An administrative law judge on Friday put a temporary stop to the state assigning adult care homes a special status that cuts off their federal Medicaid payments.
A group of adult care homes went to court this week to ask that the state Department of Health and Human Services no longer be allowed to designate certain adult care homes “institutes of mental disease.”
To comply with federal rules, the state is surveying adult care homes to determine how many of their residents are mentally ill. Adult care homes have long offered housing for mentally ill people, but the practice conflicts with federal policy.
Senior Administrative Law Judge Fred G. Morrison Jr. granted a temporary restraining order Friday telling the DHHS it could continue its surveys but that it could not take the final step to stop the flow of Medicaid money from adult care homes they find to be violating federal rules before June 28.
The federal Medicaid program won’t reimburse adult care homes where more than half the residents have mental illness as a primary diagnosis.
The adult care homes said losing the federal money would create a financial hardship because the government health insurance program pays more than 40 percent of each eligible patient’s yearly costs.