Court: Medicaid beneficiaries can sue states over nursing home benefits

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Medicaid beneficiaries who have been denied nursing home benefits as a result of state budget cuts can sue their home states, a federal court of appeals has ruled.

A 9th Circuit Court of Appeals judge in San Francisco reinstated a lawsuit filed by seven Oregon seniors and disabled individuals. The beneficiaries lost their coverage for resident and community home nursing services when the state Department of Human Services narrowed Medicaid eligibility standards to trim the budget.

The ruling granted the plaintiffs a right to sue their state under a provision of the Medicaid Act that requires state governments to provide minimum nursing facility services to eligible individuals.

The decision is binding to the nine states covered by the court, which include California and Oregon. Also, the recently passed Deficit Reduction Act could lead to similar lawsuits because of deep cuts in Medicaid included in the legislation.