Court Won't Stop Medicaid Reduction in Coverage for Personal Care Services

A federal district court in Washington state denied a motion for a temporary restraining order by Medicaid beneficiaries and others challenging the state's reduction in coverage for personal care services.

 To read a complete article about this case, subscribe to Washington Report. The following is background information on the status quo.

Stimulus Act Allows States  to Reduce Services, Not Eligibility

Currently, states are limited in the extent to which they may reduce Medicaid spending due to the additional federal assistance currently being provided to them. 

The American Recovery and Reinvestment Act of 2009 (ARRA, otherwise known as the Stimulus Act) increased the federal Medicaid reimbursement rate by at least 6.2 percentage points for all states.  In order to receive the enhancement, however, states were subject to a maintenance of effort (MOE) requirement. 

Specifically, states were prohibited from making their eligibility standards, methodologies, or procedures more restrictive than they were as of July 1, 2008.  ARRA’s enhanced federal Medicaid assistance and the MOE were set to expire on December 31, 2010, but they both were extended through June 30, 2011 by the Education, Jobs and Medicaid Assistance Act enacted in August 2010. 

However, states will continue to be prohibited from making more restrictive their eligibility standards, methodologies, and procedures beyond June 30, 2011 by virtue of a separate MOE requirement contained in the Affordable Care Act (ACA), a requirement that is essentially effective until 2014 and is not tied to a similar enhancement in the states’ federal reimbursement rate.

Generally, however, the MOE prohibits states from eliminating, or making it harder to attain, eligibility for Medicaid.  Reducing or eliminating the scope of services available to individuals who attain eligibility has generally been permitted.  Thus, many states have reduced or eliminated coverage for services, with several of them specifically targeting PCA services.  In addition to Washington, other states include California, Minnesota, North Carolina, and the District of Columbia.  NSCLC is co-counsel in the challenge made to the cuts in California.  (See V.L. v. Wagner, 669 F.Supp.2d 1106 (N.D.Ca. 2009).