North Carolina Department of Medical Assistance Illegally Cut Medicaid Payments to Home Care Providers, Lawsuit Alleges

Home-care providers in North Carolina last week filed a lawsuit against the state Division of Medical Assistance, alleging the agency did not follow state law when it announced a 5% rate cut for the providers, the AP/Winston-Salem Journal reports. To trim Medicaid spending, the agency on May 30 and June 10 announced payment cuts for nursing, personal care and home-based services through the Community Alternatives Program, which provides care for disabled adults, those with mental retardation and people with HIV/AIDS. In its lawsuit, the Association for Home and Hospice Care of North Carolina alleges the DMA did not negotiate the rate change with providers, as is required by state Medicaid law. The lawsuit seeks to prevent the cuts from taking effect. If the cuts are made, the association said services for 37,000 Medicaid beneficiaries would be affected. "The impact of DMA's arbitrary and unilateral decisions to reduce reimbursements for these home- and community-based services will be devastating to home-care agencies and the Medicaid population they serve," the lawsuit states. Although DMA Director Nina Yeager did not comment specifically on the lawsuit, she said the cuts were necessary because the agency was in a "dire budget situation." She added, "We're doing the best we can to avoid possible cuts on our beneficiaries" (AP/Winston-Salem Journal, 6/21).