[00:00:00] Speaker 00:
Okay, the next case before us this morning is MG versus Scarce?

[00:00:06] Speaker 00:
Scarcy?

[00:00:07] Speaker 00:
Scrace.

[00:00:08] Speaker 00:
Scrace.

[00:00:09] Speaker 00:
Okay, 23-2093.

[00:00:12] Speaker 00:
And actually, while we're on that, I believe that the person holding that office has changed.

[00:00:18] Speaker 02:
Yes, Your Honor.

[00:00:18] Speaker 02:
It is now Secretary Kerry Armijo.

[00:00:22] Speaker 00:
Can you send in a 28-J letter?

[00:00:26] Speaker 00:
Yes, ma'am.

[00:00:27] Speaker 00:
Because we have to substitute that.

[00:00:29] Speaker 02:
I would be happy to do them.

[00:00:34] Speaker 02:
She was just confirmed in the last legislative session, so.

[00:00:38] Speaker 00:
Great, thank you.

[00:00:44] Speaker 00:
And we are ready when you are.

[00:00:46] Speaker 02:
May it please the court.

[00:00:47] Speaker 02:
I'm Patty Williams, and I represent the New Mexico Human Services Department, which I'll refer to as HSD today, if that's all right.

[00:00:55] Speaker 02:
which is asking you to dissolve or vacate the preliminary injunction entered against it.

[00:01:02] Speaker 02:
I'd like to reserve four minutes for rebuttal.

[00:01:06] Speaker 00:
And you know what I'm going to say.

[00:01:07] Speaker 00:
Yes, ma'am.

[00:01:08] Speaker 02:
And I will try to watch the clock and get your questions answered before that four minutes comes up.

[00:01:14] Speaker 02:
The plaintiffs in this case are extraordinarily sympathetic, medically fragile children who hover on the brink of death.

[00:01:23] Speaker 02:
The district court went to great lengths to act in favor of these children by entering a mandatory injunction.

[00:01:30] Speaker 02:
She admits the injunction is mandatory.

[00:01:33] Speaker 02:
The court didn't grant plaintiff's first preliminary injunction, and in the order denying it, gave plaintiffs a roadmap.

[00:01:41] Speaker 02:
Plaintiffs did not follow that roadmap in renewing their preliminary injunction.

[00:01:47] Speaker 02:
And in setting the second hearing on the preliminary injunction, in which the order that you're considering today

[00:01:53] Speaker 02:
was entered, the court went so far as to specify the exact information she needed before that hearing in an order directing briefing.

[00:02:07] Speaker 02:
Plaintiffs still didn't provide all that evidence.

[00:02:10] Speaker 02:
The judge then crafted an injunction despite the fact that plaintiffs did not meet their burden and were here today.

[00:02:18] Speaker 02:
We understand the humanity of the court

[00:02:22] Speaker 02:
an emotional appeal of East Plainness to all of us.

[00:02:27] Speaker 02:
But that's not the court's role.

[00:02:31] Speaker 02:
As the rubric above you sets, reason is the soul of all law, not emotion.

[00:02:38] Speaker 02:
And that's what we have to separate when you look at the factual precedence and the evidence that was presented in this case.

[00:02:48] Speaker 03:
Is there any evidence in the record

[00:02:50] Speaker 03:
that there's not enough nursing capability to go around?

[00:02:58] Speaker 02:
Yes, Your Honor.

[00:03:00] Speaker 03:
What is that evidence?

[00:03:01] Speaker 02:
It would be the affidavit of Dr. Scrace in the first preliminary injunction hearing, which was relied on in the second preliminary injunction hearing.

[00:03:10] Speaker 03:
And each of the... Tell me what the affidavit says.

[00:03:18] Speaker 03:
What are the operative paragraphs

[00:03:21] Speaker 03:
Oh, your honor, I do not have that affidavit.

[00:03:23] Speaker 03:
You don't have to tell me exactly, you don't have to read them exactly to me, but tell me what they are.

[00:03:27] Speaker 03:
What are the facts in there?

[00:03:29] Speaker 02:
That there is a longstanding nursing shortage in New Mexico and throughout the nation that was exacerbated by the COVID pandemic.

[00:03:41] Speaker 02:
And in the COVID pandemic, a lot of nurses obviously were pulled into hospital settings.

[00:03:48] Speaker 02:
And that exacerbated the availability of private duty nursing services for people who would sit with one child in their home.

[00:03:58] Speaker 03:
Does it have numbers?

[00:04:00] Speaker 03:
Does it give any, it's just a general statement that, OK.

[00:04:06] Speaker 02:
Yes, Your Honor, because there has not been a study by HSD into the mechanics and numbers.

[00:04:17] Speaker 02:
of the nursing shortage.

[00:04:18] Speaker 02:
But each of the plaintiffs' witnesses as well acknowledge that there's a nursing shortage.

[00:04:27] Speaker 02:
And that is not really a disputed fact in this litigation.

[00:04:32] Speaker 04:
Well, the extent of the shortage is an issue, isn't it?

