Cohon Ex Rel. Bass v. NEW MEXICO DEPT. OF HEALTH

FILED
United States Court of Appeals
Tenth Circuit

May 9, 2011
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

JESSICA COHON, through her
mother/next friend STEVIE BASS,

Plaintiff - Appellant,

v.

STATE OF NEW MEXICO
DEPARTMENT OF HEALTH; NEW
MEXICO HUMAN SERVICES
DEPARTMENT; NEW MEXICO
AGING & LONG TERM SERVICES
No. 10-2002
DEPARTMENT; LOVELACE
COMMUNITY HEALTH PLAN;
CAROLYN INGRAM, Medicaid
Assistance Division Director; PAMELA
HYDE, Secretary of Human Services
Department; ALFREDO VIGIL, Secretary
of Department of Health; CINDY
PADILLA, Secretary of Aging & Long
Term Services, all in their individual
capacities,

Defendants - Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
(D.C. No. 1:08-CV-01115-LAM-RHS)

Maureen A. Sanders (Duff Westbrook with her on the briefs), Sanders & Westbrook,
P.C., Albuquerque, New Mexico, for the Appellant.
Paul R. Ritzma (Mark H. Reynolds New Mexico Human Services Department, Santa Fe,
New Mexico, Chris Woodward, New Mexico Department of Health, Santa Fe, New
Mexico, and Ana Marie Ortiz, New Mexico Aging and Long Term Services Department,
Santa Fe, New Mexico, with him on the brief), New Mexico Human Services
Department, Santa Fe, New Mexico, for the Appellees.

Jennifer L. Stone and Thomas Outler, Rodey, Dickason, Sloan, Akin & Robb, P.A.,
Albuquerque, New Mexico, filed a brief for Appellee Lovelace Community Health Plan.

Before TACHA, HOLLOWAY and KELLY, Circuit Judges.

HOLLOWAY, Circuit Judge.

Plaintiff-Appellant Jessica Cohon sought funding through New Mexico’s Mi Via

Waiver program,1 a Medicaid program offered by New Mexico that offers a home and

community-based alternative to institutional care for qualifying individuals. Cohon

qualified for the Mi Via Waiver program and submitted budget requests which were

granted in part and denied in part. She unsuccessfully filed an administrative appeal,

contesting the denial of certain of her budget requests.

1
Under the Medicaid Act, once a state has entered into a partnership with the
federal government to provide “medical assistance,” the state is required to provide a
minimum level of benefits for qualifying individuals. 42 U.S.C. § 1396a(a)(10)(A)
(2006). For qualifying individuals who would otherwise require the level of care
“provided in a hospital or a nursing facility or intermediate care facility for the mentally
retarded,” a state may alternatively provide an approved payment plan to the individual
for “home and community-based services.” Id. § 1396n(c)(1). The Mi Via Waiver
program is such a program. NMAC § 8.314.6.9.

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 Cohon then filed suit, by and through her mother, Stevie Bass (collectively,

“Cohon”), against the New Mexico Department of Health (DOH), New Mexico Human

Services Department (HSD), the New Mexico Aging and Long Term Services

Department (ALTSD), the three state agencies responsible for administering the Mi Via

Waiver program, as well as the secretaries of the three agencies in their official capacities,

and Carolyn Ingram, the Director of the Medicaid Assistance Division of HSD

(collectively, “State Defendants”). Cohon also sued the Lovelace Community Health

Plan (“Lovelace”), a third party assessor contracted by the three state agencies to

administer budget requests for the Mi Via Waiver program.

Cohon’s complaint alleged that the administration of the Mi Via Waiver program

discriminated against the severely disabled, including herself. She alleged that the

process by which the Mi Via program was administered violated Title II of the Americans

with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act (collectively,

“statutory claims”), and also violated her substantive and procedural due process rights as

well as the equal protection guarantees of the United States and New Mexico

constitutions (collectively, “constitutional claims”).

State Defendants and Lovelace moved to dismiss Cohon’s complaint under Federal

Rule of Civil Procedure 12(b)(6) for failing to state a claim for which relief could be

granted. Lovelace further moved to dismiss the complaint on the ground that it was not a

proper party to be sued under any of Cohon’s claims. The district court held that on all of

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Cohon’s federal claims, her complaint failed to state a claim for which relief could be

granted and consequently dismissed them. The district court remanded the remaining

state law claims, including Cohon’s appeal of the administrative determinations, to the

First Judicial District Court, County of Santa Fe, State of New Mexico for further

proceedings. The district court did not reach Lovelace’s additional argument that it was

not a proper party to be sued. Cohon now appeals the dismissal of the federal claims in

her complaint.

I. FACTS

The Mi Via Waiver Program

The Mi Via Waiver program “provides self-directed home and community-based

services to eligible [Home and Community Based Services] waiver recipients who are

disabled or elderly (D&E), developmentally disabled (DD), medically fragile (MF), those

diagnosed with acquired immunodeficiency syndrome (AIDS), and those diagnosed with

certain brain-injuries (BI).” NMAC § 8.314.6.9 (2006). The program is designed “to

provide a home and community-based alternative to institutional care that facilitates

greater participant choice, direction and control over services and supports that are

identified in the participant’s individualized service and support plan (SSP), purchased

within an agreed upon individual budgetary allotment (IBA), and delivered by service

providers or vendors chosen by the participant.” Id. For a participant with no prior

waiver cost experience, his or her IBA is “calculated based on algorithms developed by

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the state for recipients of the same waiver population . . . with similar characteristics as

the [M]i [V]ia participant.” NMAC § 8.314.6.17(B)(2) (2006).

