Kentucky plans to launch Medicaid overhaul this summer. Could lawsuits derail it? | Lexington Herald Leader

Gov. Matt Bevin's administration plans to launch its controversial overhaul of the state's Medicaid program — including 20 hours a week of mandatory "community engagement" for able-bodied adults — on July 1 in Northern Kentucky's Campbell County. The changes will sweep across the rest of the state in phases over the next six months, ultimately affecting several hundred thousand people.

Or they might not.

Sixteen Kentucky Medicaid recipients who are suing the federal government and the Bevin administration hope to win a federal judge's order this summer that blocks the changes. They claim Bevin's plan — known as Kentucky HEALTH — should not have been approved; they say it violates the 1965 law establishing Medicaid because it will reduce poor people's access to health care.

Both sides in the lawsuit have filed motions for summary judgment. A hearing on the motions is scheduled for June 13 in Washington, D.C., before U.S. District Judge James Boasberg, who was appointed by Democratic President Barack Obama in 2011.

"We feel pretty confident. We feel we have legitimate grounds," said Anne Marie Regan, an attorney for the Kentucky Equal Justice Center, which is helping represent the Medicaid recipients.

"If the worst happens and these changes do go into effect, then this time next year, there are going to be a lot fewer people on Medicaid in Kentucky," Regan said.

"The Bevin administration estimates there will be 95,000 people who lose Medicaid over the next five years," she said. "We think there could be a lot more than that. And that means a lot fewer people with access to health care. Fewer people who can go to the doctor, fewer people who can go to the hospital, fewer people who can afford the medicine they need."

Simultaneously, to uphold Kentucky HEALTH, Bevin is suing those same 16 Medicaid recipients in Frankfort before U.S. District Judge Gregory VanTatenhove, who was appointed in 2005 by Republican President George W. Bush.

The Frankfort lawsuit is about a month behind its Washington counterpart, setting up the possibility that a judge in one federal circuit could strike down Bevin's Medicaid changes while a judge in another could say that he had every right to make them.

Bevin says that if he loses in court and cannot prevail on appeal, he will end expanded Medicaid in Kentucky, which has extended health coverage to about 400,000 people with incomes just above the poverty line.

"Kentucky HEALTH was developed in Kentucky for Kentuckians, and its validity ought to be decided in Kentucky," Bevin's attorney, Stephen Pitt, wrote in a May 7 court filing before VanTatenhove in Frankfort. "This matter should be decided quickly so that the commonwealth can move forward with Kentucky HEALTH or withdraw from expanded Medicaid."

Bevin has attempted to have the Washington suit transferred to Frankfort to be heard by VanTatenhove. Boasberg, the Washington judge, rejected that move, noting that the parties in the case include the federal government and Washington-based attorneys for the Medicaid recipients. Boasberg also mentioned the possibility of attempted "forum shopping" by the defendants, which would not be proper, he said.

"Kentucky has two federal districts comprising ten different dockets, but the government specifically asks this court to transfer the case to Frankfort, which has only one judge," Boasberg wrote in his decision keeping the original suit in Washington.

The Kentucky Hospital Association and the Kentucky Association of Health Plans have filed briefs supporting Bevin in Frankfort while dozens of scholars representing some of the nation's most prestigious schools of public health are backing the Medicaid recipients in the Washington case.

Assuming there aren't court-ordered delays, the launch of Kentucky HEALTH is expected to start with a "slow roll-out" in July for the roughly 4,000 able-bodied adult Medicaid recipients living in Campbell County, state officials said. Boone County will go next in August, followed by Kenton County in September.

Kentucky HEALTH's My Rewards Incentive program already started statewide April 1, state officials said. Medicaid recipients can use My Rewards to earn incentives for healthy behaviors such as preventive screenings or taking online health literacy courses. As of last week, more than 72,000 Medicaid recipients had earned about $6 million in incentives through the program, state officials said.

People will be guided into available work, education, volunteer or family care-giving opportunities and told how — in some cases — they can earn back certain coverage benefits they now get automatically, such as dental and vision, through incentives accounts.

Monthly premiums will begin at $1 to $15, eventually topping top out at $37.50. There also will be monthly check-ins required to report employment and income status as well as annual coverage re-enrollments. Those who fail to comply or miss reporting deadlines will be locked out of their Medicaid coverage for a period of time.

By Dec. 1, officials say, the state will conclude its efforts by establishing Kentucky HEALTH in several dozen Central and Eastern Kentucky counties, including Lexington and its suburbs.

A cluster of eight counties with persistently high unemployment in southeastern Kentucky — Whitley, Knox, Bell, Clay, Leslie, Harlan, Perry and Letcher — will be exempt from the new community engagement requirements for the remainder of 2018, according to state officials. Other parts of Kentucky HEALTH, including premiums and incentives accounts, still will apply in those counties.

That area was designated as "the Kentucky Highlands Promise Zone" in 2014 by the federal government, and it's meant to receive special attention for economic and community development.

When Bevin first applied to the federal government in 2016 for permission to change the state's Medicaid program, he said he could shave $2.2 billion off the expected $37.2 billion cost over the next five years, according to the state's waiver application. (The federal government picks up most of the cost of Medicaid.) Following Medicaid expansion, nearly one in three Kentuckians was covered by the program, something Bevin said was not sustainable.

More recently, however, Bevin has told reporters that he doesn't know "nor do I really care" what the cost savings would be under Kentucky HEALTH. The more important goal is helping dependent people to become healthy and productive, he said.