During COVID-19, the Centers for Medicare and Medicaid Services (“CMS”) prohibited most state Medicaid agencies from disenrolling individuals who received Medicaid. However, the rules installed to protect Medicaid recipients during the pandemic are currently scheduled to end in October, 2022, and, as pointed out in an NPR special, many families are expected to face hardship. See “They lost Medicaid when paperwork was sent to a pasture, signaling the mess to come.”

This article tells the story of the Lester family who relied on Medicaid for health coverage. When Mrs. Lester was rushed to the hospital, nine months pregant, the family discovered they had no insurance. The reason? TennCare lost their paperwork. The article states when the Lesters finally discovered the problem it was “Due to a clerical error, TennCare had mailed both to a horse pasture.”

The article states the Tennessee Justice Center filed a class-action lawsuit on behalf of 35 class representatives alleging TennCare befuddles its members “with vague and contradictory instructions; demanding information it already has or does not need; ignoring the information that members provide; improperly rejecting termination appeals; and, sometimes, sending essential paperwork to addresses that it “knows, or should know,” are wrong.” TJC filed a Motion for Preliminary Injunction and Memorandum of Law in Support. There, TJC alleged on behalf of its clients that TennCare failed to properly administer the TennCare program has deprived members of the proposed Plaintiff Class necessary health coverage to which they are entitled under federal law. This unjustified denial of medical benefits would warrant preliminary injunctive relief under normal circumstances, but the ongoing harms to Plaintiffs’ health and well-being are currently exacerbated by the accelerating spread of the novel coronavirus and resulting COVID-19 pandemic in Tennessee. Defendant has acknowledged this risk by taking advantage of increased Medicaid funding under the Families First Coronavirus Relief Act (“FFCRA”), which is conditioned on TennCare ceasing all further involuntary terminations of TennCare coverage for the duration of the national emergency and reinstating coverage for those terminated since March 18, 2020. The facts recited below, as stated by the Plaintiff’s, should tell you to get a lawyer if you’re arguing with Medicaid over coverage.

Factual Background as stated in the Motion (footnotes are omitted):

Defendant’s redetermination process erroneously terminates TennCare benefits for eligible individuals and fails to provide notice and an opportunity for a fair hearing allowing those individuals to appeal the wrongful termination of their health coverage. In response to a long history of public criticism and judicial scrutiny of Defendant’s Medicaid programs and administration Tennessee spent years developing the TennCare Eligibility Determination System (“TEDS”), a computer system to handle Medicaid eligibility determinations and notices. On March 19, 2019, TennCare launched TEDS statewide with assurances that it would accurately and reliably determine eligibility for thousands of low-income and disabled individuals and notify them of the results. TennCare’s actual operation over the past year, however, perpetuated existing flaws and manifested new ones, at the expense of health coverage for tens of thousands of vulnerable enrollees.

A. Defendant’s Redetermination Process Is Flawed

In general, to enroll in Medicaid, individuals must meet specific eligibility criteria in any one of more than 20 eligibility groups. They must meet “categorical eligibility” requirements by showing that they are aged, blind, disabled or pregnant, or that they are children or parents of dependent children. 42 U.S.C. § 1396a(a)(10)(A). They must also show that their income is below certain limits, which vary depending on the categorical eligibility group to which they belong. Id.; see also id. § 1396a(e)(14) (describing income eligibility based on modified adjusted gross income). A few categorical eligibility groups must meet additional limits on the amount of resources, or assets an individual may own. E.g., 42 U.S.C. § 1396a(a)(10)(A)(ii)(XV), (XVI); id. § 1396a(r).

Federal regulations require states to redetermine enrollees’ Medicaid eligibility every 12 months, 42 C.F.R. § 435.916, and states must do so without requiring information from an individual if the state possesses or can access reliable information in its own or federal records. Id. §§ 435.916(a)(2), (b), 435.948; Crippen v. Kheder, 741 F.2d 102, 106–07 (6th Cir. 1984).

