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J.E. v. Wong

United States District Court, D. Hawai'i

August 27, 2015

J.E., through his parent SUZANNE EGAN, for themselves and on behalf of a class of those similarly situated, and the Hawai'i DISABILITY RIGHTS CENTER, in a representative capacity on behalf of its clients and all others similarly situated, Plaintiffs,
v.
RACHAEL WONG, in her official capacity as Director of the State of Hawai'i, Department of Human Services, Defendant

          For Hawaii Disability Rights Center, in a representative capacity on behalf of its clients and all others similarly situated, J. E., through his parent Suzanne Egan, for themselves and on behalf of a class of those similarly situated guardian ad litem, Suzanne Egan, Plaintiffs: Kristin L. Holland, Maile Osika, Paul Alston, LEAD ATTORNEYS, Alston Hunt Floyd & Ing, Honolulu, HI; Louis Erteschik, Matthew C. Bassett, LEAD ATTORNEYS, Hawaii Disability Rights Center, Honolulu, HI.

         For Rachael Wong, in her official capacity as Director of the State of Hawai'i, Department of Human Services, Defendant: Dana A. Barbata, Kendall J. Moser, Lee-Ann N.M. Brewer, LEAD ATTORNEYS, Office of the Attorney General-State of Hawaii, Honolulu, HI; Ruth K. Oh, LEAD ATTORNEY, Department of the Attorney General, Honolulu, HI.

         ORDER DENYING DEFENDANT'S MOTION TO DISMISS SECOND AMENDED COMPLAINT (ECF No. 46)

         Helen Gillmor, United States District Judge.

         In this proposed class action lawsuit, Plaintiffs allege that children and young adults with autism who qualify for Medicaid are not receiving applied behavioral

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analysis treatment (" ABA treatment" ), which Plaintiffs contend is a medically necessary treatment under a provision of the Medicaid Act requiring the provision of " early and periodic screening, diagnostic, and treatment" services (" EPSDT services" ). Plaintiffs allege that, for years, the Hawaii Department of Human Services (" DHS" ), has refused to cover the cost for ABA treatment. Plaintiffs allege that, while having made some changes in its official policy, DHS has continued to fail to provide medically necessary ABA treatment.

         The sole issue raised by Defendant's Motion to Dismiss is whether Plaintiffs have a private right of action to enforce the provisions of the Medicaid Act which require that the State Medicaid agency provide medically necessary services to " ameliorate defects and physical and mental illnesses and conditions. . ." 42 U.S.C. § 1396d(r)(5).

         The Court finds that Plaintiffs have a private right of action to enforce their alleged rights to certain EPSDT services.

         Defendant's Motion to Dismiss (ECF No. 46) is DENIED.

         PROCEDURAL HISTORY

         On September 5, 2014, Plaintiff filed a Complaint for Declaratory and Injunctive Relief. (ECF No. 1.)

         On December 1, 2014, Plaintiff filed an Amended Complaint for Declaratory and Injunctive Relief. (ECF No. 8.)

         On June 19, 2015, the parties stipulated to the filing of a Second Amended Complaint. (ECF No. 42.)

         On that same date, the Plaintiff filed a Second Amended Complaint. (ECF No. 43, corrected by ECF No. 44.)

         On July 6, 2015, the Defendant filed a Motion to Dismiss. (ECF No. 46.)

         On July 22, 2015, Plaintiff filed a Memorandum in Opposition to Defendant's Motion to Dismiss. (ECF No. 52.)

         On August 5, 2015, Defendant filed a Reply. (ECF No. 57.)

