Medicaid Class Action Gets Go-Ahead

By Jim Saunders

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      TALLAHASSEE — A federal judge has cleared the way for a class-action lawsuit that alleges Florida did not properly inform people before dropping them from the Medicaid program after a COVID-19 public health emergency ended.

U.S. District Judge Marcia Morales Howard last week issued a 70-page order that rejected arguments by the state that the case should not proceed as a class action. Howard also denied a state request for a continuance of a trial scheduled to start May 13.

The lawsuit, filed in August in Jacksonville and revamped in January, stems from a process that the state started in spring 2023 to determine whether more than 5 million people enrolled in Medicaid remained eligible for benefits. The process came after the end of the federal COVID-19 public-health emergency — a three-year period when the state effectively could not drop people from Medicaid.

Attorneys for Medicaid beneficiaries contend that a lack of proper notice about the discontinuation of coverage violated due-process rights and a federal Medicaid law. In part, the lawsuit seeks an injunction to block continued use of the disputed notices and to reinstate Medicaid coverage to people until they receive adequate notices of termination.

“In this case, it is undisputed that plaintiffs have a constitutionally protected property interest in their Medicaid benefits, and that they were deprived of that interest when the state terminated those benefits,” Howard wrote. “Thus, the issue in resolving this claim will be whether the state provided constitutionally-inadequate process.”

The lawsuit has five named plaintiffs, but their attorneys argued it should be a class action that would apply to a far-larger number of people. While narrowing the plaintiffs’ proposed definition of people included in the class, Howard ruled that the lawsuit met legal tests to be treated as a class action. The ruling did not decide the underlying issues in the case.

Family income plays a key role in determining whether people are eligible for Medicaid. In the narrowed class definition, Howard focused on how the notices provided information about people being dropped because of income determinations.

“The record reflects that all termination notices based on income contain uniform omissions such as the lack of individualized income information and income standards,” wrote Howard, who was appointed to the federal bench by former President George W. Bush. “As such, the court will certify a single class to resolve the issue of whether termination notices which lack this information are adequate to satisfy the requirements of due process and the Medicaid Act when the enrollee is found ineligible based on income.”

She added that “some notices reflect an additional omission in the lack of a designated reason identifying income as the basis for the ineligibility determination. As such, the court finds it appropriate to certify a subclass encompassing individuals who received this form of notice.”

Medicaid is jointly funded by the federal and state governments, and Washington agreed to pick up more of the tab for the program as part of the public-health emergency, which was declared in January 2020.

But in exchange for the extra money, states had to agree that they wouldn’t drop people from the Medicaid rolls during the emergency. Florida’s program grew from about 3.8 million beneficiaries in January 2020 to nearly 5.78 million in April 2023.

Beginning in spring 2023, Florida and other states began redetermining beneficiaries’ eligibility. Florida’s Medicaid enrollment totaled 4.675 million in March 2024, about 1.1 million lower than in April 2023, according to state Agency for Health Care Administration numbers.

Attorneys for state Agency for Health Care Administration Secretary Jason Weida and Department of Children and Families Secretary Shevaun Harris, the named defendants in the case, have disputed the allegations about improper notice and tried to prevent certification as a class action.

In a March court filing, the attorneys argued that the case is “ill-suited to class treatment” and pointed to different circumstances among people who received notices.

“Plaintiffs’ claim that class members were deprived of due process ignores dissimilarities and case-specific variations that defeat any attempt to adjudicate the rights of all class members at once,” the March filing said. “It incorrectly assumes that the court need only assess in isolation standard passages in the notices to determine whether DCF (the Department of Children and Families) denied due process to every class member. Because individualized facts are relevant, the rights of class members cannot be litigated as though they are not.”