[00:04:40] Speaker 04:
I mean, if you offer higher salaries,

[00:04:45] Speaker 04:
you could maybe get the nurses, notwithstanding a shortage, whether they be in New Mexico, or whether they be in neighboring states, or even on the East Coast.

[00:04:55] Speaker 02:
Your Honor, Judge Murphy, everyone agrees there are a limited number of nurses.

[00:05:02] Speaker 02:
The plaintiffs have speculated, and the judge acknowledged the market factors that might

[00:05:13] Speaker 02:
encourage that scarce resource of nurses to leave a different setting and serve this population or serve another population where the pay is more in a different geographical location.

[00:05:29] Speaker 02:
It's pirating nurses.

[00:05:31] Speaker 02:
It's not creating new... Well, we call it competition someplace, don't we?

[00:05:36] Speaker 02:
Yes, sir.

[00:05:38] Speaker 02:
It's economic competition.

[00:05:40] Speaker 00:
Well, here the judge was pretty careful not to include any direction to raise the wages.

[00:05:49] Speaker 00:
I agree.

[00:05:49] Speaker 00:
Because we have some problematic authority from the Supreme Court that wouldn't allow that, correct?

[00:05:58] Speaker 02:
That's exactly right.

[00:05:59] Speaker 02:
She tried to thread that needle to say.

[00:06:01] Speaker 02:
Well, she did thread the needle.

[00:06:03] Speaker 02:
All right, all right.

[00:06:04] Speaker 04:
Well, MCOs can raise the prices.

[00:06:07] Speaker 02:
And in fact, Justice Murphy, the MCOs,

[00:06:10] Speaker 02:
have raised the prices that they pay based on a stakeholder study in which the plaintiffs participated.

[00:06:22] Speaker 04:
Well, New Mexico can tell the MCOs, I don't care how you do it, you need to get sufficient nurses so that these children can be provided for.

[00:06:33] Speaker 02:
And based on the preliminary injunction order, and there are a few examples that the district court provided to

[00:06:41] Speaker 02:
the state, we have requested the MCOs.

[00:06:47] Speaker 04:
And in fact... Well, you can demand, can't you?

[00:06:50] Speaker 04:
Because their fees are capped, and they have to provide set services.

[00:06:56] Speaker 04:
And you can tell them, provide the services so that we can get X number of hours for these children.

[00:07:06] Speaker 02:
Yes, Your Honor, and in fact,

[00:07:08] Speaker 02:
the Human Services has done that.

[00:07:11] Speaker 02:
And in fact, one of the two plaintiffs, MG, services are provided under a single case agreement, which is a special outside the capitated rates analysis to provide care for her.

[00:07:27] Speaker 02:
And they still are having trouble staffing her.

[00:07:31] Speaker 02:
Through no fault of the MCOs or HSD, we get reports that say,

[00:07:38] Speaker 02:
the child was fully staffed and the nurse called in sick, or we took a vacation and didn't need hours.

[00:07:47] Speaker 02:
So there are factors outside HSD's control.

[00:07:50] Speaker 04:
But those are incidental things that happen, and that's not what we're talking about here.

[00:07:55] Speaker 02:
I hope that's not what we're talking about, Justice Murphy, but it's hard to know based on the order what is outside

[00:08:06] Speaker 02:
the control of HSD or not on a week to week basis because literally these child's needs change week to week.

[00:08:16] Speaker 00:
Well, as I understand the injunction, the injunction says use your best efforts to provide the private duty nursing hours for which these vulnerable children have been approved.

[00:08:32] Speaker 02:
And that is correct, and HSD.

[00:08:34] Speaker 00:
What is the HSD's objection to that?

[00:08:39] Speaker 00:
I mean, wouldn't they be using their best efforts to do that anyway?

[00:08:43] Speaker 02:
Well, Your Honor, that's exactly right.

[00:08:45] Speaker 02:
We are using our best efforts to do that anyway, and an injunction, a mandatory injunction in particular, that enjoins a party to follow the existing law has been considered in many cases

[00:09:00] Speaker 02:
to be too vague to be enforced.

[00:09:04] Speaker 00:
Best efforts.

[00:09:04] Speaker 00:
It doesn't say comply with the Medicaid Act.

[00:09:08] Speaker 00:
It says use your best efforts to provide the private duty nursing hours for which they've been approved.

[00:09:16] Speaker 00:
And here are some examples of things you might try.

[00:09:22] Speaker 02:
And thank you, Your Honor.

[00:09:23] Speaker 02:
I agree with both of those statements, except to the fact that

[00:09:27] Speaker 02:
Ordering us to provide the private duty nursing hours is the equivalent to enforcing the Medicaid Act.

[00:09:35] Speaker 02:
They are the same thing.

[00:09:36] Speaker 02:
To meet the obligations of the state entity under the Medicaid Act is ordering them to follow the Medicaid Act in regard to, in particular, in this case, private duty nursing.

[00:09:49] Speaker 03:
Well, the Medicaid Act doesn't set the hours.

