Daugherty v. Roob:
Contact:
- Janet Uhegbu-Patterson
- Severns Associates, P.C.
- Phone: 317-979-0186 or 317-887-5116
- Email: janet@pattersonresources.org
Nearly 10,000 disabled Hoosiers will have their Medicaid benefits restored after Indiana officials, faced with the threat of a preliminary injunction, reached an agreement with attorneys for the plaintiffs in a federal court lawsuit.
In the first five months of 2006, the Indiana Family & Social Services Administration (FSSA) has terminated nearly 10,000 aged, blind and disabled Medicaid recipients from their complex "Spend-down" program. The lawsuit, brought by six Medicaid beneficiaries, accuses Indiana of violating the constitutional rights of some of its most vulnerable citizens.
Affected beneficiaries in counties throughout the state are available for interviews.
Daniel Shue, a kidney dialysis patient and a plaintiff in the case who will now be reinstated as a Medicaid beneficiary, said of the settlement: "You wouldn't believe the weight that has been lifted from my shoulders."
Medicaid beneficiaries like Shue were terminated because their caseworkers believed that they would no longer meet their spend-down obligations. In many cases, caseworkers summarily terminated without inquiring into their department's own records. In other cases, caseworkers did not have access to the information that would have saved the beneficiary from termination. In none of the cases of the six named plaintiffs was a proper inquiry made into their medical expenses. Some with $5,000 per month in expenses were summarily terminated with the message "medical expenses do not exceed excess income."
Scott R. Severns, attorney for the six named plaintiffs, said: "We've reviewed cases from one end of the state to the other and found the same problems over and over again. It's as if the rule book had been thrown out and the rules of fair-play suspended."
"There is another class of victims here," Severns added, "Many FSSA caseworkers, facing agency-wide defections in anticipation of privatization, have seen their caseloads double and are clearly overwhelmed by new demands placed on them."
Severns filed the class action complaint for injunctive relief on June 2. On June 9, just prior to an emergency hearing before Federal District Court Judge John Tinder, the State agreed to stop terminating more Medicaid beneficiaries from the Medicaid Spend-down program. With a hearing on the plaintiffs' preliminary injunction request looming, this past week FSSA agreed to reinstate all beneficiaries who had been terminated since January 1. Further settlement negotiations are ongoing.
Janet Uhegbu-Patterson is available to arrange interviews with affected beneficiaries and attorney Scott R. Severns. The complaint and motion for preliminary injunction, including affidavits, are in the public record under Daugherty v. Roob, et. al, 1:06-cv-0878-JDT-WTL, US District Court for the Southern District of Indiana. In the Pacer system (http://pacer.uspci.uscourts.gov/) see Plaintiffs' documents 1, 12. Defendants' answer is document 21. Agreed entries are 22, 26.
Severns Associates, P.C. is a law firm focused on the needs of families confronting issues with health care
BACKGROUND ON DAUGHERTY V. ROOB AND "SPEND-DOWN"
The FSSA's complex Medicaid Spend-down program has been the subject of litigation before. A lawsuit in 2003 exposed a system that placed the impossible burden of endless paperwork, frequent visits to the FSSA offices, regular uncertainty about eligibility, and a bureaucratic labyrinth upon beneficiaries already struggling with debilitating physical and mental illnesses and the daily battles of old age and poverty.
Responding to that lawsuit, effective January 1, 2006, the FSSA automated much of their Medicaid Spend-down program. Though initially touted as an improvement, a series of malfunctions, caused in part by the State's failure to comply with a court ruling from the 2003 lawsuit, soon became evident. Beneficiaries began receiving vague or misleading termination notices that plaintiffs claimed had been outlawed in the prior case. Other beneficiaries learned of their termination from their providers, having received no notice at all from FSSA.
The plaintiffs are lung-transplant patients, victims of brain trauma, amputees, patients requiring frequent dialysis, and the blind. Besides being disabled, these Medicaid beneficiaries they propose to represent are also poor and often elderly. The state's treatment of many thousands of extremely vulnerable people--providing them with woefully insufficient information with which to mount a successful appeal of their termination--is a violation of the right to due process guaranteed by the 14th Amendment of the U.S. Constitution.
Brian McWhirt was one of six named plaintiffs in the class action complaint. He is a resident of Grant County. His medical conditions include renal failure, diabetes, below knee amputee, and amputations of toes. He is legally blind. He is on 9 prescription drugs and receives kidney dialysis three times a week, which costs nearly $20,000 a month before third-party insurance pays their portion on the bill. In May 2006 McWhirt received a notice terminating his Medicaid effective May 31, 2006. The notice, which he could not read, was typically vague, stating: "medical expenses are less than excess income." When he called his caseworker to learn how he could resolve the problem, he claims his caseworker failed to inform him that he could appeal and have his benefits continue in the interim. Once McWhirt had filed his appeal, his caseworker, who had never met him and did not know he was blind, did not reinstate his benefits until notice of the pending lawsuit against FSSA. McWhirt's is not an isolated case.
