Judge Stays Prior Order |in D.C. Medicaid Case

WASHINGTON (CN) — The District of Columbia need not approve all Medicaid applications pending past a 45-day limit because it would be too costly to taxpayers, a federal judge ruled in a decades-old case.

Washington, D.C.'s handling of Medicaid cases — including those involving "much-needed benefits for children and low income adults" — has violated the Constitution and other statutes, according to the underlying 1993 federal lawsuit.

U.S. District Judge Gladys Kessler found in 1996 that D.C. had violated provisions of the federal Medicaid statute, which the District agreed to remedy in a 1999 settlement.

Years of appeals by the city led the plaintiffs — headed by Oscar Salazar — to ask for more than $1.2 million in attorneys' fees for work performed from 2010 through 2012.

Kessler made a series of specific reductions in 2014, typically 20 or 35 percent, but sliced the co-counsel fees down to 50 percent of what was requested.

In 2015, the plaintiffs moved to enjoin D.C. from its methods of altering its Medicaid program to comply with the Affordable Care Act (ACA) of 2010, President Barack Obama's signature healthcare law.

Kessler granted the plaintiffs' motion to permanently modify the settlement on April 4 of this year, finding that the issues "have affected thousands of Medicaid beneficiaries and have deprived many District residents of necessary medical care to which they are entitled."

The judge thus ordered D.C. to provisionally approve all Medicaid applications pending over 45 days — the amount required by law to make a final determination.

But, on Tuesday, Kessler granted the District's motion to stay her April 4 order.

"The District has in fact raised serious issues about the difficulties that would flow from extensive and unintended effects of the court's order," Kessler wrote. "In the District's view, the court's order of April 4, 2016, will cause great confusion among Medicaid beneficiaries and will divert much needed resources from the District's ongoing efforts to comply with the Affordable Care Act."

The judge noted D.C. Medicaid Director and Department of Health Care Finance Senior Deputy Claudia Schlosberg's claim that the court's order would require reprogramming of multiple systems and development of new beneficiary notices, among other vast changes.

"There is no question that the resources which will be necessary to implement the changes required by the April 4, 2016 order must be diverted from other critical ACA projects on which employees have been and are now working," Kessler wrote.

The judge later added, "Clearly, it is not in anyone's interest for the District to fail to continue the ACA compliance tasks."

"Finally, if the District's appeal is successful, it will then have to go through a lengthy and expensive process to reverse what was required by the April 4, 2016 order," the ruling states.

The public interest in granting the stay is "very substantial," according to the ruling.

"The District estimates that it will cost approximately $20,261,624 in local dollars, plus $79,423,169 in federal dollars to comply with the April 4, 2016, order," Kessler wrote. "Those figures do not include the effect of the 90-day grace period. Even if the District's appeal is successful, it will still be unable to recover those costs from plaintiffs, providers, or beneficiaries. In other words, the burden of replacing those funds will be on the shoulders of the D.C. taxpayers. Obviously, that result would not be in the public interest."

One of the plaintiffs' attorneys, Kathleen Millian with D.C.-based Terris, Pravlik & Millian, said, "We are disappointed that there will be no immediate relief for D.C. Medicaid applicants who wait over 45 days for a decision on their applications and for those D.C. Medicaid recipients who lose Medicaid coverage at renewal time without adequate and timely notice."

"However, we are hopeful that the relief will be reinstated after the District of Columbia's appeal," Millian added.

D.C. Attorney General's Office spokesman Robert Marus declined to comment on the decision at this time, other than noting that the District is reviewing the judge's ruling.

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