BRADENTON, Fla. - Three consumer advocacy groups filed a federal lawsuit Wednesday accusing Tennessee of implementing "policies and practices that delay and deny health coverage" to individuals who are eligible for the state's Medicaid program, known as TennCare.
The complaint, filed in the U.S. District Court for the Middle District of Tennessee on behalf of 11 adults and minors, is seeking class action status. It was filed by the Southern Poverty Law Center, the Tennessee Justice Center, and the National Health Law Program.
Sarah Tanksley, spokesperson for the Bureau of TennCare, said Thursday that the agency received "hundreds of pages of documents" in association with the lawsuit.
"We are in the process of reviewing everything that we have received and have no comment at this time," she said.
Tennessee is "sacrificing the health of the state's most vulnerable citizens just to score political points," said Sam Brooke, attorney with the Southern Poverty Law Center.
"They're throwing a monkey wrench into their own Medicaid program so they can demonize the federal government," Brooke said. "People in dire need of medical care are being sacrificed."
The center said the complaint comes on the heels of a "scathing" letter the Centers for Medicare and Medicaid Services sent to state officials for allegedly failing to meet six of seven critical factors required by the federal health care law to fulfill the state's Medicaid obligations.
In a July 14 letter, Darin Gordon, director of the Bureau of TennCare, denied some of the assertions made by Centers for Medicare and Medicaid Services. Gordon is one of three state officials named in the lawsuit.
Among various claims, the complaint said that the state violated federal law by discontinuing in-person help for Medicaid applicants and is forcing them to apply for TennCare through the federal Health Insurance Marketplace website.
The Southern Poverty Law Center said the federal website was not designed for this purpose, and using it has caused some residents - including those with serious medical conditions - to go needlessly without health care.
The suit also alleges that Tennessee has discontinued accepting applications in person at county offices.
Under federal law, an application for Medicaid benefits must be processed within 45 days. But people in Tennessee are waiting as long as six months, the suit said.
The complaint asks the court for a declaratory judgment ruling that the state violated the rights of the plaintiffs, failed to process TennCare applications within required federal time frames, and failed to provide applicants a fair hearing. It seeks an order remedying the violations and an award of attorneys and costs.
According to the Washington, D.C.-based National Health Law Program, Tennessee is the first state to be sued over Medicaid enrollment problems since passage of the federal health law.
Wells Fargo senior analyst George Huang said some states opposing the Patient Protection and Affordable Care Act may tighten Medicaid eligibility to reduce enrollment, which likely would benefit state budgets.
Now that the ACA's maintenance of effort provision on eligibility standards has lifted, "we believe some states that strongly oppose the ACA may again tighten eligibility requirements to reduce their traditional Medicaid rolls," Huang said in a municipal commentary Wednesday.
"Stricter eligibility rules would likely be positive for states on a direct budgetary basis," he said. "However, hospitals could incur more bad debts and charity care from such measures, as these individuals would likely no longer have coverage."
Those states that have not expanded Medicaid coverage to include low-income adults could also pressure the finances of health care providers, Fitch Ratings said in a July 16 report. Tennessee is among 24 states that have chosen to not to expand coverage.