"The FSSA's appeal system is broken," said Severns, who is representing McWhirt and the other plaintiffs. "Some plaintiffs have waited for months to have their appeals heard. None of the beneficiaries were automatically reinstated when they filed their appeals as the notice of their termination promised. This has been black letter Constitutional Law since U.S. Supreme Court decisions in 1970."
As part of the June 9 agreement, defendants agreed to immediately reinstate benefits for anyone who had appealed in a timely fashion and to rely on the plaintiffs' counsel to identify those whose rights had been overlooked.
The Medicaid Spend-down program essentially works as a deductible, with beneficiaries required to pay for enough of their medical expenses to bring their income level down to the monthly "income standard" for Medicaid eligibility: $603 for individuals and $904 for couples. An individual with a $1603 monthly Social Security check a month, for instance, has a monthly spend-down amount of $1000--she must incur more than $1000 in medical bills before Medicaid will pay the balance of the patient's medical bills that month.
For a Medicaid beneficiary to "incur" a bill, that bill must travel from provider to Medicare, from Medicare to private insurance (if the beneficiary is lucky enough to have private insurance), from private insurance to Medicaid (where the spend-down amount will be applied), and from Medicaid back to the provider, who is responsible for sending a bill for the remaining amount to the beneficiary. Thus, only after a process that can take several months, is a bill deemed "incurred."
Terminations were not only poorly--or never--explained, they were also unfounded. Plaintiffs alleged that caseworkers were making termination decisions based on speculation about what bills would be incurred. These decisions are notoriously error-prone and effectively short-circuited the automated system that FSSA instituted following the 2003 lawsuit.
To complicate matters further, in some situations where the automated system had determined plaintiffs spend-down liability had been met, caseworkers had no access to the information.
Moreover, Severns said, "We found that many of the caseworkers were coping with extreme caseloads because of recent defections from the department."
Caseworkers have also struggled with the meaning of the new "Part D" Medicare program and how it effected the determination of "incurred" bills, leading to still more terminations. Plaintiff Mary Daugherty, 49, of Knox County, is a lung transplant patient who is required to take 16 prescription drugs, including immunosuppressants. She must travel frequently from Vincennes to Indianapolis for her treatment. Medicaid covers her transportation.
Having only received a half-day training on the complex new Part D program, Daugherty's caseworker, who erroneously presumed that Medicare Part D would now be paying for the expensive drugs that prevent Daugherty's body from rejecting the transplant, cut her off from Medicaid coverage. Daugherty first learned of the termination when she called for her Medicaid-covered ride to Indianapolis and was denied.
Plaintiff Daniel Walden has traumatic brain injury, a heart arrhythmia and pacemaker, COPD, hepatitis C, degenerative joint disease, anxiety, arthritis and DBT (blood clot in the left leg). He's been on Medicaid since 1999. He was terminated in April 2006. The cost of Walden's aid and attendant care alone easily meets his spend-down. Still, his notice of termination read: "medical expenses are less than excess income."
Walden appealed immediately but, contrary to the due process clause of the U.S. Constitution, his benefits were terminated while the appeal was pending. His providers began demanding payment from him and he had no means to comply.
After many phone calls to several people in the FSSA, Walden received a confounding notice, dated May 24, 2006. His Medicaid application, dated February 17, 1999, had been approved. His coverage, the notice continued, would be active from May 1, 2006 to June 30, 2006. There was no word on why his benefits would end in June or what he could do to preserve them.
Walden is required to take 23 prescription drugs every day and hepatitis shots every week. He has monthly lab work and doctor visits. Every day he has aid and attendant care services in his home. He is never far from a supply of oxygen.
In his affidavit he noted plainly that "Loss of Medicaid" might well "result in death."
Referring to earlier litigation against FSSA, Severns said: "In 2005, Hamilton County Superior Court Judge William Hughes issued a clear warning to the state: that what they were asking these caseworkers to do was far too complex. He was adamant that the State give beneficiaries full and complete disclosure regarding decisions that their caseworkers make about medical bills and Medicare coverage.
"We are pleased with the State's agreement to make this right," Severns said, "but inside this long-neglected agency, there are many more problems to be resolved."
Janet Uhegbu-Patterson is available to arrange interviews with affected beneficiaries and attorney Scott R. Severns. The complaint and motion for preliminary injunction, including affidavits, are in the public record under Daugherty v. Roob, et. al, 1:06-cv-0878-JDT-WTL, US District Court for the Southern District of Indiana. In the Pacer system (http://pacer.uspci.uscourts.gov/) see Plaintiffs' documents 1, 12. Defendants' answer is document 21. Agreed entries are 22, 26.
Severns Associates, P.C. is a law firm focused on the needs of families confronting issues with health care. We have a special emphasis on long term care issues--an emphasis that has come to be known as "elder law."