Ninth Circuit Issues (Better) New Opinion in Arc of Washington v. Braddock

Yesterday, in response to a petition for rehearing, a panel of the Ninth Circuit withdrew its earlier opinion in Arc of Washington, Inc. v. Braddock, and issued an amended opinion written by Judge Kozinski. The case is an Olmstead challenge to Washington State's refusal to seek to expand its Home and Community-Based Services Medicaid waiver to serve more individuals with developmental disabilities in the community. In the original opinion, written by Judge Fernandez, the panel held that the more specific Medicaid statute trumps the more general ADA, and therefore the existence of a cap can never violate Olmstead. That decision didn't make much sense, at least read broadly: The Medicaid statute recognizes that HCBS waivers will have a population cap, but it doesn't say what that cap should be. If a state can't satisfy its integration obligations under Olmstead without going beyond the existing cap for its HCBS waiver, there's no reason why the state shouldn't at least be required to ask the federal Department of Health and Human Services to expand the waiver. (For my earlier comments on the original panel opinion, which suggested that it should be read narrowly, see here.)

In the amended opinion, the panel eliminated the problematic aspects of its earlier opinion, but resolved the case by relying on another problematic Ninth Circuit opinion. Judge Kozinski's new opinion instead holds that, even without seeking expansion of its HCBS waiver, Washington had satisfied Olmstead's requirement that it have a "comprehensive, effectively working plan" for deinstitutionalization. Relying on the Ninth Circuit's earlier opinion in Sanchez v. Johnson (about which I blogged critically here), the panel explained that Washington's commitment to deinstitutionalization appeared to be at least as strong as was California's in Sanchez. Here's the key passage:

The record reflects that Washington's commitment to deinstitutionalization is as "genuine, comprehensive and reasonable" as the state's commitment in Sanchez. Id. at 1067. Washington's HCBS program is substantial in size, providing integrated care to nearly 10,000 Medicaid-eligible disabled persons in the state. See Decl. of Timothy Brown ¶ 5. The waiver program is full, and there is a waiting list that admits new participants when slots open up. See Dist. Court Order, Nov. 17, 2000; cf. Olmstead, 527 U.S. at 605-06. Unlike in Townsend, all Medicaid-eligible disabled persons will have an opportunity to participate in the program once space becomes available, based solely on their mental-health needs and position on the waiting list.

Further, the size of Washington's HCBS program increased at the state's request from 1,227 slots in 1983, to 7,597 slots in 1997, to 9,977 slots beginning in 1998. Decl. of Susan E. Poltl ¶ 7. The annual state budget for community-based disability programs such as HCBS more than doubled from $167 million in fiscal year 1994, to $350 million in fiscal year 2001, despite significant cutbacks or minimal budget growth for many state agencies. See Decl. of Timothy Brown ¶ 7. During the same period, the budget for institutional programs remained constant, while the institutionalized population declined by 20%. See id. Today, the statewide institutionalized population is less than 1,000.

The Department's Division of Developmental Disabilities (DDD) has also seen its biennial budget grow steadily from $750 million in 1995 to over $1 billion in 1999, making it one of the fastest growing budgets within the Department. See id. at ¶¶ 8-9. Family support services, given to families of DDD clients living at home, have grown even faster, benefitting from a 250% budget growth over five years. See id. There is thus no indication that the state is neglecting its responsibilities to the HCBS program relative to other programs.

Judge Kozinski's opinion for the panel emphasized that "We do not hold that the forced expansion of a state's Medicaid waiver program can never be a reasonable modification required by the ADA. What we do hold is that, in this case, Washington has demonstrated it has a 'comprehensive, effectively working plan,' Olmstead, 527 U.S. at 605, and that its commitment to deinstitutionalization is 'genuine, comprehensive and reasonable,' Sanchez, 416 F.3d at 1067."

Judge Fernandez filed a separate concurrence, which explained that he continued to believe that the Medicaid HCBS cap provision trumps the ADA.