TEDS was purportedly created to comply with these and other federal Medicaid requirements. Indeed, the State’s contract with Deloitte Consulting, LLP (“Deloitte”), which developed and now operates TEDS, provides for the automated system to, among other things, verify eligibility data with Federal and State data sources, determine eligibility automatically based on available data and without worker intervention when possible, generate and mail standardized notices and letters, and receive, store, and process eligibility documents and requests for appeals.

Defendant’s redetermination process, however, is plagued with systemic errors. TennCare does not use information that the State already possesses to redetermine eligibility. Instead, Defendant routinely concludes that individuals are ineligible for Medicaid when state and federal records indicate otherwise. For instance, Children and adults who are approved by the Social Security Administration (“SSA”) to receive cash assistance through the Supplemental Security Income (“SSI”) program are automatically enrolled in Medicaid. Id. § 1396a(a)(10)(A)(i)(II)(aa); 42 C.F.R. § 435.120. Defendant has access to federal databases identifying current and former recipients of SSI. Once SSA makes an eligibility determination, Defendant is simply required to maintain Medicaid coverage as long as the individual is receiving SSI benefits. The State must also cover certain individuals who formerly received SSI, and who remain eligible for TennCare as if still receiving SSI, including: Disabled Adult Children (“DAC”), 42 U.S.C. § 1383c(c), Tenn. Comp. R. & Regs. §§ 1200-13-20-.02(26), 1200-12-20-.08(2); individuals eligible under the federal Pickle Amendment, Unemployment Compensation Amendments of 1976, Pub. L. 94-566, § 503, 90 Stat. 2667 (1976); and widows/widowers who are disabled and between the ages of 50 and 65, Tenn. Comp. R. & Regs. § 1200-13-20-.08(4). TennCare has nonetheless erroneously terminated coverage for individuals eligible under these categories, including named Plaintiffs Vivian Barnes, Charles Fultz, Michael Hill, William Monroe, and Kerry Vaughn, who were without Medicaid coverage until earlier this week, when TennCare finally restored their coverage. Thousands of other similarly situated members of the proposed Plaintiff Class, who are not named plaintiffs and have not had such efforts made on their behalf, remain without Medicaid coverage for which they are eligible.

Moreover, TennCare does not request the necessary information from enrollees to evaluate eligibility under these disability-linked categories.  TennCare uses a standardized two-page questionnaire to assess an enrollee’s potential eligibility in all categories. The questionnaire consists of eight questions, each to be answered with a “yes” or “no.” If a member answers “no” to all questions, TennCare will determine that the member is ineligible for TennCare. None of the questions asks whether the member receives or has received SSI. The questionnaire does not seek information regarding whether a person could be eligible because they have been hospitalized or institutionalized for 30 days or more. Nor does it ask if the enrollee has physical or intellectual disabilities for which she is receiving home and community-based care, even though these are all ways that individuals with disabilities can establish categorical eligibility. See 42 U.S.C. §§ 1396a(a)(10)(A)(ii)(V), 1396b(f)(4)(C), 42 C.F.R. § 435.236).

B. Defendant’s Notices and Fair Hearing Processes Leave Enrollees Without Recourse to Challenge Their Wrongful Loss of Coverage

Medicaid regulations require a state to timely inform enrollees of eligibility decisions, describe the basis for each decision, and explain available appeal rights including an opportunity for a fair hearing that satisfies due process under federal Medicaid law and the Constitution. 42 U.S.C. § 1396a(a)(3); 42 C.F.R. § 431.205; Hamby v. Neel, 368 F.3d 549, 559-60 (6th Cir. 2004). They further require that states’ written communications, including renewal forms, use plain language that is accessible to persons with disabilities. 42 C.F.R. §§ 435.905(b), 435.916(g). Moreover, the state must provide a fair hearing and render a decision within 90 days from an individual’s timely appeal. 42 C.F.R. § 431.244(f)(1)(i). If the appeal is resolved in favor of the appellant, the state must take prompt corrective action, retroactive to the date of the incorrect action. Id. § 431.246.

The TEDS enrollee portal and call center are both called TennCare Connect, and their communications with enrollees are highly scripted and standardized. The State’s contract with Deloitte prescribes in detail how the contractor is to fulfill those responsibilities and contains a catalogue of enrollee notice templates that are to be used, including the standardized notices that the named Plaintiffs all received.

