("DOJ") - "the agency directed by Congress to issue regulations implementing Title II, " Olmstead , 527 U.S. at 597-98 - determined that "the ADA and the Olmstead decision extend to persons at serious risk of institutionalization or segregation, " U.S. Dep't of Justice, Statement of the Department of Justice on Enforcement of the Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C. , http://www.ada.gov/olmstead/q&a_olmstead.htm (last updated June 22, 2011) (emphasis added); see also Olmstead , 527 U.S. at 597-98 ("Because the [DOJ] is the agency directed by Congress to issue regulations implementing Title II, its views warrant respect." (citation omitted)). Courts addressing similar claims have used differing terminology to describe the level of risk of institutionalization necessary for a plaintiff to succeed on such a claim. See, e.g., M.R. v. Dreyfus , 697 F.3d 706, 734 (9th Cir. 2012) ("We conclude that Plaintiffs have demonstrated a likelihood of irreparable injury because they have shown that reduced access to personal care services will place them at serious risk of institutionalization.") (emphasis added); Marlo M., 679 F.Supp.2d at 638 ("It appears that if forced from their present settings, both Plaintiffs face a substantial risk of institutionalization.") (emphasis added); V.L. v. Wagner , 669 F.Supp.2d 1106, 1119 (N.D. Cal. 2009) ("Plaintiffs have submitted substantial evidence... showing that class members face a severe risk of institutionalization....") (emphasis added). Recently, the United States Court of Appeals for the Fourth Circuit weighed in on the matter, when, in reviewing the granting of a preliminary injunction on similar claims, it held that, by demonstrating a "significant risk of institutionalization, " the plaintiffs in that case had shown a likelihood of success on the merits. Pashby , 709 F.3d at 322 (emphasis added).

Given its applicability here, the Pashby decision warrants further attention. As an initial matter, despite the Pashby court's ultimate indication that the plaintiffs exhibited a likelihood of success on the merits through declarations demonstrating a "significant risk" of institutionalization, the Pashby decision began its discussion of the law with the statement that it was "swayed by the DOJ's determination that the ADA and the Olmstead decision extend to persons at serious risk of institutionalization or segregation and are not limited to individuals currently in institutional or other segregated settings." Pashby , 709 F.3d at 322 (emphasis added) (internal quotation marks and citation omitted). There is no subsequent suggestion in the Pashby decision that the Fourth Circuit intended to substantively alter the standard espoused by the DOJ by replacing "serious" with "significant, " and, accordingly, authority applying either terminology appears relevant to the inquiry necessary here. Moreover, in Pashby, with the exception of one cited declaration stating that the plaintiff "will have no choice but to enter a facility, '" the declarations that the Fourth Circuit held demonstrated a "significant risk of institutionalization" were equivocal in that they stated the plaintiffs "may, '" "might, '" "probably' would, " or "were likely' to" enter an institution due to the termination of their in-home personal care services. Pashby , 709 F.3d at 322. The Pashby court, however, involved a class action and sat in a significantly different procedural posture than the instant matter in that it applied an abuse of discretion standard to the district court's decision on appeal. See id. at 319. Accordingly, it would read too much into the Fourth Circuit's holding to determine that Plaintiffs in the instant matter can demonstrate a "significant risk of institutionalization" by showing only that they "may" or "might, " as opposed to "probably would" or "are likely to, " enter an institution due to the reduction in the reimbursement rate that PBH pays for Supervised Living services.

The DOJ has provided some guidance on the applicable standard in stating that the risk need not be "imminent." See U.S. Dep't of Justice, Statement of the Department of Justice on Enforcement of the Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C. , http://www.ada.gov./olmstead/q&a_olmstead.htm (last updated June 22, 2011). "For example, a plaintiff could show sufficient risk of institutionalization to make out an Olmstead violation if a public entity's failure to provide community services or its cut to such services will likely cause a decline in health, safety, or welfare that would lead to the individual's eventual placement in an institution." Id . There is, however, no simple formula to determine whether an individual is at "significant risk" of institutionalization. Indeed, the necessary inquiry is fact-intensive and is affected by numerous variables.

