A judge says Idaho can't switch to just one provider for some types of Medicaid services for the developmentally disabled until the Centers for Medicare and Medicaid Services decides whether the practice complies with federal law, the Associated Press reports. The decision from U.S. District Judge B. Lynn Winmill was handed down Thursday — just one day before the state's contract with Community Partnerships of Idaho was to go into effect. The ruling keeps dozens of other residential habilitation companies across Idaho in business, at least for now; click below for a full report from AP reporter Rebecca Boone.

Judge puts Idaho disabled care switch on hold
By REBECCA BOONE, Associated Press

BOISE, Idaho (AP) — A judge says Idaho can't switch to just one provider for some types of Medicaid services for the developmentally disabled until the Centers for Medicare and Medicaid Services decides whether the practice complies with federal law.

The decision from U.S. District Judge B. Lynn Winmill was handed down Thursday — just one day before the state's contract with Community Partnerships of Idaho was to go into effect. The ruling keeps dozens of other residential habilitation companies across Idaho in business, at least for now.

Some adults with developmental disabilities live in certified family homes under a Medicaid program that aims to provide a family-style living environment for people who need assistance with daily activities. Under the program, each certified family home must work with a residential habilitation agency, which provides training, oversight and quality assurance to the homes.

Earlier this year, under pressure from lawmakers to cut its budget, the Idaho Department of Health and Welfare decided to have just one residential habilitation company oversee all the Medicaid-covered certified family homes in the state. But legal guardians Russell and Sandra Knapp sued on behalf of their ward, Jason Knapp, and Jana Shultz sued on behalf of her ward, Toby Shultz, in Boise's U.S. District Court. The Shultz and Knapp families contended that the switch would violate their wards' right to freely choose their own health care providers.

Meanwhile, a group of residential habilitation agencies who were already suing the state over reimbursement rate cuts also asked the federal court to stall the proposed change until the federal regulatory agency, Centers for Medicare and Medicaid Services, reviewed the plan and decided if it complied with federal law. The companies contended the change was illegal because it amounted to a 100 percent rate cut for some providers, and because it would illegally reduce the services given to Medicaid clients.

In Thursday's ruling, Winmill wrote that the change should be put off at least until the Centers for Medicare and Medicaid Services can review the plan.

Under the new contract with Community Partnerships of Idaho, the state would pay $1,075 a year for new clients and $628 per year for existing clients already in certified family homes, Winmill noted. That's a dramatic cut compared to current rates, which pay $2,905 per year per client.

But the new contract also amounted to a cut in services, the judge found — only requiring Community Partnerships to make a face-to-face visit to certified family homes once a year. Most residential habilitation companies now working in Idaho say they visit homes monthly or at least once a quarter.

Besides, Winmill said, if the Centers for Medicare and Medicaid Services rejected the state's plan, Idaho will either have to find a way to undo its contract with Community Partnerships of Idaho — at a likely high cost to that company, the state and the companies that formerly provided the service — or the state would have to pay for the whole program without any federal matching funds. That would cost the state more than the $800,000 estimated savings it expects from switching to one provider.

Winmill rejected an argument from state attorneys that suggested the Centers for Medicare and Medicaid Services preferred to have contracts in effect before they are approved.

"It is ironic, if not plainly illogical, that the provision allowing for waiver ... is intended for 'cost-effectiveness' while the process for seeking and receiving the waiver results in such waste of resources," Winmill said.

The preliminary injunction lasts until the Centers for Medicare and Medicaid Services completes its review, it is unclear when that action might occur. If approval is granted, Winmill said his court would likely defer to Centers for Medicare and Medicaid Services' findings.

Copyright 2011 The Associated Press.