Frontline Initiative Legislative Advocacy

Litigation Affecting DSPs


Gary Smith is Senior Project Director involved in several HSRI projects concerning services for people with developmental disabilities, including the Core Indicators Project and the Quality Inventory Project on behalf of the Centers for Medicare and Medicaid Services. Before joining HSRI, Gary served fourteen years as Director of Special Projects for the National Association of State Directors of Developmental Disabilities Services.

Policy changes happen not only through legislative action and administrative changes but also as a result of court decision.

Two unprecedented lawsuits have recently been filed in federal court. They bear watching because how they are decided may have important ramifications for DSPs. Both lawsuits (Ball v. Biedress in Arizona and Sanchez v. Johnson in California) raise similar issues. In a nutshell, the lawsuits contend that low state payment for community services cause people with disabilities not to be able to receive the services they need. In the Ball lawsuit, it is argued that Arizona’s payments for personal assistance services are not high enough to attract individuals to provide the services. Persons authorized to receive personal assistance are going without because they cannot find individuals willing to provide services at the price the state is willing to pay. In the Sanchez lawsuit, community provider agencies argue that low payments leave them no choice but to pay very low wages. Therefore, these providers are unable to meet their obligation to provide services to individuals. In both cases, the plaintiffs directly tie low payments to problems in recruitment and retention.

These lawsuits revolve around the consequences of low payments for people with disabilities. They have been brought on behalf of individuals who are eligible for and authorized to receive Medicaid-funded services in the community but have had to go without services because of lack of workers. The federal courts may enter the picture because there are federal laws that bear on the delivery of disability services. Both lawsuits are based principally on two federal laws —

  1. Federal Medicaid law contains a requirement that a state’s payments be sufficient to attract enough providers to meet the needs of Medicaid recipients. In each of these lawsuits, the plaintiffs contend that each state’s low payments violate this requirement because individuals are going without the services they are otherwise entitled to receive.
  2. Title II of the Americans with Disabilities Act requires that governmental entities operate their programs for people with disabilities in a non-discriminatory fashion and make services available to people with disabilities in the “most integrated setting.” In each lawsuit, the plaintiffs argue that low community payments have the effect of forcing people to seek institutional services or prevent institutionalized persons from being served in the community.

The Sanchez lawsuit also argues that workers in California’s state-run Developmental Centers are paid substantially higher wages than community workers and consequently, California is not operating programs for people with disabilities in a non-discriminatory fashion because it is favoring institutional services over community services.

The lawsuits ask the federal courts to rule that the states are in violation of these federal laws and order them to change their payments so that people with disabilities can access the services they are authorized to receive in the community.

The effects of low state payments on the access of individuals to community services may come before federal courts in other ways. For example, over the past three years, there has been a flurry of “waiting list” lawsuits challenging state policies that lead to individual having to wait for Medicaid services rather than receiving them right away. In some of these cases, the issue of payments has arisen because of concerns that, even if states are directed to stop wait listing individuals by expanding services, payments may not be high enough to attract sufficient providers. In some states, provider organizations are considering joining these lawsuits as plaintiffs in order to put payment issues on the table.

How these lawsuits will be decided is difficult to predict because federal courts have not dealt with these specific issues in the past. It is not entirely clear how the courts will interpret the relevant federal laws. For example, it is uncertain whether a violation of the Americans with Disabilities Act can serve as the basis for a court’s ordering a state to increase spending. Similarly, proving that a state’s payments are the cause of people going without services is not necessarily a simple proposition.

It also is uncertain when rulings will be made in these cases. For example, the Sanchez lawsuit will not go to trial until sometime later this year. Rarely does this type of litigation move along quickly in the federal courts, especially when the courts find themselves in relatively uncharted territory.

(A quick update arrived just as we are going to press. Re: Ball, there is nothing new to report. Re: Sanchez, the only noteworthy recent event is that on 6/7/02 there was a hearing on the plaintiffs’ motion for summary judgment. But the Court won’t rule on that motion for a couple of months. New litigation filed in March 2002 Pennsylvania v. Department of Public Welfare “contends that Pennsylvania has depressed payments for ICF/MR services and held down waiver funding by predicating funding levels on depressed, inadequate compensation of direct care workers. As a result, the plaintiffs contend that they are unable to furnish an appropriate level of services to the persons they serve due to high staff turnover and workforce instability.” This information is from the Status Report: Litigation Concerning Medicaid Services for Persons with Developmental and Other Disabilities, June 12, 2002, by Gary A. Smith.)