Nursing Homes Fight Back Against Medicaid Cuts with Lawsuit

A group of Montana nursing homes and assisted living facilities sued the state Monday to stop cuts to Medicaid reimbursements, The Associated Press reported.

As part of spending decreases throughout the state government intended to address a budget shortfall, Montana’s Department of Public Health and Human Services (DPHHS) cut Medicaid provider reimbursement rates in January. In 2017, the department initially proposed a 3.47% reduction in the overall amount Medicaid providers are reimbursed, eventually adopting a final cut of 2.99%.

The DPHHS plans to extend that final cut through the next fiscal year, which begins July 1, the AP reported. The Montana Health Care Association and the six other companies suing the department argue that DPHHS violated state law because officials did not explain how the cuts were formulated or justify the need for them.


The health department also did not explain why it plans to extend the rate cut, according to the lawsuit.

As a result of the cut, nursing homes that would be reimbursed $187.71 per day are now receiving $181.01, the nursing facilities said. This can add up to a difference of more than $100,000 per year for larger nursing homes with dozens of Medicaid patients, the AP noted.

The fact that the department did not allow the public to comment when it changed the proposed rate reduction or published the fee schedule also is a violation of state law, the lawsuit argues.


Nursing homes across the country have grappled with Medicaid rate shortfalls; New Mexico and Texas nursing homes have seen problems because of Medicaid reimbursement levels that don’t match the cost and demand of skilled nursing services, according to providers in those states.

In addition, five nursing home providers sued the state of Illinois in January, claiming that low reimbursement rates for Medicaid could force them to shut down.

A call to the Montana Health Care Association was not returned as of press time. DPHHS said it does not comment on ongoing litigation in an emailed comment to SNN.

Written by Maggie Flynn

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