Arizona judge OKs Medicaid freeze for childless adults

Nearly 135,000 residents are expected to lose coverage. The Arizona Center for Law in the Public Interest is appealing the decision.

By Alicia Gallegos — Posted Aug. 29, 2011

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An Arizona judge has allowed a Medicaid enrollment freeze for childless residents in the state to remain intact, ruling that the newly implemented exclusion is constitutional.

The measure, which took effect July 8, prevents adults without children from enrolling in an assistance program that was part of a previous Medicaid coverage expansion in the state. Childless adults who were enrolled in Medicaid before the July date will be grandfathered in, but future access will be denied if their enrollment is not renewed. State officials argue that the cuts are needed to deal with a significant budget crisis and will save the state about $500 million in the first year.

In his Aug. 10 opinion, Superior Court of Arizona Maricopa County Judge Mark H. Brain said the state has the authority to enforce the Medicaid cuts. The state is required by law to provide health care assistance to eligible recipients only to the best of its ability based on available funds, he said.

The Arizona Center for Law in the Public Interest, which sued the state on behalf of residents who could be excluded from coverage, has appealed the decision. "We were extremely disappointed," said Tim Hogan, ACLPI executive director.

Excluding childless residents violates the state's Constitution and infringes on the wishes of voters, who in 2000 approved the authorization for childless adults to receive Medicaid benefits, he said. Rescinding that approval will cause nearly 135,000 residents to lose health care coverage in the next year.

Gov. Jan Brewer said the court's decision is beneficial to the state.

"This ruling ensures that elected officials maintain their authority to make difficult financial decisions on behalf of the state of Arizona," she said in a statement. "I don't take lightly the Medicaid reforms we've implemented. The human impacts are real. But I, and members of the Legislature, were elected to make difficult decisions. In this case, our decision to freeze future Medicaid enrollment of adults without children spared devastating cuts to other critical state services, including K-12 education and public safety."

The appellate court will decide whether to review Hogan's appeal on Sept. 14.

Medicaid pay cuts stand in W.Va.

Meanwhile, a Medicaid rate dispute in West Virginia delivered a defeat for Appalachian Regional Healthcare, a nonprofit health system.

A circuit judge on July 27 threw out Appalachian's lawsuit against the West Virginia Dept. of Health & Human Resources. Appalachian sued the state in 2010 on behalf of one of its nine hospitals, Beckley ARH Hospital, alleging improper Medicaid pay rates.

Medicaid enrollees at Beckley account for 22% of hospital visits, but the state pays only 67% of the facility's costs for treating them, the hospital said. For inpatient acute care, the state pays 48% of costs.

The federal government has determined reasonable rates for Medicaid payments, but the state is not adhering to those rates, said Stephen Price, ARH's counsel. In a statement, Rocco Massey, community chief executive officer of the Beckley facility, said the hospital plans to appeal.

"Although we are disappointed with the judge's decision, we expected all along that the case would go eventually to the West Virginia Supreme Court, because this case involves major policy issues," he said. "We are very surprised that the judge found that it doesn't matter how low Medicaid rates are, and even if they cover only 48% of [the hospital's] costs, they would be considered reasonable and adequate under the law."

Another similar lawsuit filed by eight other West Virginia health care centers over Medicaid rates is ongoing. The medical centers filed the lawsuit in January, claiming that the state is not calculating Medicaid payments correctly. Poor payments are impacting patient care negatively, the suit said. The centers have asked a judge to order the state to start paying proper rates immediately.

An attorney for the plaintiffs, Ted Waters, said the judge had yet to rule on the injunction at this article's deadline, but the plaintiffs hoped for a decision soon.

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