7th Circuit dismisses challenges to Wisconsin Medicaid cuts

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The court has shut its doors to a group of individuals with disabilities who sought to challenge recent changes to Wisconsin’s Medicaid program that places them at risk of being institutionalized.

On July 10, the U.S. Court of Appeals for the 7th Circuit ruled that a group of people with disabilities lack standing to bring the lawsuit, finding that the case was not ripe for adjudication because the program had not yet directly forced any of the plaintiff’s to transfer out of their homes.

The ruling is unique in that courts frequently allow lawsuits to proceed if individuals are at risk of being unnecessarily institutionalized. Under the Americans with Disabilities Act, states are required to provide services to ensure people with disabilities can live in the most integrated setting according to their needs.

The three-judge panel for the Seventh Circuit, in upholding a similar finding at the district court level, viewed the issue differently, emphasizing that “none of the plaintiffs has been placed in an institution. Indeed, plaintiffs do not allege that any developmentally disabled person in Wisconsin has been moved, involuntarily, from group to institutional care.”

The 7th Circuit also ruled that the individuals would have standing to sue on the grounds that the Medicaid cuts disproportionately impacted people with disabilities, though this argument was briefly rejected in the 10-page opinion.

In 2011, the state reduced funding for its Wisconsin Care Program, which provides funding for people with disabilities in group homes. The state argued that it was justified in placing the individuals at risk of being institutionalized under the ADA’s exception “if the resources available to the State” are limited.

The court, with little analysis, accepted this argument.

“Wisconsin believes that the changes it has made will reduce the cost of care by excluding the highest-cost providers from the program, but without landing any developmentally disabled person in an institution,” the court stated. “If that’s so, Wisconsin has fulfilled its obligations under federal law, no matter how much plaintiffs prefer the comfort and amenities of the more-expensive group homes. And whether that is so, the district court concluded, cannot be determined without more experience under the current rates.”