                NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 09a0523n.06

                                           No. 08-3931                                   FILED
                                                                                      Jul 29, 2009
                          UNITED STATES COURT OF APPEALS                       LEONARD GREEN, Clerk
                               FOR THE SIXTH CIRCUIT


PARENTS’ LEAGUE FOR EFFECTIVE AUTISM                     )
SERVICES; X.C., a minor by and through his parent,       )
A.C.; W.G., a minor by and through his parent, K.G.;     )
K.W., a minor by and through his parent, A.W.,           )
                                                         )
       Plaintiffs-Appellees,                             )
                                                         )
               v.                                        )
                                                         )
HELEN E. JONES-KELLEY, in her official capacity          )
as Director of the Ohio Department of Job and Family     )
Services; SANDRA STEPHENSON, in her official             )
capacity as Director of the Ohio Department of Mental    )         ON APPEAL FROM THE
Health,                                                  )         UNITED STATES DISTRICT
                                                         )         COURT FOR THE SOUTHERN
       Defendants-Appellants,                            )         DISTRICT OF OHIO
                                                         )
KERRY WEEMS, in his official capacity as Acting          )
Administrator, Centers for Medicare & Medicaid           )
Services,                                                )
                                                         )
       Defendant.                                        )
                                                         )



BEFORE: KENNEDY, GIBBONS, and ROGERS, Circuit Judges.


       ROGERS, Circuit Judge. Defendants Helen Jones-Kelly, Director of the Ohio Department

of Job and Family Services, and Sandra Stephenson, Director of the Ohio Department of Mental

Health, appeal the district court’s grant of a preliminary injunction enjoining the implementation of


                                                 1
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two amended state administrative rules. The Parents’ League for Effective Autism Services, along

with three children with autism and their guardians, brought this suit under 42 U.S.C. § 1983

claiming violations of their rights under federal Medicaid law. Plaintiffs claimed that amendments

to state administrative rules promulgated by defendants deprived them of services required by the

federal Early and Periodic Screening, Diagnostic, and Treatment program. The district court granted

plaintiffs’ request for a temporary restraining order and preliminarily enjoined the implementation

of the amended rules. The district court found that plaintiffs have a likelihood of success on the

merits of their claims, that plaintiffs would suffer irreparable injury absent preliminary injunctive

relief, that Ohio would not be harmed by the injunction, and that the public interest would be served

by the issuance of the preliminary injunction. The district court did not abuse its discretion in

weighing these four factors when it granted plaintiffs’ request for a preliminary injunction.



                                                 I.

       Plaintiffs are three Medicaid-eligible children and their guardians, and the Parents’ League

for Effective Autism Services (“PLEAS”), an association of parents whose children receive services

from Step by Step Academy (“SBSA”) under Medicaid. SBSA is a nonprofit treatment center that

focuses on providing Applied Behavioral Analysis (“ABA”) services to children with autism.

       Federal regulations define autism as a “developmental disability significantly affecting verbal

and nonverbal communication and social interaction, generally evident before age three, that

adversely affects a child’s educational performance. Other characteristics often associated with


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autism are engagement in repetitive activities and stereotyped movements, resistance to

environmental change or change in daily routines, and unusual responses to sensory experiences.”

34 C.F.R. § 300.8(c)(1)(i). According to plaintiffs’ expert, ABA therapy is a “highly effective form

of behavioral treatment” that uses a “one-on-one teaching approach that relies on reinforced practice

of various skills,” and “[t]he best treatment plan [for children with autism] will include ABA, the

only treatment approach confirmed as effective by a comprehensive evaluation of all proposed

therapies in a well know[n] government sponsored review process.” Decl. of James A. Mulick,

Ph.D.,    at   ¶¶   20,   21.   (citing   http://www.health.state.ny.us/community/infants_children/

early_intervention/autism/ index.htm).

         Plaintiff children receive ABA therapy, along with other services, from SBSA:

         Step by Step Academy provides treatment services exclusively for children with
         autism or related autism spectrum symptoms. This full-day, year round intervention
         is based on Applied Behavior Analysis, a system of controlling the environment,
         establishing sequential goals, providing discrete trials for learning with a high rate
         of repetition, insuring reinforcement of success in learning trials, and planned
         generalization training. Using one-to-one and small group intervention, the treatment
         focuses on the amelioration of autism symptoms and skill deficits. Individualized
         goals within the diagnostic criteria focus on each child’s receptive and expressive
         language, communication, socialization, self-help skills, and general behavior
         patterns for optimal learning.

