Lawsuit Challenges HHS on Kentucky’s Medicaid Work Requirement

The proposed class action suit calls Medicaid ‘the cornerstone of the social safety net’ and alleges the executive branch overstepped its bounds.

Fifteen plaintiffs filed a lawsuit Wednesday challenging the Department of Health and Human Services over its approval of work requirements for those who, like the plaintiffs, are enrolled in Kentucky’s Medicaid program.

Kentucky Gov. Matt Bevin submitted a request to HHS in 2016 for a waiver from certain provisions of the Medicaid Act. His plan included a proposed work requirement, according to the complaint, which was filed in the U.S. District Court for the District of Columbia by attorneys with the National Health Law Program, the Kentucky Equal Justice Center, and the Southern Poverty Law Center.

Earlier this month, the Centers for Medicare and Medicaid Services announced it would begin approving waiver requests that would pave the way for work requirements. A memo to state Medicaid directors outlined guidelines on how states could pursue such waivers.

“The very next day—January 12, 2018—without seeking or permitting comments on the radical expansion of the Medicaid waiver authority, the Defendants granted the Kentucky HEALTH application, asserting that this grant and Kentucky’s imposition of work requirements are consistent with CMS’s newly-minted approach set out in its letter to State Medicaid Directors,” the suit states.

It argues the executive branch overstepped its bounds by effectively rewriting legislation passed by Congress.

The plaintiffs, who range in age from 20 to 62 years old, seek to have their complaint certified as a class action lawsuit so other similarly situated beneficiaries of Kentucky’s Medicaid program can join in challenging the work requirement and other waivers. They accuse the defendants of violating the Administrative Procedure Act eight times and the Take Care Clause once, and they asked the court to block HHS from implementing the policies outlined in the memo to state Medicaid directors.

The six defendants are HHS, CMS, HHS Acting Secretary Eric Hargan, CMS Administrator Seema Verma, CMS Principal Deputy Administrator Demetrios L. Kouzoukas, and Center for Medicaid and CHIP Services Director Brian Neale.

Verma said during an American Hospital Association webinar last week that CMS has received proposals from 11 states seeking waivers for work requirements.

"The purpose behind this is not about reducing the Medicaid rolls, but it's really centered around helping individuals gain self-sufficiency, helping them to rise out of poverty,” Verma said.

“This is about dignity for individuals," she added.

A spokesperson for CMS said the agency does not comment on pending litigation.

Press representatives from HHS did not immediately respond Wednesday to requests for comment.

This story has been updated to note that CMS declined to comment.