Disability rights advocates sue Montana over Medicaid cuts

July 31, 2018

HELENA, Mont. (AP) — Montana disability rights advocates sued the state health department Tuesday seeking to overturn cuts in Medicaid reimbursement rates that have led to a loss of services and put clients at increased risk of institutionalization.

“This lawsuit is the direct result of unlawful and unconstitutional decisions by the state that threaten significant and long-lasting harm to Montanans and their families,” said Beth Brenneman, attorney for Disability Rights Montana.

The 2017 Legislature authorized the health department to cut reimbursement rates for primary health care services for people covered by Medicaid in the case of funding shortfalls, but did not authorize cuts in community-based services for people with physical or developmental disabilities or serious mental illness, the lawsuit argues. The petitioners include mental health and disability services providers and independent living organizations.

The lawsuit, filed in District Court in Helena, also argues the Department of Public Health and Human Services failed to follow state rule-making requirements in authorizing the reductions that led providers to cut staff, reduce wages, close offices and discontinue services.

The Medicaid cuts also violate the integration mandate of the Americans with Disabilities Act because the cuts to community-based services put patients at increased risk of institutionalization, the lawsuit argues.

Last week, Gov. Steve Bullock said some cuts would be restored, but it is unclear when or how the rates will change.

The health department plans a listening session Wednesday in Helena to set priorities in restoring targeted case management services, such as those provided by the petitioners. Those decisions may not be made until September, the governor’s office has said.

“The department looks forward to working with Medicaid providers and the people they serve as the rates are restored,” Sheila Hogan, director of the state health department, said in a statement Tuesday.

In the meantime, the petitioners are asking a judge to issue a temporary restraining order against the continued cuts and to schedule a hearing on a preliminary injunction.

Because of the cuts, clients are losing their homes and their jobs and are seeking services through hospitals, nursing homes or state institutions, the organizations argue.

“It is well-established that community-based services for the physically disabled and severely mentally ill are less expensive than institutionalization or placement in less restrictive settings,” the lawsuit argues.

The Montana Health Care Association filed a similar lawsuit against the health department in June that also alleges the agency didn’t follow state rule-making processes in reducing Medicaid provider reimbursement rates for nursing homes and assisted-living facilities.

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