Decl. of Jeffrey A. Christiansen, Psy.D., staff psychologist with SBSA, at ¶ 5. Plaintiffs claim that

this therapy provides significant benefits for the plaintiff children. Defendants note that SBSA’s

one-to-one ABA therapy is provided at great expense. Defendants claim that in fiscal year 2007,

SBSA billed the Ohio Medicaid program approximately $2.6 million for services provided to 42

children, which is one-half of Ohio’s expenditures in the specific Medicaid treatment program that

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funded SBSA’s services. SBSA’s per pupil cost in 2007 was nearly five-times the average per pupil

cost of other providers serving children with autism.

       Defendant Helen Jones-Kelley is director of the Ohio Department of Job and Family Services

(“ODJFS”), and is responsible for the supervision and operation of the Medicaid program in Ohio.

Defendant Sandra Stephenson is the Director of the Ohio Department of Mental Health (“ODMH”),

and is responsible for adopting rules and standards for services provided by community health

facilities. ODJFS works with ODMH to promulgate the Ohio Administrative Code rules that govern

Ohio’s Medicaid program. Defendant Kerry Weems is the Acting Administrator of the Federal

Centers for Medicare and Medicaid Services (“CMS”), an agency under the Department of Health

and Human Services responsible for administering the federal Medicaid program.1

       On August 13, 2007, CMS filed proposed rules that would limit Medicaid’s coverage of

rehabilitative services. 72 Fed. Reg. 45201. However, Congress placed a moratorium on these and

other proposed restrictions on Medicaid spending, and therefore these rules were never adopted. See

Pub. L. No. 110-28 § 7001(a); Pub. L. No. 110-252 § 7001(a) (extending moratorium on regulations

restricting coverage of rehabilitative services until April 1, 2009); Pub. L. No. 111-5 § 5003(a),

(d)(3) (January 4, 2009) (noting a “sense of Congress” that the proposed regulations relating to

rehabilitative services should not be promulgated as final regulations).




       1
        On June 20, 2008, the district court filed an order finding that CMS is a necessary party
under Fed. R. Civ. P. 19(a). Plaintiffs filed an amended complaint adding defendant Kerry Weems.

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       After CMS proposed restrictions on rehabilitative services, ODJFS promulgated amendments

to Ohio’s Administrative Rules. The first amended rule, Ohio Admin. Code § 5122-29-17, redefined

Ohio’s Community Psychiatric Supportive Treatment (“CPST”) program, which was the program

that funded SBSA’s services.      The amendment limited CPST services to those that were

rehabilitative in nature. The second amended rule, Ohio Admin. Code § 5101:3-27-02, redefined

when Ohio’s Medicaid program would cover community mental health services. This amended rule

limited coverage to those services that were rehabilitative, and defined rehabilitative services as

those that restore an individual to a prior functional level. These two amended rules were

promulgated on February 28, 2008, and were set to go into effect on July 1, 2008.

       On March 21, 2008, Gwendolyn Sampson, Acting Associate Regional Administrator at CMS,

sent a letter to ODJFS raising concerns about whether SBSA’s services are Medicaid-reimbursable

expenditures:

       Step by Step has been billing Medicaid for community psychiatric supportive
       treatment (CPST) for children diagnosed with autism. CPST is a rehabilitative
       service under Ohio’s State Plan intended to maximize the reduction of symptoms of
       mental illness in order to restore the individual’s functioning. CMS generally views
       treatment for autism as habilitative rather than rehabilitative—as such, the CPST
       claims by Step by Step may not comply with Ohio’s State Plan.

The letter indicated that CMS was deferring payment for the expenditures submitted by SBSA.

ODJFS was provided the opportunity to justify these expenditures, but the record does not indicate

whether ODJFS took any steps to provide CMS with further information. The letter from CMS used

the definition of CPST services from the amended rules, not yet in effect.



