State: Lawsuit not needed to protect TennCare applicants

Friday, June 19, 2015, Vol. 39, No. 25

NASHVILLE (AP) — An attorney for the state of Tennessee told a federal appeals court Thursday that a court order is not needed to protect TennCare applicants because they are no longer being left in indefinite limbo.

The state wants the court to dismiss on technical grounds a lawsuit filed last July by applicants for TennCare, the state's version of Medicaid.

The argument goes like this: Last September a lower court granted the case class action status, meaning anyone in similar circumstances to the original 11 plaintiffs could be considered a plaintiff. But that didn't happen until after the state had already helped the original 11 plaintiffs get coverage with TennCare.

Tennessee attorney Michael Kirk told the court the case became moot when the original plaintiffs voluntarily relinquished their claims. An attorney for the TennCare applicants argued that there is precedent for allowing the suit to go forward.

If the suit is dismissed, it will vacate a temporary order by the lower court requiring Tennessee to provide fair hearings when TennCare applications are not processed within 45 days for most applications and 90 days for applications based on disability. While focusing on the technical issues, the three-judge panel also expressed concern over what could happen to people trying to get TennCare without that order in place.

Both sides agree the TennCare application process went awry with the rollout of the Affordable Care Act in October 2013. Tennessee was supposed to have a new computer system in place, but it was behind schedule. The vendor was eventually let go and the state is currently looking for a new vendor.

In the meantime, the federal government agreed to temporarily process TennCare applications through the federal health care exchange. But in cases where Internal Revenue Service records did not match up with the financial information provided by TennCare applicants, the federal government was unable to process the applications.

After the lawsuit was filed, Tennessee began coordinating with the federal Centers for Medicare and Medicaid Services to resolve the problem applications.

Attorney Samuel Brooke represents the TennCare applicants. He told the judges that even though the problems are being resolved, Tennessee still is not fulfilling its duty to process the applications on time. About 100 people a day are complaining of delayed applications, he said. Their due process rights are being violated.

Judge Karen Nelson Moore suggested that the lawsuit was a waste of money on both sides, since they both seemed to want to help TennCare applicants resolve their problems.

"It seems to me this case is crying out for a settlement," she said.

Kirk said the state would be open to any settlement that vacated the lower court's order requiring fair hearings.

Brooke, in an interview after the hearing, said the order — called a preliminary injunction — is a necessary safeguard to assure people don't fall through the cracks.

"Ultimately we want to get to the point where no one needs the injunction because they are processing everyone's application within 45 days," he said.