6th Circuit Shrinks the Scope of Tenn. Settlement

(CN) - The 6th Circuit rolled back some of Tennessee's concessions in a settlement with a class of mentally disabled residents who claimed they were denied or delayed state services and care.

In the 2004 settlement, the state agreed to overhaul its administrative system, expand funding and programs for the mentally disabled, and develop program infrastructure that would allow it to drastically reduce or eliminate the waiting list for Tennessee's "home and community-based services" Medicaid waiver program.

After two years, the parties agreed to negotiate the goals for the next three years of a five-year settlement.

But the parties were unable to agree on the goals, causing a magistrate judge to declare an impasse and remand the case to the district court.

Tennessee then moved to vacate the settlement based on the 6th Circuit's interim ruling in Westside Mothers v. Olszewski (Westside Mothers II), which held that the state has no duty to ensure eligible individuals receive medical services, but only to reimburse providers for their costs.

The district court refused to vacate the settlement. The Cincinnati-based federal appeals court agreed with the reasoning in Westside Mothers II, but said it was too early to throw out the entire agreement.

"At this time, we will modify the decree in two ways," Judge Boyce wrote. "First, we vacate Tennessee's commitment to develop 'provider network capacity,' which does not appear to remedy any violation of federal law after Westside Mothers II. Second, any commitment Tennessee arguably made to eliminate the waiting list for services is likewise unenforceable after Westside Mothers II."

The court remanded with instructions for the lower court to "determine whether and to what extent the settlement should be enforced during its final nine months of existence."

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