Salazar v. District of Columbia

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

OSCAR SALAZAR, et al.,

Plaintiffs,

v. Civil Action No. 93-452 (GK)

DISTRICT OF COLUMBIA, et al.,

Defendants.

MEMORANDUM OPINION
I. INTRODUCTION

The District of Columbia ("the District," "D. C." or

"Defendants") manages a large Medicaid program, see 42 u.s.c.
§ 1396 et ~' which provides healthcare benefits for eligible

children and adults. In 1993, Plaintiffs filed a Complaint alleging

various statutory and constitutional violations in the course of

the District's provision of these much-needed benefits for

children and low income adults.

In 1996, following a bench trial, the Court found the District

liable for violations of statutory provisions of the Medicaid

statute and other federal law: (1) the District did not process

and decide applications for Medicaid eligibility in a timely

manner; (2) the District did not provide adequate advance notice

before suspending or terminating benefits; (3) the District failed

to provide early and periodic screening, diagnostic and treatment
 ( "EPSDT") services for children under 21 years of age when

requested; and (4) the District did not adequately notify eligible

families regarding the availability of EPSDT services. See Salazar

v. District of Columbia, 954 F. Supp. 278, 324-34 (D.D.C. 1996).

On January 25, 1999, the Parties' negotiated, and the Court

entered, a Settlement Order memorializing the District's

I
obligations to remedy these violations. See Order Modifying the
i
Amended Remedial Order of May 6, 1997 and Vacating the Order of

March 27, 1997 [Dkt. No. 663) (referred to throughout as the

"Settlement Order"). Some elements of that Settlement Order remain

in place today.

On March 23, 2010, President Obama signed the Patient

Protection and Affordable Care Act of 2010, Pub. L. No. 111-148,

124 Stat. 119, et~' ("ACA"), ushering in major reforms in many

different areas of the American health care system, including far-

reaching changes to the District's Medicaid program.

The Court predicted that "implementation [of the ACA's

reforms] w [ould] undoubtedly be both rocky and fairly long in

coming." Amended Memorandum Opinion and Order of Oct. 17, 2013

at 6 [Dkt. No. 1886). That prediction has been borne out, but no

one -- neither the Parties nor the Court -- anticipated the scope

and difficulty of the problems that have arisen. Although the

District has devoted huge amounts of staff time and other resources

to, essentially, rewrite the Medicaid program to comply with the

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ACA, Plaintiffs have identified severe technical and logistical

problems in the processing of initial Medicaid applications and in

the Medicaid benefits renewal process. These problems have

affected thousands of Medicaid beneficiaries and have deprived

many District residents of necessary medical care to which they

are entitled.

In light of the severe backlogs in the processing of Medicaid

applications, delays in the Medicaid renewal process, and a number

of computer glitches caused by ACA-related changes to the

District's administration of the Medicaid program, Plaintiffs

filed, on December 22, 2015, a Motion for Preliminary Injunction

Concerning District of Columbia Medicaid Applications and Renewals

("Pls.' Mot. for P.I.") [Dkt. No. 2070), seeking preliminary relief

on behalf of Medicaid applicants and recipients in the District

who may be prejudiced by these implementation difficulties.

Plaintiffs' Motion seeks a two-pronged order requiring

1) that [the District] shall provisionally approve all
Medicaid applications pending over 45 days until a
final determination can be made; [and]

2) that [the District] shall continue the eligibility
of all Medicaid recipients due [to have their
Medicaid benefits] renewed or recertified[.]

See Proposed Order accompanying Pls.' Mot. for P.I. [Dkt.

No. 2070-1).

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 On January 15, 2016, the District filed its Opposition to

Plaintiffs' Motion for a Preliminary Injunction ("Defs.' Opp'n to

P.I.") [Dkt. No. 2077], and on January 29, 2016, Plaintiffs filed

their Reply in Support of their Motion ("Pls.' Reply in Support of

P.I.") [Dkt. No. 2083].

On February 9, 2016, Plaintiffs chose to supplement their

request for preliminary relief with a Motion for Modification of

the Settlement Order ("Pls.' Mot. for Mod.") [Dkt. No. 2093], which

seeks relief on a permanent basis that is nearly identical to the

relief requested in their Motion for Preliminary Injunction.

Compare Proposed Order accompanying Pls.' Mot. for P.I. [Dkt. No.

2070-1] with Proposed Order Accompanying Pls.' Mot. for Mod. [Dkt.

No. 2093-5]. Plaintiffs' requests for relief are identical except

that the Proposed Order accompanying their Motion for Modification

adds one additional duty: "that during the time this Order is in

effect, [D]efendants shall report monthly on their compliance with

its terms." Proposed Order Accompanying Pls.' Mot. for Mod. at 2.

On February 26, 2016, the District filed its Opposition to

Plaintiffs' Motion for Modification ( "Defs.' Opp' n to Mot. for

Mod.") [Dkt. No. 2097]. On March 9, 2016, Plaintiffs filed their

Reply in Support of their Motion for Modification ("Pls.' Reply in

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Support of Mot. for Mod.") [Dkt. No. 2102]. On March 28, 2016, the

District filed its Surreply [Dkt. No. 2108] .1

Before Plaintiffs' second Motion was fully briefed, on

February 19, 2016, the Court held an on-the-record teleconference

with the Parties to discuss how best to resolve Plaintiffs'

Motions. Both Parties agreed with the Court that the two Motions

are deeply intertwined and best resolved concurrently. 2

Thus, on February 19, 2016, with the Parties' consent, the

Court decided to resolve the two Motions simultaneously.

Plaintiffs and the District rely to a large extent on the same

factual and legal arguments in support of their positions on the

Motion for Preliminary Injunction as they do with respect to the

Motion for Modification of the Settlement Order. See Pls.' Mot.

for Mod. at 2 (incorporating into Motion for Modification all

1 On March 14, 2016, the District filed a Motion to Strike New
Evidence Submitted in Plaintiffs' Reply Brief in Support of Their
Motion for Modification of the Settlement Order [Dkt. No. 2103].
The Court denied that Motion, and instead, permitted the District
to file a Surreply. See Order [Dkt. No. 2104].
2 Federal Rule of Civil Procedure 65(a), which governs preliminary
injunction motions, supports consolidated consideration of the
merits and a request for preliminary injunction. See Fed. R. Civ.
P. 65 (a) (2) ("Before or after beginning the hearing on a motion
for a preliminary injunction, the court may advance the trial on
the merits and consolidate it with the hearing."); see also United
States v. W. Elec. Co., 46 F.3d 1198, 1207 n.7 (D.C. Cir. 1995)
(" [A] trial court has inherent power to control the sequence in
which it hears matters on its calendar and to decide whether to
consolidate the proceedings on motions.").

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"briefing and evidence submitted in connection with [] Motion for

a Preliminary Injunction"); Defs.' Opp'n to Mod. for Mod. at 1.

Additionally, Plaintiffs request precisely the same relief in

their Motion for Preliminary Injunction and in their Motion for

Modification (with the one exception of a request for monthly

reports from the District, which appears only in the latter

Motion). Because Plaintiffs' two Motions rest on the same factual

and legal foundations and call for nearly identical relief, it is

clear that the merits question presented by the Motion for

Preliminary Injunction is the same as the question presented by

the Motion for Modification.

Although the District has made substantial progress since

Plaintiffs' initial filing on December 22, 2015, in addressing the

problems caused by changes in its administration of the Medicaid

program to comply with the ACA, it is clear from the Parties'

submissions that significant obstacles remain. These obstacles

stand between Medicaid eligible individuals and the healthcare to

which they are entitled. For that reason, as well as others,

Plaintiffs' Motion for Modification of the Settlement Order shall

be granted with certain modifications to the requested relief, and

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Plaintiffs' Motion for Preliminary Injunction shall be denied as

moot. 3

II. BACKGROUND

A. Prior Relevant Orders in This Case

In 1993, when Plaintiffs filed this class action the Plaintiff

class ultimately certified consisted of "a collection of several

sub-classes, with each sub-class consisting of Medicaid applicants

and recipients with a particular set of claims." Memorandum Opinion

at 2 [Dkt. No. 2046]. At the time of trial, the following sub-

classes remained:

All persons who have applied, have attempted to apply,
or will apply in the future during the pendency of this
litigation, for medical assistance pursuant to Title 19
of the Social Security Act ("Medicaid"), and all persons
who have received, are receiving, or will receive in the
future during the pendency of this litigation, Medicaid
in the District of Columbia with respect to the following
claims:

Any claims for declaratory, injunctive, or other relief
premised on an alleged delay in excess of 45 days in the
processing of Medicaid applications [Sub-class III]

Any claims for declaratory, injunctive, or other relief
premised on an alleged lack of advance notice of the
discontinuance, suspension or obligation to recertify
Medicaid benefits, after being found eligible [Sub-
class IV]

Any claims for declaratory, injunctive, or other relief
premised on an alleged lack of effective notice of the

3 The Court notes that both Parties submitted extremely
well-written briefs, which made its job a trifle easier.

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 availability of early and periodic screening, diagnostic
and treatment ("EPSDT") services for children under 21
years of age, and/or an alleged lack of EPSDT services
for eligible children under 21 years of age [Sub-
class V] . 4

Order at 1-2 [Dkt. No. 100] (brackets in original) . ,

After years of litigation and some successful negotiation by

the Parties, on October 16, 1996, the Court issued a 58-page

Opinion setting forth extensive findings of fact and conclusions

of law. See Salazar, 954 F. Supp. 278. "In particular, the Court

ruled that Defendants had failed to process Medicaid applications

for non-disabled, non-foster care [non-public assistance]

applicants within 45 days, had terminated or suspended eligible

persons' benefits without adequate notice, had failed to provide

EPSDT services to eligible families, and had failed to notify those

eligible families about the availability of such services."