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       On May 2, 2008, plaintiffs filed suit in the United States District Court for the Southern

District of Ohio, claiming that Ohio’s amended administrative rules violate federal Medicaid law.

Specifically, plaintiffs asserted that the federal Early and Periodic Screening, Diagnostic, and

Treatment (“EPSDT”) program requires Ohio, as a voluntary state recipient of federal Medicaid

funds, to provide eligible children various treatment services. Plaintiffs claim that SBSA’s ABA

therapy is covered as a mandatory rehabilitative service under EPSDT, and that the rejection of

funding for these services under the amended Ohio administrative rules would violate EPSDT’s

mandate.    Plaintiffs moved for a temporary restraining order enjoining defendants from

implementing the amended rules.

       The district court held a hearing on plaintiffs’ motion for preliminary injunctive relief. On

June 30, 2008, the day before the amended rules were to take effect, the district court granted

plaintiffs’ motion for a temporary restraining order. Parents League for Effective Autism Servs. v.

Jones-Kelley, 565 F. Supp. 2d 905 (S.D. Ohio 2008). First, the district court found that abstention

was not required under the Burford abstention doctrine. Id. at 913-14. Second, the court found that

preliminary injunctive relief was appropriate because: (1) plaintiffs have a strong likelihood of

showing that the EPSDT-mandated services under Medicaid law, specifically 42 U.S.C. §

1396d(a)(13), require Ohio to cover SBSA’s services and that Ohio’s amended administrative rules

would unlawfully deny plaintiffs these mandatory services; (2) plaintiffs would suffer irreparable

injury if the amended rules were implemented because they would experience severe regression in

their symptoms; (3) Ohio will not be harmed by the preliminary injunctive relief because complying


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with federal Medicaid law is not a harm; and (4) the public interest will be served by preliminary

injunctive relief because the early treatment of autism has been shown to provide significant

improvement and the cost of providing care will be greater if these individuals do not receive

treatment at an early stage.2 Id. at 914-18. On July 1, 2008, the district court granted a preliminary

injunction based on the reasons set forth in its June 30, 2008, memorandum.3

       Defendants filed a motion to stay the preliminary injunction, but the district court denied this

request. Defendants appealed the district court’s order granting the preliminary injunction.4



                                                  II.

       The district court did not abuse its discretion in granting plaintiffs’ request for preliminary

injunctive relief enjoining defendants from implementing the two amendments to the administrative

rules. This case involves an alleged conflict between an ambiguous federal Medicaid provision and

amendments to two of Ohio’s administrative rules. In addition, the federal agency responsible for


       2
          On the same day, the district court denied defendants’ motion to dismiss. Parents League
for Effective Autism Servs. v. Jones-Kelley, 565 F. Supp. 2d 895 (S.D. Ohio 2008). In this order, the
district court found that plaintiffs have standing to sue and that plaintiffs have alleged violations of
a right enforceable through 42 U.S.C. § 1983. Defendants did not appeal this interlocutory order.
       3
         Normally, an appellate court does not have jurisdiction to review the grant of a temporary
restraining order. It is clear from this order, however, that in addition to granting plaintiffs’ motion
for a temporary restraining order, the court also granted a preliminary injunction and both parties
treat the order as a preliminary injunction. This court has jurisdiction to review the preliminary
injunction under 28 U.S.C. § 1292(a).
       4
        On appeal, defendants do not challenge the district court’s ruling on the inapplicability of
Burford abstention.

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administering the Medicaid program has yet to take a position on the issues relevant to this case. At

this stage of the litigation, we are not deciding that plaintiffs will succeed in showing a violation of

their rights under Medicaid law, but only that the district court did not abuse its discretion in

concluding that the four factors involved in reviewing a request for preliminary injunctive relief on

balance weighed in favor of granting plaintiffs’ requested injunctive relief. See Leary v. Daeschner,

228 F.3d 729, 736 (6th Cir. 2000) (reciting the four-factor test).

         The district court properly considered the extent to which: (1) plaintiffs have a likelihood of

success with regard to whether Ohio is required under the federal Medicaid statute to cover SBSA’s

ABA therapy when medically necessary, and whether the amended Ohio administrative rules

effectively cut off funding for these services; (2) plaintiffs would suffer irreparable injury absent an

injunction; (3) the injunction would not cause substantial harm to others; and (4) the public interest

would be served by issuance of a preliminary injunction. The district court did not abuse its

discretion in finding that these factors weigh in favor of granting preliminary injunctive relief, and

the court has not “relied upon clearly erroneous findings of fact, improperly applied the governing

law, or used an erroneous legal standard.” Tumblebus, Inc. v. Cranmer, 399 F.3d 754, 760 (6th Cir.

