States File Suit Over HHS Rule Prohibiting Medicaid Direct Payments For Benefits On Behalf Of Individual Home Care Workers

On May 13, 2019, attorneys general in five states – California, Connecticut, Massachusetts, Oregon, and Washington – sued the U.S. Department of Health and Human Services (HHS) seeking to overturn an HHS final rule, issued May 6, barring states from making Medicaid payments to third parties on behalf of individual home care direct support professionals (DSPs). The rule applies to voluntary payroll deductions made to pay union dues, as well as deductions to pay for worker benefits obtained through collective bargaining, such as health care coverage.

The reason for the lawsuit is a newly finalized federal rule issued on May 6 . . .