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Moore v. Secretary, Indiana Family and Social Services Administration

United States District Court, N.D. Indiana, South Bend Division

March 15, 2017

SHELLY MOORE, Individually and as Class Representative, Plaintiff,

          OPINION & ORDER


         Shelly Moore is a Medicaid recipient and two-time breast cancer survivor living in Indiana. In 2013, she had the awful experience of being diagnosed with breast cancer for the third time. Moore's oncologist recommended that she have her ovaries removed and requested prior approval for the surgery (called an “oophorectomy”) from Medicaid. When the request was denied, Moore's doctor sent a written request asking the Family and Social Services Administration (“FSSA”), which administers the Medicaid program in Indiana, to reconsider its denial. However, the FSSA did not treat the request as an appeal of the denial and so did not conduct an administrative review of its denial or offer Moore a hearing.

         What should be a relatively straight-forward case has been transformed into a legal colossus. The First Amended Complaint alleges a putative class action against the Indiana Family and Social Services Administration (and its Secretary), as well as Advantage Health Solutions, a private company that contracts with FSSA to assist in administering the Indiana Medicaid program. Moore alleges breaches of federal and state contracts related to Medicaid, discrimination in violation of the Americans with Disabilities Act and the Rehabilitation Act, violation of the Medicaid Act, and infringement of Moore's rights to due process and equal protection under the Fourteenth Amendment of the U.S. Constitution. The defendants have moved to dismiss on a variety of grounds pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). In addition, the FSSA has moved for denial of class certification. For the reasons set out below, the FSSA's motion is granted in part and denied in part, and Advantage's motion is granted.


         Medicaid is a federal program that allows states to subsidize medical assistance to low-income individuals and families. See 42 U.S.C. § 1396, et. seq.; Bontrager v. Ind. Family & Social Servs. Admin., 697 F.3d 604, 604 (7th Cir. 2012). In Indiana, the FSSA administers Medicaid, and it has contracted with defendant Advantage Health Solutions, Inc. to perform certain Medicaid-related tasks. (DE 29 at 3.) Though the complaint claims that Moore does not have access to Indiana's contract with Advantage, this is puzzling since it is publicly available on the state's webpage. See Prof. Servs. Contract; Ind. FSSA Contract with Adv. Health Sols., Inc., Dec. 9, 2013, https://fs.gmis. Among other things, it requires Advantage to review requests for preapproval of medical services, decide whether Medicaid will cover those services, and notify the provider and the member when a service will not be covered. Id. at Ex. 1 - Scope of Work, §§ 1.1, 1.3 ¶ 29.

         The complaint does a remarkably poor job of explaining what happened when Moore's doctor sought prior authorization for Moore's oophorectomy. What follows are the parts of the story that I could glean from the scant facts alleged in the complaint. And, of course, for present purposes, I take these allegations to be true.

         Moore is a Medicaid recipient who was diagnosed with breast cancer twice before. (DE 29 ¶ 5.) Each time, she underwent radiation and chemotherapy and was told that the cancer was in remission. (Id.) In 2013, she was diagnosed with breast cancer a third time, and her oncologist advised her to have her ovaries removed because the cancer is hormone-receptive, which means that hormones released by the ovaries cause it to grow. (Id. ¶¶ 5, 12, 15.) The oncologist sent a request for prior approval of the surgery to Medicaid on Moore's behalf, but the request was denied “some time in mid-2013.” (Id. ¶ 12.) The doctor then sent a “written request . . . that FSSA reconsider its decision denying the request for surgery[, ]” but the FSSA “did not treat the oncologist's request as an appeal of its decision to deny the surgery and did not provide an agency administrative review or hearing of the denial[.]” (Id.) Although it would have been helpful to my consideration of this case, the complaint does not quote, summarize, or incorporate the documents Moore's doctor sent to Medicaid or the notice(s) he received back.

         The complaint is by turns ambiguous and internally inconsistent, but I read it to allege a breach of contract claim and claims under the ADA, the Rehabilitation Act, and the Medicaid Act against the FSSA (Counts One, Three, Four, and Eight); a breach of contract claim and claims under the ADA and the Rehabilitation Act against Advantage (Counts Two, Five, Six, and Seven); and due process and equal protection claims against all three defendants (Count Nine). The complaint purports to bring all these claims on behalf of the following class:

[A]ll past, current and future Indiana Medicaid recipients and applicants with disabilities (A) in need of accurate evaluations of their medical conditions for which Class members seek services or treatment recommended by the Class members treating physicians, doctors, or other medical providers; (B) but did not or will not receive accurate evaluations of their medical conditions; (C) and who suffered or are likely to suffer injuries as a result of the actions or inaction of the Secretary, FSSA, or Advantage.