2005).



A. Likelihood of success on the merits

         “The preliminary question of whether a movant is likely to succeed on the merits is a

question of law which we decide de novo.” Tumblebus, 399 F.3d at 760. The district court


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determined that plaintiffs have a likelihood of success on the merits of their claims because: 1)

federal Medicaid provisions likely require coverage of SBSA’s ABA therapy when determined to

be medically necessary; and 2) the amendments to the Ohio administrative rules would have the

combined effect of cutting off funding for these services.



       1. Whether 42 U.S.C. § 1396d(a)(13) covers the services provided by SBSA


       The ambiguities in the federal Medicaid provision requiring reimbursement for rehabilitative

services make a definitive determination on coverage of specific treatments a difficult proposition,

especially without the input of CMS on these issues. This factor accordingly does not weigh strongly

for or against a preliminary injunction.

       Because Ohio accepted federal Medicaid funds, the state Medicaid plan must provide for

EPSDT screening services as defined by 42 U.S.C. § 1396d(r) and provide: “. . . corrective treatment

the need for which is disclosed by such child health screening services.” 42 U.S.C. §

1396a(a)(43)(C). Section 1396d(r) requires states to provide several specific services and:

       [s]uch other necessary health care, diagnostic services, treatment, and other measures
       described in subsection (a) of this section to correct or ameliorate defects and
       physical and mental illnesses and conditions discovered by the screening services,
       whether or not such services are covered under the State plan.

§ 1396d(r)(5). Taken together, these provisions require Ohio to provide EPSDT-eligible children

all of the services in subsection § 1396d(a) that are determined to be medically necessary.




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       Section 1396d(a) includes 28 categories of services that Ohio must fund for eligible children

under EPSDT’s mandate. Most relevant to this case is § 1396d(a)(13), which requires states to

provide:

       other diagnostic, screening, preventive, and rehabilitative services, including any
       medical or remedial services (provided in a facility, a home, or other setting)
       recommended by a physician or other licensed practitioner of the healing arts within
       the scope of their practice under State law, for the maximum reduction of physical
       or mental disability and restoration of an individual to the best possible functional
       level.

§ 1396d(a)(13).

       Though § 1396d(a)(13) does not explicitly address the services provided by SBSA, it

arguably does so when the services are medically necessary.

       The majority of defendants’ arguments are based on their classification of SBSA’s services

as habilitative and therefore outside the scope of EPSDT’s mandates. Defendants argue that §

1396d(a)(13) only mandates rehabilitative services, that SBSA’s ABA therapy is exclusively

habilitative, and that habilitative services are only provided for under separate, non-mandatory

Medicaid provisions.5 In its opinion and order denying defendants’ motion to stay the injunction,


       5
           Federal regulations define “rehabilitative services” as:

       any medical or remedial services recommended by a physician or other licensed
       practitioner of the healing arts, within the scope of his practice under State law, for
       maximum reduction of physical or mental disability and restoration of a recipient to
       his best possible functional level.

42 C.F.R. § 440.130(d). In a section dealing with state waiver programs, the Medicaid Act defines
“habilitative services” as:


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the district court rejected this argument stating: “After careful study of the relevant statutes and

regulations, this Court concluded that th[e habilitative versus rehabilitative] dichotomy has no

relevance to medical or remedial services for children when the treatment has been recommended

by a physician or other licensed practitioner for the ‘maximum reduction of a physical or mental

disability.’” Parents League for Effective Autism Servs. v. Jones-Kelley, 2008 WL 2796744, at *1

(S.D. Ohio July 17, 2008). The district court noted the potential overlap between services classified

as habilitative or rehabilitative, and found that plaintiffs have a strong likelihood of showing that

SBSA’s services fall under the definition of services required under § 1396d(a)(13).

