The Arc of California v. Douglas

While a home- and community-based services waiver may serve as a bypass to the Medicaid Act, when there is irreparable harm as a result of the waiver, it may be enough to warrant a preliminary injunction.

California has developed home- and community-based services (“HCBS”) under the Lanterman Act to minimize the institutionalization of developmentally disabled individuals, allowing for those individuals to live a more productive and independent life in the comfort of their own homes with their families. The services are provided under contract with regional centers throughout California, and funded by the state. Additionally, California gets funding for the regional centers through its Medicaid program. When the state implemented statutes that involve a "half-day billing rule" and a “uniform holiday schedule," the Petitioners argue that they are inconsistent with the Medicaid Act, and that the cumulative effect of these payment reductions will and continues to leave them in economic turmoil. On appeal, the Ninth Circuit found that the state probably disregarded Section 30(A) of the Medicaid Act. The panel found that while the Medicaid Act allows for exceptions to be made when reducing funding to certain programs, one of which is being able to classify a program as a HCBS, the district was incorrect in their analysis, which led to a denial of a preliminary injunction. The panel explained that based on the circumstances, several factors need to be considered in order to determine if an injunction should be issued: (1) evaluate the likelihood of the Petitioners case to succeed on its merits; (2) the likelihood of the Petitioners to suffer irreparable harm in the absence of just an injunction; (3) the balance of equities which may tip in the Petitioners favor; and, (4) the whether an injunction is in the best interest of the public. Accordingly, the panel reversed the denial of a preliminary injunction and remanded for reconsideration. DISMISSED in part, REVERSED in part, and REMANDED.