The Mi Via Waiver program provides an IBA of $59,449 for developmentally

disabled participants over the age of 21 who require residential support services; for those

who do not require residential support services, the IBA is $34,553. A participant’s

budget allotment can be increased above the IBA if the participant shows that he or she

has a chronic physical condition, a change in physical health status, chronic or

intermittent behavioral conditions or cognitive difficulties, or a change in natural

supports. R., Vol. 2 at 429-33 (Mi Via Service Standards).

Cohon’s Mi Via Waiver Budget Determination

Cohon is twenty-seven years old and legally blind. She has a medical history of

cerebral palsy and autism. Compl. ¶ 10. Cohon’s long-term care needs were assessed at

Level 1, the most severe level of need in terms of the severity of her disability and the

amount of care she requires. Id. ¶ 19. Cohon applied for Mi Via Waiver services under

New Mexico’s Home and Community Based Services Waiver provisions and was

determined to be medically and financially eligible. Id. ¶ 11.

Cohon met with Lovelace to compile a budget request. Cohon qualified for the

IBA of $59,449 as a participant with no prior waiver experience who was

developmentally disabled, over 21 years of age, and required residential support services.

Cohon met the criteria for additional funding related to chronic or intermittent behavioral

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conditions or cognitive difficulties. Id. ¶¶ 20, 25. After meeting with Lovelace, Cohon

submitted a proposed request for additional funding such that her total budget request was

$116,080. Id. ¶ 27. After another meeting including some state employees and Lovelace,

Cohon submitted a revised budget request of $106,667. Id. ¶ 28. Lovelace determined

that the revised proposed budget of $106,667 would result in savings of $13,442.50 to the

state as compared with the cost of a traditional waiver program for developmentally

disabled individuals. Id. ¶ 29.

On March 14, 2008, Cohon’s proposed budget was partially approved in the

amount of $97,007.24. Id. ¶ 34, 48. Cohon’s proposed budget requests had been

prioritized by the State Defendant’s review committee without Cohon’s input. Id. ¶¶ 33,

35, 37. The $9,660.44 in funding denied included Cohon’s requests for funding for the

following expenses: chiropractic and orthotic services, nutritional supplements, fleet

enemas, ski lessons, swim punch cards, funds to attend non-local conferences and

meetings (including registration, hotel, and a per diem), four DVDs, overnight care, care

buddy merit increases, driver merit increases, community job advisor raises, and money

in a reserve fund. Id. ¶ 36. Of the denied expenses, all but the per diem request met the

Mi Via program’s standards as expenses that could be approved. Id. ¶ 30. Had the

budget requests not exceeded Cohon’s IBA of $59,449, they would have been approved.

Id. ¶ 42, 66.

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 Cohon requested and, on July 30, 2008, was provided with an administrative

evidentiary hearing concerning the denied budget requests. The administrative law judge

determined that Cohon’s budget requests met the criteria for Mi Via Waiver services, that

Cohon’s requests for chiropractic and orthotic services, nutritional supplements, and fleet

enemas should have been approved, but that the New Mexico Human Services

Department had the discretion to disapprove the other services. Id. at 2-3. On September

30, 2008, defendant Carolyn Ingram reversed the administrative law judge’s

determination that any of the additional budget requests should be approved and stated

that, because the additional budget requests exceeded the Mi Via budgetary allotment,

they had to be necessary to “keep the participant safe” in order to be approved. Id. at 3.

Cohon’s Complaint

Cohon’s complaint asserts claims under Section 504 of the Rehabilitation Act and

under Title II of the Americans with Disabilities Act (collectively, “statutory claims”).

Compl. ¶¶ 99-107. Cohon alleges that the State Defendants violated Section 504 of the

Rehabilitation Act “by discriminating against her in the manner used to determine the

approval of budget requests within the Mi Via Waiver program.” Id. ¶ 102. Cohon

further alleges that the State Defendants violated Title II of the Americans with

Disabilities Acts by “subjecting [her] to discrimination in state programs on the basis of

disability.” Id. ¶¶ 105-107. Specifically, Cohon alleges that aside from the per diem she

requested, the services and budget items requested in her budget would have been

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approved if her funding requests had not exceeded the $59,449 IBA set by New Mexico.

Id. ¶¶ 30, 32, 42, 43, 44, 66.

Budget requests exceeding $59,449 were approved only if they addressed Cohon’s

physical safety or risks associated with behavior issues. Id. ¶ 41, 46. Cohon alleges that

because she has a high level of need, and because the state prioritizes her budget requests,

all of her requests are effectively subject to the risk/ safety limitation to which less

severely disabled Mi Via participants are not subject. Id. ¶ 64, 65, 67, 68, 70. For

example, Cohon’s request for a homemaker/ companion was for $63,096. Id. ¶ 67.

Because that line item alone exceeded her IBA of $59,449 and because the state

prioritized her budget requests, all of her remaining budget requests were subject to the

risk/ safety limitation. Id. ¶ 68. Cohon thus contends that this manner of administering

the Mi Via program discriminates against her because of the severity of her disabilities.

Id. ¶ 55.

