Kira Marie Herald v. South Dakota Department of Social Services; Matt Althoff, Cabinet Secretary, South Dakota Department of Social Services, in his individual and official capacity; Teresa M. Schulte, Administrative Law Judge, in her individual and official capacity; Beth Adsero, DSS Benefits Specialist, in her individual and official capacity; Katie Heck, Regional Operations Manager of Department of Human Services, Long Term Services & Supports Division, in her individual and official capacity; State of South Dakota; Larry Rhoden, Governor of South Dakota, in his individual and official capacity

District Court, D. South Dakota·Decided June 15, 2026·No. 4:25-cv-04186·Unknown

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF SOUTH DAKOTA SOUTHERN DIVISION

KIRA MARIE HERAL, 4:25-CV-04186-KES

Plaintiff,

vs. ORDER DENYING PLAINTIFF’S MOTION FOR A PRELIMINARY SOUTH DAKOTA DEPARTMENT OF INJUNCTION AND GRANTING SOCIAL SERVICES; MATT ALTHOFF, PLAINTIFF’S MOTION TO Cabinet Secretary, South Dakota EFFECTUATE SERVICE ON NEWLY Department of Social Services, in his ADDED DEFENDANTS individual and official capacity; TERESA M. SCHULTE, Administrative Law Judge, in her individual and official capacity; BETH ADSERO, DSS Benefits Specialist, in her individual and official capacity; KATIE HECK, Regional Operations Manager of Department of Human Services, Long Term Services & Supports Division, in her individual and official capacity; STATE OF SOUTH DAKOTA; LARRY RHODEN, Governor of South Dakota, in his individual and official capacity; SOUTH DAKOTA DEPARTMENT OF HUMAN SERVICES, Long Term Services & Supports Division; KERRI KONECHNE, LTSS Case Management Specialist, Department of Human Services, in her individual and official capacity; DANIELLE SCHAEFFER, R.N., DHS Nurse Consultant, in her individual and official capacity; TONI ROUNDS, R.N., DHS Nurse Consultant, in her individual and official capacity; HEATHER KRZMARZICK, Director, LTSS, South Dakota DHS, in her individual and official capacity; THOMAS MARTINEC, Deputy Secretary, DHS, in his individual and official capacity; and LESLIE LOWE, HCBS Operations Administrator, LTSS, in her individual and official capacity; Plaintiff, Kira Heral, moves under Federal Rule of Civil Procedure 65 for a

preliminary injunction against defendants, South Dakota Department of Social Services (DSS); South Dakota Department of Human Services (DHS), Long Term Services & Supports Division; Matt Althoff, Cabinet Secretary, DSS; Teresa M. Schulte, Administrative Law Judge; Beth Adsero, DSS Benefits Specialist; Katie Heck, Regional Operations Manager of DHS; the State of South Dakota; Larry Rhoden, Governor of South Dakota; and six other South Dakota DHS employees: Kerri Konechne, Danielle Schaeffer, Toni Rounds, Heather

Krzmarzick, Thomas Martinec, and Leslie Lowe. Docket 42; Docket 41 at 2-4. Defendants oppose the motion for a preliminary injunction. Docket 48. Heral also moves for an order directing the United States Marshal to serve newly added defendants. Docket 44. The court issues the following order. FACTUAL BACKGROUND Heral alleges that defendants terminated her medically necessary Home and Community-Based Options and Person-Centered Excellence (HOPE) waiver services effective April 5, 2025. Docket 41 at 7-8. She asserts claims for

(1) deliberate indifference to serious medical needs in violation of the Fourteenth Amendment (2) procedural due process, (3) violations of Title II of the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act (RA), (4) municipal liability, (5) violations of the South Dakota Constitution, and (6) negligence and gross negligence. Id. at 22-28. Following the termination of services, Heral alleges that she experienced blood-glucose fluctuations requiring emergency intervention. Docket 41-1 at 5-17, 38-44. She seeks, among other relief, an injunction requiring the immediate restoration of HOPE

waiver services. See Docket 42. South Dakota administers the HOPE waiver program through the Department of Human Services (DHS). Docket 49-1 at 11. The program permits the State to use Medicaid funds to provide home- and community-based services to qualifying individuals who would otherwise require nursing-facility care. Id. To participate, an applicant must satisfy three principal eligibility requirements: age or disability status, financial eligibility, and a required

nursing-facility level of care. Id. at 12. The application process is divided between two agencies. Id. at 11. The Department of Social Services (DSS) determines whether the applicant qualifies financially and is eligible for Medicaid. See id. at 12. DHS then evaluates whether the applicant requires a nursing-facility level of care. See id.; Docket 48 at 3. That determination begins with a home-care assessment, a standardized tool used to evaluate the applicant’s physical, cognitive, and functional needs. Docket 49-1 at 8, 13-14. The results are then reviewed by a

