Hospital association sues DHS over pro-union language in Medicaid contracts

(The Center Square) – A battle over collective bargaining language in Medicaid contracts has sparked a lawsuit against the Pennsylvania Department of Human Services and a hospital system calling foul.

As The Center Square has previously reported, new HealthChoices Medicaid Managed Care agreements are being drafted, set to take effect in August. The contracts are valuable – they’ve been worth $65 billion over the last 5 years and 2.8 million Pennsylvanians are covered under the Medicaid agreements.

However, the DHS has added language into the contracts that prohibits network providers that have had a work stoppage within the last five years – unless the provider has signed a collective bargaining agreement, effectively requiring all providers to have a unionized workforce.

The draft language was supposed to be finalized April 1, but it remains in draft form, with no plans to alter the collective bargaining requirement, as The Center Square reported in a follow-up story.

Now, the Hospital and Healthsystem Association of Pennsylvania, a trade association that represents 235 hospitals in the Commonwealth, has filed a lawsuit to stop the collective bargaining language from taking effect.

“Language related to collective bargaining agreements that the administration has inserted into Medicaid managed care contracts puts access to health care at risk for Pennsylvanians who rely on Medicaid,” said Liam Migdail, director of media relations for HAP.

The lawsuit argues that DHS doesn’t have the authority to include collective bargaining language in Medicaid contracts and didn’t follow proper procedure to impose the language. HAP also argues that the National Labor Relations Act preempts the collective bargaining provision of the contracts and that the provision “is arbitrary and capricious.”

“This vague and overly broad contract language will leave it up to the current and future administrations to make arbitrary decisions about at which hospitals patients who are covered by Medicaid can seek care,” Migdail said. “Hundreds of thousands of patients could experience care disruptions if the administration enforces the provision against several hospitals later this summer.”

Additionally, an umbrella group of health care organizations calling themselves the Medicaid Access Coalition of PA sent a letter to Democratic Gov. Tom Wolf and DHS Acting Secretary Meg Snead expressing their opposition to the collective bargaining language.

“We strongly oppose this provision and request that it be removed,” the letter stated. “While your administration has been a champion for expanding health care coverage, that effort will be called into question if access to critical care is not available to those who need it most.”

State Republicans condemned the contract language.

“Once again the Wolf administration has taken a unilateral approach, and it’s going to negatively impact access to quality care, particularly for those who can least afford it,” said Sen. Kristin Phillips-Hill, R-York. “We are going to see higher costs – and this is really a nightmare scenario.”

Phillips-Hill emphasized the contract language’s threat to health care access.

“If you don’t live near a (managed care organization) that is unionized, you as a patient – as a Medicaid patient – are at great risk of being not able to access care,” she said. “What the administration is doing is putting a barrier between the poorest and neediest people in this Commonwealth and their access to health care.”

The Department of Human Services argued that the collective bargaining language is crucial for guaranteeing access, rather than restricting access to health care.

“Ensuring that patients have affordable and comprehensive access to care is our top priority,” DHS Communications Director Ali Fogarty said. “For Medical Assistance patients, access to quality health care is a lifeline and the Department of Human Services is committed to ensuring that individuals receiving Medical Assistance can receive care in or near their community. We won't allow that to be jeopardized. Managed Care Organizations provide that access across the Commonwealth, and we appreciate the many health care workers who care for these patients every day.”

From the perspective of DHS, the language strengthens network requirements so that Medicaid patients will be able to get the care they need.

“The work stoppage language in the draft HealthChoices agreement would ensure that uninterrupted access to care,” Fogarty said. “This is critical for our most vulnerable patients, especially in rural areas. While the agreements are still being finalized, DHS is engaging with MCOs to come to a resolution that ensures patients will have uninterrupted access to care.”

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