Florida Ass'n of Rehabilitation Facilities, Inc. v. Florida Department of Health & Rehabilitative Services

225 F.3d 1208, 2000 WL 1239318
CourtCourt of Appeals for the Eleventh Circuit
DecidedSeptember 1, 2000
DocketNo. 99-12507
StatusPublished
Cited by67 cases

This text of 225 F.3d 1208 (Florida Ass'n of Rehabilitation Facilities, Inc. v. Florida Department of Health & Rehabilitative Services) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Florida Ass'n of Rehabilitation Facilities, Inc. v. Florida Department of Health & Rehabilitative Services, 225 F.3d 1208, 2000 WL 1239318 (11th Cir. 2000).

Opinion

MARCUS, Circuit Judge:

This appeal involves difficult questions of mootness as well as the Eleventh Amendment. Plaintiffs, providers of Medicaid services to developmentally-disabled persons, sued various State of Florida officials seeking injunctive and declaratory relief for alleged violations of the Boren Amendment, which established federal standards governing state plans for reimbursing Medicaid providers. In September 1991 the district court entered a preliminary injunction essentially directing the Defendants to comply with the Boren Amendment. Not until April 1999, however, did the district court enter its final order concluding that Defendants had violated the Boren Amendment and directing Defendants to correct their reimbursement plan prospectively as well as retrospectively to 1991. In the meantime, Congress repealed the Boren Amendment in 1997, and Defendants contend that before entry of judgment they had already enacted a new rate plan in accordance with the requirements of the Boren Amendment’s successor.

Defendants argue on appeal that these developments render some or all of Plaintiffs’ claims moot, and that in any event the relief ordered by the district court is barred by the Eleventh Amendment to the extent it effectively requires the State to [1211]*1211pay money to redress pre-judgment violations. Because the Eleventh Amendment bars retrospective relief affecting the state treasury in this case, we vacate the district court’s judgment to that extent. We remand for determination of whether Plaintiffs’ entitlement to prospective relief had become moot by the time of judgment.

I.

Although the facts of this case are relatively straightforward, its procedural history is anything but. Plaintiffs include the Florida Association of Rehabilitation Facilities, Inc. and several operators of intermediate care facilities for the developmentally disabled (“ICF/DDs”). Plaintiffs provide essential developmental and health care services to low income persons in numerous ICF/DDs throughout the State of Florida. A number of Plaintiffs operate and provide care in ICF/DDs located on land owned by the State — so-called “cluster” facilities. The care provided in the cluster facilities is the same as that provided in the private facilities.

Plaintiffs began this lawsuit in 1989, asserting that Defendants — various Florida officials responsible for formulating and administering the State’s ICF/DD Medicaid Program — violated federal law by failing to reimburse Plaintiffs for reasonable costs incurred as a result of providing care and treatment to Florida’s developmentally disabled citizens residing in ICF/DDs.1 The suit alleged as well that Defendants violated federal law by reimbursing certain cluster providers inadequately through fixed-rate contracts.2

Plaintiffs’ claims arose under the federal Medicaid program, established by Title IX of the Social Security Act, 42 U.S.C. § 1396, et seq. This program is a cooperative federal-state effort to furnish with public assistance people who are unable to meet the cost of necessary medical services. Unlike major federal entitlement programs such as Social Security, Supplemental Security Income, and Medicare, Medicaid is not a federally-administered program with a uniform set of statutorily-defined benefits; rather, it is a state-administered program where the costs of services are allocated between the federal government and the states. No state is obligated to participate in the Medicaid program. If a state opts to participate in the Medicaid program, however, it must do so in a manner that complies with federal statutory and regulatory requirements. See 42 U.S.C. § 1396n. Within the general framework of federal law, states that choose to participate in the Medicaid program (thus qualifying for federal financial aid covering the medical assistance costs of eligible individuals) are granted broad latitude in defining the scope of covered services as well as many other key characteristics of their programs. Florida, like all other states, participates in the Medicaid program.

At the time this suit was filed in 1989, and until October 1, 1997, the Boren Amendment applied to the reimbursement claims at issue. The Boren Amendment to the Medicaid Act, formerly codified at 42 U.S.C. § 1396(a)(13)(A), authorized a “state plan to provide ... for payment ... of the hospital services ... through the use of rates ... which the State finds, and makes assurances satisfactory to the Sec[1212]*1212retary, are reasonable and adequate .... ” Thus, the Amendment required that states pay ICF/DD • providers under rates “reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities in order to provide care and services in conformity with applicable State and federal laws, regulations and quality and safety standards.” Id. The purpose of the Boren Amendment was “to give states greater flexibility in calculating reasonable costs and in containing the continuing escalation of those costs.” Children’s Hospital and Health Ctr. v. Belshe, 188 F.3d 1090, 1093-94 (9th Cir.1999) (citation and internal quotation marks omitted), cert. denied, — U.S. - — -, 120 S.Ct. 2197, 147 L.Ed.2d 233 (2000).

As the Ninth Circuit has summarized: [T]he Boren Amendment authorizes states to develop their own Medicaid reimbursement standards and methodologies for payment of hospital services, but subjects those standards and methodologies to three general federal requirements. First, states must take into account hospitals serving a disproportionate share of low-income patients. Second, states must make findings that the rates are reasonable and adequate to meet the necessary costs of an efficiently operated hospital. And third, states must assure Medicaid patients reasonable access to inpatient hospital care.

Id. (citations and internal quotation marks omitted). Although the Boren Amendment was intended to grant states greater freedom “in establishing the methodology for their reimbursement rates, the amendment was ‘not intended to encourage arbitrary reductions in payment that would adversely affect the quality of care.’ ” Tallahassee Memorial Regional Med. Ctr. v. Cook, 109 F.3d 693, 704 (11th Cir.1997) (citing S.Rep. No. 139, 97th Cong., 1st Sess., at 478, reprinted in 1981 U.S.C.C.A.N. 396, 744).

On September 13 1991, the district court entered a preliminary injunction'in Plaintiffs’ favor, finding specifically that Defendants, in violation of the Boren Amendment, were not adequately reimbursing Plaintiffs for the costs of providing ICF/DD care. The district court found that Defendants’ use of fixed-rate contracts for payment of cluster providers (i.e., private providers of ICF/DD care in state-owned facilities) also violated the Medicaid Act. The district court enjoined Defendants from reimbursing providers at inadequate rates, making that ruling retroactive to September 4, 1991 (the date of the preliminary injunction hearing).

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Bluebook (online)
225 F.3d 1208, 2000 WL 1239318, Counsel Stack Legal Research, https://law.counselstack.com/opinion/florida-assn-of-rehabilitation-facilities-inc-v-florida-department-of-ca11-2000.