Pa. Medicaid overhaul catches legal fire yet again

Community Legal Services of Philadelphia (CLS) this week filed a lawsuit in Pennsylvania Commonwealth Court challenging the state’s overhaul of its Medicaid program.

The legal aid agency alleges the state violated its own legal process in making changes to Medicaid that resulted in harmful benefits cuts for tens of thousands of current enrollees.

While Medicaid in Pennsylvania has experienced some big changes this year, including expanding the number of people who are eligible, this lawsuit does not pertain to those who are newly eligible.

CLS says it took the action on behalfh of about 200,000 prior Medicaid enrollees whom the state has moved into one of two new benefits categories,  effective Jan. 1.

Complicating matters more, the state had already sought federal permission to do this, and got the OK for some parts of the overhaul. Other changes are still under review.

Pam Walz, an attorney with CLS, says even if federal officials approve funding for all of the benefit changes, the changes are both harmful and in violation of state law, as defined in the public welfare code.

“If the Department of Human Services wanted to reduce benefits, they were legally required to change their regulations by going through a rule-making process which is spelled out in state law,” she said, also referring to the Commonwealth Documents Law, the Regulatory Review Act and the Commonwealth Attorneys Act.

Walz says these state-defined processes include a chance for public comment and for public notification of changes, none of which happened. She says the details of the cuts, such as fewer doctors visits in some instances, were only made public a few weeks ago.

In an emailed statement, DHS disagreed with the allegations:

“Thousands of Pennsylvanians now have access to quality health care coverage through Healthy PA, a program that went through a significant public comment period with stakeholders and the general public and was approved by the federal government.  While we have a common mission of ensuring all Pennsylvanians have access to quality health care coverage, the department disagrees with the allegations made in the lawsuit and will be preparing a formal response.”

The lawsuit follows on the heels of a separate CLS legal challenge filed against the state last month. In that suit, CLS is challenging the state’s process for moving enrollees into those different benefits categories. The state has rebutted the claims. The lawsuit is pending.