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Akron Univ. School of Law

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Wednesday, July 9, 2014

Recent litigation on Medicaid funding for assisted living services

State reluctance to fund Medicaid programs adequately is an endemic problem for recipients, especially those who are dual eligibles or who rely on Medicaid for services to enable them to continue to live in the community.  Yet despite the ACA’s laudable goals of expanding Medicaid and coordinating Medicaid services in the interests of improved care, states continue to constrain their Medicaid programs either directly by specifying the choice of providers or indirectly by discouraging provider participation by low reimbursement rates.  Several recent challenges to the impact of these cost control efforts on assisted living services for people with disabilities are worth following.

First, Idaho providers of supported living services brought suit in 2009 challenging the Idaho legislature’s failure to appropriate sufficient funds.  The state’s rate-setting study had recommended a substantial increase in funds, but the legislature did not approve the increase.  The district court granted summary judgment to the providers and the 9th Circuit affirmed in a very brief opinion in April 2014.  The district court’s reasoning, upheld by the 9th Circuit, was that the Medicaid Act requires state rates to be “‘consistent with efficiency, economy, and quality of care and … sufficient to enlist enough providers’ to meet the need for care and services in the geographic area. 42 U.S.C. § 1396a(a)(30).”  Exceptional Child Center v. Armstrong , 2014 WL 1328379 (April 14, unpublished).  Purely budgetary reasons such as those cited by Idaho do not suffice to meet this standard.  Last week, Idaho appealed the 9th Circuit decision to the Supreme Court.

Second, independent living centers in Southern California have brought suit challenging California’s method for enrolling dual eligibles into managed care programs.  Such efforts, touted as improving care coordination, come under criticisms that they are instead merely methods of cost control that will result in the loss of essential services.  The plaintiffs are Communities Actively Living Independent & Free, the Westside Center for Independent Living, and Southern California Rehabilitation Services, Inc.; they seek to enjoin what they contend is California’s confusing notice to dual eligible about their impending reenrollment and how to opt out of it.  Westside Center for Independent Living vs. California Department of Health Care Services, Cal. Civil No. 34-2014-080001884 (filed July 2, 2014). 

I’ll post updates, if and when available.

Leslie Francis

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