U.S. asks for new judge in Medicaid work-rule suit

The lawsuit over a work requirement for Arkansas’ Medicaid program shouldn’t be decided by the same judge who stopped a similar requirement from taking effect in Kentucky, attorneys for President Donald Trump’s administration contend.

In a filing on Tuesday, the attorneys asked U.S. District Judge James Boasberg, who decided the Kentucky case, to reject his assignment as the judge over the Arkansas case. They want the case randomly assigned to a judge per usual procedure.

The Arkansas case’s assignment by a clerk on Aug. 14, the same day the case was filed, came in response to a filing by the plaintiffs’ attorneys that their case is related to the Kentucky case.

In the filing, the plaintiffs’ attorneys said the case is related to the one in Kentucky because it involves “common issues of fact” and “grows out of the same event or transaction.”

U.S. Department of Justice attorneys argue that both cases involve only disputes over the law, not over the facts, and stem from “two separate approvals of two distinct projects in two different States.”

Quoting a ruling in another case, they said two cases can’t be considered related just because they involve the same legal arguments, “presumably because this would create a sweeping exception to the ‘general rule requiring random assignment of cases.’”

That rule, they said, is designed in part to prevent “judge-shopping.”

Kevin De Liban, an attorney with Jonesboro-based Legal Aid of Arkansas, said Wednesday that the plaintiffs’ attorneys “will be responding shortly” to the Justice Department’s arguments.

Boasberg, he said, “is already familiar with [the U.S. Health and Human Services

Department’s] positions about the reasoning, or really lack of reasoning, for approval of the Kentucky waiver [allowing a work requirement], and HHS’ positions have been essentially identical with respect to Arkansas.”

Both cases were filed in Washington, D.C., by the National Health Law Program and the Southern Poverty Law Center. Legal Aid of Arkansas is also helping with the Arkansas case.

In the Kentucky case, Boasberg on June 29 found that Health and Human Services Secretary Alex Azar violated the law governing Medicaid when he failed to consider how a work requirement would affect the health coverage of the state’s residents.

The plaintiffs in the Arkansas case contend that Azar also violated the Medicaid law in approving Arkansas’ requirement, which took effect in June.

Under the federal court’s rules, if Boasberg decides the Arkansas case is unrelated to the one in Kentucky, he could transfer the Arkansas case to a panel of judges known as the Calendar and Case Assignment Committee.

If the committee agreed the cases are unrelated, it could then randomly select another judge to decide the Arkansas case. If it found the cases are related, it could send the Arkansas case back to Boasberg.

Arkansas’ work requirement is being phased in this year for enrollees ages 30-49 and next year for those ages 19-29.

To stay in compliance, enrollees must spend at least 80 hours a month on work or other approved activities, such as volunteering or attending classes, unless they qualify for an exemption. Enrollees who fail to meet the requirement for three months during a year will lose their coverage for the rest of the year.

Of the more than 25,000 people who became subject to the requirement when it started in June, 5,426 did not comply in June or July.

As of Aug. 15, 5,162 of those enrollees had not met the requirement for this month. Their coverage will be deactivated Saturday unless they visit a state website to claim an exemption or report their work hours.

If they report their hours or an exemption by Sept. 5, they can have their coverage restored. Otherwise, they will lose their coverage for the rest of the year.

State officials estimated in March that the requirement will apply to about 167,000 enrollees when it is fully implemented next year. More than 265,000 people were enrolled in Arkansas Works as of Aug. 1.

The program covers Arkansans who became eligible for assistance when the state Medicaid program was expanded in 2014.

The expansion extended eligibility to adults with incomes of up to 138 percent of the poverty level. Currently that income cutoff is $16,753 for an individual or $34,638 for a family of four. Most enrollees receive the coverage through private insurance plans, with the Medicaid program paying the premiums.

In a letter in January announcing the approval of Kentucky’s work requirement, Demetrios Kouzoukas, principal deputy administrator of the federal Centers for Medicare and Medicaid Services, said it is “designed to encourage beneficiaries to obtain employment and/or undertake other community engagement activities that research has shown to be correlated with improved health and wellness.”

Less than three months later, agency Administrator Seema Verma gave the same reasoning in a letter announcing the approval of Arkansas’ requirement.

Kentucky officials estimated that the work requirement and other changes requested 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 estimate in their waiver request. According to records obtained under the Arkansas Freedom of Information Act, an internal estimate of potential budget savings examined one scenario in which 20 percent of enrollees subject to the work requirement would lose coverage and another in which 50 percent would lose coverage.

In rescinding the approval of Kentucky’s requirement, Boasberg, who was appointed by President Barack Obama in 2011, noted that promoting improved health is different from providing coverage, which he said is a central aim of the Medicaid program.

Federal law governing Medicaid allows officials to grant waivers such as the ones approved for Kentucky and Arkansas only when they are likely to promote the Medicaid program’s objectives, he wrote.

Otherwise, he wrote, Azar could allow states to condition Medicaid coverage “on consuming more broccoli (at least on an experimental basis).”

“Or, as Plaintiffs suggest, he might force all recipients to enroll in pilates classes or take certain nutritional supplements,” the judge wrote.

Quoting from a ruling in another case, he continued, “Either of those conditions could promote ‘health’ or ‘well-being’ (perhaps in a more straightforward way than ‘community engagement’ would), but both are far afield from the basic purpose of Medicaid: ‘reimbursing certain costs of medical treatment for needy persons.’”

In response to the ruling, the Centers for Medicare and Medicaid Services solicited a new round of public comments on the waiver. According to news reports, federal officials hope to satisfy the judge’s concerns by showing they considered the requirement’s effect on coverage.

“The state remains optimistic for CMS re-approval of Kentucky HEALTH,” Doug Hogan, a spokesman for Kentucky’s Cabinet for Health and Family Services, was quoted as saying in a report Tuesday in the Louisville Courier Journal. “It’s imperative that Kentucky HEALTH be re-approved in order to create better health, wellness, education and employment outcomes for our recipients and create sustainability for the Medicaid program.”