Memorandum Opinion of December 28, 1998 at 2 [Dkt. No. 653]

(summarizing findings detailed in Salazar, 954 F. Supp. 278).

In order to remedy these violations of the law and to avoid

further litigation, the Parties crafted and agreed upon the terms

of a Settlement Order, which the Court entered on January 25, 1999.

See Settlement Order at 1 [Dkt. No. 663] . Section II of the

Settlement Order detailed steps the District was to take to redress

problems related to the timely processing of initial applications

4 Claims corresponding to Sub-classes I and II were resolved before
trial. See Memorandum Opinion at 4 n.2 [Dkt. No. 2046].
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for Medicaid on behalf of members of Sub-class III. Settlement

Order ,, 6-16. In general, Section II required the District to

decide Medicaid applications and notify beneficiaries of its

decision within 45 days of receiving an application. Id. , 6(a).

The Settlement Order also provided that if the District

demonstrated compliance over three consecutive years, Section II

of the Order would terminate. Id. , 74.

On February 24, 2009, the District notified the Court that it

had satisfied the exit criteria for. Section II and represented

that Plaintiffs were in agreement with that position. See Consent

Motion to Vacate Sections II and IV of the Settlement Order of

January 22, 1999 [Dkt. No. 1443] . 5 The District therefore

requested, with Plaintiffs' consent, that the Court vacate

Section II. Id. The Court granted the District's Motion to Vacate

that same day. See Minute Order of Feb. 24, 2009.

Section III of the Settlement Order concerned the annual

recertification 6 of Medicaid benefits on behalf of Sub-class IV.

5 Section IV of the Settlement Order concerned the Eligibility
Verification System by which the District determined the Medicaid
eligibility of District residents. That Section was also vacated.
See Minute Order of February 24, 2009.

6 As Plaintiffs note, "recertification" of Medicaid benefits is
now generally referred to as "renewal." It is the process by which
Medicaid beneficiaries are annually subject to review of their
continued eligibility for Medicaid benefits based on income,
family status, and other factors. See Pls.' Ex. 23 at 009-010 [Dkt.
No. 2070-21]. This Memorandum Opinion uses "recertification" and
"renewal" interchangeably.
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See Settlement Order ~~ 17-28. At the time the Settlement Order

was issued, Medicaid required the District to provide annual

recertification forms to beneficiaries that they were required to

complete in order to retain their Medicaid benefits. Section III

required the District to mail recertification forms and various

notices to advise beneficiaries of their recertification status.

Id. ~ 17. Section III's requirements were specific, setting forth

a schedule which the District was required to adhere to and

language that the District was required to use. Id.

Passage of the ACA in March of 2010 ushered in a host of

changes to the Medicaid program, including significant

modifications to the Medicaid re certification process. The ACA

requires the District to move to a "passive renewal" model in which

beneficiaries' eligibility is determined to the extent possible on

the basis of reliable information available to the District, such

as data available through the IRS or the Social Security

Administration. See 42 C.F.R. § 435.916. Section III of the

Settlement Order does not rest on the ACA's passive renewal model.

Instead, it assumes that Medicaid beneficiaries would have to

actively renew their benefits on an annual basis.

In light of the ACA' s October 1, 2013 effective date for

.significant changes to the Medicaid renewal process, see Amended

Memorandum and Order at 2 [Dkt. No. 1886], on September 20, 2013,

the District filed a Motion to Modify the Settlement Order [Dkt.

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No. 1870] pursuant to Federal Rule of Civil Procedure 60(b) (5).

The District asked the Court to relieve it from complying with

Section III entirely, contending that it could not implement the

ACA's passive renewal system while still bound by the conflicting

provisions of Section III. Motion to Modify the Settlement Order

at 1. Plaintiffs opposed the District's Motion, arguing that

limited modifications to Section III could address any apparent

conflicts between the ACA and Section III. Plaintiffs' Brief in

Opp'n at 1-2 [Dkt. No. 1876].

On October 17, 2013, the Court granted the District's Motion.

See Amended Memorandum Opinion and Order [Dkt. No. 1886]. The Court

found that "[t]here is simply no comparison between the statutory

framework that existed at the time this Court made its factual

findings in 1996 and what implementation of the ACA envisions[.]"

Moreover, many of the ACA' s renewal provisions "are in direct

conflict with the renewal process in Section III." Id. at 6.

Accordingly, the Court "conclude[d], pursuant to Fed. R. Civ. P.

60 (b) (5), that passage of the ACA has created a 'significant change

in circumstances' that justifies termination of the provisions of

Section III of the Consent Order." Id. at 5. Notably, Plaintiffs

declined to appeal the Court's termination of Section III.

Thus, following the termination of Section II.I, no provisions

of the Settlement Order relating to Medicaid application

processing or benefits renewal remained in effect. The only

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portions of the Settlement Order affecting programmatic elements

of the District's Medicaid program that remained in force related

to the delivery of EPSDT services. See Settlement Order Sections

V & VI.

Sections V & VI of the Settlement Order resolve the claims of

Sub-class V, which were premised on the lack of effective notice

of the availability of EPSDT services for children under 21 years

of age and the failure to provide those services. Order at 1-2

[Dkt. No. 100] . Section V sets forth detailed procedures for

providing and tracking the provision of EPSDT services through

entities that participate in the District's Medicaid program. See

Settlement Order Section V. Section VI sets forth similarly

detailed procedures for providing notice to eligible Medicaid

beneficiaries regarding the availability and nature of EPSDT

services. See id. Section VI.

In 2014, the District reported to the Centers for Medicare

and Medicaid Services ("CMS") that there were 98,350 children in

the District eligible for EPSDT services under Medicaid. Form CMS-

416, line la [Dkt. No. 2039-1]. As of October 2014, there were a

total of 247, 850 District residents on Medicaid. Pls. Ex. 61,

column 1 [Dkt. No. 2102-1] (figure reflects subtraction of certain

non-Medicaid beneficiaries included in the District's data). Thus,

children eligible for EPSDT services constitute a large portion of

the District's Medicaid population.

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 B. ACA Implementation

Beginning on October 1, 2013, the District began processing

Medicaid applications pursuant to new eligibility rules

established by the ACA and its implementing regulations. See 42

U.S.C. § 1396a(e) (14); 42 C.F.R. §§ 435.603, 457.315(a). In order

to facilitate implementation of the ACA's new rules, the District

took steps to build a new, automated Medicaid application and

eligibility determination system called the DC Access System

( "DCAS") , which is intended to eventually entirely replace the

District's legacy system, called the Automated Client Eligibility

Determination System ( "ACEDS") . Schlosberg Deel. ~~ 14-15 [Dkt.

No. 2077-1] .

As required by ACA regulations, the District also implemented

a "no wrong door" approach to applications under which individuals

may apply for Medicaid benefits online through DCAS, on paper, by

telephone, or in person at D. C. Department of Human Services

("DHS") Economic Security Administration ("ESA") Service Centers

("Service Centers"). See 42. C.F.R. § 435.907(a). Finally, the

District took steps to establish a system for processing "passive

renewals" of Medicaid benefits, as required by the ACA. See

42 C.F.R. § 435.916.

These changes did not go smoothly. The Parties disagree as to

the scope of the problems that developed; however, it is clear

that thousands of Medicaid beneficiaries were affected by (1) the

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District's failure to process Medicaid applications within 45 days

in violation of 42 C.F.R. § 435.912(c) (3) and D.C. Code§ 4-205.26

(2014); and (2) the District's failure to timely renew Medicaid

benefits or to provide adequate notice to Medicaid recipients

before 'terminating their benefits in violation of federal law.

The roots of these failures are technical in nature, but the

facts below demonstrate the deeply personal calamity that befell

many Medicaid applicants and beneficiaries when they and their

children were unable to get the care to which they were entitled.

The number and narratives of affected District residents

demonstrate the gravity of the situation, as the following

information shows.

1. Initial Processing

The District of Columbia is required to make an eligibility

determination on all Medicaid applications within 45 days of

submission. 42 C.F.R. § 435.912(c) (3); D.C. Code § 4-205.26. 7

During 2015 and the beginning of 2016, the District failed to

comply with this duty.

Around March or April 2015, the District became aware that as

many as 12,000 applications were listed as pending in the DCAS

system for 45 days or more. Pl. Ex. 1 at 3 [Dkt. No. 2070-2]. The

7 The one exception is for applicants who apply for Medicaid on
the basis of disability, whose applications must be adjudicated
within 90 days. 42 C.F.R. § 435.912(c) (3) (i).

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District had previously been unaware of this backlog until staff-

members ran new queries as part of their backlog reports. Id.

The District states that the 12,000 application figure

overstates the number of District residents who had actually been

denied Medicaid coverage. For instance, of the approximately

12,000 cases appearing on the report, around 15 percent already

had active Medicaid coverage. Schlosberg Deel. ~ 69. Another

quarter of these cases were applications that had been determined

to be ineligible, but the system simply had not closed them out.

Id. Even if these figures are accurate, approximately 7,000

applications - and people -- were affected.

In August 2015, the District reported that there were still

5,263 applications 8 that had been pending in DCAS for more than 45

days. Pl. Ex. 2 at DHCF 32 [Dkt. No. 2070-3]. District staff

"work[ed] overtime to resolve these cases as soon as possible,"

but as of November 23, 2015, there were still 5, 215 Medicaid

applications in_DCAS pending over 45 days. Pl. Ex. 21 Response

5 (c) &(d) [Dkt. No. 2070-19]. By December 2015, the District had

reduced the number of pending applications to 4,497. See Pl. Ex.