[00:09:52] Speaker 03:
It doesn't list the hours and the Medicaid Act doesn't.

[00:09:55] Speaker 02:
No, it does not.

[00:09:56] Speaker 03:
That's something that's more discretionary.

[00:10:00] Speaker 02:
Well, Your Honor, the record is not developed below, and that's another problem that HSD has with the injunction.

[00:10:09] Speaker 02:
It's unclear how many of the hours are medically necessary to be provided by private duty nurses.

[00:10:19] Speaker 02:
There was evidence put on about that, wasn't there?

[00:10:22] Speaker 02:
There was speculative evidence put on about that.

[00:10:25] Speaker 03:
So that's an objection to the evidence.

[00:10:26] Speaker 03:
And we did object, Your Honor.

[00:10:28] Speaker 03:
Did you raise that here, that the district court abused its discretion by allowing speculative evidence?

[00:10:38] Speaker 03:
I mean, you don't have an evidentiary-based appeal here.

[00:10:42] Speaker 02:
Well, Your Honor, our issue on appeal, because where we are, is even assuming arguing

[00:10:49] Speaker 02:
that plaintiffs met their burden, which we have said through the docketing statement and all of the pleadings below, and in fact, multiple motions to strike the evidence below, which are part of the record that you would be considering to know in this setting.

[00:11:06] Speaker 02:
Assume, arguendo, that they met the four elements, which we absolutely dispute, then

[00:11:17] Speaker 02:
The order is impermissibly vague.

[00:11:21] Speaker 02:
Best efforts comply with the law.

[00:11:25] Speaker 02:
And under the case law that we cited in our briefs, that is impermissibly vague, and especially in a mandatory injunction setting.

[00:11:34] Speaker 03:
If she would have said, instead of use your best efforts, if she would have said just do it, provide them the hours, where are you then?

[00:11:46] Speaker 02:
Well, I think that we're then in a position where it is impossible to comply because there are not enough nurses to provide the hours.

[00:11:58] Speaker 02:
And we have an issue with the Act says provide in-home skilled care.

[00:12:08] Speaker 02:
It does not say private duty nursing.

[00:12:11] Speaker 02:
And the evidence below was that the parents prefer private duty nursing.

[00:12:16] Speaker 02:
to respiratory therapists or other people who can perform the same functions.

[00:12:21] Speaker 02:
And Dr. Spreece's affidavit lists all the required Epstat services, and in his affidavit said 80% of those can be provided by in-home skilled providers other than private duty nursing.

[00:12:38] Speaker 00:
Well, but what the injunction does is it keys off

[00:12:43] Speaker 00:
private duty nursing hours that have been approved.

[00:12:46] Speaker 00:
So whatever the dispute is, who can do what, eventually they come down to the amount that are approved for each of the vulnerable children and what the injunction says.

[00:12:58] Speaker 00:
And again, impossibility doesn't make sense here because it's not impossible to use your best efforts.

[00:13:05] Speaker 00:
It may be that your best efforts can't get enough private duty nurses, but that's not what the district court is saying.

[00:13:13] Speaker 02:
And Your Honor, I will submit two things.

[00:13:16] Speaker 02:
Number one, HSD has made its best efforts and I can give you a list that makes it different than the Norwood injunction.

[00:13:24] Speaker 04:
Would you break that list down into two categories?

[00:13:27] Speaker 04:
What you did before the case was filed and what you've done after the case was filed.

[00:13:32] Speaker 02:
That's a little harder, Your Honor.

[00:13:34] Speaker 04:
Yes, I know, but it's very important for us.

[00:13:36] Speaker 02:
The injunction orders us to do

[00:13:39] Speaker 02:
something after the order was entered and is undisputed that HSD has, obviously we couldn't do that before the order, comply with the order or not.

[00:13:51] Speaker 02:
I don't understand that.

[00:13:52] Speaker 04:
Just go ahead and list the things you did before the case and the things you did after.

[00:13:58] Speaker 04:
OK, I'm happy to do that.

[00:14:00] Speaker 02:
And I'm not going to have any time for rebuttal.

[00:14:02] Speaker 02:
But I think this is important if it's important to you.

[00:14:04] Speaker 02:
Well, that's too bad.

[00:14:06] Speaker 02:
I know I'm good with that.

[00:14:07] Speaker ?:
I'm good with that.

[00:14:09] Speaker 02:
Before the injunction was entered and before the lawsuit was filed, HSD actually arranged services.

[00:14:20] Speaker 02:
And the language in the Medicaid Act is for treatment

[00:14:26] Speaker 02:
that HSD does not have to provide, it has to arrange for.

[00:14:31] Speaker 02:
And it's undisputed that HSD is actually arranged through contracts with the managed care organizations, which in turn contract with home healthcare agencies, which in turn contract with the private duty nursing.

[00:14:45] Speaker 02:
All that was in place before the lawsuit was filed.

[00:14:49] Speaker 02:
and before the injunction was entered.

[00:14:51] Speaker 00:
So I want to make sure I understand that.

