Memorandum opinion and order

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GROOMS v. MARAM (N.D.Ill. 5-30-2008)
DAVID GROOMS, Plaintiff, v. BARRY S. MARAM, Director, Illinois Department of
Healthcare and Family Services, Defendant.
No. 06 C 2211.
United States District Court, N.D. Illinois, Eastern Division.
May 30, 2008

Medicaid funding was once available only to pay for an

individual to receive care in an institution. Today, states may

"waive" the need for individuals to receive services in an

institution and, instead, provide funding for home or

community-based medical care for Medicaid-eligible individuals.

Federal matching funds are available for home or community-based

care, however, only if the services provided cost no more than it

would cost to care for the individual in an institutional

setting. Subject to this and other prerequisites for federal

approval, each state may define the terms of its waiver programs.

In this case, the parties debate whether an existing Illinois

waiver entitles a severely disabled adult — who requires a

hospital-level of care to survive — Medicaid benefits enabling

him to receive this care at home.
Plaintiff David Grooms suffers from Type II Glycogen Storage

Disease ("GSD Type II"), a genetic disorder which progressively

affects skeletal muscle and muscles involved in respiration. He

retains his cognitive ability but is quadriplegic and suffers

from a variety of other, related ailments. Until he reached age

twenty-one, the Illinois Department of Healthcare and Family

Services ("HFS") paid for Grooms to receive care in his home

through the Illinois Medicaid program. As described in more

detail below, Grooms's home care was funded by the Medically

Fragile Technology Dependent Children's ("MFTDC") waiver. The

MFTDC program pays for a participant's home care so long as the

cost of home care does not exceed the cost of care in a hospital

or skilled

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pediatric nursing facility. On his twenty-first birthday,

however, Grooms "aged out" of that program and is now eligible

for Medicaid-funded home care under the Persons with Disabilities

Medicaid waiver ("PWD"). The State of Illinois has opted to

provide home or community-based care for disabled adults only if

the cost of such care does not exceed the cost of care in a

nursing facility. Under Illinois law, Grooms is therefore now

eligible only for home care at a nursing-facility level of care

and can receive hospital-level of care only in an institution.
Several key facts are undisputed. First, Grooms is

Medicaid-eligible. Second, Defendant has not challenged

Plaintiff's evidence that a nursing facility level of care is

inadequate to Grooms's needs, and that only a hospital level of

care — including many hours per day of nursing care — is

appropriate for him. Third, although neither side has

acknowledged it explicitly, both parties appear to recognize

that, were Grooms to receive care in an institution rather than

at home, Medicaid would pay for the care he needs. Fourth, the

PWD waiver provides for home or community-based care only up to a

nursing facility level of care, which is less than a

hospital-level of care. In this lawsuit against Defendant Barry

S. Maram, the Director of HFS, Grooms contends that by choosing

to cap the benefits it will provide for Grooms's home care at the

cost of nursing home care, HFS has violated the "integration

mandate" of the Americans with Disabilities Act,

42 U.S.C. § 12132, and the Rehabilitation Act, 29 U.S.C. § 794(a), see

28 C.F.R. §§ 35.130(d) and 41.51(d). The case was set for a bench

trial in October 2007. After opening statements, however, it

became clear that the only disputed issue is the applicability of

the integration mandate in this case — a pure question of law —

so the court ordered summary judgment briefing on the issue.

Having now reviewed the briefs on HFS's motion for summary

judgment, the court concludes HFS is not entitled to judgment in

its favor, as explained below.

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I. Illinois Medicaid
HFS operates Illinois's Medicaid program under Title XIX of the

Social Security Act, 42 U.S.C. § 1396. Under the Title XIX health

care assistance program, the federal government provides funding

for Medicaid programs administered and partly funded by the

states pursuant to state-established guidelines for low-income

individuals and families. Specifically, the Medicaid program

provides federal funds to enable states to "furnish (1) medical

assistance on behalf of families with dependent children and of

aged, blind, or disabled individuals, whose income and resources

are insufficient to meet the costs of necessary medical services,

and (2) rehabilitation and other services to help such families

and individuals attain or retain capability for independence or

self-care." 42 U.S.C. § 1396. The state may elect to provide

certain services in its Medicaid program, including private-duty

nursing services, which may be available at the recipient's home,

at a hospital, or at a skilled nursing facility. See Radaszewski

ex rel Radaszewski v. Maram, 383 F.3d 599, 601 (7th Cir. 2004).

