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Federal appeals court asked to throw out case claiming TennCare leaving applicants in limbo

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NASHVILLE, Tennessee — Tennessee is asking a federal appeals court to throw out a class-action lawsuit that claims the state left thousands of TennCare applicants in indefinite limbo, with their applications neither approved nor rejected.

With the rollout of the Affordable Care Act in October 2013, the government changed the method used to determine financial eligibility for Medicaid. But in Tennessee, a new computer system designed to accommodate the change was behind schedule. So the federal government agreed temporarily to accept applications for TennCare — Tennessee's version of Medicaid — on behalf of the state.

The switch was followed by long delays in which many TennCare applicants could not get any response to their requests or even find out the status of their applications. By law, applications for most forms of Medicaid should be processed within 45 days. Applications based on disability are allowed 90 days.

In July 2014, 11 people filed suit against Tennessee agencies and officials. The suit claimed Tennessee was violating the law by failing to rule on applications in a timely manner and refusing to provide hearings to explain those delays.

Plaintiffs included a prematurely born infant whose application was not processed for more than four months and who missed critical treatments as a result.

In September, a federal judge granted the case class-action status, meaning that anyone in a similar situation to the original plaintiffs could also be considered a plaintiff.

The judge also issued a preliminary injunction, a sort of temporary ruling that is in effect while the lawsuit works its way through the courts. The injunction required the state to provide anyone whose application process was not completed on time with a fair hearing to explain the delay.

The state appealed the district court's decision. In a brief to the 6th U.S. Circuit Court of Appeals, in Cincinnati, attorneys for Tennessee argue the whole lawsuit should be dismissed. That's because the 11 original plaintiffs were able to enroll in TennCare, with the state's help, before the judge ruled.

In the view of the state, once the original plaintiffs no longer had a grievance, the case was moot, and it should not have been later certified as a class action.

Attorneys for the TennCare applicants argue that in similar cases, class action lawsuits have been allowed to move forward. And, they say, Tennessee still does not know when its new computer system will be in place.

Attorney Samuel Brooke, with the Southern Poverty Law Center, said "There are about 100 people a day requesting hearings. That means people are still having problems."

But Michael Kirk, who represents Tennessee in the case, says those problems are being resolved without the need for hearings.

"What's changed between now and the time this lawsuit was filed is that at the time, the state didn't even know the problem existed," he said. Now the state is getting information from the federal Centers for Medicare and Medicaid Services on the cases where there are problems and helping to resolve them.

"If this case goes away, we think there's a very good chance nothing more will ever happen," Kirk said.

Oral arguments in the case take place Thursday at the 6th U.S. Circuit Court of Appeals in Cincinnati.

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