April 2018
Northern District Federal Court Orders Presumptive Eligibility for Medicaid Applicants for Long Term Care Services 
A recent ruling by Judge Gotschall in the United States District Court for the Northern District of Illinois, Eastern Division made it abundantly clear that the state has 90 days to bring its procedures for processing Medicaid applications for Long Term Care benefits in line with federal regulations. 

On March 30, 2018 the Court issued a significant Memorandum Order and Opinion in Koss v. Norwood, involving the issue of delayed Illinois Medicaid eligibility determinations and failure to provide prompt payment of Medicaid benefits. While the plaintiffs were dealt some setbacks, they were granted class certification with regard to certain Medicaid applicants whose applications have been pending in excess of the time frame set out in 42 CFR 435.912. They were also successful in their pursuit of a preliminary injunction, with the Court requiring the Illinois Department of Human Services (“DHS”) and Illinois Department of Healthcare and Family Services (“HFS”) to make such determinations, implement policies and processes to comply with the federal timeliness requirements, and deem class members presumptively eligible for Medicaid benefits.

The Koss plaintiffs have brought claims for injunctive and declaratory relief against DHS and HFS due to delays in processing and administering their applications to be determined eligible for Long Term Care (“LTC”) Medicaid benefits. The plaintiffs’ claims largely survived a Motion to Dismiss brought by DHS and HFS. Additionally, the named plaintiffs were successful in certifying a broad class of affected Medicaid applicants and requiring DHS and HFS to presume LTC applicants eligible for benefits after the deadlines for decisions included in the federal regulations.

The plaintiffs sought to certify two classes: a “Medicaid Pending Class” and an “Admit Pending Class.” While the “Admit Pending Class” was denied certification, the “Medicaid Pending Class,” consisting of all individuals who applied to receive LTC Medicaid on or after February 1, 2015 and have not received final eligibility determinations or notice of their opportunity for a hearing within 45 days of the date of application in a non-disability application or 90 days in a disability application, was certified. In doing so, the court noted that there is a backlog of thousands of Illinois LTC Medicaid applicants who have not received determinations for more than 45 or 90 days, highlighting a significant and frustrating problem that patients and providers have been familiar with for some time.

The Court considered the plaintiffs’ likelihood of success in determining whether to grant the request for preliminary injunction and cast a favorable light on the future of this case, with regard to prompt decisions on applications. In no uncertain terms, the Court indicated that the State of Illinois is likely violating federal law and that Illinois’ budget woes do not outweigh the public interest in ensuring that Medicaid eligible individuals promptly receive necessary medical services.

Specifically, the preliminary injunction requires DHS and HFS to:
  1. Determine, on or before June 28, 2018, the eligibility of class members for LTC Medicaid benefits for which they have applied.
  2. Implement policies and processes to ensure that DHS and HFS prospectively comply with the Medicaid Act’s deadlines for eligibility found in 42 U.S.C. § 1396a(a)(8) and 42 C.F.R. 435.912.
  3. Beginning June 28, 2018, pay LTC and other Medicaid benefits for the benefit of class members while their applications remain pending beyond the Medicaid Act’s deadlines for eligibility determination.

For more information on the decision, please contact one of the authors of this e-alert or your Polsinelli attorney.