Federal judge rules TennCare must hold hearings following complaints

Sept. 03--A federal judge has ordered Tennessee's state Medicaid program to take responsibility for long-delayed applications, calling for the agency to hold hearings for people who have waited months to find out whether they will receive coverage.

The ruling against TennCare on Tuesday follows months of complaints from Tennesseans who say their TennCare applications have long gone unanswered.

The delays led first to a federal reprimand, then a lawsuit filed in July against the state by a coalition of civil rights groups on behalf of 11 people, including newborns and people with chronic health problems.

U.S. District Court Judge Todd J. Campbell ordered TennCare to hold hearings for people who have struggled for coverage and he granted the lawsuit class-action status, meaning that potentially hundreds of Tennesseans can join in.

The court's preliminary injunction takes immediate effect, although the state can file an appeal.

"This is a profound victory for all of Tennessee," said Sara Zampierin, a staff attorney with the Southern Poverty Law Center, which filed the lawsuit along with the Tennessee Justice Center and the National Health Law Program.

"The court's ruling today will require TennCare to do their job and ensure that the people who have been stuck waiting for a decision for months will be able to finally receive the health care they deserve," Zampierin said in a statement.

TennCare spokesman John Goetz said Tuesday evening that agency officials had received the ruling "and are reviewing our options," a line echoed by Gov. Bill Haslam's spokesman, David Smith.

State officials have blamed the delays on the federal government, since the state has been sending TennCare applicants the federally run health care insurance exchange, Healthcare.gov.

But Campbell wasn't persuaded by that argument. If a state decides to participate in the Medicaid program, he wrote in his ruling, it must ensure that applications are handled promptly.

"The Federal Exchange was not designed to replace the State's Medicaid application process, and it is not particularly surprising that the system has had operational problems and difficulties in handling that task," the judge added.

TennCare attorneys also had argued that a class-action lawsuit would create a backlog of undecided claims. But the judge wrote that "their fear has already been realized" in the form of the families joining the lawsuit.

"The relief granted by the Court is designed to eliminate the backlog, not create one," Campbell wrote.

Michele Johnson, executive director of the Tennessee Justice Center, said the organization was "jubilant that the vulnerable Tennesseans will now get the care upon which their lives and futures depend."

She said the group is looking forward to working with state officials to develop a process to deal with the delays.

The court ordered the state to provide hearings to any "class members" -- those whose initial applications were not answered within 45 days, or 90 days for people with disabilities.

Campbell used the same time frames for the hearings.

"The law requires Medicaid applications to be processed promptly because low-income individuals and people with disabilities often have a brutal need for health care that, without TennCare coverage, they will be unable to afford,"said Elizabeth Edwards, staff attorney at the National Health Law Program.

The judge said the hearings were necessary to stop what he said was clearly "irreparable harm" while the lawsuit continues to play out.

"The plaintiff class members are economically impoverished and, without TennCare benefits, have forgone or are forgoing vital medical treatments, services and prescriptions," Campbell said.

TennCare oversees a number of Medicaid programs for low-income mothers, their children, people with disabilities, and the elderly.

When requirements for determining eligibility changed under the Affordable Care Act in 2010, Tennessee began creating a new computer system to handle enrollment decisions, called the Tennessee Eligibility Determination System, or "TEDS."

But the system is nearly a year past its deadline and still not operating. TennCare Director Darin Gordon told state lawmakers last week he couldn't say when TEDS would be finished.

Instead, TennCare has told people to apply for TennCare through Healthcare.gov. The state removed workers who helped people apply for TennCare, instead directing people to computer kiosks to apply through. A state hot line designed to give more personal help directed callers to do the same.

State Rep. JoAnne Favors, D-Chattanoooga, said that she was sorry the problem had reached a point where it required a judge's intervention, "but there was no other option."

"I've spent a lot of time talking to people trying to enroll in regular Medicaid," Favors said. "So many people qualified, and were told to walk over to a kiosk. They couldn't even have a face-to-face encounter with a person."

Staff writer Andy Sher contributed to this report.

Contact staff writer Kate Harrison Belz at [email protected] or 423-757-6673.

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