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.
Tennessee Health, which provides health insurance to about 1.5 million Tennesseans, failed to properly evaluate the eligibility of thousands of families, knowingly concealed information needed to reinstate their enrollment and “did nothing for months to correct a system-wide error that resulted in the wrongful termination of employees’ disability benefits,” U.S. District Judge Waverly D. Crenshaw wrote in the ruling.
Thirty-five children and adults who were terminated from TennCare filed a class action lawsuit in 2020, alleging that a flawed TennCare eligibility determination process led to roughly 250,000 children losing coverage due to paperwork issues.
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.
After the first lawsuits were filed in 2020, they were put on hold as federal law forced states to maintain health insurance for nearly all their subscribers during the coronavirus pandemic. Meanwhile, the number of plaintiffs continued to grow, including a rural Middle Tennessee family that lost coverage for three years after failing to respond to important paperwork they never received. TennesseeCare I accidentally mailed it to a horse farm. Due to a clerical error, the case was set to go to trial in November 2023.
TennCare’s eligibility determination system has been criticized for years for its unreliability. In 2019, Tennessee Survey They found that at least 220,000 Tennessee children are either not covered by TennCare or are at risk of having their coverage cut off because of a system that relies heavily on paper forms sent by mail.
Tennessee state officials have tried to improve the system but their response has been largely “lackluster,” the opinion said.
TennesseeCare Director Steven Smith, who was appointed by Gov. Bill Lee in March 2020, said the eligibility errors were the result of the computer system “receiving inaccurate data, worker error, or other system deficiencies,” the ruling said. But the court found that TennesseeCare was ultimately responsible for errors made by both its system and employees. TennesseeCare could have added questions to the survey to give enrollees a chance to submit information that the system “had difficulty recognizing,” the ruling said.
While TennCare has a system for granting “reasonable accommodations,” the court found that it “needs review” and that staffing and organizational shortages “will almost certainly result in enrollees with disabilities being left behind.”
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.
“This is a major victory for the plaintiffs and all TennesseeCare subscribers who lost critical health coverage due to TennesseeCare’s unlawful policies and practices,” Johnson said in a news release Monday. “I am proud to side with these brave families who filed suit to protect the health coverage of thousands of our neighbors across our state, and we will continue to fight as this case moves forward.”
The state can also appeal the court’s decision.
Tennessee Ruling
