Disabled Iowans upset about privatized Medicaid seek to sustain lawsuit against DHS leader

Tony Leys
The Des Moines Register

The departure of a controversial Medicaid management company from Iowa strengthens disabled residents’ legal claims against a top state official and should not lead to their federal lawsuit’s dismissal, their lawyers contend.

The advocacy group Disability Rights Iowa is suing Iowa’s Department of Human Services director on behalf of six disabled Iowans who say the state’s 2016 shift to private management of its Medicaid system has led to illegal cuts to services. State lawyers earlier this month asked a federal judge to dismiss the lawsuit because all six plaintiffs have their care overseen by AmeriHealth Caritas, a national company that is dropping out of the Iowa program. The state lawyers contend the plaintiffs haven’t shown they would be harmed by having their care overseen by one of the other two managed-care companies helping run the program.

Neal Siegel and his girlfriend, Beth Wargo sit at their kitchen table on Thursday, June 8, 2017, at their home in West Des Moines. A bike accident a few years ago left Siegel with a brain injury.

Disability Rights Iowa lawyers filed a response this week. They have focused their lawsuit on Department of Human Services Director Jerry Foxhoven, not the managed-care companies, because they say it is the state’s responsibility to ensure Medicaid members are provided services they need to stay out of nursing homes or other institutions.

“There is no evidence that (Foxhoven) or any of the remaining managed care companies intends to come into compliance with constitutional or statutory due process or to restore (the plaintiffs’) services or budgets,” the plaintiffs’ response says. “… In other words, their injuries continue despite AmeriHealth Caritas ending its contract with defendant.”

The plaintiffs’ lawyers also contend the state took another step to illegally limit Medicaid members’ rights when it recently signed amended contracts with the managed care companies Amerigroup and UnitedHealthcare. The contracts now say Medicaid members can’t appeal the companies' decisions to deny them “exceptions to policy,” under which many disabled Iowans in the past received services or care beyond what is spelled out in state law. “Neither the state nor the managed care organizations have the authority to remove or alter beneficiaries' constitutional rights,” the lawyers wrote.

U.S. District Judge Rebecca Goodgame Ebinger is considering whether to let the lawsuit go forward and whether to grant the plaintiffs’ request to declare the case a “class action,” representing more than 15,000 Medicaid members. The plaintiffs are not seeking a financial award, but want the judge to order state officials to change the way Medicaid is handling the situation.