Cohon’s complaint also asserts claims under the United States and New Mexico

Constitutions. Id. ¶¶ 92-98. Cohon alleges that her “due process rights were violated by

the [State] Defendants’ arbitrary and capricious manner of partially denying her budget

requests.” Id. ¶ 94. Cohon alleges that the State Defendants “fail[ed] to give her

adequate notice of the reasons for the partial denial of her budget requests, [failed] to

follow the Mi Via regulations and standards in partially denying her budget requests and .

. . prioritiz[ed] her budget requests without input from her.” Id. ¶ 95. Cohon alleges that

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her equal protection rights were violated because she “was subjected to disparate

treatment as compared to those similarly situated Mi Via participants with less severe

disabilities in the criteria applied to a determination of approval/ denial of her budget

requests,” and that “[n]o adequate justification exists for the disparate treatment by the

[State] Defendants.” Id. ¶ 96-97.

II. DISCUSSION

A. “Final Order” Analysis

We first address whether we have a reviewable final order in this case given the

parallel proceeding in state court. The district court dismissed Cohon’s statutory and

constitutional claims, holding that her complaint failed to state a claim for which relief

could be granted as to each of those claims. The district court then declined to exercise

supplemental jurisdiction over any remaining state claims and remanded adjudication of

the administrative claims to the state court. R., Vol. 1 at 241-42 (citing 28 U.S.C.

§ 1367(c)(3); Smith v. City of Enid, by and through the Enid City Comm’n, 149 F.3d

1151, 1156 (10th Cir. 1998) (“When all federal claims have been dismissed, the court

may, and usually should, decline to exercise jurisdiction over any remaining state

claims.”)). The district court then entered final judgment.

Because the remand to the state court was discretionary under Section 1367(c), the

separate state appeal pending does not deprive us of jurisdiction to hear this appeal for

lack of finality. See Carlsbad Tech., Inc. v. HIF Bio, Inc., 129 S. Ct. 1862, 1867 (2009)

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(“‘[T]he [district] court’s exercise of its discretion under § 1367(c) is not a jurisdictional

matter. Thus, the court's determination may be reviewed for abuse of discretion, but may

not be raised at any time as a jurisdictional defect.’”) (quoting 16 J. Moore et al., Moore's

Federal Practice § 106.05[4], p. 106-27 (3d ed. 2009)). Thus, before the state court is

Cohon’s appeal of the budget requests that were denied and before us for review is the

process by which the Mi Via Waiver program is administered and whether Cohon’s

allegations state a claim for relief under federal law.

B. Collateral Estoppel

As a threshold matter, State Defendants and Lovelace argue that the district court

erred in holding that Cohon was not precluded from raising her claims of discrimination.

Rather, they argue that because these issues were decided in the administrative

proceedings, Cohon should have been estopped from raising them before the district

court. Appellee’s Br. at 28-32. The Supreme Court instructs that “when a state agency

‘acting in a judicial capacity . . . resolves disputed issues of fact properly before it which

the parties have had an adequate opportunity to litigate,’ federal courts must give the

agency’s factfinding the same preclusive effect to which it would be entitled in the State’s

courts.” Univ. of Tenn. v. Elliott, 478 U.S. 788, 799 (1986) (quoting United States v.

Utah Const. & Min. Co., 384 U.S. 394, 422 (1966)); Brockman v. Wyo. Dept. of Fam.

Servs., 342 F.3d 1159, 1165 (10th Cir. 2003) (applying Elliott to a Wyoming proceeding

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and holding that “the hearing officer’s decision is preclusive so long as the Wyoming

courts themselves would give it preclusive effect.”).

Under New Mexico law, the party advocating the application of collateral estoppel

to an issue must demonstrate that (1) the party to be estopped was a party to the prior

proceeding, (2) the cause of action in the case presently before the court is different from

the cause of action in the prior adjudication, (3) the issue was actually litigated in the

prior adjudication, and (4) the issue was necessarily determined in the prior litigation.

Shovelin v. Cent. N.M. Elec. Coop., Inc., 850 P.2d 996, 1000 (N.M. 1993) (citing Silva v.

State, 745 P.2d 380, 382-84 (1987)). Although the first prong is met because Cohon was

a party to the administrative proceeding, State Defendants and Lovelace have failed to

articulate any persuasive reason as to how any of the last three prongs are met, summarily

stating that “it was necessary in the administrative proceedings to decide these ultimate

issues,” Appellee’s Br. at 32, citing only Cohon’s closing argument statements. Id. at 31

(citing R., Vol. 2 at 687 & 697).

As Cohon points out, Reply Br. at 14-15, State Defendants and Lovelace cite

nothing in the administrative decision issued, and our review of the record reveals

nothing, on the issue of discrimination, let alone how it was “actually litigated” or

“necessarily determined” in the administrative proceedings. Rather, the September 30,

2008 decision issued by the New Mexico Human Services Department, R., Vol. 1 at 23-

24, and the September 8, 2008 Findings of Fact and Conclusions recommended by the

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administrative law judge, R., Vol. 1 at 25-34, reflect the adjudication only of Cohon’s

budget requests. Cohon’s statutory and constitutional claims of discrimination were not

raised until she filed her complaint on October 30, 2008. Therefore, it is unclear how any

issue of discrimination would have been actually litigated or necessarily determined in the

administrative proceeding. Because these issues were not reached in the administrative

proceeding, there is no determination that could be given preclusive effect, whether as a

purely legal issue or otherwise.