As it relates to the instant matter, the Parties' experts, whose qualifications leave no doubt as to their abilities in this field, set forth their own frameworks for assessing risk of institutionalization and how to determine whether that risk is significant. Defendants' expert, Dr. Forrest, opined that removal from a community setting is indicated where the individual poses an imminent danger to self or others, outpatient support has been unsuccessful in halting a psychiatric decompensation, or psychiatric issues or maladaptive behaviors have progressed to the point where that individual can no longer function in the community (see DX-33 at 13), and defined "significant risk of institutionalization" as a situation where, because of those factors, "facility placement is being (or is very likely to be) sought" (id.). Plaintiffs' expert, Dr. Bodfish, testified to a three-part test for determining risk of institutionalization: (1) "determining clinical characteristics of the individuals being evaluated" including "looking for the presence or absence of severe and persistent mental illness... [, ] severe behavioral problems, severe medical conditions[, and]... the presence of psychotropic medications, in particular, complicated prescription, " 9/24/13 Tr. at 191:12-19 (Dr. Bodfish); (2) "evaluating the plan of care and the adequacy of the plan of care for... managing or treating those clinical conditions, " id. at 192:2-4 (Dr. Bodfish); and (3) "looking for evidence that there is a mismatch, that the plan of care is not adequate[, such as]... [p]rotracted episodes of behavioral problems or psychiatric symptoms[, ] [i]njuries to the individual or to the others around them[, ] [n]eed to be placed in a hospitalization[, ] [i]nvolvement with the police[, and] [s]taff changes or staff turnover for more difficult clients associated with that and then changes in the residence, " id. at 193:3-12 (Dr. Bodfish). Thus, under this framework, a Plaintiff would be at risk of institutionalization when the plan of care cannot adequately manage his or her behaviors.

There is some merit to both experts' opinions as each addresses a slightly different aspect of the relevant inquiry. That is, in order to determine whether any of the six individual Plaintiffs here are at significant risk of institutionalization, the analysis requires, similar to what Dr. Bodfish sets out, examining the clinical characteristics of Plaintiffs and weighing those against the provider's ability to manage those characteristics. Any opinion as to this aspect is informed from the past three and a half years of biographical data presented during trial. In examining this information as a whole, of particular relevance are, as Dr. Forrest indicated, whether any of the Plaintiffs pose a danger to self or others, whether outpatient support has been unsuccessful in halting a psychiatric decompensation, or whether psychiatric issues or maladaptive behaviors have progressed to the point where that Plaintiff can no longer function in the community. Finally, in granting the DOJ the respect commensurate with its role as the agency issuing the regulations implementing Title II, the ultimate inquiry is whether the reduction in the Supervised Living reimbursement rate has caused or "will likely cause a decline in health, safety, or welfare that would lead to the individual's eventual placement in an institution." U.S. Dep't of Justice, Statement of the Department of Justice on Enforcement of the Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C. , http://www.ada.gov./olmstead/ q&a_olmstead.htm (last updated June 22, 2011).

Finally, for Plaintiffs to succeed on their claims, any significant risk of institutionalization must be causally related to PBH's Supervised Living reimbursement rate reduction.[14] In giving some structure to the causation analysis, at least one court has applied tort concepts of proximate causation to the ADA and the Rehabilitation Act. See Henrietta D. v. Bloomberg , 331 F.3d 261, 278-79 (2d Cir. 2003). Although the Henrietta D. decision focused on explaining multiple causation, see id. at 279 n.8, because the instant action also addresses potential issues of multiple causation, as well as attributions of harm to only tangentially related events, application of proximate cause concepts is well-suited to the instant analysis as well. Accordingly, the causation inquiry will focus on whether PBH's reduction to the Supervised Living service reimbursement rate is "substantially related" to Plaintiffs' significant risk of institutionalization, or "too remote or insignificant to the harm to be a legal basis for liability." Id . (internal quotation marks omitted). In other words, Plaintiffs cannot succeed on their claims merely by demonstrating that the Supervised Living reimbursement rate reduction led to some remote change unrelated to the service or reimbursement rate, but rather must demonstrate that a reduction in services itself led to the decline in Plaintiffs' health, safety, or welfare that would lead to Plaintiffs' eventual placement in an institution.

This framework will guide the analysis of each of the six Plaintiff's risk of institutionalization.

III.

A.

Plaintiff Diane D. represents "one of [PBH's] most difficult consumers by history." PX-67 at PBH010526. Her diagnoses include unspecified psychotic disorder, mild mental retardation, intermittent explosive disorder, scoliosis and Cohen syndrome. DX-348 at PBH011614.[15] Prior to the February 2010 rate reduction, Diane lived in a single-person placement in Davidson County operated by Monarch, Inc. ("Monarch") where she received 24-hour supervision consisting of a 2:1 staff to consumer ratio during the day and a 1:1 ratio of awake staffing at night. See PX-60 at PBH008114. At that time, PBH paid Monarch a reimbursement rate of $250.00 per day for the provision of Diane's Supervised Living services. Id.

