Politics & Government

Caregivers win $57 million award

Superior Court Judge Thomas McPhee, shown here in a May 12, 2000 file photo, presided over the three-week trial that awarded 22,000 home health care workers trying to recover their back pay.
Superior Court Judge Thomas McPhee, shown here in a May 12, 2000 file photo, presided over the three-week trial that awarded 22,000 home health care workers trying to recover their back pay. AP Photo, File

OLYMPIA - A Thurston County jury has awarded 22,000 home health care workers more than $57 million, finding that the state Department of Social and Health Services breached its contract with a 2003 action - the so-called "shared living rule" - that cut benefits to in-home care recipients by about 15 percent.

The “shared living rule” was repealed by DSHS in 2007 after a state Supreme Court ruling. Shared living is when the care provider lives in the home with the client.

The award came Monday at the end of a three-week trial before Superior Court Judge Thomas McPhee. The class-action lawsuit was filed in May 2007.

Tacoma attorney Darrell Cochran, who represented the workers trying to recover their back pay, said Monday that DSHS should have known that its shared living rule was subject to legal challenge in light of a Medicaid primer published by the federal government in 2000 stating that all Medicaid beneficiaries should be treated equitably regardless of who provided the care.

Assistant Attorney General Carrie Bashaw, a DSHS attorney in the case, disagreed, stating that the 2000 Medicaid primer directed that Medicaid funds should not be used to benefit “other members of the household” and should be used to benefit only the Medicaid client.

“The department believes it is not appropriate to ask taxpayers to pay for everyday tasks that providers perform for themselves such as housekeeping, meal preparation and shopping,” Bashaw said.

According to Cochran, DSHS in 2003 decided to cut 15 percent of the benefits given to in-home care recipients who use the funds to pay the providers. According to Cochran, DSHS argued that the cut was justified because in-home providers would perform some services, such as housework, cooking, laundry and shopping for medication, whether they got paid by DSHS or not.

Bashaw disagreed Monday that DSHS’ shared living rule was a budget reduction, and instead argued that it was an attempt to “maximize resources and provide in-home services to the most people possible.”

Attorneys with the Washington Attorney General’s Office argued at trial on behalf of DSHS that the class-action plaintiffs were entitled to zero damages. Cochran said he asked the jury for between $60 million and $89 million.

Janelle Guthrie, a spokeswoman with the Attorney General’s Office, said Monday that the office is exploring its options in light of the jury’s award.

In an e-mailed message, Guthrie added, “The department believes the contracts with the providers were legally sufficient and that no breach of those contracts occurred in this case because until today no court had ever ruled on such a claim.”

Cochran said Monday that the jury found DSHS broke its contract with health care providers by breaching its “implied duty of good faith and fair dealing.” Cochran added that DSHS “absolutely did know” that its shared-living rule was invalid under federal Medicaid law.

DSHS spokeswoman Kathy Spears declined to comment Monday. “Until the department has the opportunity to closely review the potential program outcomes of the jury verdict, we will refer to our attorneys at the AG’s office for comment,” Spears wrote in an e-mail.

Cochran said he is pleased with the jury’s verdict, which will help needy Medicaid beneficiaries and their care providers. He said the plaintiffs in his suit were home care providers for the disabled, including a woman who took care of her now-deceased disabled daughter, who needed to be fed formula via a tube and had to eliminate waste through an ileostomy bag.

“The jury showed a lot of courage in returning this award, particularly in light of the front page news stories they saw every day quoting the state budget crisis all throughout the trial,” Cochran said.

State government should be held accountable just like any private corporation, Cochran added. “If this was AT&T, and AT&T had snuck in an illegal charge on all of our phones that cost us $5,000 on all of our bills for over five years, we wouldn’t hesitate to hold them responsible,” he said.

In 2007, the state Supreme Court ruled that the DSHS’ shared living rule violated federal Medicaid comparability law, Cochran said. Cochran filed the class-action lawsuit after the state Supreme Court’s 2007 order. DSHS repealed the rule after the 2007 order.

When asked why the Attorney General’s Office litigated the case, Guthrie wrote in her e-mail, “We felt we owed it to the taxpayers and to the state to take this to trial and not to accept the $90 million sought by the providers.”

Cochran responded that DSHS should have heeded warnings from social service advocates that the shared living rule would not withstand a legal challenge.

“An ounce of prevention back in 2003 would have prevented the pound of cure they’re getting now,” Cochran said.

Jeremy Pawloski: 360-754-5465 jpawloski@theolympian.com