Thus, we agree with the district court’s holding that Cohon was not collaterally

estopped from raising the issues in this appeal and we need not reach the State

Defendants’ and Lovelace’s remaining allegations of error in the district court’s decision

on this issue. See United States v. Lott, 310 F.3d 1231, 1242 n.7 (10th Cir. 2002) (“We

are free to affirm a district court decision on any grounds for which there is a record

sufficient to permit conclusions of law, even grounds not relied upon by the district

court.”) (citation omitted).

C. Statutory Claims

Cohon asserts that she has pled facts sufficient to support a claim under the ADA

and under Section 504 of the Rehabilitation Act. Because the legal sufficiency of a

complaint is a question of law, we review de novo a district court’s granting of a motion

to dismiss under Federal Rule of Civil Procedure 12(b)(6). Sunrise Valley, LLC v.

Kempthorne, 528 F.3d 1251, 1254 (10th Cir. 2008). We accept as true all well-pleaded

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facts and “‘construe all reasonable allegations in the light most favorable to the

plaintiff.’” Id. (quoting United States v. Colo. Supreme Court, 87 F.3d 1161, 1164 (10th

Cir. 1996)). We may also consider “‘documents referred to in the complaint if the

documents are central to the plaintiff’s claim and the parties do not dispute the

documents’ authenticity.’” Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)

(quoting Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir. 2007)). Dismissal

of a complaint is appropriate only if, accepting all facts alleged as true, Cohon has not

pled “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic

Corp. v. Twombly, 550 U.S. 544, 570 (2007). The complaint must set forth “more than an

unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 129

S.Ct. 1937, 1949 (2009) (citation omitted). Our function “‘is not to weigh potential

evidence that the parties might present at trial, but to assess whether the plaintiff’s

complaint alone is legally sufficient to state a claim for which relief may be granted.’”

Sunrise Valley, 528 F.3d at 1254 (quoting Sutton v. Utah State Sch. for the Deaf & Blind,

173 F.3d 1226, 1236 (10th Cir. 1999)).

In support of her statutory claims, Cohon alleges that the following procedural

components of the Mi Via Waiver program administration discriminated against her on

the basis of the severity of her disability: (i) the $59,449 IBA applied to Cohon was

calculated using all individuals with a developmental disability rather than those with

“similar characteristics”; (ii) the requirement that budget requests over $59,449 were

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approved only if they addressed her physical safety because her requests would have

otherwise been approved if they did not exceed $59,449; and (iii) the $59,449 budget

allotment effectively precluded Mi Via Waiver participants with severe disabilities from

accessing Mi Via services which address the Mi Via goals of self-direction and self-

determination. Aplt’s Br. at 14. We address each of these arguments in turn.

Section 504 of the Rehabilitation Act provides that “no otherwise qualified

individual with a disability . . . shall, solely by reason of her or his disability, be excluded

from the participation in, be denied the benefits of, or be subjected to discrimination

under any program or activity receiving Federal financial assistance.” 29 U.S.C. § 794(a)

(2006). To state a claim under Section 504, “a plaintiff must prove (1) that he is a

‘handicapped individual’ under the Act, (2) that he is ‘otherwise qualified’ for the

[benefit] sought, (3) that he was [discriminated against] solely by reason of his handicap,

and (4) that the program or activity in question receives federal financial assistance.”

Johnson by Johnson v. Thompson, 971 F.2d 1487, 1492 (10th Cir. 1992) (citations

omitted). The parties do not contest that Cohon has met prongs (1), (2), and (4).

Appellee’s Br. at 10; R., Vol. 1 at 231. The only issue is whether she has stated a prima

facie case that the Mi Via Waiver program discriminated against her on the basis of the

severity of her disability.

Title II of the ADA provides that“[n]o qualified individual with a disability shall,

by reason of such disability, be excluded from participation in or be denied the benefits of

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the services, programs, or activities of a public entity, or be subjected to discrimination by

such entity.” 42 U.S.C. § 12132 (2006). To state a claim under Title II, the plaintiff must

allege that “(1) [s]he is a qualified individual with a disability, (2) who was excluded

from participation in or denied the benefits of a public entity’s services, programs, or

activities, and (3) such exclusion, denial of benefits, or discrimination was by reason of a

disability.” Robertson v. Las Animas Cnty Sheriff’s Dept., 500 F.3d 1185, 1193 (10th Cir.

2007). The parties do not dispute that Cohon has met the first prong under Title II of the

ADA, and thus the question is whether she was denied benefits of the Mi Via Waiver

program by reason of her disability. Appellee’s Br. at 10; R., Vol. 1 at 230-231.

“To the extent feasible, we look to decisions construing the Rehabilitation Act to

assist us in interpreting analogous provisions of the ADA.” Patton v. TIC United Corp.,

77 F.3d 1235, 1245 (10th Cir. 1996) (citing Helen L. v. DiDario, 46 F.3d 325, 330 n.7 (3d

Cir. 1995)); see also Rogers v. Dep’t of Health and Envtl. Control, 174 F.3d 431, 434 (4th

Cir. 1999) (“We may presume that Congress was aware of the Supreme Court’s

interpretation of § 504 of the Rehabilitation Act when it (Congress) passed the ADA in

1990 and included antidiscrimination language in § 12132 that parallels § 504 of the

Rehabilitation Act.”) (citing Cannon v. Univ. of Chicago, 441 U.S. 677, 696-97 (1979));

Doe v. Univ. of Md. Med. Sys. Corp., 50 F.3d 1261, 1264 n. 9 (4th Cir.1995) (“Because

the language of [Title II of the ADA and the Rehabilitation Act] is substantially the same,

we apply the same analysis to both”); DiDario, 46 F.3d at 331 (explaining that Title II of

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the ADA, 42 U.S.C. §§ 12131-12134, incorporates the “non-discrimination principles” of

section 504 of the Rehabilitation Act) (citation omitted). Because neither party argues

that the non-discrimination principles of the ADA and of the Rehabilitation Act require

distinct analysis in this case, we will address them together.

