As North Carolina’s legislators prepare to try once more to control the cost of Medicaid, the settlement of a longstanding lawsuit may provide some protection to people with developmental disabilities.
The settlement affects nearly 12,000 North Carolinians with mental retardation, autism, cerebral palsy and related disorders. They need help to live independently, and they get it through a Medicaid program known as the Innovations waiver. Thousands more are eligible, but there’s not enough money.
That aid can be costly: The class-action suit was filed in 2011 by five families of Union and Cabarrus County teens whose care ranged from about $43,600 to $64,000 a year.
And these are needs that don’t go away. For instance, one of the plaintiffs is described in court papers as a 208-pound 15-year-old with the mind of a 3-year-old, who needs help dressing, bathing and eating, as well as constant supervision to keep him from hurting himself.
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“His need for supervision and assistance is so intense that I cannot even go to the bathroom with the door closed or shower when I am alone in the house with (him),” his mother, a Cabarrus County single parent, said in a sworn statement. Names of minors and their parents were redacted from public files.
But the alternative, institutional care, is more expensive. That’s why the Innovations program pays to support people with developmental disabilities so they can live with their families, in small group homes or independently.
“People with disabilities need a lot of support, and they also have a lot to contribute,” said Betsy MacMichael of First in Families of North Carolina, a Durham-based disability advocacy group.
Aiming for efficiency
Still, the soaring cost of Medicaid for low-income and disabled people troubles many taxpayers and Republican legislative leaders, who convened their 2015 legislative session last week. From 2004 to 2013, the state’s share rose from $2 billion to $3.6 billion, and reform is high on this year’s agenda.
The federal lawsuit, which has been working through the courts for 3 1/2 years, arose from an effort to rein in the tab for Innovations clients. The five families were told their benefits were being slashed in 2011, even though the teens’ conditions hadn’t changed, because of a new system for rating needs and setting individual budgets.
Lawyers for three advocacy groups – Disability Rights North Carolina, Legal Services of Southern Piedmont and the National Health Law Program – sued the N.C. Department of Health and Human Services and Piedmont Behavioral Health, a Kannapolis-based managed care organization that has since changed its name to Cardinal Innovations Healthcare Solutions.
Cardinal, which now handles government spending for behavioral health in Mecklenburg and 15 other counties, pioneered North Carolina’s managed care approach to providing Medicaid services for the mentally ill and developmentally disabled. That approach, now used statewide, pays groups like Cardinal a fixed amount per participant.
By reducing costs, those managed care organizations are supposed to save the taxpayers money while improving services. Cardinal reports that it has used more than $9 million in savings to expand or add services, including respite care, employment support and services to help clients avoid institutionalization.
The settlement requires that none of the parties to the suit discuss the case. But Cardinal leaders have said previously that their goal is to tailor services to individual needs and improve communication with families.
“We are committed to the promotion of choice, independence and wellness for individuals with intellectual and other developmental disabilities,” a brochure on the Cardinal website says.
Cost isn’t everything
But the families say that wasn’t what happened in 2011, when the organization then known as PBH rolled out its cost-cutting system. And a federal judge agreed.
The new system, which the families say was poorly explained to them, set a budget based on a seven-point rating of needs. Parents and guardians involved in the suit were told their allotments would drop 24 percent to 60 percent. That meant far fewer hours of in-home help.
The plaintiffs said PBH staff discouraged them from challenging the cuts. One mother said in a sworn statement that a PBH employee told her “you have to sign (the new plan), you don’t have a choice.” The grandmother of an 18-year-old with multiple disabilities reported that the granddaughter’s case manager said the girl would lose all services if she didn’t sign the new plan.
In 2012, District Judge Louise Flanagan said the families and their lawyers had made their case and were likely to win. She granted a preliminary injunction restoring their services to the earlier levels.
“Where defendants complain of fiscal complications and insufficient funds to comply with relief plaintiffs seek, fiscal concerns cannot be held to outweigh harm to plaintiffs’ safety, health and well-being,” Flanagan wrote.
Ready to settle
Cardinal and the state disputed the families’ allegations. But rather than continue a long, costly court fight, they agreed to a settlement that was filed in December. A hearing in April will offer a chance for people affected by the statewide plan to raise objections.
The agreement allows Cardinal to keep using the evaluation tool that triggered the suit, but promises individual spending flexibility, a clear appeals process and protection from “discouragement, coercion or misinformation.” An individual’s budget rating won’t be used as a “binding limit,” and if additional requests are denied, Cardinal must explain the decision and options to appeal.
It applies to all of the managed care organizations handling the Innovations waiver program across the state. As of November, they had a total of 11,726 clients.
The settlement also calls for the state and Cardinal to pay $375,000 for the plaintiffs’ legal expenses and attorneys’ fees. After the case is resolved, the agreement calls for a joint statement. Beyond that, it says, “they shall not otherwise make any public statements.”
Listen to families
But other groups that support people with disabilities have been following the case.
It won’t bring dramatic change, they say. It doesn’t mean there will be enough money to provide Innovations services to everyone who needs them, and it doesn’t guarantee that those who already have the services will get what they request.
But it does guard against the institutional temptation to lock in arbitrary spending limits or gloss over the complexity of individual situations, they say.
“You need to listen to families. Their voice is very, very important,” said MacMichael, the First in Families executive director. “I hope this settlement will provide more opportunity for that.”
Families of people with disabilities have been fighting to get their needs met since long before this suit was filed, and are likely to keep facing new challenges, say representatives of such groups as the Davidson-based Exceptional Children’s Assistance Council and the Raleigh-based Autism Society of North Carolina.
Both state and federal governments have a tendency to change programs and revise rules. They’ll be watching Congress and the N.C. General Assembly as their 2015 sessions gear up.
“People with developmental disabilities typically have lifelong conditions,” said Jennifer Mahan, the Autism Society’s public policy director, “and they need lifelong support services.”