         BACKGROUND

         Plaintiff J.E., through his parent Suzanne Egan, brings this case as a proposed class action on behalf of himself and all Hawaii children under the age of twenty-one with Autism Spectrum Disorder (" autism" ) who receive Medicaid services and have been recommended for medically necessary applied behavior analysis treatment (" ABA treatment" ). (SAC ¶ 1.) Plaintiff J.E. is a boy, age 6 at the time of the filing of the Second Amended Complaint (" SAC" ), who qualifies for Medicaid's EPSDT services. (SAC ¶ 66.) Plaintiff J.E. has been diagnosed with autism and a number of medical professionals have recommended ABA treatment for J.E.'s condition. (SAC ¶ ¶ 68, 69.) Plaintiffs allege that the ABA treatment is medically necessary and critical at J.E.'s age to make a behavioral impact on his adult life. (SAC ¶ ¶ 69, 70.) According to the SAC, without ABA treatment J.E. faces serious harm including regression of his skills and increases in potentially dangerous behaviors as he approaches adolescence. (SAC ¶ 70.) Ms. Egan, Plaintiff J.E.'s mother, depends on Medicaid to cover J.E.'s medical expenses and cannot otherwise afford the cost of ABA treatment. (SAC ¶ 71.)

         Plaintiff Hawaii Disability Rights Center (" HDRC" ) is a Hawaii nonprofit corporation whose purpose is to protect and advocate for the human, legal, and civil rights of people with disabilities. (SAC ¶ 21.) The HDRC brings this action in its representative capacity on behalf of all Hawaii children under the age of twenty-one with Autism Spectrum Disorder (" autism" ) who receive Medicaid services and have been

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recommended for medically necessary ABA treatment. (SAC ¶ 20.)

         According to the Second Amended Complaint, the Defendant Hawaii Department of Human Services (" DHS" ), of which Defendant Rachael Wong is the director, does not provide Medicaid coverage for ABA treatment regardless of medical necessity and, thus, fails to comply with the Medicaid Act. (SAC ¶ 1.)

         Plaintiff alleges that he and the proposed Class are entitled to a broad scope of " early and periodic screening, diagnostic, and treatment" services (" EPSDT services" ) under the Medicaid Act, which includes ABA treatment. (SAC ¶ 2.) Plaintiffs further allege that the cost of these services must be covered by Medicaid when medically necessary. (Id.)

         According to the SAC, ABA treatment is an effective medical treatment for autism which can lead to the maximum reduction of physical and mental disabilities for children with autism and bring them to their best possible functional level. (SAC ¶ ¶ 28-29.) Over 1,500 children and young adults under the age of twenty-one in Hawaii suffer from autism, many of whom are recipients under Medicaid's EPSDT services program. (SAC ¶ 30.)

         DHS is the State agency responsible for administering Medicaid in Hawaii. (SAC ¶ 3.) The SAC alleges that DHS's refusal to provide coverage for ABA treatment for the treatment of autism is a long-standing policy. Plaintiffs allege that for years DHS has refused to cover ABA treatment for recipients of EPSDT services under Medicaid based on a conclusion that ABA treatment is never medically necessary. (SAC ¶ ¶ 4, 52.) Plaintiffs allege that DHS planned to formalize its long-standing policy to exclude ABA treatment from Medicaid coverage beginning on January 1, 2015. (SAC ¶ ¶ 3, 4.)

         On December 1, 2014, the State and DHS administration changed and Rachael Wong succeeded Patricia McManaman as the acting Director of DHS. (SAC ¶ 5.) On December 4, 2015, Defendant informed Plaintiffs that the ABA exclusion would be removed from Medicaid contracts and not implemented, as planned, on January 1, 2015. (SAC ¶ 6.) In light of this change in circumstances, Plaintiffs withdrew their request for a preliminary injunction. (ECF No. 23.)

         On January 13, 2015, DHS issued a Memorandum to Medicaid providers and health plans regarding coverage of " intensive behavioral therapy for autism spectrum disorder." (SAC ¶ 8.) According to the SAC, the Memo revealed DHS's intent to develop a program for the coverage of ABA treatment under Medicaid. Plaintiffs, however, allege that the Memo did not include the details necessary for DHS to develop and implement a federally-compliant program. (Id. ¶ ¶ 8-11.) Plaintiffs further allege that DHS has not made any public statements to inform beneficiaries ...


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