Mandy R. et al. v. Owens et al. was filed in the US District Court in August of 2000.  The plaintiffs claimed violation of federal Medicaid law, the ADA, Section 504 of the Rehabilitation Services Act of 1973 and the US Constitution.  The suit specifically sought ICF/MR small group home services rather than waiver services.  The Arc of CO supported this lawsuit.

In March 2002, Judge Richard P. Matsch ruled on several motions that had been filed in the case.  He denied the state’s motion to dismiss on the reasonable promptness contention and granted a motion to intervene by the Colorado Association of Community Center Boards (CACCB).  The CACCB new claims included the fact that the state’s payments for community services were inadequate and that placing people on wait lists violated federal law but argued that this violation could be cured by expanding waiver services.  Judge Matsch also denied the plaintiff’s motion for class action certification on the basis that if the suit were successful, it would require systemic change that would apply to others.  Finally, he denied the demand for a preliminary injunction.  A major reason for this denial was his assertion that the relief sought by the plaintiffs would cause major changes in the state’s Medicaid program and have a significant budgetary impact.  He determined that he did not have the basis for the injunction given its potential impact.

In July 2002, the state moved to dismiss the claim arguing that it had no affirmative responsibility to develop ICF/MRs but was limited to paying for services once they were delivered—much like an insuror.  In August 2002, the plaintiffs asked for partial summary judgment arguing that the state had a responsibility under Medicaid to provide services to eligible people beyond simply paying for those that were provided.  Plaintiffs requested that the state be ordered to develop 14 small four-bed ICF/MRs to meet the ADA integration standard.

In Sept. 2003, Judge Matsch ruled against the state for dismissal and against the plaintiffs’ demand for summary judgment.  He noted, “Olmstead does not stand for the proposition that a state must create, expand, or maintain programs for the purpose of preventing disabled individuals from becoming institutionalized.”

The case went to trial in June, 2004.  In February 2005, Judge Matsch dismissed the plaintiffs’ and intervenor claims.  He decided that he could not order the relief sought because it would amount to mandating that the state provide or actively develop ICF/MR services.  He contended that such an order would have the effect of ordering an increase in state taxes or appropriations or force the state to reduce or eliminate other Medicaid services.  His ruling stated that such an action would be “an exercise of federal judicial authority that would encroach upon the fundamental powers of State government” and undermine the “principle of democratic government that…reserves to the people the power to tax and spend.”   He also argued that ordering the relief would require overriding the TABOR amendment to the CO constitution that limits government revenues.  The plaintiffs argued that the limit could be exceeded when needed to comply with a federal order. Judge Matsch disagreed.

In March 2005, the Mandy R. plaintiffs and the intervenor (CACCB) appealed the dismissal in the 10th Circuit Court.  The Mandy R. plaintiffs and CACCB advanced many of the same arguments:

          1)       A state must provide sufficient funding for its Medicaid programs
          2)       The state has an affirmative responsibility to furnish Medicaid services to eligible individuals
                     and act in more than an “insuror” capacity.
          3)       The request for class certification should be reviewed

CACCB disagreed with the Mandy R. plaintiffs on the contention that the needs of the plaintiff could be met by adequate funding of community based services.

Oral arguments were heard in May 2006.  The 10th circuit court denied class certification and affirmed the decision of the lower court.  Judge. McConnell held that the reasonable promptness and comparability provisions of the Medicaid Act do not require the state to provide services, and that recipients and providers do not have a private right to enforce sufficient payments under section 1983. 

On January 18, 2007, the attorneys for the plaintiffs filed a Petition for a Writ of Certiorari with the United States Supreme Court. On March 26, 2007, the United States Supreme Court decided not to hear the plaintiff's appeal.