The February 2010 rate reduction remained in place for only a short period for Diane. In April 2010, the reimbursement rate PBH paid for Supervised Living services provided to Diane returned to the pre-rate reduction rate of $250.00 per day. See DX-292 at PBH009947. Moreover, an Enhanced Rate Request in June 2011 resulted in Diane's provider receiving a rate of $391.15 per day from PBH for providing Diane's Supervised Living services. See PX-37; PX-38; PX-63; see also DX-292 at PBH009958. Regardless, the direct impact of the February 2010 rate reduction was that it forced Diane from her single-person placement with a 2:1 staff to consumer ratio into a three-person congregate placement in May 2010 with a 2:3 staff to consumer ratio. PX-60 at PBH008114.

Since her move to a three-person placement, Diane has experienced incidents of physical and verbal aggression, medication refusals, police involvement and placements outside of the home, including a particularly tumultuous period in 2011. As to that 2011 period, in January 2011, one of Diane's housemates pressed charges against Diane after Diane, without warning, punched her in the arms and legs. DX-171 at PBH002138, PBH002140; DX-62. As a result, Diane spent a brief period in jail for simple assault. See 10/8/13 Tr. at 72:20-23; 10/31/13 Tr. at 26:12-17. On March 9, 2011, Diane's staff referred Diane to Frye Hospital for increased psychotic symptoms (DX-278), and Diane remained at Frye Hospital until April 5, 2011 (DX-277 at PBH008001). Immediately upon her return from Frye Hospital, Diane resumed "threatening behaviors toward staff and her housemate, verbal aggression, and physical aggression where she was pounding the walls, etc." DX-277 at PBH008001. On April 6, 2011, Diane's direct care staff brought Diane to NC START crisis respite - a community-based placement that provides short term emergency respite stay to individuals in crisis situations in an effort to help those individuals avoid institutionalization (see 10/4/13 Tr. at 58:15-59:2 (Dr. Bodfish)). The following morning, however, NC START informed Diane's direct care staff that they were unable to handle Diane's behaviors and asked that staff return to pick her up. DX-277 at PBH008001. During this same period, staff reflected that "it is very difficult for them to manage Diane." Id . On June 29, 2011, Diane's treatment team requested a reimbursement rate of $391.15 per day for providing Diane's supervised living services (see PX-63; PX-64), noting that, "without additional supports and funding[, ] Diane would not be able to maintain living in her community" (PX-64 at PBH008110). Shortly thereafter, in July 2011, Monarch's qualified professional for Diane's placement, who is the supervisor for Diane's direct care staff, sent emails to her own supervisors and to healthcare professionals with Monarch seeking assistance with Diane's treatment and noting that she "is at a total loss" as to how to handle Diane's behaviors and that they are "facing health issues on top of safety issues for Diane as well as her housemates." DX-480 at DDM00736.

Although Diane's behaviors subsequently dissipated to some extent, they did not cease after 2011. For example, on January 22, 2012, Diane's staff took her to Lexington Medical Center for behavioral issues including "unusual behavior and suicidal thoughts." DX-84 at DDOT00003. And, even during the course of trial, Diane exhibited behavioral concerns warranting renewed attention. That is, in the latter half of October 2013, Diane's treatment team noted that Diane "started to decompensate." DX-919 at PBH012266. In addition to "falling and refusing to get up from the floor more frequently, " "refus[ing] to go to her day activity, " and "demonstrat[ing] headbanging" (id.), the Executive Director of Diane's then-current service provider, Elite Care Services, Inc. ("Elite Care"), observed Diane eating her own feces (id.; 11/5/13 Tr. at 104:6-12 (Bennet)).

Although there is a gap in documented behavioral incidents from late 2012 to mid-2013, Diane's longest placement outside of her home in the post-rate reduction period occurred during this time. Specifically, on November 21, 2012, after several attempts to stand from a seated position at the edge of her bed, Diane fell onto the floor of her community placement. PX-48 at DDM07537. She remained on the floor for nearly 24 hours before her direct care staff sought emergency medical assistance and hospitalization. See id. at DDM07537 - DDM07539. Subsequent x-rays taken at Lexington Medical Center revealed severe end-stage osteoarthritis of Diane's knees. DX-90 at DDOT00058. According to the Lexington Medical Center Discharge Summary, after observing that Diane was unable to stand even briefly without severe pain, "it was determined [Diane] would no longer be able to reside in her group home and would benefit with being placed in a skilled nursing facility." Id . Accordingly, Diane went to "UPAC" for rehabilitation.[16]

