A federal judge ruled Monday that Tennessee's Medicaid safety net program illegally terminated insurance coverage for thousands of families in the state, in violation of the Constitution and federal Medicaid and disability protection laws.
According to the ruling, Tennessee Care, which provides health insurance to approximately 1.5 million Tennesseans, failed to properly evaluate the eligibility of thousands of families, knowingly concealed information the families needed to reinstate their coverage, and “did nothing for months to correct system-wide errors that resulted in the wrongful termination of people with disabilities.”
Thirty-five children and adults who were fired from Tennessee Care filed a class action lawsuit in 2020.
Tennessee's Medicaid program, TennesseeCare, is the state's primary provider of health insurance to rural residents, people with disabilities, children and seniors, according to the Tennessee Justice Center, a nonprofit group that is part of the plaintiffs' legal team.
“Poor, disabled, and other disadvantaged Tennesseans should not need luck, perseverance, or diligent legal work to obtain the health care benefits to which they are entitled under law,” the ruling states. Those who do not meet these “obvious prerequisites” and whose insurance has not been reinstated and retroactively applied “likely faced both financial hardship and declining health as a result of Tennessee Medicaid's unlawful conduct.”
Reached by email on Monday, Amy Lawrence, director of public affairs for TennesseeCare, said the company is “still reviewing the lengthy opinion letter and determining next steps” but declined to comment further on the pending legal matter.
The lawsuit was first filed in 2020 and then put on hold during the coronavirus pandemic, when federal law required states to maintain health insurance for nearly all their subscribers. Meanwhile, the number of plaintiffs continued to grow, including a rural Middle Tennessee family that lost their insurance for three years after failing to respond to important paperwork they never received. TennCare had mistakenly mailed the paperwork to a horse farm in a clerical error.
Tennessee's eligibility system has long been criticized for being unreliable: A 2019 state study found that a system that relied heavily on mailed paper forms left at least 220,000 Tennessee children uninsured or at risk of having their coverage cut off by the state.
The case was set to go to trial in November 2023.
The court has yet to rule on the plaintiffs' request for an injunction to reinstate coverage for those who lost it and bar further cuts until the Tennessee Health Care Authority establishes a redetermination process that complies with Medicaid law, the Due Process Clause and the Americans with Disabilities Act.
Before considering an injunction, the court requires the state and the parties representing the plaintiffs, which include the Tennessee Justice Center, the National Health Law Program, the National Center for Law and Economic Justice and the law firm Serendy Gay LLP, to “attempt two bona fide in-person mediation with an agreed-upon mediator.”
The plaintiffs and the state have 30 days to select a mediator, and then up to four months to come up with a plan to resolve the issues with Tennessee Cares, said Michelle Johnson, executive director of the Tennessee Justice Center.
The state can also appeal the court's decision.
Tennessee Ruling
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