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PHILADELPHIA WELFARE RIGHTS ORG. v. O'BANNON

June 30, 1981

PHILADELPHIA WELFARE RIGHTS ORGANIZATION, et al.
v.
Helen O'BANNON, et al.



The opinion of the court was delivered by: GREEN

MEMORANDUM

In this class action suit the Philadelphia Welfare Rights Organization and several named plaintiffs challenge the elimination from coverage of the adult eyeglass and orthopedic shoe programs under the state regulations implementing the federal Medical Assistance program, 42 U.S.C. § 1396 et seq. Plaintiffs seek to permanently enjoin the individual defendants of the Pennsylvania State Department of Public Welfare ("DPW") from terminating these services. Plaintiffs rely on several grounds, including the charge that the termination of benefits violates the recipients' due process rights under the Fourteenth Amendment of the U.S. Constitution and their rights under regulations promulgated by the U.S. Department of Health & Human Services (formerly "The U.S. Department of Health, Education & Welfare" or "HEW") to implement 42 U.S.C. § 1396 et seq. After consideration of the evidence presented at final hearing and the arguments and memoranda submitted on behalf of the parties, I deny the relief requested. *fn1"

 I. THE FACTS

 Pursuant to 42 U.S.C. § 1396 et seq. Pennsylvania participates in a federal-state cost sharing program to provide medical assistance to needy families with dependent children and to low-income people who are aged, blind or disabled. On June 28, 1980 defendants published a public notice in the Pennsylvania Bulletin providing that effective September 1, 1980 it would terminate, inter alia, eyeglasses and orthopedic shoes for individuals over 21 years of age. *fn2" During the week of July 25, 1980 DPW sent individual notices to recipients that coverage of the eyeglass program would end on September 1, 1980; however, unlike the public notice, which did not include those aged 21, the individual notice stated the program would exclude persons 21 years of age and older. Also, at the end of July 1980 DPW sent individual notices to recipients of the orthopedic shoe program that effective October 1, 1980 the Medical Assistance Program would not pay for shoes for individuals 21 years of age or older. Thereafter, on August 2, 1980 DPW published another public notice which restated its intent to terminate the adult eyeglass program on September 1, 1980, this noticed defined adults as age 21 or over.

 In addition to a challenge to subject matter jurisdiction by defendants, the issues presented by this law suit are: (1) whether DPW's notices to individual recipients announcing the programs' terminations were violative of the applicable federal agency regulations in that the notices required that all Medical Assistance recipients must file their appeals by September 30, 1980, (2) whether DPW's public notice of June 28, 1980 was legally sufficient as to the eyeglass program and whether DPW's public notice of August 2, 1980 announcing termination of the eyeglass program on September 1, 1980 violated 42 C.F.R. § 447.205 in that it followed, rather than preceded, the notice to individual recipients and that allegedly it was published less than 60 days before termination of the program was scheduled to become effective, (3) whether the termination of the adult eyeglass program violated the "best interests" clause of 42 U.S.C. § 1396a(a)(19) in that termination of the program would leave many of the recipients financially unable to buy glasses, (4) whether termination of the adult eyeglass program violated 42 U.S.C. § 1396d(a)(12) by impermissibly singling out one service within a group of optional services, (5) whether DPW failed to appoint adequate numbers of consumers to and failed to "fully consult" with the state's Medical Assistance Advisory Committee ("MAAC") prior to attempting to terminate the programs, (6) whether the DPW's public notice of August 2, 1980 which announced the termination of the eyeglass program violated the Commonwealth Documents Act, 45 P.S. § 1102 et seq. and (7) whether the cut-off date of September 30, 1981 by which all Medical Assistance recipients had to file appeals contravenes the Due Process Clause.

 II. DISCUSSION

 A. Defendants' Contention that this Court Lacks Jurisdiction.

 The defendants argued, prior to the amendment of 28 U.S.C. § 1331, that this court lacked subject matter jurisdiction over this case because the plaintiffs' case lacked actual damages in controversy of $ 10,000 as was then required by the statute. *fn3" Secondly, defendants contend that under 28 U.S.C. § 1343(a) (3) plaintiffs' due process claim is frivolous because its effect would be to preclude termination of the eyeglass program indefinitely.