[00:14:52] Speaker 00:
So what you're saying is, before the lawsuit was filed, HSD had contracts with the MCOs that these services were to be provided.

[00:15:04] Speaker 02:
Yes, Your Honor.

[00:15:05] Speaker 00:
OK.

[00:15:05] Speaker 02:
Yes, Your Honor.

[00:15:06] Speaker 00:
But they weren't being provided.

[00:15:08] Speaker 02:
Well, until the lawsuit was filed, we're unaware that for these children, that those services were not being provided, that the home health agencies could not

[00:15:18] Speaker 02:
adequately staff the clients that they had taken on.

[00:15:23] Speaker 02:
It is undisputed that HSD, before the lawsuit was filed, contracted with the University of New Mexico medically fragile case management program to provide case management services, including the arrangement of in-home skilled healthcare for medically fragile students.

[00:15:44] Speaker 02:
That was in place before.

[00:15:45] Speaker 02:
And Ms.

[00:15:47] Speaker 02:
Agard,

[00:15:48] Speaker 02:
who they rely heavily on, said that that was part of her job and that she tried to do that job and was unable to find medically fragile children, PDN care, despite her best efforts.

[00:16:03] Speaker 02:
It's undisputed that before the lawsuit was filed, HSD had promoted the use of traveler nurses, which is a different category to staff hospitals

[00:16:16] Speaker 02:
which ostensibly would free up New Mexico resident nurses to provide PDM services to this population.

[00:16:23] Speaker 02:
It's also undisputed that after the injunction, and this may answer your question, Justice Murphy, HSD has complied with a few specific examples in the preliminary injunction order that are subparts of one, and they have done that.

[00:16:41] Speaker 02:
So my time is over and I'm happy to answer any other questions.

[00:16:44] Speaker 02:
Let's finish your list.

[00:16:46] Speaker 02:
Did you have time to complete your list?

[00:16:49] Speaker 02:
Those are the main categories because those are the things.

[00:16:53] Speaker 02:
And HSD, it is undisputed, has never denied a claim for reimbursement for private duty nursing services for any population.

[00:17:04] Speaker 02:
including the medically fragile population.

[00:17:07] Speaker 00:
So the second part of Judge Murphy's question was, and what have you done since the lawsuit was filed?

[00:17:14] Speaker 00:
Anything in addition that you want to add to your list that was after filing?

[00:17:19] Speaker 02:
Your Honor, we took the directions which the judge described as examples in the preliminary injunction order and have fully complied with those.

[00:17:31] Speaker 02:
We get reports from the MCOs on their efforts, which is one of the categories to determine what efforts are being made.

[00:17:41] Speaker 02:
We have done outreach and recruiting efforts as well, but HSD does not hire the nurses.

[00:17:50] Speaker 02:
They have this contractual flow down that we are in charge of, for sure, and are trying to make sure that that

[00:18:00] Speaker 02:
is working effectively?

[00:18:04] Speaker 04:
It's like a waltz.

[00:18:05] Speaker 04:
You say, we don't contract for services.

[00:18:08] Speaker 04:
And then you say, and we don't provide the services, and we don't go out to the nurses.

[00:18:13] Speaker 04:
That's all MCO stuff.

[00:18:15] Speaker 04:
And then on the stuff that you did before the lawsuit, you talk about arrangements you made with the University of New Mexico about arranging for traveler nurses.

[00:18:27] Speaker 04:
That sounds like

[00:18:29] Speaker 04:
you are doing things that you say the MCOs are supposed to be doing.

[00:18:32] Speaker 02:
Your Honor, I may have misspoken.

[00:18:34] Speaker 02:
We arranged, we have contracts with the University of New Mexico, Medically Fragile Case Management Program.

[00:18:42] Speaker 02:
We have contracts with the MCOs, who in turn have contracts with the home health agencies, who contract to provide the private duty nursing to these clients.

[00:18:51] Speaker 02:
A separate issue is the use of traveler nurses, which there's

[00:18:58] Speaker 02:
testimony in the record that the plaintiffs don't want, travel nurses can only be in a position for 13 weeks.

[00:19:07] Speaker 02:
And that doesn't provide the stability that this group of children would need.

[00:19:13] Speaker 02:
The parents indicated that they didn't necessarily want new people every 13 weeks in their home.

[00:19:20] Speaker 02:
But if we staff the hospitals with those short-term travel nurses, then that frees up

[00:19:28] Speaker 02:
which is, I don't know that it's fair to say, we're putting you out of the hospital setting with JUPICT, resident New Mexico nurse, but you can go serve a medically fragile child in their home.

[00:19:41] Speaker 02:
But that's something that we have put in place, the use of traveling nurses.

[00:19:47] Speaker 00:
And unless there's any follow-up, your time is up.

[00:19:49] Speaker 02:
Thank you, I appreciate it.

[00:20:07] Speaker 01:
Excuse me, may it please the court?

[00:20:08] Speaker 01:
I'm Nancy Simmons.

[00:20:09] Speaker 01:
I'm appearing for the plaintiffs and also there's now a certified class of medically fragile children in New Mexico.

