On July 13, 2000 a group of developmentally disabled individuals and two advocacy organizations filed suit against the Tennessee Department of Mental Health and Developmental Disabilities in the Federal District Court for the Middle District of Tennessee. On September 11, 2000 the Tennessee Department of Finance and Administration was substituted as the defendant. The plaintiffs claimed that the defendants were violating the Medicaid Act by denying them the opportunity to apply for community based treatment, by denying their applications for such treatment, or by placing them on long waitlists after approving the applications.

On April 30, 2001 the court (Judge Robert L. Echols) certified a class of all developmentally disabled residents of Tennessee who fell into one of the three categories in the complaint. On May 7, 2003 the court (Judge Echols) denied competing motions for summary judgment and on June 15, 2004 the court (Judge Echols) approved a settlement agreement between the parties. The settlement aimed to both reduce the period individuals spent on the waitlists and to provide interim services to those on the waitlist that better met their needs. The defendants agreed to provide additional slots for community based treatment and allocate additional funds in the first two years of the settlement agreement. They also agreed to develop a better case management program, reform the application process, and take other measures to alleviate the burdens of those on the waitlists. Specific measures for the final three years of the duration of the agreement were to be negotiated by the parties at a later date.

Disputes arose regarding whether the defendant was in compliance with the settlement and as to whether the settlement should be vacated because of a change in Sixth Circuit law. The court (Judge Echols) denied the defendants' motion to vacate the settlement and dismiss the case on September 12, 2007 and denied the plaintiffs' motion for specific performance on July 8, 2008. The defendants appealed and on March 9, 2009 the Sixth Circuit Court of Appeals (Judges Martin, Rogers, and Sutton) reversed and remanded for reconsideration.

Negotiations regarding specific provisions related to additional funding for community based treatment slots for the final three years of the settlement also reached an impasse. On July 24, 2009 the court (Judge Echols) vacated the settlement as to the provision regarding provider network capacity and granted the defendants summary judgment on the remaining issues in dispute. The case was closed on February 5, 2010 after the settlement agreement expired.

Michael Perry - 03/06/2011


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