Medicaid Recipients Sue State for Loss of Home Care Services

Prior to August 2011, Medicaid home care services were obtained through local offices. In 2011, New York State began the process of shifting $6 billion in Medicaid spending on long-term care services (including home health care, personal care, and private duty nursing) to private managed care companies - Medicaid Managed Care Organizations (MCOs). MCOs are health insurance companies that contract with states to provide services in exchange for payment at a "capitated" rate instead of "fee for service". In other words, the State Medicaid program pays the MCO a specified rate per person rather than an hourly rate. The MCO is paid the same amount for an individual receiving 24 hour daily care as for someone receiving care four hours a day. Advocates for the elderly and those with disabilities have maintained that, as a result, companies have been cherry picking only the most lucrative enrollees.

Disabled and chronically ill home care recipients in New York are suing the state in federal court, charging that due to the state's shift to Medicaid managed care, their services are being denied or reduced without notice, appeal rights, or even an explanation. The suit, filed by the New York Legal Assistance Group (NYLAG) in United States District Court for the Southern District of New York, names three plaintiffs who "are representative of thousands of New Yorkers who struggle with severe health conditions and depend on Medicaid-funded care, but are now having their services reduced or discontinued without adequate notice or the opportunity for a fair hearing, as required by law," according to NYLAG.

The lead plaintiff, Janie Taylor, is an 84-year-old woman who lives alone in Manhattan and who suffers from numerous medical conditions, including impaired mobility, and who had been receiving home care services 10 hours a day, seven days a week. In March of 2013, Ms. Taylor was mandatorily enrolled in a VNS Choice plan. The plan initially maintained her home care, but on July 1, 2014, VNS Choice cut her services in half without notice, to 5 hours a day. The reduction was erroneously characterized as a "new authorization" and she was not advised of her right to an appeal or to request a hearing. She contacted lawyers, who requested a fair hearing, but her hours have not been restored, pending the outcome.

State contracts require that the MCOs furnish services in "an amount, duration and scope" that are no less than the same services furnished to beneficiaries under fee for service Medicaid. There are also many other requirements pursuant to federal law and regulation. Ms. Taylor's hours were reduced, she did not receive proper notice of the decrease, and her internal appeal was denied.

Hopefully, the outcome of the lawsuit will be a favorable one for home care recipients in similar situations.

Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that exclusively concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Stacey Meshnick, Esq. is a senior staff attorney at the firm who has chaired the firm's Medicaid department for over 15 years. The law firm can be reached at 718-261-1700, 516-466-4422, or toll free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also the co-founder of JR Wealth Advisors, LLC. The wealth management firm can be reached at 516-466-3300 or 800-353-3775.