DHS nurse consultant, who determines whether the applicant meets the required level of care. Id. at 8; Docket 48 at 3. Applicants who satisfy the financial and level-of-care requirements work with a case-management specialist to develop an Individual Support Plan (ISP). See Docket 49-1 at 34. The ISP identifies the participant’s assessed needs, goals, supports, and authorized services. See id. Relevant here, those services include homemaker assistance, personal-care services, nursing services, and structured family caregiving. Id. at 43. Except for structured family caregiving,

HOPE waiver services are not provided on a 24-hour basis. Docket 50 ¶ 11. The ISP is developed through a review of the assessment results, consideration of available informal supports, and discussion with the participant regarding needs and goals. Docket 49-1 at 34. Once the participant has been determined financially eligible, found to meet nursing-facility level-of- care requirements, and completed and signed an ISP, authorized services may begin. Id. at 22, 39.

Nursing services under the HOPE waiver program must be medically necessary and tied to an assessed need. Id. at 39, 71. Participants receiving nursing services must also obtain a physician’s order identifying the services required and the hours authorized. Id. at 40, 72. In addition, the total cost of authorized services generally may not exceed the cost of nursing-facility care, unless an exception applies. Id. at 27; see also 42 C.F.R. § 441.302(e). The State does not directly provide HOPE waiver services. See Docket 49- 1 at 24. Instead, services are delivered by private providers that voluntarily

participate in the program and are reimbursed with Medicaid funds. Id. Participation in the HOPE Waiver program is voluntary for service providers. Id. at 24-26. To furnish waiver services, an agency must enroll with South Dakota Medicaid and be approved for the particular service categories it will provide. Id. Nursing services must be provided through a Medicare-certified home- health agency and performed by a registered nurse. Id. at 71-72. DHS monitors service delivery through periodic reviews and reassessments. Id. at 42. If a participant is later determined not to require a nursing-facility level of care, the

participant is disenrolled from the program. Id. at 98. Heral first received HOPE waiver services in December 2023. Docket 25- 9. At that time, she was approved for homemaking and personal-care services totaling 6.5 hours per week. Id. at 2-4. She did not receive nursing services. See id. at 1-5. That changed in October 2024 when Heral qualified for the structured family caregiving program. Docket 25-8 at 1. The program permits a

participant to reside with a designated caregiver who provides substantial assistance and supervision. Docket 49-1 at 75-77. The caregiver must be a family member or fictive kin who lives with the participant and receives support and a stipend through an approved provider. Id. at 77. Heral’s caregiver moved out of her residence in April 2025. Docket 25-10. Because continued eligibility for structured family caregiving depended on that living arrangement, the change triggered a reassessment. See Docket 49-1 at 41, 77. Defendant Beth Adsero conducted the reassessment on April 9, 2025,

and forwarded the results to DHS nurse consultant Danielle Schaeffer. See Docket 26-1; Docket 26-3.

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Kira Marie Herald v. South Dakota Department of Social Services; Matt Althoff, Cabinet Secretary, South Dakota Department of Social Services, in his individual and official capacity; Teresa M. Schulte, Administrative Law Judge, in her individual and official capacity; Beth Adsero, DSS Benefits Specialist, in her individual and official capacity; Katie Heck, Regional Operations Manager of Department of Human Services, Long Term Services & Supports Division, in her individual and official capacity; State of South Dakota; Larry Rhoden, Governor of South Dakota, in his individual and official capacity, (D.S.D. 2026).

Kira Marie Herald v. South Dakota Department of Social Services; Matt Althoff, Cabinet Secretary, South Dakota Department of Social Services, in his individual and official capacity; Teresa M. Schulte, Administrative Law Judge, in her individual and official capacity; Beth Adsero, DSS Benefits Specialist, in her individual and official capacity; Katie Heck, Regional Operations Manager of Department of Human Services, Long Term Services & Supports Division, in her individual and official capacity; State of South Dakota; Larry Rhoden, Governor of South Dakota, in his individual and official capacity (Kira Marie Herald v. South Dakota Department of Social Services; Matt Althoff, Cabinet Secretary, South Dakota Department of Social Services, in his individual and official capacity; Teresa M. Schulte, Administrative Law Judge, in her individual and official capacity; Beth Adsero, DSS Benefits Specialist, in her individual and official capacity; Katie Heck, Regional Operations Manager of Department of Human Services, Long Term Services & Supports Division, in her individual and official capacity; State of South Dakota; Larry Rhoden, Governor of South Dakota, in his individual and official capacity) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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