“Poor, disabled, and otherwise disadvantaged Tennesseans should not require luck, perseverance, or zealous lawyering to receive healthcare benefits they are entitled to under the law.” – Waverly D. Crenshaw, Jr., United States District Judge.
So begins the scathing Federal Court opinion in A.M.C., et al., v. Smith, finding the Tennessee Medicaid program (known as “TennCare”) violated the Medicaid Act, the Due Process Clause of the Fourteenth Amendment, and the Americans with Disabilities Act.[1] The decision, issued on August 26, 2024, is the culmination of a lengthy class action brought on behalf of over 100,000 individuals whose benefits were terminated by TennCare and over 100,000 qualified individuals with a disability.[2]
The purpose of the Medicaid program is to provide health coverage to qualified low-income adults, children, pregnant women, elderly adults, and people with disabilities.[3] In its Memorandum Opinion, the Court concluded that “certain TennCare policies and practices work against this mission.” A.M.C., et al., v. Smith, (M.D. Tenn. Aug. 26, 2024). Programming errors and design defects in TennCare’s computerized Eligibility Determination System (known as “TEDS”) improperly screened out thousands of individuals since its implementation on March 19, 2019. Id. Further, the termination of benefits notices issued by TEDS were misleading and deficient which deprived enrollees of their right to a fair hearing. Id.
In addition to errors with the computerized system, the Court also cited TennCare’s unwritten policy of refusing to grant good cause exceptions or good cause hearings to enrollees who alleged that they had not received written notice that their benefits were being terminated. Id. Thus, a beneficiary who missed the deadline to appeal a termination of benefits because they didn’t actually receive a written notice of the termination would not be given any opportunity to explain the reason why the appeal was late. TennCare’s failure to give the beneficiary an opportunity to argue “good cause” for an untimely appeal, the Court found, conflicts with the agency’s own written policy, which allows for good cause and also violates the Due Process Clause. Id.
As of June 2024, over 72 million Americans were enrolled in Medicaid.[4] TennCare serves approximately 1.7 million Tennesseans. Id. Given the enormity of the programs and the practical challenges of certifying and recertifying individuals for benefits, many states have turned toward increasingly automated systems: call centers, document processing centers, online portals, auto-generated notices, and computerized eligibility screening. Some of these systems, like TEDS, can also make decisions about whether an individual qualifies for benefits without the need for a caseworker, which the Court noted can dramatically speed up the renewal process. Id.
But the system, in whatever form, may not undermine the fundamental purpose of the Medicaid program – to provide benefits to the needy and qualified individuals – and may not, the Court stressed, take priority over the rights of the beneficiaries as guaranteed by federal law. Id.
The Court has not yet ruled on what relief will be granted but noted that class members have “more likely than not faced both financial hardships and adverse health outcomes on account TennCare’s unlawful actions.” Id.
Author: Erin Sailor, Senior Partner at Stotler Hayes Group, LLC
[1] A.M.C., et al., v. STEPHEN SMITH, 3:20-cv-00240 (M.D. Tenn. Aug. 26, 2024). Memorandum Opinion available at: https://casetext.com/case/amc-v-smith-3.
[2] A.M.C., et al., v. STEPHEN SMITH, 3:20-cv-00240 (M.D. Tenn. Aug. 9, 2022). Opinion available at: https://casetext.com/case/amc-v-smith.
[3] See www.medicaid.gov/medicaid/index.html (last visited October 21, 2024).
[4] See June 2024 Medicaid and CHIP Enrollment Data Highlights, available at: https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html