(Id. ¶ 27.)


         To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citations omitted); accord Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). I must accept as true all factual allegations in the complaint and draw all reasonable inferences in favor of the plaintiff, but I am not required to accept “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Iqbal, 556 U.S. at 678. “[L]egal conclusions can provide the complaint's framework, [but] they must be supported by factual allegations . . . [that] plausibly give rise to an entitlement to relief. Id. at 679.

         Because the breach of contract claims alleged in Counts One and Two derive from the other claims alleged in the complaint, I will address them last.

         Discrimination Claims against the FSSA (Counts Three and Four)

         Counts Three and Four of the complaint allege that FSSA denied Medicaid services and benefits and discriminated against her on the basis of a disability in violation of Title II of the ADA and section 504 of the Rehabilitation Act. (DE 29 ¶¶ 42-43, 49-50.) Title II provides that “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.” See 42 U.S.C. § 12132. Section 504 of the Rehabilitation Act is substantially similar. See 29 U.S.C. § 794(a). Indiana argues that these discrimination claims should be dismissed for failure to state a plausible claim on grounds that the complaint only alleges that Moore has cancer, which by itself, does not constitute a disability under the statutes. (DE 38 at 8.) I disagree.

         Both the ADA and the Rehabilitation Act define “disability” as “a physical or mental impairment that substantially limits one or more major life activities of such individual[.]” See 42 U.S.C. § 12102; 29 U.S.C. § 705 (9)(B). Indiana may be right that cancer isn't necessarily a disability, but the complaint alleges other physical impairments. Specifically, it alleges that Moore has “neuropathy in her fingers and toes that prevents her from manipulating her fingers well and causes her to lose her balance” and that these problems were “severe enough to make her eligible for federal Social Security disability benefits.” (See DE 29 ¶ 5.) Although a disability determination by the Social Security Administration doesn't necessarily mean one is disabled under the ADA (and, by extension, Rehabilitation Act), it does provide additional support for the notion that Moore's cancer “substantially limits one or more [of her] major life activities.” See Lawson v. CSX Transp., Inc., 245 F.3d 916, 923 (7th Cir. 2001) (citations omitted). All this taken together is more than sufficient to allege a disability within the meaning of the ADA and the Rehabilitation Act.

         Unfortunately for Moore, that's not the end of the matter because Indiana has also moved to dismiss these claims on grounds they don't plausibly allege discrimination because of a disability. (DE 38 at 8-9.) This is a more persuasive argument-and one Moore's brief utterly fails to address. A plausible claim under either Title II of the ADA or section 504 of the Rehabilitation Act requires not just allegations that Moore had a disability, but that “because of her disability, she was denied the benefits . . . or was otherwise subjected to discrimination. . . [which] means that the disability was the immediate cause of the discrimination or denial of benefits.” L.W. by Bridgett J. v. Ill. Dep't. Children & Family Servs., No. 13-cv-8463, 2015 WL 3476313, at *3 (N.D. Ill. June 1, 2015) (citing 42 U.S.C. § 12132; 29 U.S.C. § 794(a)); see also Wisc. Comty. Servs., Inc. v. City of Milw., 465 F.3d 737, 752 (7th Cir.2006) (“Title II case law . . . requires the plaintiff to show that, “but for” his disability, he would have been able to access the services or benefits desired.”).

         These counts fall short of this requirement. The complaint parrots regulatory language promulgated for the purposes of implementing the ADA. (Compare DE 29 ¶¶ 43, 50, and 28 C.F.R. § 35.130(b)(1)(v); DE 29 ¶¶ 45, 52, and 28 C.F.R. § 35.130(b)(8); DE 29 ¶¶ 44, 51, and 28 C.F.R. § 35.103(b)(3).) But regurgitated regulatory language cannot be the sum total of a plausible claim. Instead, it must be accompanied by factual allegations that support the elements of the claim and therefore give rise to a plausible inference that the plaintiff is entitled to relief. See Iqbal, 556 U.S. at 679. For this reason, Counts Three and Four will be dismissed without prejudice, and Moore will be given an opportunity to file a second amended complaint if she wants to try to cure the deficiencies described above.

         Discrimination Claims Against Advantage (Counts ...

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