Parents of disabled children sue Indiana over Medicaid changes addressing $1 billion shortfall

INDIANAPOLIS (AP) — Parents of two children with disabilities are suing an Indiana agency in federal court over changes to attendant care services they say violate the Americans with Disabilities Act and federal Medicaid laws.

A state agency overseeing Medicaid has reimbursed parents, guardians and spouses for home care for years.

Starting July 1, the state will no longer reimburse family members or guardians. The changes were proposed as a part of a cost-savings plan after the agency — the Family and Social Services Administration or FSSA — underestimated its Medicaid expenditures through July 2025 by nearly $1 billion.

Families of children who require constant medical attention in particular say the transition is mismanaged. The lawsuit alleges children’s health and well being is at risk and asks the court to order the state to continue reimbursing parents and guardians.

“This is a legally complex case about medically complex children,” the complaint filed Friday said.

A spokesperson for the FSSA did not immediately respond to an emailed request for comment. The state has said the attendant care services are where the Medicaid program is “most acutely seeing an unanticipated growth in spending.”

The American Civil Liberties Union of Indiana and Indiana Disability Rights are representing the families and the Indiana Protection and Advocacy Services Commission in the lawsuit.

Families of children with a variety of complex medical needs have spoken out against the changes since they were first proposed in January. The complaint says the Medicaid payments help rural families who are far from facilities with trained personnel and are a financial necessity for parents unable to work while caring for their children.

Parents must provide constant care including feedings through a gastronomy tube, operating a ventilator, monitoring seizure activity and administering medications, the complaint says.

The FSSA has said it will work with families to find alternate care options, but the lawsuit alleges the new reimbursements rates are not sufficient.

The complaint said the changes could result in some children who need constant medical attention being placed in an “institutional environment," especially if their parent must return to work to pay for the care. The lawsuit says parents of children with such disabilities often prefer to care directly for their child to suit their individual needs.

The mothers named in the suit care for a 6-year-old boy with rare genetic disorder called cri-du-chat syndrome and a 10-year-old who has hypoxic-ischemic encephalopathy, a type of brain damage.

According to the lawsuit, both children experience routine seizures that require constant monitoring on top of other assistance. The 10-year-old was placed for a period of time in a pediatric nursing home but had a “horrendous experience."

The lawsuit says the risk of being placed in institutions violates the Americans with Disabilities Act requirement that state and local governments offer services in people’s homes and communities.