[00:20:17] Speaker 01:
There's about 50 children, more or less, that will be part of the class.

[00:20:23] Speaker 00:
I thought we were just here on the two individual claimants.

[00:20:29] Speaker 01:
We are, I'm assuming that the preliminary injunction will apply to the class, but we're at the early stages even of notifying class members, so that is, you're right, your honor, basically, that's beyond anything that we need to talk about today.

[00:20:47] Speaker 01:
First, I'd like to make clear, pre-authorized services are PDN hours, a parent could elect

[00:20:57] Speaker 01:
to settle for a home health care aide with a huge gap in skill set.

[00:21:04] Speaker 01:
Anyone in this courtroom could become a home health care aide, including sadly myself.

[00:21:11] Speaker 01:
But I would not be allowed to be alone with the child.

[00:21:15] Speaker 01:
And I would not be allowed to fix the ventilator, change the gastronomy tube, all the highly skilled tests that are necessary.

[00:21:24] Speaker 01:
But there are parents who either say,

[00:21:27] Speaker 01:
Well, I'd like the flexibility of having a health care aide or who realized that there is not a nurse available and somebody to help me with the wheelchair, I'll take that.

[00:21:37] Speaker 01:
But the pre-authorization is for all PDN hours.

[00:21:41] Speaker 01:
The district court said that at any time the HSD could come forward and say that the PDN hours were not medically necessary.

[00:21:52] Speaker 01:
And that, in fact, in my mind, Your Honor, was a gift

[00:21:57] Speaker 01:
And certainly it's up to the discretion of the district court, but in fact, pre-authorization pursuant to CFR section 422.138 says that if a service is pre-authorized, an MCO can challenge it by presenting evidence by saying, oh, no, you shouldn't be getting these PDN hours.

[00:22:24] Speaker 01:
Turns out you're not on a ventilator.

[00:22:26] Speaker 01:
I mean, it's hard to imagine a situation where an MCO would challenge, and in this case, the MCOs never did challenge the right to the PDN hours because of the rigorous process that has already occurred by the time they're qualified to receive, you go through the, they go, and what UNM does, they don't hunt for nurses.

[00:22:45] Speaker 01:
They put the parents through, put the application through a rigorous process where they determine based on the medical record what would be appropriate in terms of

[00:22:55] Speaker 01:
private duty nursing hours.

[00:22:57] Speaker 01:
They check with the primary care physician.

[00:22:59] Speaker 01:
The primary care physician in the end signs off on the level of care.

[00:23:03] Speaker 01:
The level of care then goes to a group called CO-MAGIN, which is a third party assessor that goes through and says, okay, yeah, we approve it.

[00:23:11] Speaker 01:
They're actually on behalf of HSD.

[00:23:14] Speaker 01:
It's then sent to the MCOs and the MCOs can say, you know what, I don't think this kid is sick enough to need PDN hours.

[00:23:22] Speaker 01:
But in fact, just the number of 50

[00:23:26] Speaker 01:
in New Mexico tells quite a story.

[00:23:29] Speaker 01:
These are children that are on the edge of death.

[00:23:31] Speaker 04:
Is this methodology you're talking about, that's how you get to what is called EPSDT?

[00:23:39] Speaker 04:
Yes, sir.

[00:23:40] Speaker 01:
The EPSDT budget then is finalized by approval by the MCOs who sign off on it.

[00:23:47] Speaker 01:
But at that point, it's gone through all kinds of medical rigor.

[00:23:51] Speaker 01:
And the UNM hospital,

[00:23:54] Speaker 01:
contracts with HSD to just sort of do the initial work and then make sure it gets through all the different stages.

[00:24:02] Speaker 04:
And this is done for each child who might fall in the category of medically fragile?

[00:24:08] Speaker 04:
Exactly.

[00:24:09] Speaker 04:
And do the parents have a participation in this EPSDT process?

[00:24:16] Speaker 01:
I think, well, it would be interviewed, but they couldn't say, oh, my child really needs a ventilator.

[00:24:22] Speaker 01:
if the primary care physician hadn't ordered it and said, yes, they really need a ventilator.

[00:24:27] Speaker 01:
So they participate just like when I take my, thankfully, very healthy child a long time ago, when I had a young child to the physician and he said she had scoliosis, I said, oh, so what do I do now?

[00:24:43] Speaker 01:
And there is that level of participation, but it's not a decision-making.

[00:24:46] Speaker 04:
OK, you go through the screening, diagnostic, and training.

[00:24:50] Speaker 04:
And during that process,

[00:24:53] Speaker 04:
a distinction can be made between private duty nurses and something different, not as trained.

[00:25:02] Speaker 04:
Is that correct?

[00:25:03] Speaker 01:
The parent could turn down the nursing services, just like I'm entitled to.

[00:25:09] Speaker 04:
In the process of determining what is needed for this particular child, do they go through a process that says,

[00:25:19] Speaker 04:
Well, they only need so many hours of private duty nurse, but they can get by with fewer hours and then add more eight hours.