As to Cohon’s first claim that the $59,449 IBA is discriminatory, we must

determine whether Cohon’s well-pled allegations state a claim for which relief may be

given. In Alexander v. Choate, the Supreme Court held that Section 504 “requires that an

otherwise qualified handicapped individual must be provided with meaningful access to

the benefit that the grantee offers.” 469 U.S. 287, 301 (1985) (analyzing Se. Cmty. Coll.

v. Davis, 442 U.S. 397 (1979)); Patton, 77 F.3d at 1246 (“A facially neutral governmental

restriction does not deny ‘meaningful access’ to the disabled simply because disabled

persons are more likely to be affected by it.”) (quoting Choate, 469 U.S. at 303-04). The

Supreme Court reasoned that this “struck a balance between the statutory rights of the

handicapped to be integrated into society and the legitimate interests of federal grantees

in preserving the integrity of their programs.” Choate, 469 U.S. at 300. Thus, to state a

Section 504 claim, Cohon must allege facts demonstrating that she has been denied

meaningful access to the $59,449 individual budget allotment provided by the Mi Via

Waiver Program.

Under this lens, Cohon does not allege that she was denied meaningful access to

the $59,449 budget allotment. Indeed, she was granted that amount in full. Under

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Patton, this does not amount to a denial of meaningful access under the ADA solely

because it is insufficient to meet her needs. Rather, Cohon alleges that the $59,449

individual budget allotment is discriminatory because the amount was “arbitrarily”

determined “using an undisclosed algorithm with weighted averages for all adults with

developmental disabilities rather than using all adults with similar characteristics as

Jessica Cohon.” Id. ¶¶ 17, 18, 51. Essentially, Cohon’s allegation is that the category of

“all developmentally disabled individuals over the age of 21 who require residential

support” is insufficiently similar to her because it is not determined using only those

individuals who require a Level 1 level of long term care. Yet, it is unclear how this is

discriminatory.

As the Supreme Court in Choate explained, states have the discretion to determine

the mix of programs and services that Medicaid beneficiaries will be afforded so long as

they serve the interests of the Medicaid population. 469 U.S. at 303 (“[T]he [federal

Medicaid] Act gives States substantial discretion to choose the proper mix of amount,

scope, and durational limitations on coverage, as long as care and services are provided in

‘the best interests of the recipients.’”). Although Cohon argues that the $59,449 IBA is

insufficient to meet her needs, she does not allege that it is insufficient to serve the

interests of the Medicaid population as a whole. That she requires more money than the

average developmentally disabled Mi Via Waiver participant is a matter of mathematical

truth: for any average, some individuals will require more money than the average and

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some will require less. That does not mean the average is discriminatory, particularly

because the $59,449 budget allotment is a starting point, adjusted further based on her

needs.

As the D.C. Circuit reasoned in Modderno v. King, “[i]f § 504 permits across-the-

board limits on coverage, as [Choate] holds, then it cannot forbid partial limits that leave

some disabled individuals better off and the remainder no worse off.” 82 F.3d 1059, 1062

(D.C. Cir. 1996) (citing Traynor v. Turnage, 485 U.S. 535, 549 (1988)). Moreover, as the

State Defendants and Lovelace point out, “[t]he problem with [Cohon]’s theory is that the

State must establish a way to provide a budget allotment for a new participant in the

program with no prior cost history.” Appellee’s Br. at 17.

Although Cohon further conclusorily alleges that the $59,449 individual budget

allotment was money-based rather than needs-based, she does not plead facts supporting

this allegation. Cohon does allege that her revised proposed budget of $106,667 would

result in a $13,442.50 savings to the state of New Mexico as compared with the

traditional developmentally disabled waiver program, Compl. ¶ 29, but she cites no case

suggesting that her monetary entitlements under a separate program bear on whether the

administration of the Mi Via program is discriminatory.

To the extent Cohon attempts to redefine “benefit” as synonymous with the Mi Via

waiver programs’ “goals” of self-direction and self-sufficiency, we are unconvinced that

this is what the ADA and Section 504 require. The state cannot provide “self-direction”;

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it can only provide an allocation or package of services or compensation in the hope that

participants can achieve those goals using the program’s provided “benefits.” As the

Supreme Court explained in Choate, “[a]ny interpretation of § 504 must . . . be responsive

to two powerful but countervailing considerations – the need to give effect to statutory

objectives and the desire to keep § 504 within manageable bounds.” 469 U.S. at 299.

Cohon’s position would render the Mi Via program administratively unworkable and

would supply a cause of action to any individual claiming to require further services in

order to achieve the program’s goals. Thus, Cohon’s allegations that the Mi Via

program’s method of establishing and administering the $59,449 IBA was discriminatory

do not state a claim for relief under either the ADA or the Rehabilitation Act.

