Two men with developmental disabilities and their guardians are suing the state over a recent money-changing change to Idaho's Medicaid program, saying the state is violating their right to freely choose providers, the Associated Press reports. The two are seeking class-action status on behalf of all residents of Medicaid-covered certified family homes in Idaho. Idaho decided this year to contract with just one agency, rather than dozens, to oversee the state's 1,800 certified family homes; the move is expected to save the state $800,000, though it also means far fewer inspections of the homes and other changes. Click below for a full report from AP reporter Rebecca Boone.

Medicaid recipients sue Idaho in federal court
By REBECCA BOONE, Associated Press

BOISE, Idaho (AP) — Two men with developmental disabilities and their guardians are suing the state over changes to Medicaid's residential habilitation program, saying Idaho is violating their right to freely choose providers.

Russell and Sandra Knapp, on behalf of their son, Jason Knapp, and Jana Shultz, on behalf of Toby Shultz, filed the lawsuit in Idaho's U.S. District Court earlier this week. They're asking for class-action status on behalf of all residents of Medicaid-covered certified family homes in Idaho.

The Knapps and Shultz both provide certified family homes for those under their care under a Medicaid program that aims to provide a family-style living environment for people who need assistance with daily living activities. There are more than 1,800 certified family homes in Idaho, according to the Department of Health and Welfare, and they all must operate under the supervision of a residential habilitation agency — a business that provides training, oversight and quality assurance for certified family homes.

Since certified family homes became a part of Idaho's Medicaid program in the mid-1990s, the people running the certified family home providers were able to pick from a few dozen residential habilitation agencies. But earlier this year, the Idaho Department of Health and Welfare decided to contract with just one agency in an effort to save money. Starting next month, Community Partnerships of Idaho will be the only residential habilitation program coordinator that certified family homes can use under the Medicaid program.

"These are, in the broad sense of the term, health care providers," said James Piotrowski, the attorney representing the Knapps and Shultzes. "Even if you're on Medicaid, you get to pick your own providers — that's what Congress has said. And the state is trying to deny that choice and force everyone to use the same agency out of Boise."

The Knapps and Shultzes are asking the federal judge to bar the state from requiring certified family homes to use Community Partnerships of Idaho.

Idaho Department of Health and Welfare spokeswoman Emily Simnitt said the department doesn't comment on pending or active lawsuits. But she said the Idaho Legislature has encouraged the department to do more "selective contracting," such as moving to a single residential habilitation agency, because it generally saves money.

The department expects the contract with Community Partnerships of Idaho will save about $800,000.

Having one contractor allowed the department to more clearly define the services it expects from a residential habilitation agency, she said, and it will help avoid any duplication of services.

Piotrowski said some of the cost savings will likely come because services are being reduced. For instance, he said residential habilitation agencies normally have in-person visits to certified family homes every month — or at least every three months — to check for any signs of abuse or other problems. He said the state's new contract with Community Partnerships of Idaho only requires an annual visit.

Copyright 2011 The Associated Press.