Diane's subsequent departure from UPAC was affected by the recommendations of her physician, which also resulted in a change in providers. On January 11, 2013, Diane's treating physician at UPAC, Dr. Thomas-Slade, issued a form referred to as an "FL-2" recommending continued skilled nursing facility level of care for Diane. See PX-52 at PBH012136. In an apparent response to that recommendation, on January 21, 2013, Diane's then-current provider, Monarch, issued a letter to Diane's guardian noting that it "does not provide nursing level of care and therefore must issue notification of immediate discharge from residential services." PX-49 at DDM07509. That letter continued: "It is most important for Diane to live somewhere that can accommodate all of her needs and ensure her health and safety at the level of care determined in her assessments." Id . A subsequent FL-2, dated January 29, 2013, recommended "Other: Custodial Care" for Diane (see PX-52 at PBH012137) - a level of care not recognized by PBH (see 9/24/13 Tr. at 62:14-63:22 (Jennings); 110:6-18 (Jennings)). Three more FL-2s followed - one dated February 25, 2013, failing to provide a recommendation for Diane's care (see PX-52 at PBH012138), another dated February 25, 2013, recommending "Assisted Living" (see PX-52 at PBH012139), and one dated May 3, 2013, again recommending "Assisted Living" (see PX-51 at PBH012135) - before Dr. Thomas-Slade issued an FL-2 on May 22, 2013, recommending that Diane return to a group home (see PX-53 at PBH012140). On May 27, 2013, Diane moved into a three-person group home operated by Elite Care. See PX-59 at PBH012062. Almost immediately, Elite Care indicated that it had underestimated Diane's needs (see PX-59 at PBH012064) and, shortly thereafter, moved Diane to another home it operated where, as of the most recent information presented during trial, Diane currently resides with one male and one female housemate (see 11/5/13 Tr. at 140:13-142:4 (Bennett); 101:7-102:6 (Bennett)).

Although Diane's post-rate reduction behaviors are concerning, they are similar to Diane's pre-February 2010 behaviors. An April 10, 2008, note from Daymark Recovery Services ("Daymark"), a provider of medical and professional mental health treatment, indicates that "[s]taff encouraged [Diane] to open up and tell [her psychiatrist] that she has been having more problems with her explosive anger behavior." DX-894 at DDM07185. It describes "an episode where [Diane] locked herself in the car and the police had to be called. When she got home, she started throwing things, turned over the entertainment center, wiped things off the counter and threw her hamster across the room." Id . On June 10, 2008, a follow-up note from Daymark noted that Diane "ha[d] been involuntarily hospitalized twice" in the previous two months. Id. at DDM07183. It elaborates: "Apparently, she was not taking her medications and she was having escalating aggressive behavior, destroying things and allegedly saying that voices were telling her to do these things." Id . Diane spent June 24, 2008 to August 18, 2008, September 30, 2008 to October 8, 2008, and October 11, 2008 to December 9, 2008, in jail for separate episodes of assault and communicating threats. See DX-471; DX-472; DX-473. A psychological evaluation conducted on January 28, 2009, noted Diane's "extreme behavioral issues, which include: physical aggression; property destruction/tantrumming; self-injurious behavior; and[] elopement." DX-270 at PBH007740. Of note, that same assessment concluded with the following recommendation:

Consider group home placement with people her own age and functioning level. [Diane] is very isolated in her own home, particularly when she refuses community outings. Having a few other peers in your home can provide opportunities for social interaction, friendships and immediate feedback from someone your own age and not staff. Peers can be positive role models for [Diane] in terms of getting up, going to work, having fun and appropriate behavior in general. The positives outweigh the negatives at this time. Her current isolation does not appear to be helpful in addressing many of her needs.

Id. at PBH007748.

