The first of three legal challenges to funding levels for Department of Social and Rehabilitation Services programs will come before a federal court before Christmas.
Arguments in a lawsuit brought by associations representing both not-for-profit and for-profit nursing homes concerning Medicaid reimbursement rates set by the 1990 Kansas Legislature will be heard by U.S. District Judge Dale E. Saffels Dec. 18 in Topeka.
Decisions made in this and two other lawsuits against SRS could further hamper the 1991 Legislature as it attempts to fund social service and education programs next year.
Many legislators and state officials have said the 1991 Legislature will begin its session with a general fund balance that is $100 to $200 million short of what is needed for current SRS and education programs.
In the lawsuit, nursing homes are seeking an injunction to stop a freeze in rates of Medicaid payments imposed by the state Oct. 1.
THE KANSAS Association of Homes for the Aging, representing 130 non-profit nursing homes, and the Kansas Health Care Assn., representing 230 for-profit nursing homes, said in the suit that the methodology the Legislature used in setting Medicaid rates for nursing homes violates federal law.
"It's simply a last resort," said John Grace, president of KAHA. "We exhausted all legislative and regulatory efforts to come up with what we think is reasonable funding of places that care for the frail, the sick and the elderly by the 1990 Legislature."
SRS also faces two other lawsuits, one filed in Topeka by the American Civil Liberties Union over treatment of children under SRS foster care services and one filed in Sedgwick County concerning cuts made last year in the state's General Assistance and MediKan programs.
The ACLU suit is in the discovery stage and no trial date has been set, said Dick Kurtenbech, executive director of the ACLU district covering Kansas and Western Missouri.
THE SEDGWICK County suit is set for trial Feb. 26 before District Judge M. Kay Royse, said David Gray, a private attorney representing SRS clients.
Rep. John Solbach, D-Lawrence, estimated the nursing home suit could cost the state between $5 million and $13 million, should the nursing homes win. And he said the state's bill on the suit over cuts in MediKan and General Assistance in Sedgwick County could come to $10 million, should SRS lose.
Solbach said it is impossible to say how much the ACLU lawsuit, which calls for major changes in the way foster care and other children's programs are run in Kansas, could cost the state. But he pointed out that the ACLU has a record of winning similar suits in other states.
While not commenting on the validity of the lawsuits, Solbach and two other local lawmakers said the lack of funding for state programs is at the root of each lawsuit.
"PROBLEMS IN SRS probably began four years ago, but they have certainly gotten worse in the last four years," said Rep. Betty Jo Charlton, D-Lawrence. "The lawsuits attest to that."
Solbach said the the suits against SRS were triggered by attempts by Gov. Mike Hayden and the 1990 Legislature to trim spending because funding was not there.
"To some extent, the lawsuits were brought on by state attempts to save money in one of the largest agencies we have," Solbach said.
Rep.-elect Sandy Praeger, R-Lawrence, agreed.
The lawsuits, she said, "are another symptom of the overall problem. There's not enough money to deal with all these programs."
Praeger said she thinks an SRS task force, which has been studying the way the agency is funded and operated, will provide some answers. During her campaign, Praeger also said a tax increase to meet funding needs may be necessary.
GRACE, THE KAHA president, said the nursing homes feel funding levels set by the 1990 Legislature did not consider the needs of clients, but were "strictly budget-driven." He said that SRS itself said nursing homes would need a total of $220 million in state and federal Medicaid payments, but the Legislature provided only $190 million.
And he said costs associated with the federal nursing home reform act, called OBRA after the 1989 Omnibus Budget Reconciliation Act, also is part of the lawsuit. He said additional costs from OBRA were not taken into consideration by the Legislature when rates were set.
Provisions of this act will result in nursing homes hiring additional personnel, which in turn will cost more money, he said.
Grace said it was the first time KAHA has sued the state. Solbach said the for-profit KHCA has sued three times, winning a large settlement in 1987.
"WE THINK the Legislature is the appropriate forum to resolve the issues," Grace said. "But we also recognize that when we feel the law is violated and we cannot get the Legislature to deal with the issue, we certainly should execute our rights under the law."
Solbach said there are serious questions of law to be decided in the lawsuit. But he also said that, in the end, he suspects the state may have to pay additional nursing home costs.
"My perception of the 1990 Legislature is that it was a scramble by the governor and by appropriations committees to point and tuck everywhere they could and damn the long-term consequenses," he said.
"We should all be concerned about doing what's fair, and humane and appropriate," he added.