Suit alleges Medicaid underfunding and appeals court OKs class-action status

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Oklahoma providers claiming they are cumulatively owed millions of dollars because of insufficient Medicaid funding can attach class-action status to their lawsuit against the government.

The Oklahoma Court of Civil Appeals reversed a lower court's ruling, thus enabling the more than 350 nursing homes in the state that accept Medicaid funding to band together in one lawsuit.

Providers' claims are based on the notion that the government must provide adequate funding to pay for levels of care it mandates, said provider attorney Marjorie Galt. A provider victory could have stunning implications for the rest of the states, the majority of which under pay for Medicaid care, according to provider advocates.

Oklahoma healthcare officials, however, scoffed at the provider allegations, noting that daily Medicaid reimbursement rates rose from $66.75 in 2000 to nearly $104 in 2006. The state will likely appeal the class-action decision to the state Supreme Court, said Howard Pallotta, general counsel for the Oklahoma Health Care Authority, which oversees the state Medicaid program.