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TROUTMAN v. COHEN

April 7, 1987

Minnie Troutman, et al.
v.
Walter Cohen, et al.; Margaret Holland, et al. v. Walter Cohen, et al.; Ida Cherry, et al. v. Walter Cohen, et al.



The opinion of the court was delivered by: VANARTSDALEN

 VanARTSDALEN, S.J.

 Three separate class actions were filed against the same named defendants, all arising out of substantial revisions in regulations relating to skilled nursing and intermediate care facilities adopted by the Pennsylvania Department of Public Welfare under Title XIX of the Social Security Act (Medicaid), 42 U.S.C. § 1396-1396p.

 The first class action complaint, Troutman v. Cohen (Civil Action 83-3534), which was filed on July 26, 1983, challenges the validity of the Medical Assistance Skilled Care Regulations on the ground that Pennsylvania's revised criteria for classification of skilled nursing care are impermissibly stricter than the federal criteria and are therefore not in compliance with the federal regulations. The second class action suit, Holland v. Cohen (Civil Action 85-5983), filed December 16, 1983, challenges the administrative hearing procedure by which patients contest adverse decisions regarding the level of nursing care they are entitled to receive under applicable state and federal regulations. The Holland complaint also alleges that the amount of reimbursement paid to nursing care facilities for intermediate nursing care is inadequate. The third class action suit, Cherry v. Cohen (Civil Action 84-5892), filed December 5, 1984, challenges the adequacy of notice provided to patients whose care has been reclassified from skilled to intermediate nursing care. *fn1"

 Procedural History

 A motion for class certification was filed by the plaintiffs in Troutman on October 13, 1983, which was granted in part by order dated November 4, 1983. The plaintiff class was certified as comprising all persons in Pennsylvania eligible to receive "medical assistance" and who are or will be receiving "skilled nursing facility services" or "intermediate care facility services" within the meaning of Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. The order provided that the action was certified as a class action only with respect to two issues: (1) whether the regulations published at 13 Pa. Bull. 148 (Jan. 8, 1983) were invalid on their face and (2) whether the regulations were invalid because of a defect in publication.

 A pretrial conference was held in my chambers on January 5, 1984, at which plaintiffs' counsel sought an agreement from the state that the new regulations would not go into effect until there was a final disposition of plaintiffs' case on the merits. Because no such agreement could be reached, a hearing was held on January 11 and 12, 1984, on the application filed by plaintiffs for a preliminary injunction. At that time, I had advised all counsel that I would hear evidence on any of the related pending actions.

 Although various claims were raised by plaintiffs at different times both before and after the hearing (e.g., in plaintiffs' pretrial brief, findings of fact, pretrial and post-trial motions, and post-trial brief), my opinion and order, dated March 8, 1984, only addressed those claims upon which evidence was presented at the hearing that had some bearing on whether a preliminary injunction should issue. The two substantive issues addressed in the opinion involved (1) the alleged inconsistencies between the mandated federal regulations and revised state regulations relating to skilled nursing care and (2) the contention that the state's methods of calculating reimbursable costs for skilled and intermediate care facilities were inadequate to effectuate the plan's intended purpose.

 I denied plaintiffs' motion for a preliminary injunction on both issues, concluding that plaintiffs had failed to show irreparable harm and were not likely to succeed on the merits of most of their claims. Troutman v. Cohen, 588 F. Supp. 590 (E.D. Pa. 1984). On appeal, the Third Circuit affirmed the denial of plaintiffs' motion for a preliminary injunction in an unpublished opinion dated December 28, 1984. Troutman v. Cohen 755 F.2d 924 (3d Cir. 1984).

 The Troutman plaintiffs have now filed a motion for partial summary judgment on the issue of whether the criteria for skilled nursing care under Pennsylvania's Medical Assistance program violate federal law as being inconsistent with the mandated federal regulations. Plaintiffs are seeking declaratory relief and a permanent injunction.

 A motion for class certification was filed by the named plaintiffs in Holland on March 9, 1984, which was granted in part by order dated April 24, 1984. The plaintiff class was certified as comprising all persons in Pennsylvania eligible to receive "medical assistance" and who are or will be receiving "intermediate care facility services" within the meaning of Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., with respect to the issue of "whether the defendants' reimbursement scheme for intermediate care facility services violates 42 C.F.R. § 440.230." Court Order, April 24, 1984, para. 2.

 The plaintiffs in Holland have now filed a renewed motion for class certification requesting that the April 24, 1984 order be amended to allow the action to be maintained as a class action with respect to the following additional issues:

 
2. Whether the policy and practice of the defendants of denying specialized legal and medical training to Hearing Officers who are judging Medical Assistance cases where medical conditions are expected to be part of the fact pattern violates federal law.