8 A household with several members will sometimes submit a single
application, Pl. Ex. 21 Response 5(b) [Dkt. No. 2070-19]; thus,
the number of individuals affected by the backlog may be larger
than the application backlog figures. ·

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1 at 3 [Dkt. No. 2070-2] (figure combines pending and

stuck/malformed applications) .

The backlog of applications can be divided into two main

groups, based on the source of the problem.9 The first group of

backlogged applications, the "stuck/malformed" group, consisted of

approximately 1,970 cases as of December 2015. "A malformed case

is a case that did not generate all the information to create a

fully formed case when it was entered into the system [case worker

portal] because of a technical system issue." See Pl. Ex. 23 at 6

[Dkt. No. 2070-21]. As the District of Columbia Department of Human

Services explains, "[w]hat this means . [is that] [t]here are

individuals who are not get ting Medicaid that should be. " Pl. Ex. 2

at DHCF 34.

The second group of backlogged applications, the "case

processing backlog," consisted of 2,527 individuals as of December

2015. Pl. Ex. 1 at 3. The case processing backlog is a catch-all

category, which consists of applications that have not been

processed due to the District's inability to verify income,

residency, or some other type of required verification or due to

other "[computer] system performance issues." Id.

9 In addition to the serious backlog of applications in the DCAS
system, as of August 2015, "there [wa] s a paper application
backlog" as well. Pl. Ex. 2 at DHCF 35 [Dkt. No. 2070-3]. However,
the Parties have not indicated the size of the paper application
·backlog.
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 As of August 2015, over 1,500 applicants in the case

processing backlog had not been notified that their applications

could not be processed because of the District's inability to

verify some piece of information. Pl. Ex. 2 at DHCF 32. Plaintiffs

point out that since the backlog was discovered in March or April

of 2015, it is possible that, as of late December, 2015, many of

the backlogged applications had been pending for nine months or

longer.

In addition to the serious application backlogs, Plaintiffs

also describe significant hurdles facing Medicaid applicants as

they attempt to file their initial applications. Plaintiffs cite

evidence that documents scanned into the District's document

management system cannot always be found and must often be

resubmitted. See Pls. Ex. 42 at 20 [Dkt. No. 2070-40]. The

testimony of Medicaid advocates who assist Medicaid beneficiaries

on a daily basis demonstrates that lost or misplaced paperwork is

a substantial problem. See, ~, Loubier Deel., Pl. Ex. 27 ~ 9

[Dkt. No. 2070-25]; Bread for the City Deel., Pl. Ex. 24 ~ 11 [Dkt.

No. 2070-22]; Legal Aid Deel., Pl. Ex. 26 ~~ 5, 17 [Dkt. No.

2070-24] .

A review of DHS Service Centers conducted by Medicaid

advocates in February 2015 observed widespread problems with

document processing. See Legal Aid Deel., Pl. Ex. 26 ~~ 2(b)-(c),

7-15, 18. As part of this review, Medicaid advocacy organizations,

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including Plaintiffs' counsel, made 12 visits to three DHS service

centers in February 2015 and spoke with approximately 309 people

in line. Id. ~ 7. In March 2015, the DC Fiscai Policy Institute

and the Legal Aid Society of the District of Columbia provided

testimony to the District of Columbia City Council's Committee on

Health and Human Services that analyzed the data from these visits.

They testified that consumers were often required to "make return

trips to Service Centers to correct improper benefits terminations

and denials caused by ESA failing to process their paperwork." Pl.

Ex. 8 at 2 [Dkt. No. 2070-9].

Subsequent visits by these same organizations to the service

centers in June 2015 again found numerous individuals standing in

line to resubmit documentation they had already provided, many now

facing denial or termination of benefits due to Defendants' failure

to process the paperwork in the first instance. See Legal Aid

Deel., Pl. Ex. 26 ~~ 13 (a), (c), (d), (e), (g), (h); 15 (a), (c).

After Plaintiffs filed their Motion for Preliminary

Injunction on December 22, 2015, the District continued its efforts

to reduce the two backlog groups. It made impressive progress. "As

of February 24, 2016, zero individuals were in the case processing

backlog (down from 1,247 individuals on January 11, 2016), and as

of February 23, 2016, . 67 initial applications were affected

by the [stuck/malformed] issue (down from 1,408 on January 11,

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2016) ." Defs.' Opp'n to Mot. for Mod. at 3 (citing Second

Schlosberg Deel. ~~ 4-5 [Dkt. No. 2097-1]).

The District has attempted to make whole applicants who were

eventually determined to be Medicaid eligible: "Where a

beneficiary was determined eligible but had not received a

determination, the individual was notified and approved

retroactively to the date of the initial application along with

instructions on how to request reimbursement for any eligible out-

of-pocket expenses." Defs.' Opp'n to P.I. at 14 (citing Schlosberg

Deel. ~ 70) ~

The District also represents that many of the "root causes of

problems have been identified and will be resolved in an upcoming

update to DCAS," and that "in the meantime caseworkers have been

provided additional training and guidance to navigate any new or

remaining [stuck/malformed] cases while managers continue to

receive reports to track pending cases." Defs.' Opp'n to Mot. for

Mod. at 3 (citing Second Scholsberg Deel. ~ 6). "In addition, the

District has also implemented automated batch processes through

which initial applications [that do not require the verification

of additional information] . . . are automatically activated with

Medicaid coverage." Id. (citing Second Scholsberg Deel. ~ 7).

Finally, to provide a sense of scale, the District notes that

"[s]ince October 2013, over 33,000 new electronic applications for

Medicaid were process~d in DCAS on the same day they were

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submitted." Gov't's Opp'n to Mot. for P.I. at 7 (citing Schlosberg

Deel. ~ 99).

While the District's progre.ss in reducing the Medicaid

application backlogs is laudable, Plaintiffs argue that the

District has not "put in place a durable remedy to ensure that

Medicaid applications will be decided within 45 days." Pls.' Reply

in Support of Mot. for Mod. at 13. They note that "four of the

root causes for the stuck/malformed defect in the District of

Columbia computer system remain unresolved and that several new

applications are still affected by those defects every day." Id.

(citing Second Schlosberg Deel. ~ 6; Defs.' Opp'n to Mot. for Mod.

at 3) .

Moreover, Plaintiffs contend that the issues of long Service

Center wait times, paperwork loss, and processing delays have not

been remedied. They set forth a particularly enlightening example

to sharpen their point:

On November 24, 2015, Ms. [Nurian] Flores Rivas
submitted an application for Medicaid benefits for her
two minor children and [received] a receipt for the
visit. [] Pl. Ex. 62 ~ 8 [Dkt. No. 2102-2] . . . . Over
three months later, she ha[d] received no written
decision. Even with the assistance of a Legal Aid lawyer,
Ms. Flores Rivas has received conflicting information
about the status of her application. [DCAS] Customer
Service found a record of application only for her son
and not for her daughter and also found an approval for
her son. The ESA Customer Service [representative], whom
she was told to contact next, saw no record of any
application for either her daughter or her son and no
record of any approval for her son. Id. ~ 8(e). [As of
March 9, 2016, after the date the District represented

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 that it had eliminated the application backlogs], Ms.
Flores Rivas ha[d] not received a notice of DHS's
determination concerning her children's application[,]
and they [could not] access Medicaid benefits. Id. ~
8 ( g) .

Pls.' Reply in Support of Mot. for Mod. at 15.

The District responds to this particular example by

contending that individualized mistakes, rather than systemic

problems led the Flores Rivas children's loss of coverage. See

Defs.' Surreply at 6. It notes that "ESA records indicate that a

caseworker erroneously labeled the application [submitted by Ms.

Flores Rivas on November 24, 2015] as a recertific~tion instead of

an application. Ms. Flores Riva's son was approved for

Medicaid but the daughter was not approved because her application

was mislabeled." Id.

The District's attempt to separate the mistakes of individual

District employees from the systemic issue plaguing the Medicaid

system is unconvincing. The two are interrelated. Just as the

complexity of the system increases the opportunity for individual

errors, individual errors combine to form systemic problems.

Accordingly, it is clear that despite its substantial

progress, the District has still not been able to entirely

remediate the problems that Plaintiffs document.

2. Benefit Renewals

In the 1996 merits Opinion, the Court held that "[t] he

District of Columbia is required, under federal law, to give

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Medicaid recipients timely and adequate notice of proposed action

to terminate, discontinue, or suspend their eligibility and to

provide an opportunity for a hearing if it takes such action."

Salazar, 954 F. Supp. at 326 (internal brackets and quotation marks

omitted).

Under the ACA' s implementing regulations, the District is

required to "passively" renew 10 the Medicaid benefits of Medicaid

beneficiaries "if able to do so based on reliable information

contained in the individual's account" or if such information is

otherwise available to the agency through federal and local

databases and other sources. See 42 C.F.R. § 435.916(a) (2). If

sufficient information is available to the agency to permit an

eligibility determination, the Medicaid recipient cannot be

required to take any action. Id. If sufficient information is not

available to passively renew an individual, the agency must mail

a form that contains the information already available to the

agency and ask the Medicaid recipient to complete the missing

portions and return the form by telephone, e-mail, online, or in

person. 42 C.F.R. § 435.916 (a) (3). The latter process is referred

to as "manual" renewal.

10 The "passive renewal" occurs when a Medicaid recipient's
benefits are renewed without the recipient having to provide any
additional information to the District.
-22-
•.

Ordinarily, if the information available to the District is

insufficient to establish ongoing Medicaid eligibility, the

beneficiary is sent a form 60 days prior to the renewal date.

Scholsberg Deel. ~ 33. The form instructs the beneficiary to return

the form after adding the needed information. Id. If the

beneficiary does not return the form, the beneficiary is provided

30 days' notice that benefits will terminate if the form is not

returned before the renewal date. Id.; see also MAGI 30-day Notice,

Def s. Ex. D [Dkt. No. 2 077-4] . Recipients of this notice. are

advised of their appellate rights. Schlosberg Deel. at ~ 33; Defs.