We next turn to Cohon’s argument that the safety requirement imposed on her

budget requests exceeding $59,449 is discriminatory because it is not also imposed on

those less severely disabled whose budget requests do not exceed $59,449. Cohon alleges

that her budget requests would have been approved had they not exceeded $59,449. Yet,

Cohon qualifies for a budget allotment in excess of $59,449 precisely because of the

severity of her disabilities. She qualified for an approved budget of $97,007.24 to pay for

her care buddies, a job coach, a life skills coach, a driver, and a budget to pay for mileage

to and from her community activities. That additional funding is available to her that is

not also available to less severely disabled individuals is not discriminatory. See also

Ackley v. Corp. of State of Ariz., 98 F.3d 461, 462 (9th Cir. 1996) (“The class plaintiffs do

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not argue that Arizona has excluded severely disabled persons from state services,

programs or activities by reason of their disability. Indeed, it [sic] could not seriously

make such an argument because Arizona has provided disability benefits to severely

disabled persons precisely because of their disability.”). Moreover, the Supreme Court

has explained that “[i]t is not required that any benefit extended to one category of

individual with a disability also be extended to all other categories of individual with a

disability. Thus, any class so excluded is not denied benefits solely on the basis of

disability within the meaning of Section 504.” Traynor, 485 U.S. at 549.2

Cohon next argues that New Mexico’s program is facially discriminatory because

“[t]he State Defendants [sic] use of the safety/ risk limitations do [sic] not apply to all Mi

Via participant budget requests. Rather they are only imposed upon budget requests

above the individual budgetary allotment.” Aplt’s Br. at 18. However, Cohon’s

argument misunderstands the nature of a facially discriminatory regulation. The risk/
2
Cohon argues that the District of New Mexico has held that the “Traynor
reasoning ‘does not encompass the severely handicapped plaintiffs who cannot be faulted
for the occurrence of their condition.’” Aplt.’s Br. at 20 (citing Jackson v. Ft. Stanton
Hosp. & Training School, 757 F. Supp. 1243, 1299 n.36 (D.N.M. 1990), rev’d on other
grounds in Jackson v. Fort Stanton Hosp. and Training School, 964 F.2d 980 (10th Cir.
1992)). This distinction is questionable as circuit courts have cited Traynor in contexts
suggesting it is not limited to instances in which the plaintiff “cannot be faulted” for their
condition. See Rogers v. Dep’t of Health and Envtl. Control, 174 F.3d 431, 434-36 (4th
Cir. 1999) (applying Traynor’s reasoning and holding that Title II of the ADA did not
require a state to provide to mentally disabled equal long term disability for those
physically disabled); Vaughn v. Sullivan, 83 F.3d 907, 909-910, 913 (7th Cir. 1996)
(holding that Indiana’s preferential treatment of the blind over all other disabilities,
including the two representative plaintiff’s severe disabilities of multiple sclerosis and
being a quadriplegic as a result of a shooting accident, was not forbidden by the ADA and
the Rehabilitation Act, citing Traynor).

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safety limitation imposed does not facially discriminate against the severely disabled even

if it may affect the severely disabled with higher frequency because of the costs needed to

address their needs. Compare Cohon’s circumstances with Lovell v. Chandler, 303 F.3d

1039, 1045 (9th Cir. 2002) (where the aged, blind, and disabled were categorically

excluded from Hawaii’s QUEST pilot program, resulting in the Ninth Circuit’s holding

that the QUEST pilot program violated the ADA and Rehabilitation Act).

Cohon’s argument is also self-defeating to the extent she alleges that the risk/

safety limitation is discriminatory because it “preclude[s] [her] from having any budget

requests not related to safety concerns approved by the Defendants.” Aplt’s Br. at 25-26

(citing NMAC § 8.314.6.9). The relevant portion of the governing Mi Via Waiver

program regulation makes clear that Cohon’s budget requests are at all times subject to

the “agreed upon individual budgetary allotment (IBA).” NMAC § 8.314.6.9. Moreover,

to the extent Cohon argues that the state’s process is discriminatory because it prioritizes

her budget requests, it is unclear how this is discriminatory, or how the program would be

administrable if the state could not prioritize the budget requests.

Insofar as Cohon argues that the remaining budget items were denied despite

satisfying the risk/ safety limitation, or were necessary for her to attain the program’s goal

of self-direction, those questions are properly before the state court and not before us.

Thus Cohon’s allegations that the risk/ safety limitation for requests exceeding $59,449

are discriminatory do not state a claim for which we may grant relief.

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 Finally, we turn to Cohon’s argument that the Mi Via program is discriminatory

against those with severe disabilities because they are precluded from accessing Mi Via

services which address the Mi Via goals of self-direction and self-determination. As

discussed above, Cohon does not have a legal entitlement to the services she requests; her

budget requests are eligible for approval but they are also subject to the IBA limitation.

This does not amount to discrimination. C.f. Weyer v. Twentieth Century Fox Film Corp.,

198 F.3d 1104, 1116 (9th Cir. 2000) (“[T]here is no discrimination under the [ADA]

where disabled individuals are given the same opportunity as everyone else.”); McKelvey

v. Turnage, 792 F.2d 194, 202-203, 253 (D.C. Cir. 1986) (per curiam) (holding that the

Veteran Administration’s irrebuttable presumption that all veterans suffering from

alcoholism did so as a result of their own misconduct was not discriminatory even though

it resulted in veterans suffering from alcoholism being unable to obtain extensions of

educational benefit cutoffs). Insofar as Cohon seeks to achieve the goals of self-direction

and the approval of budget requests sufficient to meet that end, the Medicaid program

cannot guarantee “equal results,” despite Cohon’s arguments that she does not seek equal

results. See Cercpac v. Health and Hosp. Corp., 147 F.3d 165, 168 (2d Cir. 1998)

(“[T]he disabilities statutes do not guarantee any particular level of medical care for

disabled persons, nor assure maintenance of service previously provided.”).

