Medicaid Work Requirement Bill HB 3136 Dead for Now

To:               West Virginia Department of Health and Human Resources

Attention:      Jeremiah Samples, Deputy Director

From:           Kathleen D. Stoll, Esquire

                    Principal, Kat Consulting

RE:               HB 3136 and Risk of Federal Litigation


The federal District Court of the District of Columbia ruled in June 2018 that Kentucky’s effort to add work reporting requirements to the state’s Medicaid program was “arbitrary and capricious.”

Judge James Boasberg ruled that the administration never adequately considered whether the work reporting requirements and other restrictions would violate the program's central purpose of providing medical assistance to vulnerable citizens. The implementation of the work reporting requirement was stopped. The federal court’s 60 page decision is here.

The Trump administration then re-approved what was essentially the same request from Kentucky, to  go into effect on April 1, 2019.

Kentucky made no changes to the key features of the project; it continues to include work reporting requirements and program lockouts.

The 15 plaintiffs suing the administration now have filed their suit in the same federal court and want to have the new Trump administration approval also declared to be arbitrary and capricious.  Plaintiffs from Arkansas have also joined the lawsuit asking for the program to be vacated. Oral arguments have been set for March 14 before Judge Boasberg.  The amended 53 page complaint is here.

HB 3136 will require a Medicaid 1115 waiver that will be parallel to the Kentucky and Arkansas waivers. Kentucky’s waiver seeks to allow the state to deny coverage to any nondisabled adult who cannot prove they are working, volunteering or in school for at least 20 hours per week. 

It is the expectation of legal experts following the lawsuits that Judge Boasberg will again vacate both the Kentucky and Arkansas work reporting requirements and Medicaid lock-out. 

The lawsuit will be appealed to the Federal District Court of Appeals and could go up to the Supreme Court.

Unless Congress acts to change the underlying Medicaid statute, the eventual final court ruling will uphold Judge Boasberg’s decision and vacate state Medicaid work reporting requirements. It is unlikely that Congress will open up the underlying Medicaid statute to incorporate a change to the stated purposes of the Medicaid program or to specifically allow work reporting requirements in new statutory language. 

House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) and Senate Finance Committee ranking member Ron Wyden (D-Ore.) wrote to the administration that the requirements “threaten to impede access to critical care for millions of Americans.”

The Democrats called on Azar to “put a halt to” approving more states to implement work requirements. “We unfortunately are now seeing these concerns play out in real life in the state of Arkansas where thousands of individuals have been forced off and locked out of their Medicaid coverage,” they added in the letter to Secretary of Health and Human Services Alex Azar.

Three national level entities – the National Health Law Program, the Southern Poverty  Law Center, and Families USA – have stated that they will bring a suit against the state of West Virginia if a Medicaid 1115 waiver is submitted to the Centers for Medicare and Medicaid Services pursuant to implementation of HB 3136. In addition, two West Virginia based entities have stated they will join the lawsuit as plaintiffs bring forward West Virginia Medicaid enrollee.  It is also likely that a number of disease and provider associations will sign on to an Amicus Curiae brief to the court based on their current opposition to HB 3136.

The cost to West Virginia to defend this lawsuit is very difficult to estimate.  However, based on similar state experiences, it will be in the tens of millions of dollars in legal staff time and possible outside counsel contracts to defend a work reporting requirement.

West Virginians Together for Medicaid