Ex. D. However, when an individual fails to provide the needed

information on time, the District extends a 90-day grace period,

meaning that benefits will terminate at the end of the

certification period as required by law, but if a beneficiary

returns the completed form late, benefits can be restored

retroactive to the date of termination if the beneficiary's

information establishes that he or she remains eligible.

Schlosberg Deel. at ~ 33.

Another serious problem occurs because during the ongoing

transition from the District's legacy ACEDS system to the new DCAS

system, renewals cannot be done through DCAS directly. Instead,

-23-
data must be transferred from DCAS to ACEDS. These large-scale

data transfers did not perform as the District hoped. 11

In April 2015, the District began receiving reports from the

managed care organizations ("MCOs") that their enrollment numbers

were declining by the thousands, even when beneficiaries received

a passive renewal approval letter or timely returned the renewal

form. See Pls. Ex. 12 at DHCF 12 [Dkt. No. 2070-11]. The District

investigated the problem over the next several months and, by June,

it had identified 1,149 cases in which the information in DCAS was

not automatically transferring to ACEDS, meaning that Medicaid

recipients were listed as receiving benefits in DCAS and yet were

not actually receiving benefits in ACEDS. See Pl. Ex. 13 at 6 [Dkt.

No. 2070-12].

However, the people who were affected had to wait six months

for any benefits. The District contends that the MCOs' specific

concerns about declining enrollment were unfounded -- in fact, MCO

enrollment has increased by approximately 9% since the District

started using DCAS. Schlosberg Deel. ~ 98. However, the

11 Technological and organizational failures in the District's
administration of the Medicaid program have affected different
populations in disparate ways. For example, Medicaid beneficiaries
who are eligible on the basis of disability face different
obstacles than beneficiaries eligible on the basis of income. See
Pls.' Mot. for P.I. at 5-9; Defs.' Opp'n to Mot. for P.I. at 8-9.
However, these distinctions are not material to the outcome of
Plaintiffs' Motion or the relief Plaintiffs seek.

-24-
investigation that the MCOs' inquiry launched gave the District

the opportunity to find serious problems in the renewal system

that had developed and were unknown to the District.

In early October 2015, the District discovered that due to

the same stuck/malformed technological defect affecting initial

applications in DCAS, many renewal "cases were not populated

correctly in the [DCAS] system and thus lost coverage." See Pls.

Ex. 21 Response No. 2(d). As of October 26, 2015, the District had

identified 86 renewal cases that had lost coverage at the time of

renewal due to this defect and had only restored coverage to a

subset of these cases. See id. Response 2(c) (indicating

restoration of coverage to only 68 individuals) . Data provided at

a D. C. Medical Care Advisory Committee meeting on December 10,

2015, indicates that this defect affected 361 renewal cases (and

likely more individuals, as a case may include multiple members of

a household). Pl. Ex. 1 at 3. By December 10, 2015, 131 cases

remained to be reviewed to determine, in the first instance,

whether coverage had been lost. Pl. Ex. 1 at 3.

Of course, the long lines and wait times at ESA Service

Centers add difficulty to an already trying process. See, ~,

Pl. Ex. 25 ~ 8 [Dkt. No. 2070-23] ("We [Whitman Walker Health]

hear from consumers that they must line up as early as 4 am for an

opening time of 7: 45 am or 8 am in order to be seen .

-25-
Consumers reported to me . . that they wait for many (often more

than 4) hours to meet with a case worker to get help.").

Further technological errors have plagued what is supposed to

be an automatic renewal process. In May 2014, the District

discovered that DCAS had erroneously denied an unknown number of

individuals who had been granted asylum in the United States (who

are Medicaid eligible) the coverage to which they were entitled.

See Pl. Ex. 15 at 2, 5. However, the District points out that

technical problems that led to the error regarding asylum status

were fixed by November 2014. Schlosberg Deel. ~ 31.

Additionally, DCAS system defects led to the failure to

automatically account for certain life changes that can af feet

Medicaid coverage, such as the birth of a baby. The District has

recognized DCAS's "inability to accurately redetermine eligibility

once a life event has been reported due to system defects." E-mail

Communications between CMS and DHCF, January 2015, Pl. Ex. 16 at

DHCF 1850 [Dkt. No. 2070-15]; see also id. at DHCF 1955 ("We are

having major challenges with processing change [sic] in

circumstances for all reported changes.") . The District must

"manually add[] newborns and additional household members to the

case by using [its] old legacy system" to avoid a loss of coverage.

Id. at DHCF 1850. As of August 2015, the District reported "a

significant backlog in life event processing." E-mail

Communications Between DHS and DHCF, August to September 2015, Pl.

-26-
Ex. 17 at DHCF 51 [Dkt. No. 2070-16]. The District maintains that

because it has been manually processing life event changes "[n]o

individual has lost coverage due to such issues." Defs.' Opp'n to

Mot. for P.I. at 26 (citing Schlosberg Deel. ~ 94).

In addition to these technical errors, the District's failure

to process renewal paperwork in a timely manner has led to

confusion and the loss of coverage by Medicaid beneficiaries. Email

exchanges between the District and the Centers for Medicare and

Medicaid Services ("CMS") in January 2015, indicate that the

District was regularly taking 90 days to process renewals, which

CMS considered too long. Pl. Ex. 16 at DHCF 1847-1849; id. at 1849

("The agency should be working to process the returned form as

expeditiously as possible and . . the whole process ordinarily

should not take 90 days . . . . "); see also Pl. Ex. 17 at DHCF 47-

48 (referring to a "backlog renewal"). Individual examples

provided by several of the District of Columbia's most reliable

and experienced legal aid and public heal th organizations help

convey the severity of the problem:

One client [of the D.C. Legal Aid Society], a mother of
seven with severe disabilities, submitted her Medicaid
renewal form in January 2015. She got a notice in late
February stating that the form had not been received.
She then got a notice in early March stating that the
form had been received. She went to a [S]ervice [C]enter
in April to renew her SNAP benefits and was told that
there was nothing more that she needed to do to renew
her Medicaid. Then she received another notice in April
telling her that she needed to verify District residency
for herself and one of her children. The client had not

-27-
 recently moved, and all of her children live with her.
After Legal Aid got involved, the client's benefits were
restored in May 2015. The client and her son -- who both
have serious health conditions -- were unable to receive
needed treatment during the weeks that they went without
coverage.

Legal Aid Deel., Pl. Ex. 26 ~ 6 (e) [Dkt. No. 2070-24].

[Bread for the City] Patient I, a Spanish speaker who
managed to submit a timely renewal form, despite it being
sent in English, received verbal confirmation of
receipt, but was terminated in October 31, 2015, and [as
of December 22, 2015] remain[ed] without coverage[.]

Pls.' Mot. for P.I. at 23 (citing Pl. Ex. 24 ~ 19).

[Bread for the City] Patient J, who is incontinent,
completed and timely submitted her renewal form, but
nevertheless experienced a temporary loss in coverage
resulting in her going without needed incontinence
supplies, limiting her ability to fully function[.]

Pls.' Mot. for P.I. at 23 (citing Pl. Ex. 24 ~ 20).

[Bread for the City] Patient K, who suffers from prostate
cancer, submitted his renewal form and proofs twice, but
was left to cope with a demeaning situation because he
could not afford to pay for incontinence supplies out-
of-pocket during the lapse in coverage[.]

Pls.' Mot. for P.I. at 23 (citing Pl. Ex. 24 ~ 21) (internal

quotation marks omitted) .12

Lest the reader be getting exhausted reading all these numbers

and examples, s/he must constantly keep in mind that these are

12 See also Whitman-Walker Deel., Pl. Ex. 25 ~ 9 (a) (A Whitman-
Walker patient was informed by ESA staff that his form had been
received, yet his coverage was still terminated.); id. ~ 9(b) (A
Whitman-Walker patient was unable to access life-saving
medications after coverage was terminated following completion of
form at service center.).
-28-
real people -- poor and sick people and their children -- who are

being denied the health care and the dignity of receiving health

care to which they are entitled by law.

Plaintiffs' counsel represents that s/he also encounters

these types of improper terminations with some frequency among the

individuals that are represented. For example, the District failed

to renew the Medicaid coverage of Terri Jackson and her family,

despite the fact that they timely submitted a renewal form first

online and then at a service center. Accordingly, Ms. Jackson and

her family lost their Medicaid coverage.

Among other problems, this resulted in Ms. Jackson's Medicare

Part B premiums being withheld from her Social Security check for

six months. Jackson Deel., Pl. Ex. 32, ~~ 1-3, 8-12 [Dkt. No. 2070-

30]. Ms. Jackson's husband and son, who suffer from chronic health

conditions, also lost coverage, forcing Ms. Jackson to purchase

medications out-of-pocket for them and causing the family a great

deal of stress. Id. ~~ 6, 12; see also Declaration of Vera Edmonds

("Edmonds Deel."), Pl. Ex. 48 [Dkt. No. 2070-46] (Ms. Edmonds, who

timely mailed renewal forms for her family, found out her coverage

had lapsed when she went to the doctor following a car accident;

as a result, she has been unable to attend rehabilitation therapy

or pay for needed medication) .

For its part, the District states that it has reviewed each

of the foregoing individual cases, that all of them were resolved

-29-
in the first half of 2015. Defs.' Opp'n to Mot. for P.I. at 29.

The District also states that it reported the resolution of each

case to the relevant legal services providers in June of 2015. Id.

Moreover, the District claims that most of these cases were the

result of systemic problems that had already been fixed by the

time the legal service providers became involved. Schlosberg Deel.

