Parents’ League for Effective Autism Services v. Jones-Kelley

Parents’ League for Effective Autism Services (PLEAS) (plaintiff) was an association of families with children diagnosed with autism. These children were receiving applied-behavioral-analysis (ABA) therapy that was recommended for them by licensed healthcare providers and was funded by Medicaid. Ohio (state) (defendant) proposed new administrative rules that limited Medicaid coverage of mental-health services to rehabilitative services. The state concluded that ABA therapy for children with autism was not rehabilitative. PLEAS filed suit against the state in federal district court and moved for a preliminary injunction to stop the state from implementing the proposed rules. PLEAS asserted that the proposed rules violated the early and periodic screening, diagnostic, and treatment (EPSDT) provisions under the Medicaid Act (act) because the ABA therapy was covered as a mandatory rehabilitative service under EPSDT. The district court found that the ABA therapy was a medically necessary service that provided the maximum reduction of a mental or physical disability. The district court granted the preliminary injunction, finding that PLEAS had a strong likelihood of showing that the EPSDT-mandated services under § 1396d(a)(13) of the act required the state to cover ABA therapy and that the proposed rules would unlawfully deny these mandatory services. The state filed a motion to stay the preliminary injunction, which the district court denied. The state appealed. Section 1396d(a)(13) defined rehabilitative services as any medical or remedial services recommended by a licensed clinician for the maximum reduction of physical or mental disability and restoration of an individual to the best possible functional level. The state argued that (1) in addition to the maximum-reduction element, § 1396d(a)(13) required restoration of an individual to the best possible functional level and (2) the restoration requirement excluded the ABA therapy from coverage because the children did not have a previous functional level that the therapy attempted to restore.