Politics & Government

Lawsuits obstruct budget cuts

State lawmakers lopped millions of dollars from health care programs to balance their budget in April, but court orders are blocking a handful of cuts worth more than $3 million a month.

Gov. Chris Gregoire said recently that the court action is hampering her ability to trim spending, and she might add to cuts elsewhere if the state cannot lift the orders or loses the cases. The total value of the cuts to nursing home payments and other skilled nursing care for Medicaid patients is about $37 million to $38 million a year in state dollars.

Gregoire told reporters that for every day of delay, she needs to “cut twice” later. She called the lawsuits a “huge financial burden.’’

But advocates say more than money is at stake. They contend the cuts under challenge could harm people who need the state services, and the legality of some actions is in question. Judges in federal court are hearing the legal challenges and could rule as soon as Wednesday on one order.

The biggest of the disputed cuts is a reduction in payments to nursing homes valued at $19 million a year in state dollars ($46 million with federal cash added). The Washington Health Care Association and seven owners of nursing facilities sued to block the cuts, and U.S. District Court Judge Ronald Leighton in Tacoma has blocked that rate cut temporarily for 30 days.

“We’ve suffered for years with rates that didn’t cover costs. ... We’re at the tipping point here for long-term-care funding in general. These lawsuits are an example that you can’t do it any more,” said Gary Weeks, executive director for the Washington Health Care Association. “They may be a last-ditch effort but facilities that provide long term care ... can’t do it anymore’’ as rates fail to keep up with costs.

The average nursing home takes a loss of $18 to $20 a day on Medicaid patients, and the budget cuts would reduce the amount paid by about $11 to $12 a day, to $156.36 a day, Weeks said. He said that is $50 a day less than Oregon plans pay, and “it cannot help but have an impact in some facilities on the quality of care and the ability to have Medicaid beds available.”

But Thomas Shapley of the Department of Social and Health Services was skeptical that patients will be harmed.

“We don’t decide where the cuts are made by the nursing homes,” he said. “And we would hope that the nursing home management would manage those reductions in a manner that has the least impact on residents and services.”

A hearing is scheduled Friday in U.S. District Court in Tacoma before Judge Ronald Leighton. One key issue in the case is whether the state can order cuts without going through a review process with the federal Centers for Medicare and Medicaid Services.

A DSHS summary of the lawsuits says the agency recalculates its rates quarterly. Any restraining order on the rates would stay in effect for 30 days after CMS approves or disapproves the state’s proposed rate amendment, the summary says.

Weeks warned that eventually, some nursing facilities could refuse Medicaid patients – and one Snohomish facility that handles patients with traumatic brain injuries might have to shut down. If it closes, its patients could end up in hospitals, which are more expensive for Medicaid, he said.

The three other lawsuits are aimed at halting:

 • A $1.1 million-a-month cut in adult day health services that the state ombudsman for long-term care, Louise Ryan, is challenging. Ryan said a judge already has ruled that the state must provide skilled nursing and rehabilitative services to about 900 Medicaid clients who no longer will get that care through adult day health centers, which in some cases have closed since budget cuts took effect July 1.

 • A $59,000-a-month reduction in spending on personal care services for at least two children with developmental disabilities who are cared for at home. The parties are discussing a settlement, according to lawyers on both sides of the dispute.

A key in the case is a letter from the Centers for Medicare and Medicaid Services dated July 29 that suggests the state cannot reduce the services without an individual assessment of needs.

“Our interpretation of the letter is that the federal government is telling the state it cannot do across-the-board cuts to kids,’’ said Amy Crewdson, lead attorney on the case for Columbia Legal Services, which sued on behalf of the families. Crewdson said the bottom line is “the state must provide medically necessary services to children.”

The case could develop into a class action on behalf of about 3,000 children if a settlement is not reached.

 • A $420,000-a-month cut in home-care services provided to Medicaid patients who are cared for by family members employed by care agencies. Substitute House Bill 2361 barred home care agencies from assigning relatives to care for family members, meaning that relatives wanting to continue getting paid for care must instead do it as an individual provider, which is cheaper for the state.

A ruling is expected no later than Wednesday in the case.

Brad Shannon: 360-753-1688