~~ 90-91. The others were the result of routine processing errors

that are not indicative of systemic issues within DCAS. Id.

While the District is clearly doing its best to rectify errors

and to provide retroactive status to those who lost coverage, the

end result is that a significant number of very sick people, or

elderly people, or parents of children, are suffering from the

time their benefits lapse erroneously until the District can fix

the error and make benefits retroactive. In the interim, those

people may not be able to buy their cancer medicine, receive

necessary mammograms, or continue necessary physical therapy.

Plaintiffs next point out that the District often terminates

the Medicaid coverage of beneficiaries who, despite becoming

ineligible on one basis, remain eligible on another. Legal Counsel

for the Elderly reports recurring issues with the District

terminating Medicaid coverage based on recipients' slight change

in income, even when these same recipients are eligible for

Medicaid under another coverage category. See Pl. Ex. 30 ~~ 5-8

[Dkt. No. 2070-28]. When these individuals experience a loss of

-30-
coverage, they are unable to access needed medical care, such as

personal care aide services, and are at an increased risk of

institutionalization. Id. ~ 6.

For example, when Fonda Carroll's husband died and she became

eligible for a widow's benefit, she lost her Medicaid coverage,

which she had obtained due to a disability, because she was

considered over-income. Carroll Deel., Pl. Ex. 31 ~~ 1-6, 9 [Dkt.

No. 2070-29]. Although Ms. Carroll was eligible for Medicaid under

a different category (as a childless adult under 65) despite her

income increase, she was not screened for eligibility under that

category prior to termination. Instead, her coverage was

terminated and she was informed that she should re-apply through

DCAS. Id. ~~ 10-11. As of December 22, 2015, she had a pending

Medicaid application, but while waiting for a determination, she

could not obtain needed doctor's appointments or her Chronic

obstructive pulmonary disease medication because she cannot afford

the hundreds of dollars to pay for even a single inhaler. Id.,

~~ 12-13.

The District responds to this particular example, noting that

it had insufficient information to establish that this individual

was eligible for a different coverage category. Schlosberg Deel.

~ 97. On April 8, 2015, Ms. Carroll received a 30-day notice to

terminate her Medicaid benefits because she was over income. Id.

In addition, Ms. Carroll received general correspondence from the

-31-
District specifically advising her to file an application through

DCAS so that she could be considered for eligibility under other

Medicaid coverage groups and informing her that she could apply in

person, on line and over the telephone. Schlosberg Deel. at ~ 97.

According to the District's records in ACEDS, Ms. Carroll received

a total of three such communications. Id. Eventually, she did file

the correct application, and her Medicaid coverage in the childless

adults category began on December 1, 2015. Id.

Additionally, the District claims that it does consider

whether individuals who lose their Medicaid eligibility on one

basis might still be eligible on another. The problem, it contends,

is that the District often lacks sufficient information to

automatically grant benefits on new grounds. Schlosberg Deel.

~ 95. In such cases, the District requests that the beneficiary

submit any missing information needed to establish eligibility.

Id. If the information is received prior to the beneficiary's

renewal date, and the information establishes eligibility in a

different coverage group, the beneficiary will not experience a

lapse in coverage. If not, the beneficiary will lose coverage

(although benefits may be restored retroactively to the date

coverage was lost during the 90-day grace period) . Id.

As noted above, " [t] he District of Columbia is required, under

federal law, to give [Medicaid] recipients timely and adequate

notice of proposed action to terminate, discontinue, or suspend

-32-
their eligibility and to provide an opportunity for a hearing if

it takes such action." Salazar, 954 F. Supp. at 326 (internal

quotation marks and citation omitted). However, Plaintiffs respond

that the District has failed to send renewal forms notifying

recipients of the need to renew.13

Bread for the City's medical director, Dr. Randi Abramson,

explains that "DHS frequently terminates Medicaid coverage without

providing recipients with any notice that they are required to

renew their coverage" and recounts the stories of several

individuals who had their Medicaid coverage terminated without

receiving any advance notice of the need to renew. Pl. Ex. 24,

~~ 13-14 [Dkt. No. 2070-22] i id. ~ 15 (Patient F, who never

received a renewal form and found out her coverage had been

terminated at doctor's office, was unable to receive needed

13 Plaintiffs also contend that the District fails to send
appropriate notices upon a lapse in coverage, but the District
notes that it does in fact send notice of its intent to terminate
30 days prior to the scheduled termination date. Pls.' Mot. for
P.I. at 30; Defs.' Opp'n to P.I. at 29. ACA implementing
regulations require that the District provide "timely and adequate
notice of proposed action to terminate, discontinue, or suspend
their eligibility" at least 10 days before the proposed
termination. 42 C.F.R. § 435.919(a). Thus, the 30-day notice
complies with these regulations.

Plaintiffs point out that if a beneficiary returns a renewal
form but loses coverage because of the District's failure to timely
process the form, then the beneficiary has not received adequate
notice of termination. The real problem faced by the hypothetical
Medicaid beneficiary Plaintiffs describe is the unlawful
termination of Medicaid coverage, not the concomitant lack of
notice.
-33-
•.

mammogram) i. id. ~ 16 (Patient G, who never received a renewal form,

had coverage terminated and could not obtain needed orthopedic

care); id. ~ 17 (Patient H, who never received a renewal for~ for

herself and her son, found out their coverage was terminated when

she attempted to obtain medication) .

In October 2015, the District discovered a computer error

that garbled the mailing addresses of Medicaid recipients from May

to October 2015, preventing many recipients from receiving the

renewal form. Pl. Ex. 1 at 3. The renewal forms that the District

is supposed to send to each Medicaid beneficiary in advance of

termination have unique codes that must be provided during the

renewal process. Thus, if a Medicaid recipient cannot access the

renewal code because they never received the renewal form on which

it appeared, they must go to great lengths to obtain a replacement

form or face an indefinite period without coverage. See Pl. Ex. 24

~ 15 (Patient F was only able to activate coverage after visiting

a service center twice to obtain her existing renewal form) ; id.

~ 16 (Patient G is still unable to renew because he cannot obtain

his renewal code); id. ~ 17 (Patient H remains without coverage

because she is unable to reach DCAS to obtain the necessary renewal

form and code) .

As with the initial application backlogs discussed above, the

District has made substantial progress with respect to the issue

of passive renewals. In February 2016, the District processed

-34-
benefits renewals for approximately 7, 000 Medicaid recipients

whose eligibility is determined by their income. Of those, the

District was able to passively renew 59% of the beneficiaries.

Second Schlosberg Deel. ~ 12. Moreover, as of February 26, 2016,

the District had reduced the number of renewals affected by the

stuck/malformed issue to zero and was "not aware of any issue

causing a backlog of renewals, nor [wa] s it aware of any issue

that is impeding the processing or mailing of notices." Def s. '

Opp'n to Mot. for Mod. at 3-4 (citing Second Schlosberg Deel. ~~

13, 16).

The District also notes that the response rate for

beneficiaries who received renewal notices in 2015 was 86.3%, which

compares favorably to a historical rate of 60%. Schlosberg Deel.

~ 100. Finally, the District notes that

[s]ince August 2015, in addition to tracking notices,
[it] has implemented an enhanced quality oversight
protocol. On a daily basis, [the District] receives a
sample from the daily batch of notices from [DCAS] prior
to mailing. Each sample is reviewed for accuracy,
correct notice logic, and adherence to policy
guidelines. If there are issues, the notice in question
is put on hold until the technical issues are resolved.
If there are no issues, the batch of notices is released
and the notices are sent to the recipients.

Second Schlosberg Deel. ~ 17.

However, Plaintiffs point out that even the District's recent

numbers reflect that some Medicaid beneficiaries are still losing

coverage at the renewal stage. Plaintiffs also point out that the

-35-
District cannot currently accept renewals submitted on-line, which

will lead to additional loss of Medicaid coverage. Second

Schlosberg Deel. ~ 12. Some Medicaid recipients have had difficulty

renewing their benefits over the telephone. See Whitman-Walker

Deel. Pl. Ex. 25 ~ 10 [Dkt. No. 2070-23] ("ESA Customer Service

Line Staff indicate that they are not authorized to complete the

renewal process over the phone but customers must walk into a

service center"); Declaration of Albert Tillman, March 4, 2016,

Pl. Ex. 66 ~ 6; L. Jackson Deel., Pl. Ex. 71 ~~ 5-.7. Thus, the

long lines at service centers and paperwork processing issues

already discussed are likely to lead to future losses in coverage.

Plaintiffs again provide a wealth of individual narratives to

demonstrate ongoing barriers that Medicaid beneficiaries face in

renewing their coverage. Several of these narratives are

consistent with the District's story of progress -- that is, issues

affecting the individuals described were, in fact, resolved by the

date of the District's Opposition, February 26, 2016.

For example, the Declaration of Jocelyn Blier describes the

situation of one Medicaid beneficiary who sent her Medicaid

recertification form to the District in December of 2015. Pls.'

Ex. 64. In early February, she received a notice that the District

had not received her recertification form. Id. According to

Plaintiffs' counsel, when asked about this, the District stated

that the processing backlog had prevented timely processing of the

-36-
 beneficiary's form; however, by the end of February, the District

had succeeded in processing the form and the beneficiary never

experienced a loss of coverage. Id.

With respect to this particular case, the District states

that it never received a recertification form in December 2015,

and denies that this individual was affected by any renewal

backlog. Defs.' Surreply at 9-10. The District states that when it

did not receive a renewal form in December 2015, it sent the

appropriate 30-day notice on January 29, 2015. Id. The District
.1

agrees with Plaintiffs that this individual never experienced a

loss of coverage. Id.

