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CIV 91-261 TUC JMR, United States District Court for the District of Arizona
A decade ago, lawyers representing Arizona’s Medicaid-eligible children filed J.K. v. Dillenberg, a class action lawsuit seeking improved access to behavioral health care. On June 26, 2001, federal District Court Judge John Roll approved, in the words of Arizona Governor Jane Hull, an “historic” settlement to the case. The agreement commits the state of Arizona to a wholesale redevelopment of its children’s behavioral health system according to a set of principles that put child and family needs first.
J.K. v. Dillenberg, now styled J.K. v. Eden, was brought to redress the harrowing experiences of lead Plaintiff, Jason K., which were thought to be typical of the conditions facing Arizona’s children in need. Jason had a long history of serious emotional problems including suicidal ideation. He was unable to function in school and was recommended for a therapeutic day program. The state Medicaid provider denied the recommended treatment and continued to authorize only one counseling session per week. Jason left school, ran away from home, attempted suicide, and was ultimately admitted to a psychiatric hospital.
The gravamen of Jason’s case was that Arizona had failed to provide the mental health treatment mandated by Medicaid's Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) mandate. The district court certified a plaintiff class that included all Title XIX eligible persons under the age of twenty-one, who were identified as needing behavioral health services. The children and adolescents in the class are poor, disabled, and/or in state custody due to abuse or neglect by their parents. Plaintiffs’ counsel included attorneys from the Bazelon Center for Mental Health Law, the Arizona Center for Disability Law, Lewis and Roca, a private firm, and the National Center for Youth Law.
During the course of the litigation, plaintiffs established that private agencies under contract to provide Arizona’s Medicaid managed care services were state actors, and that children in Medicaid managed-care plans have the right to notice and fair hearing. J. K. v. Dillenberg, 836. F. Supp. 694 (D. Ariz. 1993).
Plaintiffs also built a convincing case that Arizona was not providing adequate care to children in need. Seven separate reports produced during litigation by an independent investigator cataloged the deficiencies. Key problems included:
- Children did not have an acceptable service plans in two-thirds of the cases reviewed;
- 56% of the children did not have an adequate assessment of their behavioral health needs;
- Delivery of services was not timely or competent in 62% of the cases; and
- In half of the cases where services were terminated or reduced there was no clinical justification in the case records.
According to the reports, the system’s performance was not acceptable for any age group of children with the worst performance being for the children 14 years and older. For developmentally disabled children, children in state custody, and children in the juvenile justice system, the system failed to meet minimum standards from 55% to 72% of the time. In short, the system performed poorest for the children with the highest needs.
In the most recent report, completed less than one year ago, investigators concluded that children had less than a 50% chance of being adequately served by Arizona’s system of care, and that by any set of standards - including the State’s own definition of “medically necessary services - Arizona was failing to meet the needs of the children it was supposed to serve. Previous independent evaluators, including the state’s Auditor General, had also concluded that Medicaid-eligible children were not receiving adequate behavioral health services.
New state leadership for the defending agencies probably resulted in the turning point in this case. In August 2000, the newly appointed director of the Arizona Department of Health Services, Catherine Eden, signaled a clear commitment to resolve J.K. through negotiation rather than litigation. Substantial groundwork for agreement had already been laid by the parties in the form of a statement of core principles entitled J.K. Practices to Achieve Success for Children. These principles constituting both an agreement over goals, as well as a general road map for reform, emphasized partnering with families and children, interagency collaboration, and individualized services. They lie at the core of the settlement agreement approved by Judge Roll.
Under the agreement, the state commits to undertake a “fundamental shift” in the way it treats children and families. This transformation will be guided the J.K. Principles in order to achieve meaningful and successful outcomes for families and children. The agreement also commits the state to increased funding for training, special pilot projects, and specific improvements in the structure of the state’s behavioral health managed care program.
Based on broad principles rather than programmatic minutiae, the settlement agreement does not detail the complete scenario for reform, nor a date certain by which the goals will be achieved. There is no Court Monitor or Special Master to supervise implementation. Instead, plaintiffs are relying on an emerging level of trust among the parties, as well as a joint commitment to collaborative action on mutually agreed reforms. According to Governor Hull, “for too long, the state has failed Arizona’s children with mental health needs. This settlement represents my commitment to improving children’s behavioral health services in Arizona.”
The Agreement does specify a number of concrete actions the state must take to improve front-line practice, enhance the capacity of private agencies to deliver needed services, promote collaboration among public agencies, and develop a quality management and improvement system focused on sound medical practices. For example, Defendants will implement a statewide training program to “provide front-line staff and supervisors sufficient knowledge and skills to enable them to plan and provide services consistent with the Principles;” add respite care to its list of covered services and develop a plan for the expansion of substance abuse treatment services; take steps to increase the supply of specialty providers; develop practice guidelines for monitoring and addressing the effects of medication; and initiate a 300 Kids Project to test reform strategies and to serve as the first phase of a statewide effort to deliver services according to the Principles. Also, there is a dispute resolution process in the Agreement permits a mediator, to help resolve a dispute, to hire an independent expert to study the matter under dispute and make a report to the mediator and the parties. Finally, Defendants have committed to deliver on needed improvements, “as quickly as is practicable.”
In the wake of J.K., the future for children such as Jason who need quality behavioral health services looks more promising. Although concerns about funding, bureaucratic inertia, and shortages of skilled service providers continue, the state’s commitment to reform appears to bereal. Already new money has been allocated to improve services and training. The effort to keep the spotlight on children’s mental health needs in Arizona must continue, however. The terms of the settlement agreement extend the court’s oversight for several years to come. Plaintiffs will play an important role in assuring that needed reforms are implemented. With continued leadership by Arizona’s Governor and agency heads, real reform is possible.
The parties settled plaintiffs’ claim for attorneys’ fees and costs for $1.2 million which the defendants have paid.
Counsel: Patrick Gardner, NCYL, Oakland, CA; Anne Ronan and Dena Epstein, Arizona Center for Disability Law, Phoenix, AZ; Ira Burnham and Mary Giliberti, Bazelon Center for Mental Health Law, Washington D.C.; and Joseph McGarry and Bruce Samuels, Lewis and Roca LLP, Phoenix AZ.
Updated Dec. 20, 2005
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