## Facts

- Pennsylvania Medicaid recipients with moderate to severe mental illness attended psychiatric partial hospitalization services (PPHS), a non-inpatient program intended to prevent or shorten institutionalization.
- Many PPHS patients required reliable, often specialized, round-trip transportation (e.g., escorts, door-to-door service, specialized vehicles) to receive treatment.
- The Pennsylvania Department of Public Welfare (DPW) proposed a Special Transportation Plan (STP) to control costs by shifting transportation responsibilities to service providers.
- The STP classified providers as “exempted” (specialized services or average transport distance over 20 miles) or “unexempted” (all others).
- Unexempted providers had to assure round-trip transportation for eligible clients and were paid an additional $1.45 per hour of treatment; exempted providers could decline both the transportation obligation and the increased payment.
- A significant minority of providers declined the transportation obligation, making beneficiaries’ access to PPHS transportation dependent on provider participation.
- Plaintiffs, a certified class of Medicaid-eligible Pennsylvania residents, sought declaratory and injunctive relief; temporary and preliminary injunctions had delayed implementation.

## Issues

1. Whether the STP violated Title XIX and federal Medicaid transportation regulations by shifting the state agency’s duty to assure necessary transportation to providers.
2. Whether the STP unlawfully created unequal and insecure access to covered services by conditioning transportation on provider participation and classification.
3. Whether the STP violated federal requirements of uniform statewide administration and adequate public disclosure of governing rules and policies.

## Decision

- The court held the STP, as applied to PPHS, violated Title XIX and governing federal Medicaid regulations.
- The court found DPW improperly delegated its obligation to assure necessary transportation to and from covered medical services.
- The court concluded the STP would produce nonuniform and unequal access to PPHS because transportation availability depended on provider status and choices rather than beneficiary medical need.
- The court granted equitable relief and enjoined DPW from implementing the STP with respect to PPHS providers and affected class members.

## Legal Principles

- Federal Medicaid law and regulations require the state Medicaid agency to assure necessary transportation to and from covered services for eligible recipients.
- A state Medicaid agency may not satisfy that obligation by shifting responsibility to private providers in a manner that allows transportation to be withheld based on provider participation.
- Medicaid plan administration must be uniform statewide and rules affecting eligibility, benefits, and access must be adequately disclosed and implemented through clear, consistent policies.
- Courts may enjoin state Medicaid program changes that create arbitrary disparities in access to covered services or that conflict with mandatory federal requirements.

## Conclusion

The court permanently barred Pennsylvania from implementing its provider-based special transportation arrangement for psychiatric partial hospitalization services because it unlawfully transferred the state agency’s transportation duty and created nonuniform, unequal access to medically necessary care for Medicaid recipients.


Morgan v. Cohen, 665 F. Supp. 1164 (E.D. Pa. 1987)