Other narratives, however, demonstrate the presence of

renewal issues beyond February 26, 2016, the date at which the

District believed that it had rectified the lion's share of

systemic renewal problems.

Larry Campbell, who suffers from liver disease, high blood

pressure, and diabetes, received notice from the District that he

needed to submit additional information by February 14, 2016 or

risk termination of his Medicaid benefits on February 28, 2016.

Declaration of Larry Campbell, March 7, 2016, Pl. Ex. 70 ~~ 3-6.

Mr. Campbell submitted a renewal form before the due date. Id. Yet

on March 2, 2016, he received a notice informing him that his

Medicaid coverage will be terminated in April 2016, leaving him

-37-
without access to needed medical care. Id. However, the notice

provided no reason for the termination. Id.

The District claims that although Mr. Campbell submitted the

proper renewal form, he failed to also submit a "required Medical

Examination Report at that time. /1
Defs.' ·Surreply at 11. After

being informed that his benefits would be terminated on April 1,

2016, "Mr. Campbell then submitted the completed form, and his

coverage has been extended through September 2O16 . /1 Id. The

District does not address Plaintiffs' assertion that the notice of

termination failed to provide a reason for the termination.

In late January, Leslie Jackson received multiple notices

warning that her Medicaid benefits as well as the benefits of her

minor son, who suffers from a severe form of epilepsy, would be

terminated. L. Jackson Deel., Pl. Ex. 71 , , 3-9, 15. The multiple

forms contained inconsistent information concerning the date the

renewal form was due. Id. On February 5, 2016, Ms. Jackson renewed

her son's coverage over the phone, and on February 8, 2016, she

confirmed that coverage had been renewed. Id. ,, 5-6. Yet on

February 9, 2016, Ms. Jackson received a termination notice from

the District stating that her son's coverage would end at the end

of the month for failure to submit information required for

renewal. Id. , 7.

Ms. Jackson had a number of additional interactions with

District personnel that left her unsure of whether she and her son

-38-
would continue to obtain their Medicaid benefits. Id. ~ 8-14. As

late as March 8, 2016, the District continued to provide inaccurate

information that appears to be the product of either computer

errors, processing backlogs, or both. On that date, Ms. Jackson

received yet another termination notice from the District stating

that her son's Medicaid coverage would be terminated on March 21,

2016 for failure to return a form with information necessary for

renewal. Id. ~ 15.

With respect to Ms. Jackson's own benefits, the District

states that she is, in fact, no longer Medicaid eligible. Defs.'

Surreply at 8. "When the District attempted to re-determine Ms.

Jackson's eligibility in February 2016, available records

suggested that she remained over income and that her coverage might

terminate unless she was eligible under another coverage

category." Id. The District sent her notice of its findings and

asked her to complete a questionnaire to determine her eligibility

under non-income-based categories. Id. Based on her responses, Ms.

Jackson was found to be ineligible for Medicaid but was eligible

for a cost-sharing program called Qualified Medicare Beneficiary.

Id. Thus, the District concludes, "the system has functioned for

[Ms. Jackson] as it should." Id.

The situation of Ms. Jackson's son, on the other hand,

resulted from the District's mistakes. The multiple notices that

Ms. Jackson received about her son's Medicaid benefits "were the

-39-
result of an error by a caseworker who [mistakenly] . opened

a new case for the son" rather than adding him to Ms. Jackson's

case, "resulting in two cases for the same individual." Id. at 7.

On February 9, 2016, the son's renewal of benefits was recorded in

only one of the two duplicate cases, and a termination notice was

automatically generated for the case that was not renewed. Id. at

7-8.

The District construes what happened to Ms. Jackson's son as

another individualized error that does not signal system problems.

However, as noted at the conclusion of the previous section, it is

impossible to separate individual mistakes from the systemic

problems facing the District's Medicaid beneficiaries. The bottom

line is that whether it is an "individualized error" or a "system

problem," it is the beneficiary who is suffering

On the basis of the facts stated above, it is clear that a

significant number of Medicaid beneficiaries have been harmed by

the District's failure to efficiently send and process benefits

renewal forms.

C. Relief Requested

In light of the forgoing facts, Plaintiffs request that the

Court modify the Settlement Order so that

• [the District] shall provisionally approve all
Medicaid applications pending over 45 days until a
final determination can be made; .

-40-
 • [the District] shall continue the eligibility of all
Medicaid recipients due to be renewed or recertified;

• these remedies shall remain in place until [the
District] demonstrate[s] to the Court, based on
substantial evidence, that [its] technology and
business processing systems for making timely
eligibility determinations on applications[] and
providing adequate notice to Medicaid recipients and
applicants of the decisions on renewals and
applications are functioning as required to ensure
and protect the rights of Medicaid recipients and
applicants under the Due Process Clause of the Fifth
Amendment of the United States Constitution, Title
XIX of the Social Security Act, 42 u.s.c. 1395, et
~' and accompanying regulations, 42 C.F.R. 430, et
seq., and the Patient Protection and Affordable Care
Act of 2010, Pub. L. No. 111-148, 124 Stat. 119, et
~ ( "ACA") , and its implementing regulations; . . .

• [the District] may move to terminate [these remedies]
anytime [it] can make the demonstration [] described
[above] ; and . .

• during the time [these remedies are] in effect, [the
District] shall report monthly on [its] compliance
with [their] terms.

Proposed Order Accompanying Pls.' Mot. for Mod. at 1-2.

III. STANDARD OF REVIEW

Plaintiffs' Motion for Modification of Settlement Order is

governed by Federal Rule of Civil Procedure 60(b). As Plaintiffs

point out several times in tp.eir briefs, Paragraph 71 of the

Settlement Order provides that "either party shall have the right

to move the Court for a modification of this Order at any time for

any reason." Settlement Order ~ 71. The Settlement Order's very

next paragraph clarifies that " [i] n determining motions for a

-41-
modification of this Order under paragraphs 70 and 71 above, the

general body of federal law governing motions to modify orders in

contested matters pursuant to Rule 60(b) of the Federal Rules of

Civil Procedure shall apply." Settlement Order , 72.

Plaintiffs rest their Motion for Modification upon Rule

60 (b) 's fifth subsection, which provides in relevant part that

"the court may relieve a party or its legal representative from a

final judgment, order, or proceeding [when] applying it

prospectively is no longer equitable [.]" Fed. R. Civ. P. 60 (b) (5).

The District claims that Rule 60 (b) (5) is inapplicable to

Plaintiffs' Motion because Plaintiffs seek to modify provisions of

the Settlement Order that are not prospectively applicable. See

Twelve John Does v. District of Columbia, 841 F.2d 1133, 1138 (D.C.

Cir. 1988). ("an order or judgment may be modified under .

Rule 60(b) (5) only to the extent that it has 'prospective

application. '") .

In the District's view, Plaintiffs' Motion for Modification

seeks to reinvigorate Sections II & III of the Settlement Order,

which were terminated by this Court's Orders of February 24, 2009

and October 18, 2013. Thus, the Government contends, Plaintiffs'

Motion seeks relief from those termination Orders, which have no

prospective application. "[A]n order or judgment has prospective

application within the meaning of Rule 60 (b) (5) [only if] it is

executory or involves the supervision of changing conduct or

-42-
conditions." Id. at 1139 (internal quotation marks omitted)

(emphasis added). The Government argues that the Court's Orders

terminating Sections II & III of the Settlement Order are neither

executory nor involve the supervision of changing conduct or

conditions. In fact, termination of Section II & III meant the end

of the Court's supervision of conduct related to those Sections.

Contrary to the District's assertions, however, Plaintiffs

disclaim that they are seeking to revive Sections II & III of the

Settlement Order, and "[i] nstead, [] seek modification of the

Settlement Order, granting additional injunctive relief, based on

the new factual circumstances." Pls.' Reply in Support of Mod. for

Mod. at 3. They note that the Settlement Order has prospective

application, and thus may be modified under Rule 60(b) (5), because

sections of the Settlement Order relating to early and periodic

screening, and diagnostic and treatment services ( "EPSDT") very

clearly require the supervision of changing conduct or conditions.

Id. (citing Settlement Order ~~ 36, 41, 47, 79); see also Pls.'

Mot. for Mod. at 17, 18. The modifications Plaintiffs propose are

within the sphere of the Settlement Order's prospectively

applicable EPSDT provisions because "it is common sense that a

child cannot obtain any EPSDT service when he or she lacks Medicaid

eligibility." Pls.' Reply in Support of Mod. for Mod. at 9-10.

Courts applying Rule 60(b) "must strike a 'delicate balance

between the sanctity of final judgments and the incessant

-43-
command of a court's conscience that justice be done in light of

all the facts.'" Twelve John Does, 841 F.2d at 1138 (quoting Good

Luck Nursing Home, Inc. v. Harris, 636 F.2d 572, 577 (D.C. Cir.

1980)).

As our Court of Appeals has stated, "[t]he power of a court

of equity to modify a decree of injunctive relief . . is long-

established, broad, and flexible." United States v. W. Elec. Co.,

46 F.3d 1198, 1202 (D.C. Cir. 1995) (internal citations and

quotation marks omitted) (quoting New York State Ass'n for Retarded

Children, Inc. v. Carey, 706 F.2d 956, 967 (2d Cir. 1983), cert.

denied, 4 64 U.S. 915 ( 1983) (Friendly, J.) ) . "At the request of

the party who sought the equitable relief, a court may tighten the

decree in order to accomplish its intended result." Id. (citing

United States v. United Shoe Machinery Corp., 391 U.S. 244, 252

(1968)). Thus, Rule 60 (b) (5) is merely "a codification of the

universally recognized principle that a court has continuing power

to modify or vacate a final decree[.]" Id. (quoting 11 Charles A.

Wright, et al., Federal Practice & Procedure§ 2961 (1994)).