       The district court found that SBSA’s ABA therapy “is a medically necessary service which

provides the maximum reduction of a mental or physical disability.” Parents League, 565 F. Supp.

2d at 917. There was medical evidence before the district court to support the factual aspects of this

conclusion. Defendants argue, however, that in addition to the “maximum reduction” element, §

1396d(a)(13) requires “restoration of an individual to the best possible functional level,” and that

“restoring” in this context excludes SBSA’s services because the children it serves did not once have

a functional level that the therapy attempts to restore.

       It is true that this provision can be read to mandate only services recommended by a

physician that provide both a “maximum reduction of physical or mental disability and restoration


       services designed to assist individuals in acquiring, retaining, and improving the
       self-help, socialization, and adaptive skills necessary to reside successfully in home
       and community based settings.

42 U.S.C. § 1396n(c)(5)(A).

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of an individual to the best possible functional level.” However, this provision can also be read to

mandate both services recommended by a physician “for the maximum reduction of physical or

mental disability,” and services recommended by a physician for the “restoration of an individual

to the best possible functional level.” The choice between two ways to read “and” in a statute is

often made by looking to “context and common sense.” OfficeMax, Inc. v. United States, 428 F.3d

583, 597 (6th Cir. 2005). “Whether to interpret the preceding words as distributed over the

conjoined elements or not depends on the context of the sentence, and what we externally know

about the conjoined elements.” Id. at 600 (Rogers, J., dissenting). The language of the statute

supports either reading, and there are reasons, relied on by the district court, to read the statute

plaintiffs’ way.

       First, § 1396d(a)(13) “reflects the extremely broad EPSDT obligation.” Parents League, 565

F. Supp. 2d at 912. Defendants’ reading of § 1396d(a)(13) to cover only services that restore a child

to a prior skill level would arguably “mean that no child who is born with a disability, could ever

receive rehabilitative services.” Parents League, 565 F. Supp. 2d at 916. Such an outcome arguably

“does not comport with the broad coverage afforded under the EPSDT mandate.” Id.

       Second, cases from other circuits have concluded that § 1396d(a) covers services that are

arguably similar to the ABA therapy provided by SBSA. See Pediatric Specialty Care, Inc. v.

Arkansas Dept. of Human Services, 293 F.3d 472, 480 (8th Cir. 2002); Chisholm v. Hood, 133 F.

Supp. 2d 894 (E.D. La. 2001).




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       Third, no administrative interpretations of § 1396d(a)(13) appear to clarify or restrict the

provision in the way suggested by defendants. Defendants cite several administrative materials that

state that “habilitation services cannot be provided pursuant to 42 U.S.C. §§ 1396d(a) or

1396d(a)(13).” These materials simply state that habilitation services can only be funded through

other Medicaid provisions, such as those dealing with ICF/MR residents or approved Medicaid

waivers. These materials do not support the proposition that ABA therapy is exclusively habilitative,

which plaintiffs dispute, or that ABA therapy should not otherwise be covered under § 1396d(a).

       The district court’s attempts to get the federal government’s view of the meaning of §

1396d(a)(13) appear to have been elusive. In a case such as this, the federal court is entitled to a

clear statement of the federal agency’s interpretation of the federal Act that it administers. On March

21, 2008, CMS sent a letter to ODJFS deferring payment on claims made by SBSA and stated that

“CMS generally views treatment for autism as habilitative rather than rehabilitative—as such, the

CPST claims by Step by Step may not comply with Ohio’s State Plan.” However, during the hearing

on plaintiffs’ motion for preliminary injunctive relief, the district court questioned a representative

from CMS in an attempt to nail down the agency’s official position on the matter:

                 THE COURT: Does CMS have a position on whether these services are
       covered under the Medicaid Act?
                 MR. D’ALESSANDRO: Your Honor, I hate to use the word “it depends,”
       but the answer is, it depends on the service. And I think that’s what the deferral
       process is going to decide for all of us. . . . And I think the State may have spoken
       a little too strongly when it said we have decided not to pay. There has been no such
       decision not to pay. That’s what the deferral process is for.
                 Your Honor, it’s our understanding that the deferral letter may have come
       about based on information gleaned from a county agency which was providing funds
       to Step-by-Step, the county advised the state, and the deferral process was started.