 Plaintiffs' Renewed Motion for Class Certification, Nov. 25, 1986, at 1-2. The defendants oppose the renewed motion for apparently the same reasons stated in their brief opposing plaintiffs' original motion for class certification. *fn2"

 The Holland plaintiffs have also filed a motion for summary judgment on Counts I, II and III of their amended complaint which deal with the two issues that are the subject of plaintiffs' renewed motion for class certification.

 A motion for class certification was filed by the named plaintiffs in Cherry which was recently granted in part by order dated February 25, 1987. The plaintiff class in Cherry was certified comprising all persons in Pennsylvania eligible to receive "medical assistance" who are or will be classified as receiving "skilled nursing facility services" and who have or will be reclassified or notified that they will be reclassified for "intermediate level of care services" within the meaning of Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq.

 There are three pending motions: (1) Troutman's motion for partial summary judgment, (2) Holland's renewed motion for class certification, and (3) Holland's motion for summary judgment on Counts I, II, and III of their amended complaint. *fn3" The merits of each of these motions will be addressed in turn.

 Troutman's Motion for Partial Summary Judgment

 The plaintiffs in Troutman have moved for summary judgment on the issue of whether the Pennsylvania Medical Assistance regulations regarding the criteria for skilled nursing care are facially invalid as being inconsistent with the mandated federal regulations. The plaintiffs argue that the state's new criteria for skilled care are impermissibly stricter than that provided by federal law, thus resulting in reduction in the level of nursing care to thousands of low income elderly nursing home patients who might not otherwise be reclassified under the federal criteria. Specifically, plaintiffs contend that the state regulations are not in compliance with the federal regulations because the state regulations fail to incorporate as skilled services the "overall management and evaluation of care plan" and "observation and assessment of the patient's changing condition" which are included in the federal regulations. See 42 C.F.R. § 409.33(a)(1) and (2).

 The relevant federal regulations define skilled nursing and skilled rehabilitation services as generally requiring services which are ordered by a physician; which require the skills of technical or professional personnel; and which are furnished directly by or under the supervision of such technical or professional personnel on a daily basis. 42 C.F.R. § 409.31 (1986). The federal regulations provide criteria for skilled services, 42 C.F.R. § 409.32, and include a list of examples of skilled nursing and rehabilitation services. 42 C.F.R. § 409.33. Examples of services that qualify as skilled nursing services appear at 42 C.F.R. § 409.33(b) and services which would qualify as skilled rehabilitation services appear at 42 C.F.R. 409.33(c). Pennsylvania has adopted these portions of the federal regulations almost verbatim. 55 Pa. Code § 1181, Appendix E II(b). The dispute in this case focuses on the listing of examples in the federal regulations of skilled care services that could qualify as either skilled nursing or skilled rehabilitation services which appear at 42 C.F.R. § 409.33(a). These services include (1) overall management and evaluation of care plan, (2) observation and assessment of the patient's changing condition, and (3) patient education services. *fn4" Pennsylvania did not adopt this portion of the federal regulations and instead adopted the following provision:

 
A recipient may not need or receive a skilled care service specified in paragraphs (i) or (ii) of subsection (b), however, in rare instances, a particular medical condition may occur which complicates the recipient's medical state to the degree that the treatment of the recipient's medical condition must be rendered or supervised by medical professionals on a daily basis. Although any of the services required in the treatment of this condition could be performed by a properly instructed person, that person would not have the ability to understand the relationship between the services and to evaluate the ultimate effect of one service on the other. Therefore, the treatment of the medical condition requires that the services be performed by or under the immediate supervision of medical professionals. It is the necessity of the immediate involvement of medical professionals in the treatment of the recipient's special medical condition that qualifies the recipient to be determined medically eligible for skilled nursing care. In these cases, the special medical complication and the services which meet the criteria specified in section II(a) and are provided on a daily basis by medical professionals because of the recipient's special medical complication must be documented in the recipient's medical record by physician's orders and nursing or therapy notes.

 55 Pa. Code § 1181, Appendix E II(c).

 Plaintiffs have maintained throughout this action that the state's failure to specifically include an overall management and evaluation of care plan and the observation and assessment of a patient's changing condition as skilled care services precludes many patients from qualifying for skilled care under the state regulations who would otherwise qualify under the federal regulations. The plaintiffs argue that as a result of this omission, the nursing homes caring for these patients are forced to place these reclassified patients in less intensive, intermediate care units because the nursing homes are reimbursed for such patients only at intermediate care rates which are less than the skilled care rates.

 The defendants argue that the provision in the regulations which allows skilled care classification where "special medical circumstances" exist, 55 Pa. Code § 1181, Appendix E II(c), provides an adequate substitute for the omitted federal regulations. Plaintiffs, however, maintain that the "special medical circumstances" provision is not an adequate substitute because, among other reasons, the state provision requires daily documentation of skilled services whereas the applicable federal ...


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