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Federal Court Orders Health & Human Services (HHS) to Stop Applying Trump Administration Rule that Cut Hundreds of Thousands Off Medicaid Benefits, Certifies National Class

February 6, 2023

A federal judge in the U.S. District Court for the District of Connecticut has issued a nationwide preliminary injunction in a pending case against the U.S. Department of Health and Human Services (HHS), ordering HHS to stop enforcing an illegal Trump-era Interim Final Rule (IFR) that continues to strip vital Medicaid benefits away from hundreds of thousands of older adults and people with disabilities. See 2023 WL 1280172. The rule, put in place in November 2020, required states to reduce their Medicaid rolls in violation of the Families First Coronavirus Response Act (FFCRA) passed by Congress in March 2020.

In his ruling in Carr v. Becerra yesterday, Judge Michael P. Shea first certified a nationwide class (individuals on both Medicaid and Medicare cut off of Medicaid since March 2020) so that the five named plaintiffs in three states (Connecticut, Delaware and Nebraska) can formally represent the class in the case.

He further ordered HHS to refrain from enforcing the IFR with respect to all members of the certified class, and ordered HHS to reinstate its previous guidance prohibiting states from terminating or reducing Medicaid coverage during the Public Health Emergency and to notify all states of this reinstatement by February 7, 2023. The injunction is in effect through March 31, 2023, when the current protections from termination of Medicaid under the FFCRA come to an end as a result of changes brought by the Consolidated Appropriations Act signed on December 29, 2022.

Judge Shea found a “clear or substantial likelihood of success” by plaintiffs on their claim that the rule violated the Administrative Procedure Act (APA), in that HHS failed to provide advance notice and comment before issuing its new rule. And he found that an immediate nationwide injunction was needed because the application of the IFR was causing “irreparable harm” to the members of the class, all of whom are 65 or over or meet the strict SSA definition of disability, and who have a broad variety of health care needs that have gone unmet since they lost their benefits.

This decision follows the November 7, 2022 preliminary injunction issued by another federal judge, Omar A. Williams, in the same case, granting the same relief to the five named plaintiffs (available at 2022 WL 16744351). That ruling found that the application of the IFR caused irreparable harm to the named plaintiffs, with some dependent on Medicaid going without cancer diagnoses or essential home care services because of the terminations. One plaintiff went without home health assistance, and “she often was unable to get out of bed, to the point where she ate unheated, canned food that she kept near her bed, and that she fell on more than one occasion.”

As a practical matter, this means that all states, which “must comply with federal [Medicaid] regulations” to continue to receive substantial federal Medicaid reimbursement (slip op. at 3, 22), will be advised that all class members cut off of Medicaid benefits at any time since March 18, 2020 must have their benefits reinstated promptly. That is what happened after the court granted the same relief to the named plaintiffs: “[A]fter Judge Williams’ ruling [named plaintiffs] were reinstated to their previous coverage by the states of Connecticut, Nebraska and Delaware.” (slip op. at 23).

It also means that these individuals will stay on their Medicaid benefits while their status is redetermined. This is the normal course to be taken by state Medicaid agencies that will be reviewing all individuals who have been kept on due to the PHE, a process called the “unwinding,” that in most states will take about a year and will start on April 1, 2023. This assures two things. First, most class members nationwide will be reinstated and kept on Medicaid for at least a few more months. Second, as with all persons kept on Medicaid because of the FFCRA, they will first be checked for any possible alternative Medicaid eligibility before their current coverage can terminated. As a result, many will then be found to still be eligible and thus not be terminated at all.

Paige Dailey, a resident of Tennessee, said “my daughter Amber has severe disabilities and medical problems, including traumatic brain injury. My husband has advanced cancer, and when he started receiving Social Security Disability, TN tried to cut off her Medicaid, despite the ongoing public health emergency. The state said that the rule from the federal agency said it was okay to do that. We were devastated, because Amber faced the loss of services that enable us to care for her at home instead of an institution. I am glad to hear that a court has finally decided that what the federal government did in telling states to cut people like my daughter off of Medicaid during the emergency was wrong, and that people like my daughter will get essential services back.” Vanessa Zapata, attorney with the non-profit Tennessee Justice Center, said: “There are many others in TN who were illegally cut off, and they also will benefit from this nationwide court injunction.”

One of the attorneys for the plaintiffs, Harvey L. Reiter, a partner with the Washington DC office of Stinson LLP, said: “By stripping Medicaid enrollees of benefits they were receiving when the Coronavirus Response Act was passed, the agency’s rule was in direct conflict with federal law, and threatened the health of hundreds of thousands of persons nationwide. This injunction puts a stop to an unlawful rule and provides essential relief to those harmed by the agency’s actions.”

Another of the plaintiffs’ attorneys, Carol Wong, Associate Litigation Director, Justice in Aging, explained: “Any loss of Medicaid benefits disproportionately impacts low-income older and disabled adults of color, who are already most at risk of institutionalization and illness due to structural inequities.”

Miriam Heard, Senior Attorney at the National Health Law Program, noted: “Congress enacted a statute that is clear on its face—as worded, the Coronavirus Response Act does not intend for low-income people to be stripped of Medicaid benefits during the COVID pandemic. Of course, that makes sense, given the harsh realities of this public health emergency.”

Sheldon Toubman, Litigation Attorney with Disability Rights CT, said: “Now that the court has spoken, we hope that the Biden Administration, in addition to complying with the court’s nationwide injunction, will also make sure that all the states promptly reinstate everyone cut off under the invalidated Trump Administration rule.”

Plaintiffs are represented by Disability Rights Connecticut, Justice in Aging, the National Health Law Program (NHeLP), and the law firm Stinson LLP.

Media Contacts:
Disability Rights Connecticut: Bernard Kavaler
Justice in Aging: Vanessa Barrington
National Health Law Program: Andrew DiAntonio

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