Cohon next argues that she states a claim of discrimination on the basis of

unjustified isolation under Olmstead v. Zimring. Aplt’s Br. at 21 (citing 527 U.S. 581

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(1999)). In Olmstead, the Supreme Court recognized that individuals with mental

disabilities in institutions are subject to unjustified isolation and that unnecessary

isolation in this context could be seen as discrimination based on disability. 527 U.S. at

597-601. In Fisher v. Oklahoma Health Care Authority, our court held that an individual

did not need to be institutionalized in order to assert an Olmstead claim. 335 F.3d 1175,

1181-82 (10th Cir. 2003). There, individuals brought an action seeking declaratory and

injunctive relief, arguing that a prescription drug cap violated the ADA because it would

force the plaintiffs to enter nursing facilities prematurely in order to obtain necessary

prescriptions. Id. at 1181. Recognizing that the plaintiffs were not yet institutionalized,

our court reasoned that “nothing in the Olmstead decision support[ed] a conclusion that

institutionalization is a prerequisite to enforcement of the ADA’s integration

requirements.” Id.

Cohon urges us to read Fisher as expanding Olmstead’s “unjustified isolation”

claims beyond the context of institutionalization without citing support for such a broad

reading and we are unpersuaded that either decision should be read so broadly. As the

Ninth Circuit has explained, “where the issue is the location of services, not whether

services will be provided, Olmstead controls.” Townsend v. Quasim, 328 F.3d 511, 517

(9th Cir. 2003) (citing Rodriguez v. City of New York, 197 F.3d 611 (2d Cir. 1999)).

Thus, to state a claim under Olmstead, Cohon had to allege facts supporting a claim that

the process by which the Mi Via program was administered would result in her

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unjustified isolation or premature institutionalization, and she has not. Although Cohon

urges repeatedly that the denial of her budget requests results in her falling short of being

able to meet her goals of self-direction, these allegations do not amount to an Olmstead

claim. To the extent that Cohon argues that the denial of her requested services would

result in an Olmstead claim, her denied budget requests are not before us; they are before

the state court. As to the “process” of administering the Mi Via program, the facts

alleged by Cohon do not state an Olmstead claim.

To save her argument, Cohon next argues in her briefing, but not in her complaint,

that persons similar to her are already institutionalized in nursing homes. Aplt’s Br. at

22-23; 26-27. We are, however, not obliged to consider allegations that are newly made

on appeal, since we are reviewing the sufficiency of the complaint. Doyle v. Okla. Bar

Ass’n, 998 F.2d 1559, 1566 (10th Cir. 1993). Thus, we agree with the district court’s

conclusion that Olmstead does not support Cohon’s claims.

D. Constitutional Claims

We now turn to Cohon’s constitutional claims.

Equal Protection

Because Cohon is not a member of a suspect class and she does not contend that

she was denied a fundamental right, the Mi Via program administration must only satisfy

rational basis review. Corder v. Lewis Palmer Sch. Dist. No. 38, 566 F.3d 1219, 1233-34

(10th Cir. 2009) (citing Save Palisade FruitLands v. Todd, 279 F.3d 1204, 1213 (10th

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Cir. 2002)); see S.S. v. E. Ky. Univ., 532 F.3d 445, 457 (6th Cir. 2008) (“Disabled persons

are not a suspect class for purposes of an equal protection challenge.”) (citing Tennessee

v. Lane, 541 U.S. 509, 522 (2004)). Under rational basis review, a challenged state action

survives if it rationally furthers a legitimate state interest. Nordlinger v. Hahn, 505 U.S.

1, 11 (1992). “In general, the Equal Protection Clause is satisfied so long as there is a

plausible policy reason for the classification.” Id. (citing United States v. R.R. Ret. Bd. v.

Fritz, 449 U.S. 166, 174, 179 (1980)). The burden is on the challenging party “to

negative ‘any reasonably conceivable state of facts that could provide a rational basis for

the classification.’” Bd. of Trustees of Univ. of Ala. v. Garrett, 531 U.S. 356, 367 (2001)

(quoting Heller v. Doe, 509 U.S. 312, 320 (1993)).

Cohon argues that she is disparately treated as compared with the less severely

disabled because they are allowed to obtain services that address their health, safety, and

community integration needs, whereas her requests are approved only if they relate to her

safety needs. Aplt’s Br. at 31-32. The district court disagreed and held that Cohon failed

to state an equal protection claim under the Fourteenth Amendment of the United States

Constitution because the State Defendants’ safety and risk limitation satisfied rational

basis review. The district court reasoned that Cohon was eligible for an increased budget

over $59,449 because she qualified under the “Chronic or Intermittent Behavioral

Conditions or Cognitive Difficulties” category, “which requires a showing that she needs

additional services ‘in order to keep [her] safe.’” R., Vol. 1 at 241 (record citation

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omitted). Thus, “it is rational for State Defendants to require participants who qualify for

an increased budget allotment based on those participants’ safety needs to be required to

show that those additional services be related to the participants’ safety.” Id.

