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The Kentucky Hospital Association has thrown its support behind the state’s effort to save a planned overhaul of Medicaid that would include a monthly work or “community engagement” requirement.

The nonprofit group, whose membership includes every hospital and health system in the state, has filed a friend of the court brief, backing the state’s appeal of a federal judge’s decision to strike down Kentucky HEALTH.

The Trump administration approved the program, also known as the state’s Section 1115 waiver, for a second time in November. But U.S. District Court Judge James Boasberg vacated that decision in March, deeming the approval “arbitrary and capricious” and contrary to federal law.

In doing so, he sided with more than a dozen Medicaid beneficiaries who’d filed a legal challenge maintaining that the program would harm Kentuckians across the state, from custodians and cashiers to musicians and retired workers, in need of health services. Both the Trump and Bevin administrations are appealing.

Despite an initial estimate from the state that the program could cost 95,000 people their Medicaid coverage, the hospital association touts Kentucky HEALTH and its work requirement as innovations that Kentucky should be allowed to try, given the state’s myriad health problems and finite health care dollars.

“Kentucky providers are keenly aware of the precarious state of Kentucky’s economy and, consequently, its Medicaid program,” according to the association’s brief at the U.S. Court of Appeals. “… There is a palpable sense that the physical health of Kentuckians is spiraling out of control, and the economic health of the commonwealth-at-large is caught in its drag.”

Alex Azar, secretary of the U.S. Department of Health and Human Services | Courtesy of HHS

The association also maintains that U.S. Health and Human Services Secretary Alex Azar’s approval of Kentucky HEALTH was consistent with federal law and his “Congressionally-granted authority.”

Boasberg maintained that Azar didn’t adequately consider whether Kentucky HEALTH promotes the central objective of the Medicaid Act — furnishing medical assistance to needy populations — and the potential effects of Kentucky HEALTH on coverage.

But the association said, “It is clear that furnishing medical assistance is not the only objective of the Medicaid Act, nor can it be viewed in isolation apart from the practical means of actually accomplishing it. When looking at the ‘statute as a whole,’ as the Court is required to do, the Secretary was well within his statutory authority to approve Kentucky HEALTH as being consistent with the objectives of the Medicaid Act. ”

The association files friend-of-the-court briefs in cases that may have a significant impact upon Kentucky’s health care providers and their delivery of health care services.

Kentucky HEALTH would require certain able-bodied Medicaid recipients to complete and report 80 hours a month of work or other qualifying activities, such as volunteering or job training, to keep their benefits. Other features would include monthly premiums for some people and a My Rewards account to earn virtual dollars for some benefits, such as routine dental and vision services.

More than 18,000 people dropped off of the Medicaid rolls last year in Arkansas due to a similar program that Boasberg rejected on the same day as Kentucky’s. That decision by the judge also is being appealed.

Samuel Brooke, a lawyer with the Southern Poverty Law Center, previously told Insider, “When the waiver briefly went into effect in Arkansas, everyone saw the devastating effect it could have — thousands lost coverage in a matter of months. We are confident the appeals courts will similarly agree with the district court that the Medicaid program is designed to provide access to health care, and efforts to undercut that are contrary to Congress’ intent.”