The standardized notices TennCare relies on are confusing and inaccurate. They fail to explain the basis for TennCare’s decision or how enrollees can maintain their coverage, incorrectly state that all information has been used to determine eligibility for all categories of eligibility, and mislead enrollees regarding their appeal rights. On top of this, the notices are frequently riddled with errors and internal inconsistencies that make them incomprehensible. In particular, enrollees with certain disabilities find it especially difficult to understand and respond to Defendant’s forms
correctly and in a timely manner.

Furthermore, TennCare’s automatically generated notices are frequently misaddressed or never actually sent, resulting in individuals discovering that their coverage was involuntarily terminated without their knowledge or being informed that they have the right to appeal. If enrollees do receive notice and wish to appeal, TennCare further subjects all appeal requests to an initial screening requiring the enrollee to demonstrate that the appeal presents a “valid factual dispute.” Specifically, TennCare Rule 1200-13-19-.05(3) provides:

When the Agency receives an appeal from an appellant, the Agency will dismiss this appeal unless the appellant has established a valid factual dispute relating to the appeal. The Agency will screen all appeals submitted by appellants to determine if each appellant has presented a valid factual dispute. If the Agency determines that an appellant failed to present a valid factual dispute, the Agency will immediately provide the appellant with a notice informing him that he must provide additional information as identified in the notice. If the appellant does not provide this information within ten (10) days of the date of the notice, the appeal will be dismissed without the opportunity for a fair hearing. …If the appellant responds but fails to provide adequate information, the Agency will provide a notice to the appellant, informing him that the appeal is dismissed without the opportunity for a fair hearing.

The rule states that it is applicable to only certain types of TennCare eligibility appeals, but TennCare’s form notices prove that Defendant applies this requirement across the board: all termination notices advise enrollees that their right to appeal is subject to the state review process, and appeals are closed for failure to provide the required “valid factual dispute” justification.

C. Tennesseans Without Health Insurance, Particularly Those Eligible for TennCare, Face Grave Risks During the COVID-19 Pandemic

The coronavirus and related COVID-19 pandemic are a serious threat to the public health and welfare of Tennessee. According to Plaintiffs’ expert Dr. Brenda Butka, a retired pulmonologist, former Director of the Pulmonary Program at Vanderbilt Stallworth Rehabilitation Hospital, and former Assistant Professor of Medicine at Vanderbilt University, “COVID-19 is an acute respiratory disease” which can “progress[] to acute respiratory distress, and, in some cases, organ failure and death.” COVID-19 also manifests in serious respiratory illnesses, such as pneumonia. “There is no vaccine or cure for the disease” and “[n]o vaccine is expected to be available for at least 12 months.” COVID-19 is highly contagious and easily spread. Millions of Tennessee residents are expected to contract the virus, with “a mid-range projection” that half of the state’s population could become infected. While many cases are mild or asymptomatic and can be resolved without medical intervention, severe manifestations of COVID-19 can require intensive care, “includ[ing] advanced life support with ventilation for those who are most seriously compromised.” “[C]urrent estimates are that 10%” of Tennessee’s expected infected population, “approximately 350,000 [people], will require hospitalization” to treat their COVID-19 symptoms.

Individuals with underlying illnesses or comorbidities, as well as the elderly “whose immune systems have been weakened by age,” face particularly high risks if they develop COVID19. According to the CDC, 80% of reported deaths due to COVID-19 are among patients age 65 or older. The CDC also cautions that “[p]eople of all ages with underlying medical conditions are at higher risk for severe illness, particularly if the underlying medical conditions are not well controlled.” These conditions include chronic lung disease or asthma, diabetes, severe obesity, and individuals with compromised immune systems(such asthose undergoing cancer treatment).