Cohon’s only response to the district court’s reasoning is to argue that the Mi Via

program’s safety and risk requirement fails rational basis review because it “is not

appropriate for the Defendants to limit the approval of budget requests to those instances

where the requested services address safety issues,” given that her behavioral and

cognitive issues are not limited to safety issues. Aplt’s Br. at 32. However, Cohon’s

characterizing the program administration scheme as “not appropriate” does not

demonstrate how it fails rational basis review. Moreover, we are not the appropriate

tribunal to address the “appropriateness” of Cohon’s denied budget requests as those are

on appeal before the state court and not before us now.

The district court did not separately or specifically address Cohon’s equal

protection claim under the New Mexico Constitution, nor does Cohon assert that the

analysis would be different from that under the Equal Protection Clause of the Fourteenth

Amendment. We therefore do not undertake that analysis.

Due Process

Cohon next argues that she has stated a claim that the State Defendants and

Lovelace violated her due process rights in violation of the United States and New

Mexico Constitutions because their actions were arbitrary and capricious. Aplt’s Br. at

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30. Specifically, Cohon contends that the State Defendants gave insufficient notice of the

reasons for her budget denials, and that the State Defendants failed to follow the Mi Via

regulations and standards. Moreover, the State Defendants’ reprioritizing her budget

requests without her participation violated her due process guarantees. Because these

failures deprived Cohon “of the essential nature of the Mi Via program—self-direction,

self-determination, and choice,” Cohon argues that “they violated [Cohon]’s procedural

and substantive due process rights.” Id. at 31

The district court held that Cohon’s allegations failed to state either a substantive

or procedural due process claim. To state a claim for relief for a violation of substantive

due process, Cohon must demonstrate that the State Defendants’ conduct is “arbitrary,

lacking a rational basis, or shocking to the conscience of the Court.” Butler v. Rio

Rancho Public Sch. Bd. of Educ., 341 F.3d 1197, 1200-01 (10th Cir. 2003). As to

Cohon’s claim that she was given insufficient notice for the reasons of her budget denials,

the district court pointed out that the NMAC § 8.314.6.17(C) was cited as the basis for the

denial. Cohon argues that § 8.314.6.17(C) supports the granting of her budget requests

rather than its denial. We are unpersuaded and do not find Cohon’s allegations sufficient

to state a substantive due process claim.

The documents attached to Cohon’s complaint reflect notice that the following

occurred: the administrative law judge found that Cohon’s budget requests “did meet the

criteria as outlined in 8.314.6.17, but that per the same regulation, the Department has the

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discretion to approve or disapprove services, supports or goods as it deems,” R., Vol. 2 at

261, and the Hearing Decision explained that Cohon’s “Increased Budgetary Allotment

request was properly granted under the Chronic or Intermittent Behavioral Conditions or

Cognitive Difficulties category,” and that under that category, “requested budget items

must be necessary to ‘keep the participant safe.’” Id. at 251. We agree with the district

court, R., Vol. 1 at 237 (record citation omitted), that Cohon’s allegation that she received

“inadequate notice” is conclusory and is not supported by well-pled facts in her

complaint. Moreover, the allegations do not state a substantive due process claim

because they do not show actions that are arbitrary, lacking in a rational basis, or

shocking to the conscience of the court.

Similarly Cohon’s allegation that the Mi Via program failed to follow its own

regulations and standards does not amount to a substantive due process violation. As the

district court explained, and as Cohon does not contest on appeal, the “State Defendants’

requirement that [Cohon]’s benefits over the initial budget allotment amount must be

linked to her safety is consistent with their regulations and standards because the category

under which [Cohon] is eligible for increased benefits explicitly states that those

additional needs must be related to safety.” Id. at 239; see R., Vol. 2 at 431-33 (Mi Via

Service Standards for increased funding for chronic or intermittent behavioral conditions

or cognitive difficulties). Moreover, we agree with the district court’s characterization of

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Cohon’s allegation that the State Defendants failed to follow their own regulations as

conclusory. R., Vol. 1 at 239.

Next, Cohon’s allegation that the State Defendants’ failure to allow her to

prioritize her budget requests similarly does not state a substantive due process claim.

There is nothing in the Mi Via program rules or standards “that give [sic] complete

discretion to the participants in the prioritization of their budget requests.” Id. (citing

NMAC § 8.314.6.17(E) (2006) (the Mi Via budget is submitted to the State’s utilization

review contractor for final approval)). We again agree with the district court’s holding

that it was “not arbitrary, nor without a rational basis, nor shocking to the conscience for

State Defendants to conduct the final prioritization of [Cohon’s] (or any participant’s)

budget requests.” Id. at 239-40.

Lastly, the district court found that Cohon’s complaint failed to state a claim for

any violation of her procedural due process rights. The district court explained that

“[p]rocedural due process is a guarantee that the state will not deprive individuals of a

protected liberty or property interest without the benefit of procedures such as notice and

an opportunity to be heard.” Id. at 240 (citing Mathews v. Eldridge, 424 U.S. 319, 333

(1976)). Because Cohon was “given notice that she could request a re-review or

reconsideration or appeal the denial of her budget request by requesting a fair hearing,”

and because she “did request and was given a full hearing where she was represented by

counsel and was permitted to present witnesses and submit evidence,” the district court

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held that she has failed to state a claim that she was denied her procedural due process

rights. Id. We agree.

E. Lovelace

Because we affirm the district court’s dismissal of Cohon’s federal claims as

insufficient in substance, we do not reach Lovelace’s arguments as to whether it is a

proper party to be sued under the ADA or under the Rehabilitation Act.

CONCLUSION

Accordingly, the judgment of the district court is AFFIRMED.

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