16 Kentuckians on Medicaid sue Trump administration again over re-approved Medicaid program, say it still violates federal law

By Melissa Patrick
Kentucky Health News

Kentucky’s new Medicaid program, which includes controversial work and community engagement requirements was recently re-approved by the Trump administration after a judge rejected it. Now the plan is back in federal court after 16 Kentucky Medicaid enrollees filed an amended complaint to the original class-action lawsuit.

The 88-page amendment, filed Monday night, says nothing of substance was changed when federal officials re-approved the plan, so many of its new requirements continue to violate federal law.

The plan website: https://kentuckyhealth.ky.gov/Pages/FAQ.aspx

The state’s new program, called Kentucky HEALTH for Helping to Engage and Achieve Long Term Health, includes, among other things, work or other community engagement requirements; monthly reporting; lock out periods for failure to comply; and income-based premiums. It is set to launch April 1.

Just days before the program was originally set to roll out in July, U.S. District Judge James Boasberg of Washington, D.C. vacated it and sent it back to the U.S. Department of Health and Human Services for review, ruling that, among other things, HHS Secretary Alex Azar had not fully considered the state’s projection that in five years the Medicaid rolls would have 95,000 fewer people with the plan than without it.

Boasberg found the approval of Kentucky HEALTH “arbitrary and capricious” because the federal government had “never adequately considered whether Kentucky HEALTH would, in fact, help the state furnish medical assistance to its citizens, a central objective of Medicaid.”

The amended lawsuit has been filed in Boasberg’s court, despite Gov. Matt Bevin’s efforts to have it moved to Kentucky. Defendants and interveners have until Jan. 28 to respond, including motions for dismissal or summary judgment.

The Southern Poverty Law Center is among the counsel for the plaintiffs. Samuel Brooke, the center’s deputy legal director, said in a news release, “The Trump administration’s desire to explode Medicaid and transform it into a work program seems to have no limits. After being declared arbitrary and capricious last year, the administration has now issued a virtually identical re-approval letter; it should face a similar fate and be declared illegal,”

The plaintiffs’ lawyers argue that the work and community-engagement requirements, income-based premiums, cost-sharing for non-emergency use of emergency rooms, lockout penalties for violators, removal of retroactive coverage, and removal of non-emergency medical transportation — and Kentucky HEALTH as a whole — don’t promote the objectives of the 54-year-old Medicaid program.

They argue that each of those measures is “categorically outside the scope” of what is allowed under the guidelines for a waiver of the Medicaid rules; that these new requirements don’t qualify as “experimental, pilot or demonstration project(s), nor (are they) likely to promote the objectives of the Medicaid Act;” and that the federal government has “relied on factors which Congress has not intended them to consider, entirely failed to consider several important aspects of the problem, and offered an explanation for their decision that runs counter to the evidence.”

In addition, the lawyers claim that a Jan. 11, 2018 letter from the Centers for Medicare and Medicaid Services to all states’ Medicaid directors. laying out a path for approval of work and community-engagement requirements under a waiver of the original Medicaid rules, should not have been issued without a formal hearing process.

The suit also notes that the state has said it seeks to “comprehensively transform Medicaid” through Kentucky HEALTH, that the director of CMS has stated the need to “fundamentally transform Medicaid” and the Trump administration has “repeatedly expressed its hostility to the Affordable Care Act and its desire to undermine its operation,” violating the constitutional requirement that the president “take care that the laws be faithfully executed.” The suit says “The power to ‘transform’ a congressional program is a legislative power vested in Congress.”

The Bevin administration has long said the goal of Kentucky HEALTH is not to kick people off of Medicaid, but to empower individuals to improve their health and help them shift to employer-sponsored coverage, and to ensure the program’s financial stability. The state has estimated that it would save about $2.4 billion over five years.

Adam Meier, secretary of the state Cabinet for Health and Family Services, said in an e-mail, “The cabinet is not surprised by the refiling and will continue to work toward implementation of the Kentucky HEALTH waiver. Kentuckians, and specifically our Medicaid members, deserve a Medicaid program that will improve health outcomes and provide paths for employability, long-term stability, and future success while also ensuring the long-term sustainability of Medicaid for those who need it most.”

The lawyers disagree, saying in their preliminary statement: “Purporting to invoke a narrow statutory waiver authority that allows experimental projects ‘likely to assist in promoting the objectives’ of the Medicaid Act, the [HHS] secretary is working to effectively rewrite the Medicaid statute, ignoring congressional restrictions, overturning a half century of administrative practice, and threatening irreparable harm to the health and welfare of the poorest and most vulnerable in our country.”

Medicaid covers 1.4 million Kentuckians, including almost half of a million under the previous administration’s 2014 expansion of eligibility to people with incomes up to 138 percent of the federal poverty level.

Only four of the 16 Medicaid enrollees listed on the amended complaint were part of the original lawsuit; 12 new plaintiffs have been added. The amendment describes each one’s situation in detail. They are represented by the National Health Law Program, a public-interest law firm; the Kentucky Equal Justice Center; and the Southern Poverty Law Center.

The defendants are HHS, CMS and their top officials. It also names the Commonwealth of Kentucky, which filed an unopposed motion for intervention, which was granted on March 30, 2018, as a “defendant-intervenor.”

Boasberg’s original 58-page decision is at: https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2018cv0152-74.

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