A U.S. district court judge has ruled that the Kentucky Medicaid program's efforts to tighten its medical eligibility criteria for long-term care violated the Medicaid statute's mandate that states employ reasonable standards for determining eligibility 42 U.S.C. §1396a(a)(17). The judge ordered the state to reinstate more than 3,500 people who were denied nursing home or home health care services in the cost-cutting move. Kerr v. Holsinger (E.D. Ky., No. Civ. Act. 03-68-JMH, March 25, 2004).
U.S. District Judge for the Eastern District of Kentucky Joseph Hood granted a motion for preliminary injunction against the rules, writing: "Kentucky has inappropriately chosen to use cost-savings as the sole touchstone in its determination, focusing on how much money it wants to save rather than upon the medical needs of Medicaid recipients or the Medicaid statutory requirements."
In the first six months after the more rigid eligibility rules were put in place in 2003, the number of individuals terminated from or denied eligibility for Medicaid long-term care services shot up more than 600 percent. In some cases, individuals who had resided in nursing homes for close to five years were being informed by the state that they did not need nursing facility care, according to the National Senior Citizens Law Center, which with the Office of Kentucky Legal Services Programs filed a statewide class action suit against state officials in October 2003. The suit, on behalf of Kentucky residents whose Medicaid coverage for long-term care was terminated by the state, alleged violations of federal Medicaid eligibility standards as well as due process rights because of inadequate notice.
In its motion to dismiss, the state alleged that the plaintiffs did not have any rights in these provisions that could be enforced under 42 U.S.C. §1983.
Judge Hood ruled that the provisions in the Medicaid statute at issue had enforceable rights. Under Hood's ruling, the ten plaintiffs named in the suit must be reinstated within 15 days. In addition, Hood said thousands of Kentuckians similarly denied Medicaid benefits or terminated from the program since April have the right to take part in a class action, which would allow for their reinstatement within the next few weeks. Hood also agreed that the termination notices were insufficient.
On January 30, Kentucky Governor Ernie L. Fletcher signed an emergency regulation that softened the restrictive changes in eligibility criteria, ordering that low-income people could get nursing home or in-home care if they met two health-related criteria, instead of the three they had to meet under the previous rules.
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