By Jon Hood
ConsumerAffairs.Com
August 20, 2010
Maryland has begun paying restitution to nursing homes and their residents in satisfaction of a lawsuit alleging that the state wrongly determined that certain patients could foot their own bills.
The lawsuit, filed in August 2005, alleged that the state's Department of Health and Mental Hygiene erroneously concluded that nursing home residents could afford co-payments for their care. That determination failed to take into account the debt that patients accrued while waiting to be approved for Medicaid coverage, according to the suit. Federal and state law requires states to consider patients' debt when calculating their income.
The payments, which will total $16 million, make the settlement the second largest in Maryland history among those where the state is the defendant, according to the plaintiffs' attorneys. Maryland will provide $8 million of the settlement funds, with the federal government paying the other half. The lawyers originally contended that the state owed $64 million for incorrect calculations made since 2002.
A similar suit filed against Washington, D.C. was also settled, with the city agreeing to to abide by the law in the future. The plaintiffs in that suit were not awarded damages.
Settlement could serve as model for other states
This is a great day for Maryland and Washington, DC citizens who need nursing home care but can't afford to pay for it, as well as the nursing homes who have provided that care for years without payment, Cy Smith, an attorney for the plaintiffs, said in a statement. We have succeeded in bringing Maryland and the District into compliance with federal law for the benefit of their neediest citizens, both now and for the future.
Smith told The Baltimore Sun that his firm is starting to send checks to nursing homes now. He said the suit wipes out a lot of debt for the class.
Ron Landsman, co-counsel on the case, said that the settlement ends three decades in which Maryland shirked its obligations under the Medicaid statute.
The state similarly expressed satisfaction with the outcome.
We think that things are pretty well resolved, John Folkemer, Maryland's deputy secretary for health-care financing, told The Washington Post. When someone is in a nursing home not only do you have to recognize what their obligations are, you have to recognize some of the debts they owe.
The class includes 12,000 nursing home residents and over 300 nursing facilities.
The settlement could serve as precedent for other states that fail to take patients' old debt into account when determining their Medicaid eligibility.
Consumers can obtain information at the official settlement website
.