"A consent decree[,]" such as the Settlement Order at issue

here, "no doubt embodies an agreement of the parties and thus in

some respects is contractual in nature." Rufo v. Inmates of Suffolk

Cty. Jail, 502 U.S. 367, 378 (1992). However, the Supreme Court

has made clear that agreements embodied in a consent decree remain

"subject to the rules generally applicable to other judgments and

-44-
decrees." Id. "A consent decree, in other words, is subject to

modification to the same extent as if it had been entered as a

final judgment after a full trial." W. Elec. Co., 46 F.3d at 1205.

In Rufo·, the Supreme Court set forth the test for determining

whether modification of a consent decree is warranted under Rule

60(b) (5). 502 U.S. at 383. Emphasizing the flexibility provided by

Rule 60(b) (5), the Court held that "a party seeking modification

of a consent decree bears the burden of establishing that a

significant change in circumstances warrants revision of the

decree." Id. at 383.

"Ordinarily, . modification should not be granted where

a party relies upon events that actually were anticipated at the

time it entered into a decree." Id. at 385. However, "Rule 60(b) (5)

does not foreclose modifications based on developments that, in

hindsight, were things that 'could' happen. . The focus of

Rule 60(b) (5) is not on what was possible, but on what the parties

and the court reasonably anticipated." w. Elec. Co., 46 F.3d at

1205.

"Once a moving party has met its burden of establishing either

a change in fact or law warranting modification of a consent

decree, the District Court should determine whether the proposed

-45-
modification is suitably tailored to the changed circumstance."

Rufo, 502 U.S. at 391. 14

IV. ANALYSIS

A. Significant Change in Circumstances

Based on the extensive evidence submitted by Plaintiffs, it

is clear that circumstances have changed significantly since entry

of the Settlement Order. Given the numerous case histories

presented by Plaintiffs, there is no question that many of the

class members are being irreparably harmed by their inability to

obtain Medicaid benefits, even though the District is acting with

the best of intentions to comply with the ACA.

The narratives set forth above clearly demonstrate that

numerous Medicaid-eligible residents of the District were denied

benefits to which they were entitled due the District's failure to

timely process initial applications, failure to deliver adequate

and timely renewal notices, and failure to efficiently process

14 In the alternative, Plaintiffs put forth Rule 60 (b) (6) as grounds
for their Motion. Rule 60(b) (6) is a catch-all provision, which
permits relief "from a final judgment, order, or proceeding for
. . . any other reason that justifies~relief." Subsection (6) is
only applicable when .none of the five other grounds for relief
under Rule 60(b) are available. Salazar v. District of Columbia,
633 F.3d 1110, 1116 (D.C. Cir. 2011). The Supreme Court has held
that relief under 60 (b) (6) may be granted only under "extraordinary
circumstances," Ackermann v. United States, 340 U.S. 193, 199, 202
(1950), and our Court of Appeals has noted "that a more compelling
showing of inequity or hardship is necessary to warrant relief
under subsection ( 6) than under subsection ( 5) [,]" Twelve John
Does, 841 F.2d at 1140.
-46-
renewal requests. These changed circumstances, which violate the

Constitution and the ACA, affect members of the Plaintiff class.

See Salazar v. D.C., 954 F. Supp. 278, 326 (D.D.C. 1996); 42 C.F.R.

435.912(c)(3); Order at 1-2 [Dkt. No. 100]. Accordingly,

modification of the Settlement Order to address these violations

is warranted.

The District's significant progress in reducing the

processing time for the backlogs and stuck/malformed errors in the

month of February 2016 does not change the conclusion that changed

circumstances warrant relief. Before Plaintiffs filed their Motion

for Preliminary Injunction, the District had made only moderate

progress in reducing the application backlogs between April of

2015, when they were first discovered, Schlosberg Deel. ~ 66 [Dkt.

No. 2077-1], and December 2015. At the end of this nine-month

period, there were still close to 5,000 Medicaid applications in

the backlog. Pl. Ex. 1 at 6 [Dkt. No. 2070-2].

Since the filing of Plaintiffs' initial Motion on December

22, 2015, the District has been able to resolve all of the

thousands of remaining cases in just over one month's time. While

the District's progress is commendable, the timing of it suggests

that Court oversight has been a boon rather than a hindrance.

Moreover, the Court has no assurance that the significant problems

(and violations of the law) that arose will not arise again.

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 In order for relief to be proper under Rule 60 (b) ( 5) , the

cited change in circumstances cannot have been anticipated or

foreseen by the parties. See Agostini v. Felton, 521 U.S. 203,

215-216 (1997). The District contends that the troubled

implementation of the ACA' s reforms were foreseen by both the

Parties and the Court. See, ~, Amended Memorandum Opinion and

Order of Oct. 17, 2013 at 6 [Dkt. No. 1886] (predicting that

"implementation [of the ACA's reforms] w[ould] undoubtedly be both

rocky and fairly long in coming").

However, despite the District's contentions, no one could

have predicted the magnitude of the problems that attended the

ACA's implementation. Indeed, the Memorandum Opinion cited

immediately above related only to portions of the Settlement Order

dealing with Medicaid benefits renewal procedures, but as is now

clear, the problems facing Medicaid-eligible residents go far

beyond renewal procedures and affect initial applications, as well

as the basic administration of the program.

More importantly, the relevant inquiry with respect to the

foreseeability of changed circumstances is not whether the Parties

or the Court anticipated the changes at any point, but instead,

whether the circumstances "actually were anticipated at the time

[the Parties] entered into a decree." Rufo, 502 U.S. at 385.

Needless to say, no one did or could have anticipated, in 1999

-48-
when the Settlement Order was entered, the passage of the ACA, no

less its complexity and its reforms to our health care system.

The District claims that the relief Plaintiffs request would

essentially reinstate Sections II and III of the Settlement Order.

This, the District contends, would deprive it of the sunset

provisions that it had negotiated in Section II and substitute for

a foregone appeal with respect to Section III. See EEOC v.

Local 40, 76 F.3d 76, 81 (2d Cir. 1996) ("If we were to enforce

this consent decree against Local 40 twelve years after its

expiration, we would be depriving the union of the benefit of its

bargain."); cf. Twelve John Does, ·841 F.2d at 1141 ("Indeed, it is

a commonplace that Rule 60(b) (6) may not be used as a substitute

for an appeal not taken.") . Additionally, the District contends

that the Court lacks jurisdiction to restore terminated portions

of a consent decree.

Plaintiffs have expressly disclaimed that they seek to

reinstate Sections II and III of the Settlement Order. As they put

it, "Plaintiffs do not seek to relitigate terminated provisions of

the settlement order." Pls.' Reply in Support of Mod. for Mod. at

2 (capitalized in original). "Instead, [P]laintiffs seek

modification of the Settlement Order, granting additional

injunctive relief, based on the new factual circumstances." Id. at

3 (emphasis added). Accordingly, the District's concerns regarding

-49-
reinstatement of terminated provisions of the Settlement Order are

misplaced .1s

The District also notes that courts overseeing institutional

reform consent decrees must interpret Rule 60(b) in a manner that

ensures that "'responsibility for discharging the State's

obligations is returned promptly to the State and its officials'

when the circumstances warrant. 11
Horne v. Flores, 557 U.S. 433,

450 (2009) (quoting Frew v. Hawkins, 540 U.S. 431, 442 (2004)).

The District objects that the modifications Plaintiffs propose

would further hamstring its efforts to run its Medicaid program

and would delay the prompt return of authority to District

officials.

However, Plaintiffs' proposed relief itself makes provision

for allowing the District to be free of the proposed remedy as

15Before disclaiming, in their Reply, any reliance on Sections II
and III, Plaintiffs asserted in their Motion for Modification that
a footnote in the 2013 Order terminating Section III indicates the
Court's intention to retain broad jurisdiction over the District's
processing of Medicaid applications and renewals. See Salazar v.
D.C., 991 F. Supp. 2d 34, 38 (D.D.C. 2013) ("members of the
plaintiff class can also contact Plaintiffs' counsel, as they have
been doing over the years, to obtain legal assistance"). Plaintiffs
read too much into this footnote. As the District points out, the
footnote mentions no further oversight role for the Court in these
areas. The footnote only serve to reaffirm the right of Plaintiffs'
counsel to represent residents of the District who are inquiring
about their Medicaid eligibility, as counsel has done admirably
for many years. Thus, the jurisdictional foundation of Plaintiffs'
Motion must rest upon the grounds confirmed in their Reply: the
Settlement Order's prospectively applicable EPSDT provisions.

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soon as it "demonstrate [s] to the Court, based on substantial

evidence, that [the District's]" systems and processes will comply

with applicable law. 16 Proposed Order Accompanying Pls.' Mot. for

Mod. at 1-2. The proposed relief further provides that "[the

District] may move to terminate [these remedies] anytime [it] can

make the demonstration [] described [above.] " Id. Accordingly,

Plaintiffs' proposed relief is consistent with the goal of

restoring responsibility over local management functions as

quickly as possible.

Finally, the District contends that modification of the

Settlement Order is unwarranted because the changed circumstances

are unrelated to the remaining portions of the Settlement Order,

which relate to the delivery of EPSDT services to children:

16 The full provision reads as follows:

[T]hese remedies shall remain in place until defendants
demonstrate to the Court, based on substantial evidence,
that defendants' technology and business processing
systems for making timely eligibility determinations on
applications, and providing adequate notice to Medicaid
recipients and applicants of the decisions on renewals
and applications are functioning as required to ensure
and protect the rights of Medicaid recipients and
applicants under the Due Process Clause of the Fifth
Amendment of the United States Constit~tion, Title XIX
of the Social Security Act, 42 u.s.c. 1395, et~, and
accompanying regulations, 42 C.F.R. 430, et ~, and
the Patient Protection and Affordable Care Act of 2010,
Pub. L. No. 111-148, 124 Stat. 119, et~ ("ACA"), and
its implementing regulations; . .