[00:25:31] Speaker 01:
No.

[00:25:32] Speaker 01:
They don't go through a process where it's allocated.

[00:25:35] Speaker 01:
As the district court found, the EPSDT budget sets forth a certain number of hours, and those are all PDN hours.

[00:25:43] Speaker 01:
What the district court said was that HSD could come forward and say,

[00:25:46] Speaker 01:
Not all of those need to be PDN hours.

[00:25:48] Speaker 01:
There's a audible presumption.

[00:25:51] Speaker 01:
But if you can show that it's not medically necessary, then we'll take another look at it.

[00:25:56] Speaker 01:
But for now, I'm going to say that whatever's budgeted is for PDN hours.

[00:26:00] Speaker 01:
And when you think about it just logically, it doesn't make sense to say you only need a couple of nursing hours because there is no nurse who can work just a couple of hours and check on.

[00:26:11] Speaker 01:
It's shift work.

[00:26:12] Speaker 01:
And what you're substituting for

[00:26:14] Speaker 01:
And what I think gets sometimes lost is that we also brought our ADA section 504 claim to say that this is a substitute to get a child out of an institution.

[00:26:26] Speaker 01:
In an institution, there's always a nurse there.

[00:26:29] Speaker 01:
This is already sort of a step down that the nurse is not there 24-7.

[00:26:33] Speaker 04:
But there's not a PDF, excuse me, a PDN requirement 24-7, is there?

[00:26:44] Speaker 01:
No, Your Honor, I think that would be, I don't know for sure, but I don't think that Medicaid pays for 24-7 PDF notes.

[00:26:54] Speaker 04:
Right, so part of the day in this child's life, they are dependent on their parents to provide services that would otherwise be provided by a private duty nurse.

[00:27:06] Speaker 01:
They are, Your Honor, and that's one of the difficulties of being a parent of one of these children.

[00:27:11] Speaker 01:
And it is a step down from life in an institution.

[00:27:14] Speaker 01:
But the choice is made, being at home has benefits that even though there is a risk, that when the child is, for example, awake and at home with a parent who's been highly trained, then maybe they can, there are times when there's not an emergency.

[00:27:33] Speaker 01:
But that the nurse is necessary to be coming in and checking what the parent is understanding,

[00:27:39] Speaker 01:
And for example, one of the things that Ms.

[00:27:45] Speaker 01:
C.V.'

[00:27:45] Speaker 01:
's mother testified to is that when taking the child out, if the child goes to school or if the child goes on a community outing, just having the mother there isn't doable.

[00:27:57] Speaker 01:
Some of these parents, of course, work.

[00:28:00] Speaker 04:
I understand, but that's not my point.

[00:28:02] Speaker 04:
My point is that you don't have to have incessant

[00:28:09] Speaker 04:
private duty nurse presence.

[00:28:15] Speaker 04:
Most of the day, that private duty nurse is not going to be there even if you meet the approved hours.

[00:28:23] Speaker 04:
And so something that is, I don't want to say less, but it's different, not trained in the same way as a private duty nurse, will suffice.

[00:28:33] Speaker 01:
Well, Your Honor, Medicaid is set up so that your choice for the PDN hours

[00:28:39] Speaker 01:
This particular kind of service is either a nurse or these home health care aides.

[00:28:46] Speaker 01:
So it's clear you can't swap out a respiratory therapist, for example.

[00:28:50] Speaker 01:
You either get a nurse who's there for 40 hours or a home health care aide who's there for 40 hours or a nurse who's there 20, a nurse and a health care person who's there for 20, and it's up to the parent's choice.

[00:29:03] Speaker 01:
And so we're sort of stuck with what Medicaid has provided

[00:29:06] Speaker 01:
And what we're saying is, and what the law says, is that once you're pre-authorized for PDN hours at 40, you can get those 40, and that the state has to make reasonable efforts, at least, to ensure that those nursing hours are provided.

[00:29:22] Speaker 01:
And the idea, for example, that they were ignorant of this problem with the MCOs not providing the nurses, not providing a rate that would attract nurses, beforehand there were

[00:29:34] Speaker 01:
substantial meetings before the lawsuit was filed.

[00:29:37] Speaker 01:
After the lawsuit was filed, all that we were told to do, and all that's on the record, was exhaust your administrative remedies.

[00:29:47] Speaker 01:
Go to a hearing every week that you don't get these hours, and somehow something will happen magically that will give you these hours.

[00:29:53] Speaker 01:
And what we said is no, it's a statewide problem.

[00:29:57] Speaker 01:
It's certainly a problem as to these two children that routinely aren't getting their hours, and it's because of the rates.

[00:30:05] Speaker 01:
And Michelle German, who runs the largest nursing agency in the state, she's in Bernalillo County, where, by the way, there is no nursing shortage, according to the records we submitted, according to the studies that have been done.

[00:30:18] Speaker 01:
There's no nursing shortage in Bernalillo County.

[00:30:20] Speaker 01:
So there should be nurses available.

