Lawsuit: DSS understaffing produces illegal delays for Medicaid applicants

The state Department of Social Services has failed to employ enough workers to process Medicaid applications in the timeframe required by federal law, leaving thousands of low-income residents without access to health care coverage, legal aid attorneys alleged in a federal class action lawsuit filed Monday.

"Over the last decade, DSS has been systematically stripped of the workers needed to process applications and ensure timely provision of these critically important health care benefits while, at the same time, applications for Medicaid assistance and numbers of Medicaid enrollees have dramatically increased along with worker caseloads," said the lawsuit, filed by the New Haven Legal Assistance Association.

One of the named plaintiffs, Paul Shafer, 27, has a seizure disorder and has been waiting nearly six months for a decision on his Medicaid application; in that time, he's been unable to get coverage for his $165-a-month anti-seizure medication and has been taking half the recommended dose, which his father pays for, according to the complaint.

The lawsuit said Shafer is one of nearly 5,000 people whose applications for Medicaid have been pending "well beyond the 45-day time period generally required for the processing of Medicaid applications." At the end of November, the lawsuit said, nearly 55 percent of Medicaid applications were pending beyond federal time limits.

The lawsuit seeks an injunction to require DSS to promptly process the backlog of Medicaid applications. It names Commissioner Roderick L. Bremby as the defendant.

In a statement, DSS spokesman David Dearborn said it was common knowledge that the agency had dealt with "major, double-digit percentage staffing losses" in the past decade while monthly caseloads for Medicaid rose by 19.5 percent for Medicaid and 81 percent for the Supplemental Nutritional Assistance Program -- formerly known as food stamps -- in the past five years.

"We are disappointed that legal services has chosen to file a lawsuit that will consume precious time and resources, rather than working with us on practical approaches to re-investing in DSS," Dearborn said.

The department is working with the Office of Policy and Management -- the governor's budget office -- to refill vacancies and hire additional staff and has started to upgrade the department's information technology infrastructure, including replacing antiquated computer systems, Dearborn said.

"We will continue to be transparent and engage our partners in the process of increasing our ability to process applications in the most timely and accurate ways possible," Dearborn said. "As Commissioner Rod Bremby has emphasized, we can't correct and resolve issues resulting from lack of investment over the past decade in a matter of months. However, the commissioner and agency are committed to doing so as promptly and as cost-effectively as possible."

The total number of DSS employees fell by about 20 percent in the past decade,while the number of DSS employees handling eligibility for programs the department administers fell by 31 percent, from 845 to 586, according to the complaint, which noted that the number is even lower following retirements that took effect in October.

This is not the first time DSS staffing levels have drawn scrutiny. Last year, federal officials warned that the state could face financial sanctions if it did not improve its performance in handling applications for SNAP, the program formerly known as food stamps.

At the time, then-Commissioner Michael P. Starkowski attributed the delays and errors in application processing to outdated technology and having too few workers to process applications at a time when requests for aid had skyrocketed.

The nursing home industry has also raised concerns about delays in processing applications for Medicaid coverage for nursing home residents. Matthew Barrett, executive vice president of the Connecticut Association of Health Care Facilities, which represents nursing homes, said it's not uncommon for applications to be pending for six months or longer. By the time they're granted, DSS can owe the nursing homes upwards of $500,000, he said; in the less common cases when applications are denied, the nursing homes typically don't recover the cost of caring for the resident while the case was pending.

Nursing home leaders have asked DSS to consider advancing payments to nursing homes as a short-term solution while the department tries to make long-term improvements to things like its technology. Barrett emphasized that the talks have been "collaborative and cooperative."

Plaintiff attorney Sheldon Toubman said in a statement that Bremby and Gov. Dannel P. Malloy's administration -- which began last year -- "inherited such a severely hobbled agency," which had lost staff in cutbacks made by previous administrations.

"However, given his commitment to preserving the safety net, we are optimistic that Governor Malloy will step up to the plate and recognize the need to reverse these cutbacks and thus avoid jeopardizing federal funds," Toubman said.

Medicaid is a federal-state program, and Shelley White, another attorney for the plaintiffs, warned that the state must comply with federal law by processing applications on time, or could risk losing federal reimbursement funds.

In the past 18 months, DSS got an average of 10,000 new applications for Medicaid every month, up from 8,300 in 2004, the lawsuit said. Of the cases still pending at the end of the month, an average of 4,600, or about 45 percent, were delayed in violation of federal law, and the figure rose to 55 percent in November 2011, according to the complaint. It noted that the vast majority of applications for Medicaid must be processed within 45 days. A smaller number -- for people eligible because they are aged, blind or disabled -- must be processed in 90 days.

The lawsuit alleged that DSS set up a system to "circumvent" federal timelines requirements by making it appear as if the applicants failed to provide required documentation. The department sends out generic written notices to applicants whose cases have not been acted on by the deadline, saying that DSS needs more information or documentation from the applicant, even if the applicant has provided all the requested information, according to the lawsuit.

DSS eligibility workers can stop the notices from going out or modify them, but the notices routinely go out with no modifications because there is no additional information required or because workers have such high caseloads they can't check if each notice is accurate, the lawsuit said.

"These generic letters serve the purpose of presenting a façade of compliance with federal law, by suggesting that the delay beyond the federal law requirement is the applicant's fault, when in reality the notices are routinely issued in the absence of any missing information from the applicant," the lawsuit said.

The complaint also targeted the treatment of people who meet all Medicaid requirements except the income limits, but who can qualify for Medicaid if they spend a certain amount of money on medical bills. People in this category, who are considered "medically needy," are given an amount to "spend down" every six months, after which they can receive Medicaid coverage. But according to the lawsuit, workers are unable to process the medical bills that get submitted in a timely manner, leading to delays in people receiving Medicaid coverage. In some cases, applications have not been processed within a six-month period, requiring the person to spend down more money before becoming eligible for Medicaid again.

One of the named plaintiffs, Joshua Harder of New Haven, has a degenerative brain disorder. To qualify for Medicaid, he must spend down about $200 every six months. From July 1 through Dec. 31 of last year, Harder had to spend down $214.68. In October, medical bills totaling $218.39 were submitted to DSS on his behalf, along with an explanation of what they covered, according to the lawsuit. But Harder's Medicaid eligibility was never activated, and he wasn't told of any problems in the medical bills, the complaint said. Then, in December, he got a letter saying he would have to spend down another $244.68 in the next six months to receive Medicaid.

The lawsuit seeks to represent people who have or will apply for Medicaid, and those who have or will be found eligible for Medicaid as long as they spend down a certain amount of money.

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