Disabled Iowans Challenge Privately Run Medicaid

DES MOINES, Iowa (CN) – A class of disabled Iowans claims the state’s recently privatized Medicaid program illegally discriminates against disabled residents who receive services that keep them in their communities instead of institutions.

The lawsuit filed Tuesday in Des Moines federal court names as defendants Gov. Kim Reynolds and Charles Palmer, director of the state’s Department of Human Services.

The six named plaintiffs – Medicaid beneficiaries with disabilities that include multiple sclerosis, brain injuries and intellectual disabilities – seek to represent a class that could number more than 13,000 Iowans. Their complaint asks for restoration of disability benefits that have been denied, terminated or reduced, as well as preliminary and permanent injunctions.

Medicaid, the federal health care program for low-income people, is administered by participating states with costs split between state and federal governments.

The federal government pays about 57 cents of each dollar spent on Medicaid services in Iowa, according to the lawsuit.

In April 2016, Iowa transferred delivery of Medicaid services from the Department of Human Services to three private, for-profit care providers.

The move, designed to rein in growing Medicaid costs in the state, has been widely condemned by critics who say services to low-income residents has been dramatically reduced as a result.

The plaintiffs argue that by privatizing Medicaid services, Iowa is violating the Americans with Disabilities Act, which prohibits discrimination against individuals with disabilities by state and local governments.

The ADA requires that these local services be delivered in “the most integrated setting appropriate to the needs of qualified individuals with disabilities,” according to the lawsuit. The “most integrated setting” means that persons with disabilities are able to interact with nondisabled persons “to the fullest extent possible.”

Iowa has received federal grant money to help Medicaid recipients with intellectual disabilities or brain injuries move out of group care facilities and nursing homes into their own homes in communities of their choice.

But when the state shifted the delivery of Medicaid services to three private contractors – AmeriHealth Caritas Iowa, Amerigroup Iowa and United Health Care Plan of the River Valley – services were reduced, creating a “crisis” for the plaintiffs, according to the complaint.

“This year, the plans claimed that they had lost too much money on their Medicaid contracts, and began cutting these members’ necessary home and community-based services without any significant changes to their health needs, giving them neither notice nor an opportunity to appeal,” the lawsuit states.

The 54-page complaint lays out in detail the impact of the funding cuts and service reductions on each of the six plaintiffs, who now face a choice between reduced services and leaving their homes and moving back to group homes or institutions.

“After Iowa’s Medicaid system was privatized on April 1, 2016, the defendants and their agents engaged in a pattern and practice of reducing the costs they paid for [Medicaid] services without regard to the needs and preferences of . . . recipients whose needs had not changed,” the complaint states. “As a result of the reductions and denials, the plaintiffs and other similarly situated have or will have their individual budgets and services reduced or changed, regardless of their individual needs as identified in assessments, interdisciplinary team meetings and service plans and the fact their conditions and needs have not changed.”

The plaintiffs claim that state officials failed to provide notice to many of them when terminating, reducing or denying services, which they argue violates their due process rights under the Federal Medicaid Act and the U.S. and Iowa Constitutions.

“Defendants’ policy of denying, terminating, and reducing [Medicaid benefits] to plaintiffs threatens plaintiffs’ full integration into the community and their ability to remain in their homes,” the suit alleges.

The plaintiffs ask the court to issue a declaratory judgment that the defendants’ actions are in violation of federal and state law. They also seek preliminary and permanent injunctions to prevent Iowa from reducing Medicaid services to the plaintiffs and class members and to reinstate services that have been reduced.

They are represented by Des Moines attorney Roxanne Conlin; Jane Hudson, a Des Moines attorney with Disability Rights Iowa; and Elizabeth Edwards, a North Carolina attorney from the National Health Law Program.

The Iowa Department of Human Services does not comment on pending litigation.

Brenna Smith, spokesperson for the governor’s office, said in a statement, “We have received a copy of the lawsuit and are reviewing it. We cannot comment on pending litigation, however we have always been committed to ensuring the most vulnerable Iowans get the right care, at the right time and in the right time.”

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