[00:30:26] Speaker 01:
Why aren't they coming?

[00:30:27] Speaker 01:
They're not getting paid enough.

[00:30:28] Speaker 04:
You put on evidence that counteracted then this affidavit from this doctor who talked about the shortage in New Mexico and nationwide?

[00:30:39] Speaker 01:
Very much, Your Honor.

[00:30:40] Speaker 01:
One, Judge Strickland correctly found that he did brainstorming in terms of what you could do if there were no nurses at all.

[00:30:49] Speaker 01:
And mostly his experience was during COVID, which is a different issue when there were

[00:30:57] Speaker 01:
Otherwise, healthy adults going into hospitals needing ventilators because of COVID.

[00:31:03] Speaker 01:
What is going on now is that what Ms.

[00:31:07] Speaker 01:
German testified to is that she receives different rates for her nurses that are in her agency.

[00:31:15] Speaker 01:
Presbyterian pays substantially less.

[00:31:18] Speaker 01:
She can't fill those hours.

[00:31:23] Speaker 04:
So what's the source of your evidence?

[00:31:27] Speaker 04:
that there is no shortage in Bernalillo County?

[00:31:31] Speaker 01:
We submitted, and I would have to look, your honor, but we submitted a study that was done, a public information document that said Bernalillo County did not have a nursing shortage.

[00:31:42] Speaker 01:
It was done by the state of New Mexico.

[00:31:45] Speaker 01:
But there's also the fact that this is in a possibility defense to say there are no nurses in Bernalillo County.

[00:31:50] Speaker 04:
That study's in the record?

[00:31:52] Speaker 01:
It is, your honor.

[00:31:53] Speaker 01:
It's attached to, I think, the first

[00:31:56] Speaker 01:
No, to the second motion for preliminary injunction as an exhibit.

[00:32:01] Speaker 01:
And it's a map of the state of New Mexico and Birmingham County appears as not having a shortage.

[00:32:06] Speaker 01:
But there's also the fact that this was an impossibility defense, that the defendants did not prove that there was a nursing shortage such that nothing could be done.

[00:32:16] Speaker 01:
And in fact, what has happened since, for example, getting a single case agreement for MG has helped, but that was court ordered.

[00:32:24] Speaker 00:
Okay, the argument that you're making right now on talking about the rates that these private duty nurses are being paid seems to be different than the argument that you've been making in response to your opponent's reliance on Armstrong, which is, oh no, we're not saying you have to raise the rates and the injunction doesn't say that you have to raise the rates, but today you're arguing

[00:32:54] Speaker 00:
You need to fix this by raising rates.

[00:32:56] Speaker 00:
In the one county, they pay more so they don't have a shortage.

[00:33:02] Speaker 01:
No, it's that they pay more in the entire state.

[00:33:06] Speaker 01:
But let me explain, Your Honor, why the rates.

[00:33:09] Speaker 01:
That is a critical issue, but it's a mistake to think that what we are asking is that the court affirm an injunction that ordered the MCOs

[00:33:23] Speaker 01:
to receive more from HSD.

[00:33:25] Speaker 01:
HSD pays a capitated rate to the MCOs.

[00:33:31] Speaker 01:
So each child gets a certain amount of money from the state.

[00:33:36] Speaker 01:
And with this, a medically fragile child, the capitated rate is higher.

[00:33:41] Speaker 01:
So $100,000, let's say.

[00:33:43] Speaker 01:
I don't know what it is.

[00:33:45] Speaker 01:
But for Angie, here's $100,000.

[00:33:48] Speaker 01:
Make sure she gets nurses.

[00:33:49] Speaker 01:
Make sure she gets whatever she's entitled to.

[00:33:52] Speaker 01:
And then Presbyterian takes that money and they negotiate with nursing agencies.

[00:33:58] Speaker 01:
That's where the nurses are paid.

[00:34:00] Speaker 01:
That's the rates we're talking about.

[00:34:02] Speaker 01:
And Presbyterian pays less, substantially less, to the nurses that it contracts for, the Presbyterian MCOs, versus Blue Cross Blue Shield that pays more to the nursing agencies.

[00:34:19] Speaker 01:
The nursing agencies don't put this into one big pool.

[00:34:23] Speaker 01:
They pay their Blue Cross nurses what they can be pursuant to their contract with Blue Cross MCO.

[00:34:31] Speaker 01:
And they pay their Presbyterian nurses.

[00:34:34] Speaker 04:
We understand that.

[00:34:36] Speaker 04:
But the question is, the suggestion is that you're saying increase the prices.

[00:34:44] Speaker 01:
That's one way.

[00:34:46] Speaker 04:
To increase the number of businesses.

[00:34:47] Speaker 04:
Well, but you deny that you're doing that in the proceedings of District Court.

[00:34:51] Speaker 01:
Respectfully, Your Honor, no, I'm, no, because there's a difference.

[00:34:54] Speaker 01:
What Armstrong says is, one, we distinguished, my time is up, if I could finish my thought.

[00:35:01] Speaker 00:
Yes, you have some additional time because your opponent went over, so.

