ACLU Wins Appeal Challenging Indiana Medicaid Waiver Program

An appeals court has ruled against the Indiana Family and Social Services Administration in a case challenging changes the agency made regarding Medicaid waivers for people with disabilities.

The waivers allow those with disabilities to receive care outside of institutions and group homes, and, the ACLU argues, “to live in their communities even though their disabling conditions would otherwise require they be placed in an institution.” The waivers cover the costs of services such as home health aides.

But changes the state made to requirements needed to obtain certain waivers meant some beneficiaries received less money for such services.

The ACLU challenged the change, saying the move violates a segment of the Americans with Disabilities Act, the “integration mandate,” which requires states to offer services in the least restrictive manner possible. The plaintiffs say the loss of funds meant they lost independence and the ability to take part in community activities.

The state says the integration mandate doesn’t apply to the people seeking the waivers, only to people in institutions, a claim affirmed by a district court last year. This week, the Seventh Circuit Court of Appeals overturned that claim, saying there’s nothing in the law that indicates it doesn’t apply to people living outside group homes or hospitals.

ACLU lawyer Gavin Rose says the case sets a historical precedent:

“This is one of the first cases to recognize the mandate is actually more broad than that,” he says.

The decision doesn’t require the FSSA to make any immediate decisions, but Rose says that doesn’t mean change won’t happen.

“I would not be surprised if it forced the state to look very, very hard at the smaller waiver program and decide whether it really is giving person the type of services and the amount of services they are entitled to.”

An FSSA spokesman declined comment for the story, saying the department prefers not to comment on court proceedings.

The court doesn’t compel the state to any action, but does say the state can’t avoid the mandate by “painting itself into a corner and then lamenting the view.”