Proposed Order Accompanying Pls.' Mot. for Mod. at 1-2.

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•.

[W]hether an initial application for Medicaid benefits
is processed within 45· days has no bearing on the
District's ability to achieve an adequate participant
ratio for well-child visits, to advise children or their
caretakers regarding the need for and importance of
EPSDT services, to train providers of EPSDT services, or
its ability to offer transportation and scheduling
assistance as required by Sections V and VI of the
Settlement Order. Nor can plaintiffs advance any
reasonable argument that the District's compliance with
its EPSDT obligations is frustrated by an alleged lack
of advance notice before terminating Medicaid benefits
in the context of renewal.

Defs.' Opp'n to Mot. for Mod. at 8.

Plaintiffs, however, provide a simple and convincing response

to this argument: ~[I]t is common sense that a child cannot obtain

any EPSDT service when he or she lacks Medicaid eligibility." Pls.'

Reply in Support of Mod. for Mod. at 9-10. Moreover, children make

up a substantial proportion of the District's Medicaid population.

In 2014, there were 98,350 children eligible for Medicaid, Form

CMS-416, line la [Dkt. No. 2039-1], and as of October 2014, there

were a total of 247,850 people on DC Medicaid, Pl. Ex. 61, column

1 [Dkt. No. 2102-1]. Thus, issues affecting initial applications

and renewals are clearly related to portions of the Settlement

Order concerning EPSDT services.

For all of these reasons, significant changes in facts and

law warrant modification of the Settlement Order.

B. Suitably Tailored Relief

Once a court has determined that .a change in circumstances

warrants revisions to a consent decree, it must consider whether

-52-
the relief requested is suitably tailored to those changes. Rufo,

502 U.S. at 391. "A change in circumstances is not a free pass to

rewrite a consent decree; rather 'the focus should be on whether

the proposed modification is tailored to resolve the problems

created by the change in circumstances.'" Keepseagle v. Vilsack,

118 F. Supp. 3d 98, 127 (D.D.C. 2015) (quoting Rufo, 502 U.S. at

3 91) .

The District contends that the relief Plaintiffs seek is not

suitably tailored because it would provide assistance to

individuals beyond the population that receives EPSDT benefits.

Defs.' Opp'n to Mot. for Mod. at 8 n.3. The District's argument

construes the Court's power to amend consent orders too narrowly.

The Supreme Court has stated that "[o] nee a court has

determined that changed circumstances warrant a modification in a

consent decr~e, the focus should be on whether the proposed

modification is tailored to resolve the problems created by the

change in circumstances." Rufo, 502 U.S. at 391. The "problems

created by the change in circumstances" that brought about

Plaintiffs' Motion are not limited to the delivery of EPSDT

services. True, Plaintiffs rely exclusively on the EPSDT

provisions of the Settlement Order to demonstrate that the Order

itself has prospective application, but the "problems created" by

the District's implementation of the ACA's provisions include the

denial of coverage to eligible adults as well as children. It is

-53-
in the public interest to ensure that those children and adults do

not lose the vital services provided by Medicaid coverage under

the ACA.

Put differently, Plaintiffs have shown that changed

circumstances have led the District to violate its obligations to

adjudicate Medicaid applications within 45 days and to renew

Medicaid benefits in accordance with the ACA's implementing

regulations and due process. The general thrust of the remedies

that Plaintiffs propose are suitably tailored to resolve those

problems. That is what Rufo requires. That is all Plaintiffs ask

for.

The District also contends that because it has made

significant progress in resolving the problems that led Plaintiffs

to file their Motions (by eliminating all known backlogs and

reducing the number of stuck/malformed applications to 67), the

relief requested is unnecessary.

However, the first prong of relief Plaintiffs request does

nothing more than address the systemic problems that arose during

the District's implementation of the ACA and may well arise again.

The first prong would simply require provisional approval of

Medicaid applications pending longer than 45 days until a final

determination can be made. If the District complies with the law

by reaching f irial determinations within 45 days (as it claims to

have done in the month for February 2016), this relief will impose

-54-
no additional burden at all. It is, accordingly, suitably tailored

to respond to the District's failure to timely process Medicaid

applications.

By contrast, the second prong of relief requested by

Plaintiffs, which would indefinitely continue the benefits of all

Medicaid recipients due to be renewed or recertified, does indeed

sweep too broadly. See Proposed Order Accompanying Pls.' Mot. for

Mod. at 1-2 ("[the District] shall continue the eligibility of all

Medicaid recipients due to be renewed or recertified").

The narratives detail that many Medicaid beneficiaries lost

access to benefits to which they were entitled because of the

District's failure to send appropriate renewal forms or to

efficiently process renewals. However, the District notes that

Plaintiffs' request to continue the benefits of all Medicaid

recipients due to be renewed or recertified contains no end date

or provision for terminating the benefits of M~dicaid recipients

whose ongoing eligibility cannot be verified or who are simply no

longer eligible for Medicaid. Thus, the requested relief "would

virtually eliminate the District's ability to terminate coverage

for individuals who are not eligible or entitled to Medicaid

benefits at heavy costs to the District's taxpayers." Defs.' Opp'n

to Mot. for Mod. at 16.

Although the situation faced by many beneficiaries due to

renew their benefits is indeed dire, that does not justify

-55-
obligating the District to indefinitely continue the Medicaid

benefits of individuals who may no longer be eligible to receive

them. Simply put, if the Court were to impose the second prong of

Plaintiffs' requested remedy, the District would be required to

continue providing benefits to individuals required to recertify

even if it knew that such individuals no longer qualified for

Medicaid. Such a result cannot be justified, and thus, it is clear

that the second prong of Plaintiffs' requested relief is not

suitably tailored to resolve the problems discussed above.

However, despite the unsuitability of the second prong as

requested, a slight modification will provide the necessary

tailoring. The second prong of relief shall read as follows:

[The District] shall continue the eligibility of all
Medicaid recipients due to be renewed or recertified for
90 days after each recipient's renewal or
recertification deadline unless [the District] ha[s]
affirmatively determined that the recipient is no longer
eligible for Medicaid[.]

Order Accompanying This Memorandum Opinion at 2.

As modified by the Court, this relief will adequately remedy

the problem of Medicaid recipients losing benefits due to the

District's failure to effectively provide and efficiently process

renewal forms. Medicaid recipients will maintain the full value of

their benefits during the 90-day grace period, rather than lose

their access to health care for reasons beyond their control. At

the same time, the District -- and by extension, the District's

-56-
taxpayers -- will not be saddled with the burden of indefinitely

furnishing benefits to individuals who may no longer be Medicaid

eligible.

The final provisions of Plaintiffs' request enhance the

suitability of the foregoing remedies. The proposed relief

provides that the substantive remedies shall remain in place until

the District demonstrates by substantial evidence that its

processes will ensure the rights of Medicaid eligible residents of

the District. Proposed Order Accompanying Pls.' Mot. for Mod. at

1-2. The Proposed Order also provides that the District may move

to terminate the imposed relief any time it can make the required

demonstration of non-eligibility. Id. All of these provisions

combine to ensure that the relief imposed will last no longer than

is necessary to cure the "problems created by the change in

circumstances." Rufo, 502 U.S. at 391. 17

The District contends that Plaintiffs' requested relief is

likely to lead to waste and abuse of Medicaid resources. The Court

recognizes that there may be some instances of fraud and abuse of

the system. However, there is no way to know the scope of such

incidents. Moreover, the modification of the second prong of relief

17Plaintiffs request that the Court order the District to submit
monthly reports regarding its compliance with the remedies
imposed. Such reports would be unnecessarily burdensome and shall
not be required.

-57-
discussed above will significantly reduce any likelihood of fraud

or abuse by limiting the period that the District must provide

benefits to individuals whose ongoing eligibility is unknown.

Finally, the equities -- balancing the District's concerns about

wasted resources against the needs of children and low-income

adults for medical care to which they are entitled -- clearly favor

granting the relief which will be ordered.

For all of these reasons, the Court concludes that Plaintiffs'

proposed amendments to the Settlement Order -- incorporating the

Court's alterations are "suitably tailored." 1 8

18 In its Opposition to Plaintiffs' Motion for Preliminary
Injunction, the District argues that the Preliminary Injunction
should not be granted because the United States is a necessary
party to the present controversy because the relief requested would
necessarily bind the United States as well as the District. See
Fed. R. Civ. P. 65(d) (2) (injunction issued by federal court may
bind only the parties, their agents, servants, employees and
attorneys, and other persons who are in active concert or
participation with any of the aforementioned) ; see also Fed. R.
Civ. P. 19. This, the District argues, is because federal funds
may be available to the District under 42 C.F.R. 250(b) (2) or 42
C.F.R. 435.1002(c) to offset the costs of compliance with the
injunction.

The District makes no reference to this particular argument in
its briefs on the Motion for Modification, which leaves unclear
whether it meant to preserve the argument. In any case, Plaintiffs
have a satisfactory answer: " [P] laintif f s seek relief only from
[The District], not from CMS or any other party." Pls.' Reply in
Support of P.I. at 6. The fact that the District may eventually be
reimbursed for its costs of complying with this Court's Order does
not automatically make the federal reimbursing agency, CMS, a
necessary party to this proceeding. The District offers no
authority to the contrary.
-58-
V. CONCLUSION

For the forgoing reasons, Plaintiffs' Motion for Modification

of the Settlement Order shall be granted. An Order shall accompany

this Memorandum Opinion.

April 4, 2015 Glay~ler
United States District Judge

Copies to: attorneys on record via ECF

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