[00:35:06] Speaker 01:
Thank you, Your Honor.

[00:35:08] Speaker 01:
First, we argued strenuously that Armstrong didn't apply and Judge Strickland held that Armstrong didn't apply no matter what because it was a different situation where providers were trying to get benefit based on the supremacy clause as opposed to being the recipients of the benefit.

[00:35:26] Speaker 01:
So there's that.

[00:35:27] Speaker 01:
But setting that aside, let's say Armstrong does apply.

[00:35:30] Speaker 01:
Armstrong says that if Presbyterian comes in or if we try to force

[00:35:38] Speaker 01:
HSD to pay Presbyterian more, that per capita rate, that might be a problem.

[00:35:43] Speaker 01:
But we're saying that what HSD can do, and what it in fact is now starting to do, because of a preliminary injunction, is tell its contracting party, Blue Cross Blue Shield, here's your floor.

[00:35:59] Speaker 01:
Whatever you do, don't pay less than this to the nursing agencies because you're cheating them.

[00:36:04] Speaker 01:
Because of course, any time Presbyterian

[00:36:07] Speaker 01:
doesn't pay enough to the nursing agencies to attract nurses, it gets to keep all that per capita money itself.

[00:36:14] Speaker 04:
So your position is that when you're talking about pricing and you're talking about floor, you're talking about things that the state can do.

[00:36:24] Speaker 04:
Yes.

[00:36:25] Speaker 04:
Not that you're demanding they do, but this is one alternative.

[00:36:28] Speaker 04:
Is that correct?

[00:36:29] Speaker 04:
Yes.

[00:36:30] Speaker 00:
That's not part of the injunction.

[00:36:34] Speaker 00:
District court didn't go anywhere near dictating to the state what the rate should be.

[00:36:40] Speaker 01:
No, Your Honor.

[00:36:41] Speaker 01:
No.

[00:36:42] Speaker 01:
It did not.

[00:36:42] Speaker 01:
And we're not saying that it should.

[00:36:45] Speaker 01:
We're saying this is one possibility.

[00:36:47] Speaker 04:
You're saying you have the power in Mexico to kick them in the rear end, these MCOs, and tell them how they're going to use the dollars that they're capitated on

[00:37:03] Speaker 01:
It's a needs-based contract.

[00:37:06] Speaker 01:
So it tells Presbyterian, here's a per capita amount of money.

[00:37:10] Speaker 01:
With this, meet the needs of MG.

[00:37:13] Speaker 01:
And when they don't, HSD has all kinds of possibilities, including a letter of direction, for example.

[00:37:21] Speaker 01:
That's what they're starting to do.

[00:37:23] Speaker 01:
Enter into the single case agreement that they made for MG that's ordered.

[00:37:29] Speaker 01:
by HSD to the MCO.

[00:37:32] Speaker 01:
That happened because of the preliminary injunction.

[00:37:35] Speaker 01:
Judge Strickland then said, there's not enough being done, so I'm going to appoint a special master to come up with more ideas.

[00:37:44] Speaker 01:
And we're going to look at how to do this.

[00:37:47] Speaker 01:
But you're just standing back HSD saying, well, we gave this money to the MCOs, and we can't do anything else.

[00:37:54] Speaker 01:
That's not good enough.

[00:37:55] Speaker 01:
You need to work the problem.

[00:37:57] Speaker 00:
One way to work the problem is to pay more.

[00:38:01] Speaker 00:
The injunction does not order them to pay more or to set a ceiling or a floor on the payments.

[00:38:12] Speaker 01:
No, it does not.

[00:38:14] Speaker 01:
It gives them the flexibility.

[00:38:16] Speaker 00:
If they do everything in the injunction, they try, in good faith, and they still have a shortage of private duty nurses.

[00:38:27] Speaker 00:
Would you recognize that they've complied with the injunction?

[00:38:32] Speaker 01:
Well, I think that'd be a question for Judge Strickland.

[00:38:34] Speaker 01:
It would depend on what they did.

[00:38:36] Speaker 01:
But certainly, if they work the problem, they use their contractual standing to say, this is what we ask you to do, Presbyterian.

[00:38:46] Speaker 01:
This is what we want you to do.

[00:38:48] Speaker 01:
Or if they figure out the whole thing about traveling nurses is news to me that they've been working the issue of traveling nurses, that that might solve it.

[00:38:57] Speaker 01:
done their best, and there's still a shortage.

[00:39:00] Speaker 01:
There may be in Norwood, which is a case we relied on quite a bit, they came up to about 90%.

[00:39:06] Speaker 00:
You can only do what you can do.

[00:39:08] Speaker 00:
Unless there are further questions, you're now at the extra time.

[00:39:12] Speaker 00:
Thank you.

[00:39:12] Speaker 00:
You're now even on your extra time.

[00:39:14] Speaker 00:
Thank you for the extra time, Your Honor.

[00:39:18] Speaker 00:
We'll take this matter under advisement.

[00:39:20] Speaker 00:
We appreciate your argument.