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Supreme Court hears arguments over legitimacy of $95M court award to care workers for the severely disabled

Post by Brad Shannon / The Olympian on May 14, 2013 at 3:35 pm | No Comments »
May 14, 2013 5:18 pm

The Washington Supreme Court heard arguments Tuesday in a class-action case brought by “live-in” home care aides against the state Department of Social and Health Services over unpaid work hours that could cost taxpayers $95 million or more, if the court upholds earlier court rulings.

TVW’s coverage of the hearing is here:

The 22,000 workers in the suit tend for disabled clients, some of them severely, and they saw their work hours cut by an average of 15 percent during 2003-07 under a “shared living” rule adopted by the state agency for Medicaid clients. The reductions began as the state was trying to stretch scarce resources during a recession and the rule was jettisoned after the state Supreme Court invalidated it.

“The bottom line is DSHS shortchanged these people,” Kirkland-based lawyer John J. White Jr. said after the arguments.

Clients in the Medicaid program are low income and receive the federal-state help with care – including washing, laundry, cooking, shopping and help with medicines. The in-home help lets the clients remain in their own homes and saves the public money, but the caregivers contend they ended up working unpaid hours – and the state refused to pay up, even after the Supreme Court threw out the rule in 2007.

In a December 2010 ruling, a Thurston County Superior Court jury awarded $57 million to the workers, who belong to Service Employees International Union 775 Northwest. Judge Thomas McPhee awarded another $38 million in prejudgment interest.

But in court, Deputy Solicitor General Jay Geck of the Attorney General’s Office argued that the lower court judgment was in error and that there was no breach of contract because workers agreed to accept whatever hours were authorized for clients under Medicaid. Geck said the court had given misleading and incorrect jury instructions.

Geck also said the claims should have been barred in the first place by Judge McPhee because the claimants had not actually challenged the department’s rulings within 90 days as required under law.

“People have a right to appeal and they did not. The client class had no excuse for not coming in earlier,’’ he told the nine justices.

But White said after court that DSHS had actually done away with an appeals process when it adopted its “shared living rule” so administrative judges declined jurisdiction.

The case has implications for state budget writers not just because of the costs involved. Letting claimants come back up to six years to make claims “will hobble public assistance programs,’’ Geck said.

House Majority Leader Pat Sullivan, D-Covington, said he and other budget writers are aware of the potential liability of this case – but it is one of many financial risks that lurk for the state.

“Any time we have liability we have concern … Depending on where you cut, you face liabilities all the time. Something we do take into consideration when we are making reductions is how likely is it you will be sued,” Sullivan said in an interview. “But more importantly how likely is it that you’ll be sued and lose? There’s a risk to every decision we make. We try to be as risk averse as we can so we’re not in a position of having to pay out.”

So far, budget writers have not put in a placeholder for the potential cost.

As with many cases that go before the court, the legal arguments were complicated, and the justices did not tip their hand on how they might rule. Any ruling may not come for six to nine months, based on the court’s practice in past cases.

The workers’ legal claims are based on the department’s application of a 2003 rule that the high court later invalidated on grounds the reduced hours of paid care was inconsistent with Medicaid regulations. The agency later provided greater assistance after doing specific assessments of clients’ needs and the help available to them from family and others.

Dmitri Iglitzin, a lawyer for SEIU 775NW, told the court said the state had acted unjustly to reduce paid hours knowing all along that the live-in workers would provide the care without pay. He said it would have been a different story if DSHS had done assessments that looked at the range of help available from relatives to decide case by case that fewer hours were merited.

Iglitzin also said that if the workers’ claims under appeal end up being barred, a new trial could be ordered to allow a different remedy.

There also are questions about assigning legal costs to the state for the care workers.

In a briefing provided to news media by the Attorney General’s Office this week, the state said the jury verdict was unprecedented and would have the effect of giving care workers new contract rights:

The taxpayer dollars available to public assistance programs are limited. In this case, people received the care provided for under Medicaid, and their caregivers were paid for the number of service hours awarded. The effect of the trial court judgment is to allow benefit awards that have been final and closed to be reopened years later and to give care providers contract rights to challenge benefit decisions DSHS makes for Medicaid recipients. The judgment in this case is unprecedented and undermines the fiscal planning needed for all DSHS programs. This is detrimental to the people who rely on funding for DSHS services, the taxpayers, and the continued viability of public assistance programs. Consequently, an appeal of this trial court judgment of almost 100 million dollars is appropriate and necessary.

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