For a proposed program to qualify for federal funds, the United

States Secretary of Health and Human Services ("HHS") must

approve it. Id.; 42 U.S.C. § 1396a. Once a state's plan is

approved, the federal government agrees to pay (among other

obligations) an amount equal to the statutorily-defined "Federal

medical assistance percentage" of the state's quarterly medical

assistance expenditures. 42 U.S.C. § 1396b(a)(1).
A state with an approved Medicaid plan may also apply to the

Secretary of HHS for a "waiver," which allows the state to

include as "medical assistance" payments for "home or

community-based services" (as opposed to institutional services)

that the Secretary has approved and that are provided pursuant to

a written plan of care. 42 U.S.C. § 1396n(c)(1). In order for the

state to qualify for such a waiver, the home or community based

services it provides must be available to "individuals with

respect to whom there has been a determination that but for the

provision of such services the individuals would require the

level of care provided in a hospital or

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a nursing facility . . . the cost of which could be reimbursed

under the State plan." Id. In other words, an individual is

eligible for services under the a waiver only if, absent home or

community-based care, he or she would be entitled to Medicaid

benefits enabling him or her to receive care in an institution.

In addition, the state must provide the Secretary satisfactory

assurances that, among other things, the waiver is cost-neutral:

the average per capita expenditure estimated by the State for

medical assistance may not exceed the average estimated per

capita expenditure that would have been required absent the

waiver. 42 U.S.C. § 1396n(c)(2)(D). The parties agree that the

Secretary of HHS has approved for Illinois two waivers relevant

to this action: the MFTDC waiver and the PWD waiver. (Am. Ans.

¶ 17.) Waivers providing home or community-based care for

qualified adults constitute Illinois's Home Services Program

("HSP"). Often, provision of care at home is less expensive than

institutional care. Thus, according to one court, the HSP has

proven "very cost-effective." Radaszewski ex rel. Radaszewski v.

Maram, No. 01 C 9551, 2008 WL 2097382, at *7 (N.D. Ill. Mar. 26,

2008). In 2005, HFS reported a savings of $13,676 per participant

(with 19,827 participants): community care cost per participant

cost $19,140 per year, while cost to care for each participant in

an institution was $32,816 per year. Id.
Grooms has taken advantage of the waiver programs available to

him both as a child and as an adult. First, until his

twenty-first birthday, Grooms participated in the MFTDC waiver

program. Pursuant to the MFTDC program, the State has adopted

regulations requiring HFS to "administer a home and

community-based service (HCBS) waiver program . . . for disabled

persons under the age of 21 years who are medically fragile and

technology dependent." 89 Ill. Adm. Code § 120.530(a); see also By its terms,

this waiver program applies to individuals who would otherwise

require a level of care provided by a hospital or a facility

certified by the State to provide long-term care for persons

under twenty-two years of age. 89 Ill. Adm. Code § 120.530(b).

Eligible ventilator-dependent individuals, such as Grooms,

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are entitled to reimbursement for home care so long as the cost

of such care does not exceed the cost of hospital-level care.

89 Ill. Adm. Code § 120.530(e)(3)(A).
Now that he is an adult, Grooms receives home care as a

participant in the PWD waiver. That waiver, for which disabled

individuals under the age of sixty may qualify, differs from the

MFTDC waiver in several ways.[fn1] The PWD waiver enables HFS to fund

home or community-based care at a nursing facility-level of care

for eligible adults with physical disabilities who would

otherwise be forced to live in a nursing facility. See

89 Ill. Adm. Code §§ 676.10(a), 676.30(j), 676.40, & 682.100; In

contrast to the MFTDC waiver, which is administered by the

University of Illinois Division of Specialized Care for Children,

Illinois's Department of Human Services bears direct operational

responsibility for the PWD waiver. 89 Ill. Adm. Cod § 676.10(b).

The State's PWD waiver uses a Service Cost Maximum ("SCM") to

limit the benefits available to participants; the individual's

SCM directly corresponds to the cost the State would bear for

providing nursing care for the individual in an institutional

setting. 89 Ill. Adm. Code § 679.50; Radaszewski,

383 F.3d at 602. In other words, the SCM functions as a cap: the cost of care

for a disabled adult in a nursing facility is the maximum benefit

that individual can expect to receive for his or her home care.

To calculate the SCM for individuals who are eligible for care in

an institution but choose to receive home or community-based

care, Illinois uses a Determination of Need ("DON") test, which

measures what is referred to as an individual's "imminent risk of

institutionalization." 89 Ill. Adm. Code §§ 679.10(b), 676.30(d).

Thus, the DON test assesses an individual's physical eligibility

for the Home Services Program, including the extent of his or her

impairment and need for external care.

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89 Ill. Adm. Code § 679.10. The DON assessment determines an individual's

eligibility for placement in a hospital or nursing facility

and/or for home services. Id. An individual's DON score is then

found to correspond to an SCM. See 89 Ill. Admin. Code

§ 679.50(b) (setting forth SCMs for participants in HSP).
Grooms argues that the DON calculus is irrelevant to his

claims, because — based on his dependence on a ventilator — he

received an "exceptional care" rate in October 2005. (Def.'s 56.1

¶ 52.) Indeed, Illinois regulations recognize that no SCM is

sufficient to serve individuals who require what the state refers

to as "exceptional medical care," so HFS sets an "exceptional

care rate" for those individuals. 89 Ill. Adm. Code

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