Filing: Approval of Medicaid work rules illegal

Arkansas Works alleges federal law violated as in Kentucky case

In allowing a work requirement for Arkansas’ Medicaid program, President Donald Trump’s administration violated federal law in the same way it did in approving a similar requirement in Kentucky, attorneys challenging Arkansas’ requirement contend.

The attorneys representing nine Arkansas Works enrollees made the argument in a court filing in Washington late Monday, asking U.S. District Judge James Boasberg to overturn the government’s approval of Arkansas’ requirement for the same reasons he blocked Kentucky’s from taking effect.

In both cases, the attorneys argue, the administration failed to consider the impact on the Medicaid program’s goal of providing medical assistance to low-income people.

Regarding Arkansas, they said U.S. Health and Human Services Secretary Alex Azar “ignored substantial evidence” that a work requirement would have the opposite effect — reducing the number of people enrolled — and didn’t attempt to predict how big the coverage losses would be.

“Tellingly, in just the first two months of the State terminating individuals for noncompliance with the work requirement, over 8,400 Arkansans have lost Medicaid coverage—a number that will grow as the roll-out of the Amendment continues,” the attorneys wrote.

The filing was submitted by the National Health Law Program and the Southern Poverty Law Center, which filed the lawsuit that led Boasberg to block Kentucky’s work requirement, and Jonesboro-based Legal Aid of Arkansas in their Aug. 14 lawsuit challenging Arkansas’ requirement.

The Social Security Act allows the Health and Human Services secretary to waive certain requirements in the law to allow a project that is likely to “assist in promoting the objectives” of the Medicaid program, which is funded by the federal government and states.

But in a June 29 ruling, Boasberg found that Azar failed to consider a central objective — providing medical assistance to needy residents — in approving Kentucky’s work requirement in January.

Kentucky officials had estimated that the work requirement and other provisions in the waiver Boasberg rejected would have reduced the state’s Medicaid enrollment by 95,000 people over five years.

Arkansas officials didn’t make a similar projection in their waiver request, but have estimated potential savings to the state budget.

For instance, in an internal estimate obtained under the state Freedom of Information Act, a Department of Human Services official projected that the work rule would reduce state and federal spending by $31 million this fiscal year, which ends June 30, if 20 percent of those subject to it left the program as a result of finding new jobs or being removed for noncompliance.

In Monday’s filing, the attorneys challenging Arkansas’ requirement noted that about a quarter of enrollees have failed to comply each month since the state started phasing in the rule in June.

The requirement “is harming thousands of people, including Plaintiffs, who have lost or are at risk of losing Medicaid coverage when they cannot find or maintain work or submit monthly reports as required,” the attorneys wrote.

In allowing the state to require enrollees to use a state website to report on their compliance with the work requirement, Azar also violated a provision in the 2010 Patient Protection and Affordable Care Act mandating that enrollees be allowed to submit information by mail or over the phone, the attorneys wrote.

That provision isn’t one that the Health and Human Services secretary is allowed to waive, the attorneys wrote.

The attorneys accused the administration of attempting to circumvent Congress, which failed to approve Republican-backed legislation last year that would have repealed the Affordable Care Act and added language to the Social Security Act allowing Medicaid work requirements.

“In sum, if the Secretary and Arkansas want to radically restructure the decades-old Medicaid program, then they must secure the consent of Congress,” the attorneys wrote. “It is not for them to achieve that end by administrative fiat.”

Arkansas is the only state in the more than 60-year history of Medicaid to implement a work requirement for some of its enrollees. Indiana, New Hampshire and Wisconsin have received approval to implement similar requirements next year.

Arkansas’ requirement applies to enrollees in Arkansas Works, which covers people who became eligible for Medicaid when the state extended eligibility in 2014 to adults with incomes of up to 138 percent of the poverty level.

Most of the program’s more than 252,000 enrollees receive the coverage through private plans, with the Medicaid program paying some or all of the premium.

The requirement to spend 80 hours a month on work or other approved activities was phased in this year for participants age 30-49 and will apply next year to those age 19-29. Enrollees who fail to comply for three months during a year are terminated from the program and barred from re-enrolling for the rest of the year.

Monday’s filing asks Boasberg to rule that Azar’s approval of the requirement in March violated the federal Administrative Procedure Act. A response from federal officials is due by Nov. 30.

“In sum, if the Secretary and Arkansas want to radically restructure the decadesold Medicaid program, then they must secure the consent of Congress.”

— From a filing by Arkansas Works attorneys