 On December 1, 1980, the Congress amended section 1331 to eliminate the $ 10,000 amount in controversy requirement. Since there is now no damage requirement, jurisdiction exists under section 1331.

 As to 28 U.S.C. § 1343(a)(3) *fn4" I do not find that plaintiffs' due process claim is frivolous as it is well established that plaintiffs need only allege a constitutional claim of sufficient magnitude to invoke this court's jurisdiction. Hagans v. Lavine, 415 U.S. 528, 94 S. Ct. 1372, 39 L. Ed. 2d 577 (1974). Clearly, plaintiffs' contention that "the notice sent to recipients was seriously deficient for it failed to fully and clearly explain the proposed cutbacks as well as denying individuals a right to a hearing" meets the test of a sufficient allegation of a constitutional claim.

 B. The Need for DPW to give Medical Assistance Recipients Notice and a Hearing before Terminating Benefits

 Turning now to the merits, plaintiffs argue that the notice sent to individual recipients informing them of the termination of orthopedic shoes and eyeglasses for adults was defective because it contained a cut-off date, September 30, 1980; an appeal after said date would not be heard. The notices sent to individuals for both programs contain the same language regarding appeals which reads in pertinent part:

 
These changes apply to all persons eligible for services under the Medical Assistance Program. Benefits you receive through other State or Federal government programs are not affected.
 
If you decide to file an appeal you must do so by September 30, 1980. If you appeal will not be heard and the changes made by the regulations will apply to you. You may file your appeal by writing to your local County Assistance Office by September 30, 1980. If you appeal by September 30, 1980, the particular change or changes which you appeal will not apply to you pending the outcome of your appeal. Your appeal must state the reasons why you believe that any of the changes listed above do not apply to you. You may request your County Assistance Office to assist you in filing an appeal. You may represent yourself or have a lawyer, relative, or a friend represent you at the fair hearing.
 
The changes made by the regulations have been adopted under the authority of the Public Welfare Code, at 62 P.S. §§ 403(b), 443.3 and 443.4.
 
NOTE: IF YOU HAVE ANY QUESTIONS CONCERNING THE CONTENTS OF THIS NOTICE OR THE CHANGES MADE TO THE REGULATIONS, OR IF YOU WISH TO OBTAIN A COPY OF THE REGULATIONS AS PUBLISHED IN THE PENNSYLVANIA BULLETIN, CONTACT YOUR COUNTY ASSISTANCE OFFICE.

 Plaintiffs contend that this cut-off date discourages recipients from appealing the termination and that this absolute termination date violates recipients' rights to a fair hearing before termination and, in so doing, this mandatory cut-off date violates federal regulations 42 C.F.R. §§ 431.206(c) *fn5" and 431.210(d) *fn6" promulgated by the Department of Health & Human Services and violates the due process clause of the U.S. Constitution. I hold that both notices sent to recipients conform to the requirements of 42 C.F.R. §§ 431.206 and 431.210(d) in that recipients are adequately advised of their rights in regard to the intended agency action. The notices follow the regulation and clearly inform recipients of their right to a hearing and the method by which they may obtain one. Further, the September 30, 1980 cut-off date to file notice of appeal has not been shown to be unreasonable under the regulation. Indeed, the applicable federal regulation, 42 C.F.R. § 431.221(d), *fn7" requires appeals to be filed within 90 days after notice of a proposed change is mailed to recipients. Here, individual notices were sent to recipients during the week of July 27, 1980. The DPW's deadline of September 30, 1980 does not violate the proscription of 42 C.F.R. § 431.221(d).

 C. The Requirement of Public Notice Pursuant to 42 C.F.R. § 447.205 Before Changes in Method or Level of Reimbursement for a Service Are Made

 Plaintiffs argue next that the defendants failed to comply with the federal regulation, 42 C.F.R. § 477.205, which requires a state agency to give public notice of its intent to change the level of reimbursement for benefits. Plaintiffs contend that the second public notice announcing termination of the eyeglass program for adults, published on August 2, 1980 in the Pennsylvania Bulletin, was in violation of 42 C.F.R. § 477.205 *fn8" because this notice was published after recipients were given individual notice in July 1980 of termination of service. Further, plaintiffs contend that the regulation is violated because publication of notice on August 2, ...


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