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From Health Law Daily, September 8, 2017

Untimely Medicaid claims lead to preliminary injunction

By Sheryl Allenson, J.D.

After determining that 42 U.S.C. § 1396(a)(8) creates enforceable rights that may be pursued through Section 1983 actions, a federal district court in Illinois granted a preliminary injunction, ruling that the director of the Illinois Department of Healthcare and Family Services (HFS) had to determine the eligibility of certain beneficiaries for Medicaid long-term care, where their applications were pending over the time statutorily mandated (Doctors Nursing and Rehabilitation Center, LLC v. Norwood, September 1, 2017, Bucklo, E.).

Prior ruling. Earlier this summer, the court denied the director’s motion to dismiss (see Providers and patients seeking injunction against HFS director overcome dismissal motion, June 9, 2017). Now certain of the nursing home owners and their patients moved for preliminary injunction, seeking to direct the director to process applications for Medicaid long-term care and to provide benefits promptly as set out in federal regulations.

Timely claims. Under 42 C.F.R. Sec. 435.912, eligibility for Medicaid and long-term care based on disability must be determined within 90 days of an application to the date the agency notifies the applicant of its decision. All Medicaid claims must be paid within 12 months of receipt, under 42 C.F.R. Sec. 447.45(d). In considering whether claims were unpaid, considering the reasonable promptness requirements, the court considered the date of services provided as the operative date for tolling the 12-month window, so long as that plaintiff had an application for long-term service already approved or pending for more than 90 days at the time of service.

After reviewing the evidence provided, the court determined that the plaintiffs provided sufficient evidence to demonstrate they likely would have succeeded on the merits of their Section 1983 claim for some plaintiffs, noting there was evidence that the defendant violated the reasonable promptness requirements set out in Section 1396(a)(8).

In one instance, the court noted that a patient waited 17 months for a Medicaid determination, dismissing the defendant’s argument that it was entitled to an extension of the eligibility determination because the case was pending with the HHS Office of Inspector General (OIG). The court also relied on other examples where eligibility was untimely. In its evaluation of the likelihood of success, the court emphasized that the timeliness requirement is considered from the date of the application through the date the applicant is notified of eligibility decision. Where there was no evidence that certain patients were ever notified of the eligibility determination, there was a possibility they would prevail on their Section 1983 claims.

Unpaid claims. Similarly, the court decided there was likelihood of success on other Section 1983 claims; those relating to the failure of the defendant to pay long-term care benefits. The court found there were several patients with unpaid claims over the 12 months provided for by regulation.

Eleventh Amendment. The court rejected the defendant’s argument that the Eleventh Amendment precluded these claims against the state, relying on the Ex Parte Young exception which states that the Eleventh Amendment does not preclude prospective injunctive relief directing compliance with federal law. The court found that the plaintiffs’ claims were "sufficiently forward-looking" to get past the Eleventh Amendment argument.

Harm. Considering the other factors, the court found that the certain of the plaintiffs demonstrated irreparable harm because they showed without the injunctive relief they would be denied necessary medical treatment. There was the possibility certain patient plaintiffs faced the threat of discharge and therefore termination of the care they required. Here the resultant damages would not make them whole. The plaintiffs also successfully demonstrated equity was in their favor, and there was a public interest in ensuring that Medicaid eligible individuals promptly receive necessary medical services.

Injunction. The court granted the preliminary injunction in part, and ordered the defendant to determine eligibility for certain of the plaintiff patients whose applications for Medicaid or long term care were pending in excess of 90 days and to notify those parties no later than October 16, 2017. The court also ordered the defendant to bring HFS claims processing procedures into compliance with Medicaid laws and regulations. The court ordered the defendant to prospectively process claims for certain plaintiffs for payment of services within 12 months of having notice of the claim, either from the date received or for services predating December 1, 2016, from service.

The case is Nos. 1:16-cv-9837; 1:16-cv-9842; 1:16-cv-9922; 1:16-cv-10255; 1:16-cv-10614; 1:17-cv-104; 1:17-cv-640; 1:17-cv-1750.

Attorneys: Katie Z. Van Lake (SB2 Consultants) for Doctors Nursing and Rehabilitation Center, LLC and Evergreen Nursing & Rehabilitation Center, LLC. Brian Franklin Kolp, Office of the Illinois Attorney General, for Felicia F. Norwood.

Companies: Doctors Nursing And Rehabilitation Center, LLC; Evergreen Nursing & Rehabilitation Center, LLC

MainStory: TopStory CaseDecisions IPPSNews CMSNews CoPNews MedicaidNews EligibilityNews MedicaidPaymentNews ProviderNews SNFNews IllinoisNews

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