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Washington Health Care Association, et al. v. Dreyfus, et al.

Case No. CV09-5395-RBLU.S. District Court, Western District of Washington
We successfully represented the Washington Health Care Association (WHCA) and a number of Washington skilled nursing homes in a federal lawsuit, which challenged the validity of a cut in Medicare reimbursement rates. Engrossed Substitute House Bill 1244 was enacted by the Washington State legislature in April 25, 2009. The portion of the bill at issue decreased Washington's cap on the state-wide average rate of Medicaid reimbursement for nursing homes. This decrease in the cap on the state-wide average, referred to as the "budget dial," resulted in an across-the-board 7.29 percent reimbursement rate cut for all nursing homes. WHCA, which represents nursing homes throughout the state, along with seven individual long term care providers, decided to challenge the rate cut by filing suit in the U.S District Court for the Western District of Washington. The basis or the lawsuit was that the state, when enacting the cut to the budget dial, failed to perform the required analysis under a federal Medicaid statute, 42 U.S.C. § 1396a(a)(30)(A). Instead, the state focused only on budgetary concerns. WHCA successfully obtained a temporary restraining order, preventing the rate cut from ever going into effect. This temporary restraining order effectively turned into a preliminary injunction, which lasted through the next 2010 legislative session. The Washington state legislature has now rewritten the law and restored the more than $50M in cuts. The case has drawn national interest in the long term care field it was the first of such cases pursued on behalf of skilled nursing providers. Medicaid rate cuts are widespread in the industry, and providers in many states are considering similar challenges. As they do, they will likely look to this case as an example of how providers can succeed in enjoining a state from enacting rate cuts.

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