A Helena judge ordered Montana health officials on Wednesday to temporarily reinstate last year's Medicaid reimbursement rates after a group of nursing homes and assisted-living facilities challenged state rate cuts.
The order issued by District Judge James Reynolds says the Department of Public Health and Human Services must not apply the reduced rates for reimbursements to nursing homes and assisted-living facilities that provide services to Medicaid patients.
The Montana Health Care Association and six companies that own nursing facilities in the state showed good cause that the health department is violating its constitutional rights, the judge wrote.
The order will stand until at least July 11, when Reynolds set a court hearing on the matter.
Health department spokesman Jon Ebelt did not immediately return a call for comment.
The health department cut Medicaid provider reimbursement rates by 2.99 percent in January, citing spending reductions across state government aimed at closing a budget shortfall. The rates are calculated based on the number of Medicaid patients a provider services per day.
That 2.99 percent reduction can mean a loss of more than $100,000 a year for larger nursing homes. Rose Hughes, executive director of the health care association, said the cuts have cost the plaintiffs a combined $3 million this year, forcing many to turn away new Medicaid patients or cut staff hours, programs or equipment.
"Any relief at this point helps," Hughes said Wednesday. "We feel like that puts us one step closer to the resolution of the issues we raised."
Besides nursing homes, the rate reduction also has forced closures and cutbacks for providers who help the disabled and people with developmental disabilities, and caused layoffs in hospitals in Kalispell and Missoula.
The lawsuit accuses health officials of making the cuts without providing a reasonable explanation of why they're necessary and without adequate public input.
The lawsuit also says that the rule that set the cut conflicts with a law passed by the state Legislature in 2017 that raised the nursing homes' bed fees, a measure that was meant to increase the amount the U.S. government pays in matching funds.