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           I would like to note that the deferral letter, . . . I will acknowledge, Your Honor, that
           the language used by CMS in the letter of March 21st does appear to hone in on one
           issue, the issue of rehabilitative versus habilitative. I think that may have been an
           unfortunate choice by the Acting Associate Regional Administrator to hone in on
           that. I think all coverage and eligibility and reimbursement issues are in play during
           the deferral process.
           ...
                    To any extent—and I don’t believe it was their intent, but to any extent that
           the State left the impression that there is a done deal here, I don’t think that’s the
           case.

The agency’s uncertainty on these issues does not contradict the district court’s conclusion that

plaintiffs have a likelihood of showing that these services are required under the federal Medicaid

statute.

           In addition to the agency’s stated uncertainty in this case, proposed regulations further reflect

the ambiguity of § 1396d(a)(13). In 2007, CMS proposed to amend the regulations regarding

“rehabilitative services” because of concerns that states were using § 1396d(a)(13) to cover services

that were not truly “rehabilitative.” 72 Fed. Reg. 45201 (citing as an example “behavioral treatment

services in ‘wilderness camps,’ juvenile detention, and similar facilities where youth are

involuntarily confined” that should fall “under the domain of the juvenile justice or youth systems

in the State, rather than Medicaid.”). Even if these proposed regulations would support defendants’

position, Congress placed a moratorium on the final adoption of these regulations. See Pub. L. No.

110-28 § 7001(a); Pub. L. No. 110-252 § 7001(a) (extending moratorium on regulations restricting

coverage of rehabilitative services until April 1, 2009); Pub. L. No. 111-5 § 5003(a), (d)(3) (January

4, 2009) (noting a “sense of Congress” that the proposed regulations relating to rehabilitative

services should not be promulgated as final regulations). This situation shows the current

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uncertainty regarding the definition of services in § 1396d(a)(13), which makes it even harder for

us to find an abuse of discretion when the district court weighed in plaintiffs’ favor the likelihood

of success with respect to whether SBSA’s services are required under § 1396d(a)(13).



        2. Whether implementation of the Ohio amended rules would violate federal Medicaid
        laws


        The district court also found a likelihood of success on the merits “because the proposed

administrative rules will effectively cut off funding for medically necessary services.” Parents

League, 565 F. Supp. 2d at 917. Again, while it is not clear that this is so, the district court did not

abuse its discretion by weighing the likelihood of success on this issue in favor of plaintiffs.

        In response to concerns over the federal approval of funding of SBSA’s services, the Ohio

Department of Job and Family Services (“ODJFS”) and the Ohio Department of Mental Health

(“ODMH”) promulgated rules amending the state administrative provisions that previously covered

SBSA’s services. Ohio Administrative Code section 5122-29-17 defines Community Psychiatric

Supportive Treatment (“CPST”) services, which is the general program under which SBSA receives

its funding. The prior rule stated that:

        Community psychiatric supportive treatment (CPST) service provides an array of
        services delivered by community based, mobile individuals or multidisciplinary
        teams of professionals and trained others. Services address the individualized mental
        health needs of the client. They are directed towards adults, children, adolescents and
        families and will vary with respect to hours, type and intensity of services, depending
        on the changing needs of each individual.
                The purpose/intent of CPST services is to provide specific, measurable, and
        individualized services to each person served. CPST services should be focused on

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       the individual’s ability to succeed in the community; to identify and access needed
       services; and to show improvement in school, work and family and integration and
       contributions within the community.

Ohio Admin. Code § 5122-29-17(A).

       The amendments to this provision focus the program on rehabilitative services:

       Community psychiatric supportive treatment (CPST) service is a rehabilitative
       service intended to maximize the reduction of symptoms of mental illness in order
       to restore the individual’s functioning to the highest level possible. CPST supports
       the individual’s ability to take responsibility for managing his/her mental illness and
       achieving and maintaining his/her rehabilitative and/or recovery goals.

Ohio Admin. Code § 5122-29-17(A) (as amended). The amended rule contained extensive

additional changes to this code provision that are not relevant to this case.

