Lawsuit filed over Medicaid reimbursement cuts



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IDAHO FALLS, Idaho (AP) — Eight medical care providers and two patients have filed a lawsuit against Idaho seeking to halt a plan to cut Medicaid reimbursement rates by at least 37 percent for in-home care for the developmentally disabled.

The lawsuit filed last week contends the Idaho Department of Health and Welfare didn't go through the proper rule-making procedure before announcing the cuts, the Post Register reports (http://bit.ly/1ZBAbUI ).

"There's no legislative or public review of this (decision) at all," said James Piotrowski, a Boise attorney representing the providers and developmentally disabled patients.

The lawsuit seeks to prevent cuts set to take effect in February until a decision is made on the potential rule-making violation.

Tom Shanahan, spokesman for the Idaho Department of Health and Welfare, said the agency doesn't comment on pending litigation.

The lower reimbursement rates were originally set to take effect on Dec. 22 but were pushed back after a harsh backlash from disability providers.

State officials said providers who offer in-home care at the "intense" level would see about a 46 percent cut in the reimbursement they receive each day — the same level as in 2006. Rates were cut by 37 percent at the lowest level of support.

The state agency has said the cuts would reduce payouts to providers by about $20 million a year. That includes about $5.9 million paid by the state.

"Many participants to whom (these agencies) provide services would otherwise be institutionalized in state hospitals, intermediate care facilities, or nursing homes," the lawsuit said. "In fact, it is for this specific purpose that the Medicaid waiver program was created, so that such individuals could reside in the community rather than being 'warehoused' in institutions."

The decision by the state agency to make the cuts is linked to a U.S. Supreme Court ruling in March that providers don't have a right to sue the state over its Medicaid reimbursement formula.

The decision stemmed from a 2009 lawsuit arguing that Idaho unfairly kept Medicaid reimbursement rates at 2006 levels despite studies showing the cost of providing care had gone up. Lower courts agreed and the increased reimbursements cost Idaho an additional $12 million in 2013.

The Supreme Court sided with state officials, saying it's up to the federal agencies that oversee Medicaid to decide whether a state is in compliance with reimbursement rules.

The ruling was considered a blow to doctors, hospitals and health care companies worried that they lose money seeing Medicaid participants.

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Information from: Post Register, http://www.postregister.com

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The Associated Press

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