The lack of TennCare coverage exacerbates the potential harm that eligible individuals already face. According to Dr. Butka, “[h]ealth insurance coverage or its absence has a significant impact on the availability and adequacy of medical care and, ultimately, health outcomes. As the Institute of Medicine summarized the research literature on the effects of being uninsured, individuals who lack coverage generally ‘live sicker and die sooner.’” In Dr. Butka’s opinion:

Individuals who lose or have lost Medicaid coverage are at heightened risk of harm… [and] are at especially elevated risk of serious consequences from COVID19 while they are uninsured. Uninsured former Medicaid enrollees with underlying medical conditions, including many of those whose conditions have been found to meet Social Security Administration disability criteria, are in particular danger from COVID-19, especially if they are not able to access the medications and treatments they need to manage their underlying medical conditions.

In addition, lack of TennCare coverage means that former enrollees who “become ill with COVID-19, especially those at higher risk, are less able to take their current prescribed medications exactly as directed, adhere to other treatment as directed or obtain the medical supplies needed to manage their symptoms” so they “do not worsen to the point where they need supportive care in a hospital.” “[L]ack of health coverage not only endangers uninsured patients themselves but puts additional stress on health care resources, potentially at the expense of caregivers and
other patients.

The Plaintiff Class is at risk. When Plaintiffs filed the Complaint, several named Plaintiffs remained without Medicaid coverage, despite their repeated efforts asking Defendant to restore their benefits. Only weeks after this action was filed did TennCare reinstate their coverage. The named Plaintiffs, though now covered themselves, are equally medically vulnerable as absent class members who remain uninsured and urgently need the protection of injunctive relief. For instance, A.M.C., D.R., and three of D.D.’s children suffer from asthma; according to the State, 15.1% of children enrolled in TennCare in 2014-2016 had asthma. In particular, A.M.C. was repeatedly hospitalized when unable to access her medications after losing her TennCare coverage. Plaintiff Vivian Barnes is elderly and suffers from multiple chronic conditions, including diabetes, hypertension, and heart disease, any one of which would place her at high risk from COVID-19. Plaintiff Charles Fultz is 74 years old, has advanced chronic obstructive pulmonary disease (COPD) and is reliant on costly medications, oxygen, and a ventilator. Defendant’s tactical decision to restore TennCare coverage for a handful of named Plaintiffs does not resolve problems for thousands of other ill, at-risk Tennesseans who are members of the proposed Plaintiff Class.

The federal government as well as state and local governments across the country have recognized that to save as many lives as possible, the spread of COVID-19 must be slowed. Both the State and the federal government have recognized the danger inherent in the lack of medical coverage to hamper the ability to control the pandemic. On March 18, 2020, Congress enacted and the President signed the Families First Coronavirus Response Act into law. Pursuant to that law, Defendant ceased involuntary terminations of TennCare coverage for the duration of the national emergency and reinstated coverage for those terminated since March 18, 2020. Defendant has also sought a waiver from the federal government to establish a special fund for healthcare providers fighting COVID-19, and said: “Tennessee’s proposed COVID-19 demonstration is intended to ensure that uninsured Tennesseans seek prompt treatment without fear of potential hospital bills or other medical debt, and to support the sustainability of Tennessee’s healthcare system overall so that it continues to be able to provide robust services to Medicaid patients throughout the pandemic and post-pandemic.” While the state has fortunately paused redeterminations going forward for TennCare enrollees who had coverage on March 18, 2020, Defendant’s actions have left many eligible Tennesseans without Medicaid benefits since March 19, 2019, and therefore continues to expose them to significant danger from the current pandemic.

Update: On August 9, 2022, the U.S. District Court for the Middle District of Tennessee certified the Plaintiff class of over 100,000 individuals. See A.M.C. v. Smith, (M.D. Tenn. 8/9/2022)

Resources:

• Partial list of documents filed in A.M.C. v. Smith (healthlaw.org)
• Medicaid Covid Waivers
• Covid 19 Toolkits and Checklists
• CMS Rescinds Three Covid 19 Waivers
• Treasury: Fingerprinting and Employment Eligibility Verification Delays Due to the COVID-19 Pandemic May Increase Taxpayer Data Exposure Risks
• GAO: COVID-19: Pandemic Lessons Highlight Need for Public Health Situational Awareness Network
• Medicaid Waiver Tracker: Approved and Pending Section 1115 Waivers by State
• State Waivers List (Medicaid.gov)
• GAO: COVID-19 Program Flexibilities and Considerations for Their Continuation