       Ohio Administrative Code § 5101:3-27-02 defines when the Ohio Medicaid program will

cover community mental and health services. The amendments to this section require services to

be rehabilitative and provide a new definition of rehabilitation:

       The following describes those services reimbursable as medicaid community mental
       health service when they are both rehabilitative and rendered by eligible medicaid
       providers. Rehabilitative services provide for the maximum reduction of mental
       illness and are intended to restore an individual to the best possible functional
       level. The services shall meet the principles set forth in rule 5101:3-1-02 of the
       Administrative Code.

Ohio Admin Code § 5101:3-27-02(A) (amended language in bold).

       These amended rules arguably conflict with federal Medicaid law because the amendments

to rule 5101:3-1-02 “reflect a much more narrow definition of ‘rehabilitative’ . . . . The federal

regulations do not require that the rehabilitative services reduce ‘mental illness.’” Parents League,

565 F. Supp. 2d at 910. The more apparent conflict, however, stems from the Ohio rules’

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“restoration” requirements. As noted in Part II.A.1, supra, the relevant federal Medicaid provisions

do not necessarily require rehabilitative services to involve both a “maximum reduction of physical

or mental disability” and a “restoration of an individual to the best possible functional level” for each

individual.   The language of the amended Ohio rules, however, narrows the definition of

rehabilitative services by requiring restoration to the best functional level. Under the Ohio amended

rules, rehabilitative services are “intended to maximize the reduction of symptoms of mental illness

in order to restore the individual’s functioning to the highest level possible,” Ohio Admin. Code §

5122-29-17(A) (as amended) (emphasis added), and “provide for the maximum reduction of mental

illness and are intended to restore an individual to the best possible functional level,” Ohio Admin

Code § 5101:3-27-02(A) (as amended) (emphasis added).

        In addition to noting the potential conflict between the amended rules and the federal

Medicaid statute, the district court focused on the likely effects of defendants’ implementation of

these rules. “Because the proposed administrative rules will effectively cut off funding for medically

necessary services, Plaintiffs have established a likelihood of success on the merits.” Parents

League, 565 F. Supp. 2d at 917 (emphasis added). “The proposed amendments specifically target

the provision of CPST services to these children.” Id. “The evidence is clear that the State adopted

the new rules to avoid having to pay for services which it was concerned would not be reimbursed

by CMS.” Id. at 917-18.

        The district court did not abuse its discretion in relying on the likelihood that plaintiffs’ will

be able to show that the amended rules would effectively deny funding for SBSA’s ABA therapy.


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The rules were promulgated in response to concerns over federal funding of this program, defendants

began seeking alternate services for the children previously served by SBSA, and everything in

defendants’ briefing indicates that they believe SBSA’s services to be habilitative in nature and not

covered by the new rules or the federal EPSDT mandate.



B. Irreparable injury to plaintiffs


       The district court also did not abuse its discretion in weighing the possibility of irreparable

injury to plaintiffs because, as noted in the previous section, defendants appear to interpret the

amended rules to exclude SBSA’s ABA therapy from funding under Ohio’s CPST program. In

addition, medical and personal testimony indicated that the plaintiff children would suffer irreparable

injury in the form of severe regression of symptoms if SBSA’s services are no longer available, and

plaintiffs could not receive comparable services from other providers that provide services under

other sources of federal or state funding.

       Defendants argue that plaintiffs will not suffer under the amended rules because plaintiffs

have other avenues of receiving Medicaid coverage for SBSA’s services if the services are medically

necessary. For example, plaintiffs can request prior authorization of the ABA therapy provided by

SBSA, claiming that this service is required under federal Medicaid law. Because ODJFS and

ODMH appear not to accept that ABA therapy is rehabilitative under the amended rules or §

1396d(a)(13), this path may simply lead back to a dispute in the courts over the coverage of ABA

therapy under the EPSDT mandate.

                                                - 18 -
No. 08-3931
Parents’ League for Effective Autism Servs. v. Jones-Kelley


C. Substantial harm to others and the public interest


        On appeal, defendants do not raise any independent arguments related to the harm to

nonparties or the public interest. As to the public interest, the district court reasonably weighed the

public’s interest against defendants at this stage of the litigation.



                                                  III.

        At this stage of the litigation, we do not resolve the substantive legal issues on the merits.

Because the district court did not abuse its discretion in entering the preliminary injunction, we

AFFIRM.




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