The Parties' experts - each of whom conducted an initial Report in 2011, a Supplemental Report in 2013, and, specifically with respect to Diane, testified regarding a final opinion on risk after examining behaviors arising during the course of trial - came to opposite conclusions with respect to Diane's risk of institutionalization. Defendants' expert, Dr. Forrest, concluded at the time of her initial Report, dated October 30, 2011, that Diane was not at risk of institutionalization (see DX-33 at 40), and, at the time of her Supplemental Report, dated May 30, 2013, that "[t]he February 2010 rate reduction has not caused a reduction in services that places Diane at a greater risk of institutionalization than she was prior to the rate reduction" (see DX-34 at 11). In contrast, Plaintiffs' expert, Dr. Bodfish, concluded in his September 30, 2011 initial Report, that Diane was "currently at significant risk for institutionalization, " that her "current situation is immanently [sic] dangerous for her and for those around her, " and that "her current decompensation and increased risk for institutionalization is most likely causally related to the recent changes in her living situation." PX-184 at D5-D6.[17] At the time of his Supplemental Report, dated July 17, 2013, Dr. Bodfish further concluded that "Diane's risk of institutionalization ha[d] significantly increased relative to the time period of [his] last evaluation of her." PX-185 at D1. Finally, at trial, after review of Diane's most recent behaviors, Dr. Bodfish testified that he didn't think Diane's risk of institutionalization "could be any higher." 11/8/13 Tr. at 23:20-21 (Dr. Bodfish).

While the Parties' experts agreed that a comparison of a simple count of behaviors pre- and post-reimbursement rate reduction would be both inadequate and likely infeasible (see 10/4/13 Tr. at 78:9-79:8 (Dr. Bodfish); 10/28/13 Tr. at 143:7-10, 218:4-6 (Dr. Forrest)), they settled on differing methods to develop, or at least to support, their opinions of risk of institutionalization. In conducting his initial evaluation, Dr. Bodfish observed and interacted with each of the Plaintiffs on one occasion, where available, spoke with their guardian and/or a care provider, and, finally, reviewed the documentation provided to him by Plaintiffs' counsel. See 9/24/13 Tr. at 199:20-200:13 (Dr. Bodfish). For his supplemental review, Dr. Bodfish, per the resolution of a discovery dispute between the Parties, relied on a review of documents.[18] With this information, Dr. Bodfish simply relayed his impression of each of the Plaintiff's risk of institutionalization and the cause of that risk.

This approach, however, raised some concerns. Dr. Bodfish's apparent lack of knowledge of the underlying facts, as evidenced by his testimony, raised serious questions regarding the weight his opinions warrant, especially to the extent they address causation. For example, where Dr. Bodfish testified that Diane's pre-rate reduction period "was a period of stability, success for her" (10/9/13 Tr. at 20:16-21:13 (Dr. Bodfish)), he acknowledged that he had not spoken with anyone who had known Diane prior to her move caused by the rate reduction, including Diane's guardian. Instead, he had relied on statements made by that guardian to Plaintiffs' counsel (see id. at 20:16-25 (Dr. Bodfish)). When presented with specific examples of pre-rate reduction behaviors and provider discharges, including hospitalizations, incarcerations, and numerous serious behavioral events described in the documentary evidence, Dr. Bodfish exhibited only a vague familiarity with those incidents. See, e.g., id. at 21:6-42:21 (Dr. Bodfish).

Along these same lines, Dr. Bodfish seemingly attributed every negative event that followed the reimbursement rate reduction to a mismatch in the plan of care caused by the rate reduction without regard to, and seemingly without conducting further inquiry into, whether said event was related to the plan of care at all, much less the more specific Supervised Living service central to this action. For instance, Dr. Bodfish highlighted Diane's out-of-home UPAC placement as an indicator of increased risk caused by the reimbursement rate reduction with little knowledge of the reasons Diane entered UPAC. See 10/8/13 Tr. at 151:4-11 (Dr. Bodfish); 152:13-23 (Dr. Bodfish). That is, despite evidence that Diane's UPAC placement was a result of needed rehabilitation for end-stage osteoarthritis, Dr. Bodfish testified that he saw it "as part of a chain of events that happened after [the rate reduction]" (id. at 153:19-20 (Dr. Bodfish)) and opined that "if [Diane] weren't demonstrating that pattern of behaviors at all, there would be no need for her to go to UPAC" (id. at 155:21-23 (Dr. Bodfish)). Similarly, Dr. Bodfish highlighted Monarch's discharge of Diane during this time period, which he described in his Report as "a result of increasing and persistent behavioral decompensation" (PX-185 at C2 D1), as evidence of the ill-effects of the reimbursement rate reduction. However, Monarch's own discharge notice provides only that said discharge was a result of Diane's treating physician at UPAC recommending a level of care that Monarch did not provide (see PX-49), and Dr. Bodfish offered no reasons to call Monarch's stated reasons for its discharge into doubt. When asked to review Monarch's discharge notice, Dr. Bodfish expressed that he did not believe ...


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