Federal appeals court finds Florida’s Medicaid termination letters insufficient

Florida has lost another round in a  long-running legal battle over how the administration of Gov. Ron DeSantis removed people from Medicaid.

A federal appeals court ruled this week that the DeSantis administration did not provide adequate notice to people it claimed were no longer financially eligible before dropping them from the safety net program following the end of the public health emergency caused by COVID-19.

The 23-page decision, written by U.S. Court of Appeals for the 11th Circuit Judge Barbara Lagoa, upholds a permanent injunction issued earlier this year by U.S. District Judge Marcia Morales Howard in Jacksonville.

Howard wrote a scathing 273 page opinion ordering Florida to clearly explain in its Medicaid termination letters why the state determined people were no longer financially qualified for the program.

“After a six-day bench trial, the district court found that the notices did not ‘unambiguously communicate the State’s decision to terminate benefits, the reason for that decision, or to whom it applies,’ and that the other available sources did not cure those deficiencies,” Lagoa wrote in the ruling issued Thursday. “We agree.”

The Florida Agency for Healthcare Administration (AHCA), which administers the Florida Medicaid program and one of the defendants in the lawsuit, did not immediately respond to the Florida’ Phoenix’s email request for comment on the ruling.

The Department of Children and Families, the state agency charged with determining Medicaid eligibility, also did not respond to Phoenix’s request for comment.

It’s not clear whether the state plans to seek review by the U.S. Supreme Court — an action that would need to be started before DeSantis leaves office in early January. Also unclear is how Gov.-Elect Byron Donalds views the litigation.

‘Crystal clear’ standard

The National Health Law Program and Florida Health Justice Project filed the legal challenge on behalf of plaintiffs who were erroneously removed from the program. Both groups lauded the ruling.

“It is unfortunate that it took three years and extensive state resources to confirm the non-controversial proposition that Medicaid enrollees must be informed of the grounds upon which the state is ending their health care coverage before the coverage ends,” Florida Health Justice attorney Lynne Hearne said in a written statement Friday to the Florida Phoenix.

“The good news is, going forward it is crystal clear that this is the standard for all Medicaid termination notices.”

National Health Law Program senior attorney Katherine DeBriere said the ruling comes as states prepare to implement eligibility changes under the One Big Beautiful Bill Act, which changes who qualifies for Medicaid and brings even more “urgency” to well-designed notices that explain coverage decisions.

“Florida has already begun issuing notices to immigrant enrollees noting coverage terminations,” DeBriere said in a prepared statement. “As states prepare for a new wave of Medicaid paperwork and notices under OBBBA, they should heed this decision.” 

“People need enough information to understand why the state proposes to end their coverage and to challenge mistakes,” she added. “States must build those protections into their systems now. Confusing notices and inaccessible explanations put people’s health care at risk.”

Medicaid is a health care program jointly administered and paid for by the state and federal governments. Financial eligibility for Medicaid hinges on several factors, including the qualifying eligibility category; the size of the family unit and allowable income limits based on that; and the recipient’s reported income.

During the COVID-19 pandemic, the federal government increased by 6.2% its contributions to the Medicaid program to help foot the costs of the growing number of people who qualified due to the financial downturn.

With the additional federal funding came the requirement the states couldn’t disenroll anyone from Medicaid until the public health emergency expired.

That occurred on March 31, 2023. Florida started its Medicaid unwinding the following day. And by the following year, DCF redetermined the Medicaid eligibility of more than 4 million people.

Howard’s initial ruling focused on termination notices sent to children, parents (and other caretakers of children), pregnant women, and former foster children under age 26. They are all part of the “family related Medicaid” category of beneficiaries, described by Howard as some of the state’s “most vulnerable citizens.”

Court rules Florida Medicaid termination letters fly in face of federal law

Howard found that the state did not provide enough case-specific information for recipients to understand how DCF reached its decision that they no longer qualified, making it “difficult, if not impossible, for the recipient to understand the State’s intended action as to each enrollee or the reasons for that action.”

Bad notices

The named plaintiff in the underlying case is identified in court papers Chianne D, who received an 11-page notice in April 2023 that she and her newborn son were being disenrolled for financial reasons. The notice contained eight pages discussing health-benefit criteria. One section of the letter said that neither she nor her newborn son, S.D., were eligible for Medicaid benefits because Chianne D’s household income was too high. Several pages later, a different section of the letter advised that S.D. was eligible. 

The notice didn’t include the size of Chianne D’s family or the qualifying income corresponding to the family’s size. Neither did it disclose what Chianne D’s reportable monthly income was or the Medicaid eligibility category assigned her.

Calling the DCF call center didn’t provide clarification. The court record indicates a DCF agent acknowledged to Chianne D that S.D.’s Medicaid “remained open” but the agent also told her that S.D. was being terminated because her income was too high.

Ultimately, the state determined that Chianne D.’s own coverage had been incorrectly terminated and that she remained eligible for Medicaid.

In confirming Howard’s decision on appeal, Lagoa wrote, “When a trained DCF employee could read the notice and come away with the wrong answer about whose coverage was ending, the district court did not err in finding that the notice did not reasonably convey DCF’s decision to its intended recipient.”

It wasn’t the only example of flawed determination letters plaintiffs highlighted during the six-day hearing in Jacksonville.

A.V. received an eight-page termination notice from the Medicaid program because of income limits. But the notice didn’t say what family size the state used for A.V’s family. Ultimately, A.V. , who had been on a Medicaid program called Medically Needy learned the state assigned a family size of six instead of her actual family of eight. 

The smaller family size figure lowered the allowable monthly income A.V. could earn to qualify for the Medically Needy program. Moreover, the state incorrectly inflated A.V’s reported monthly income. 

‘This is pretty bad’

Attorney Andy Bardos represented the DeSantis administration on appeal. Appearing before Lagoa and U.S. Circuit Court judges Adalberto Jordan and Robin Rosenbaum, he defended the state’s termination notices.

Bardos argued Florida needed to adhere only to minimum due-process requirements such as the information about the state’s intended action, the date when the action would occur, and a statement of the reason why.

“With nothing else?” Jordan asked.

“We think that’s the minimum requirement of due process,” Bardos replied.

Jordan offered that perhaps the state notices could have included additional information steering people to a website where they could input pertinent information like their income and family size to ensure the determination was accurate, but didn’t.

“This is pretty bad,” Jordan told Bardos at the time.

Jordan wasn’t the only judge who appeared skeptical during the arguments.

Lagoa, once a DeSantis appointee to the Florida Supreme Court, told Bardos that “it’s clear” Medicaid notices must provide the recipient with meaningful notice and the opportunity to be heard.

“You cannot be heard if you don’t know what you’re objecting to. Because, by the way, I don’t think you would like a trial judge to issue an order just telling you ‘denied’ and not tell you the basis. Correct? Because you wouldn’t be able to have meaningful appellate review.”