Community Legal Services of Philadelphia (CLS), with co-counsel from the National Health Law Program (NHeLP), has filed a class action lawsuit in Philadelphia on behalf of almost 200,000 low-income Pennsylvanians who face severe cuts in health benefits in 2015 as a result of the Healthy Pennsylvania initiative.  The suit sought a preliminary injunction before cuts began on January 1, 2015.

UPDATE: On December 31, 2014, the United States District Court for the Eastern District of Pennsylvania denied the motion for a preliminary injunction. The Court declared that the Plaintiffs 1) did not meet the requirements for class certification, which is a preliminary requirement for a class-wide injunction, and 2) failed to prove their entitlement to a mandatory injunction.

The court found that the Plaintiffs have not demonstrated that their named representatives are typical of the class, citing Plaintiff Gregory McCowin who submitted a timely appeal of his assignment to the Healthy PA PCO plan and was automatically placed, pending his hearing, into the Healthy Plus program, which will cover the non-emergency transportation he needs given his medical situation. The court also borrowed the Defendants’ argument that there can be no typical class representative. Given the wide age range and disparate medical needs of the class, members would be affected in diverse ways by the benefits cuts.

While the court conceded that the DHS’s notices were inadequate, it declared that the Plaintiffs did not demonstrate that they will suffer irreparable harm without a preliminary injunction. Namely, the Plaintiffs did not show how many members of the class need transportation for their medical situations. The court also noted that emergency transportation is not covered under Healthy PA PCO “precisely because it is ‘non-emergency’ transportation.” Finally, the court said that the Plaintiffs failed to show that the balance of equities tips in their favor or that their motion is in the public interest. The court deemed that the potential costs of providing relief to Plaintiffs through state renegotiations with the federal government well outweigh the harm suffered by class members from the benefits cuts.

Kristen Dama, Staff Attorney of Community Legal Services commented, “The judge expressed concern that DHS’s notices were inadequate, but he could not issue a preliminary injunction for technical reasons at this early stage of the lawsuit. We respect the judge’s decision. But we are very disappointed that our very low-income clients with medical problems were hurt by DHS’s benefits cuts on January 1. We look forward to working to ensure that our clients’ constitutional rights are protected as the case moves forward.”  Update from Public Interest Center of Philadelphia.

The lawsuit alleges that the Pennsylvania Department of Human Services (DHS), formerly the Department of Public Welfare, is assigning 1.1 million adult Medical Assistance recipients to benefits packages that do not meet their needs using secret standards and without proper notice. 

There are three Healthy Pennsylvania benefits packages, all of which will include some benefits cuts.  Under DHS’s plans, current Medical Assistance recipients with serious health needs are supposed to receive the “Healthy Plus” benefits package, which features new cuts in medical supplies like adult diapers, but is otherwise similar to current benefits packages. Recipients that DHS designates as having less significant health needs are being assigned to either the “Healthy” or “Healthy PA PCO” benefits packages, which contain very significant, potentially health-altering cuts.

Individuals with temporary disabilities, survivors of domestic violence, and individuals in substance abuse treatment are being assigned to the Healthy PA PCO package, which eliminates dental coverage, access to the Medical Assistance Transportation Program, and some other services.  The federal Centers for Medicare & Medicaid Services (CMS) approved the Healthy PA PCO benefits package on December 17, 2014, so Medical Assistance recipients assigned to the Healthy PA PCO package face cuts on January 1, 2015.

Very low-income parents and young adults transitioning out of foster care are being assigned to the Healthy benefits package, which includes strict new annual benefits limits of four specialist doctor visits, six radiology tests, and $350 in laboratory services.  CMS has not approved the Healthy benefits package so DHS has indicated that it will keep Medical Assistance recipients assigned to the Healthy package in their current plans, or near equivalents, until it receives approval, so they may not face cuts until after January 1, 2015.

In November 2014, Medical Assistance recipients were assigned to one of the three benefits packages based on DHS’s secret analysis of their medical claims data.  The notices sent to recipients did not identify the reason that a person was assigned to a particular package or why they were not given the package with the most benefits.  Even more troubling, DHS has refused to make public its criteria for assignments to the benefit packages. 

Recipients whom DHS did not assign to Healthy Plus based on its unilateral review of their claims data were invited to complete an online screening questionnaire in November 2014.  But the notice inviting recipients to complete the health screening was extremely complex, written at the college sophomore reading level.  Remarkably, the notice did not say that their benefits would be cut, but rather stated that “[t]his initiative will ensure that Pennsylvanians have increased access to quality affordable healthcare.”  Of the roughly 200,000 pre-transition letters sent to those assigned to the Healthy or Healthy PA PCO packages, only about 2,600 completed the screening.  This is a rate of less than 1.4%, far lower than the 30% estimated by DHS for the far healthier population of new applicants who will qualify for Medicaid starting January 1, 2015.

The lawsuit alleges that DHS’s reliance on secret standards to assign Medical Assistance recipients to the Healthy and Healthy PA PCO benefits packages violates the due process clause of the Fourteenth Amendment.  The lawsuit also alleges that two rounds of notices that DHS sent to recipients – which first did not tell recipients that their benefits were being cut, and then did not provide recipients with factual or legal reasons for the cuts – violate both the due process clause and the federal Medicaid statute.

“The Constitution does not allow a government agency to make decisions about Pennsylvanians’ lives and health while keeping them in the dark about the bases for those decisions,” said Louise Hayes, Supervising Attorney at CLS.

“Pennsylvania is out of step with the rest of the country.  It is implementing strict benefits cuts using unlawful secret standards at a time when many states are expanding access to health coverage,” said Jane Perkins, Legal Director at NHeLP.

Plaintiff Aminata Diao has significant physical and mental health conditions, including depression, asthma, and lumbago.  She was assigned to the Healthy benefits package, and did not understand from DHS’s first notice that her benefits were being cut, and that she should complete a screening questionnaire.  DHS’s second notice provided her with less than the ten days required by state and federal law to appeal and keep benefits pending a hearing.

“In light of the errors caused by DHS’s labyrinthine and opaque processes, we hope that DHS will agree not to transfer these very vulnerable Pennsylvanians to the Healthy PA PCO on January 1, 2015,” added Kristen Dama, a Staff Attorney at Community Legal Services. 

The lawsuit does not affect up to 600,000 Pennsylvanians that become newly eligible for Medicaid on January 1, 2015 through the Healthy Pennsylvania Medicaid expansion.  Benefits for newly eligible individuals, as well as current recipients scheduled to be transferred to the Healthy PA PCO who face benefits cuts, will be 100% funded by the federal government through 2016.

Original story from CLS