Lawsuit filed by parents of disabled children against Indiana over Medicaid alterations addressing $1 billion shortfall

Two parents of children with disabilities have filed a federal lawsuit against an Indiana agency, alleging that recent modifications to attendant care services are in violation of the Americans with Disabilities Act and federal Medicaid laws.

For years, the state agency responsible for Medicaid has provided reimbursement to parents, guardians, and spouses for home care expenses.

From July 1 onwards, family members or guardians will no longer be eligible for reimbursement by the state. These changes were introduced as part of a cost-savings initiative by the Family and Social Services Administration (FSSA). The FSSA had miscalculated its Medicaid expenditures and underestimated them by almost $1 billion until July 2025.

The families of children who need ongoing medical care, in particular, have expressed concerns about the mishandling of the transition process. They argue that the health and well-being of these children are at risk, and are seeking a court order to compel the state to continue reimbursing parents and guardians for their expenses.

According to the complaint filed on Friday, this case involves children who have complex medical conditions, making it legally intricate.

The FSSA spokesperson did not respond to an email requesting comment. According to the state, attendant care services are experiencing an unexpected increase in Medicaid program spending.

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

Families of children with diverse and intricate medical needs have expressed their concerns about the modifications ever since they were initially put forward in January. According to the complaint, Medicaid payments play a vital role in supporting rural families who live far away from medical facilities staffed with qualified professionals. Moreover, these payments are a crucial financial lifeline for parents who are unable to work due to their responsibilities in caring for their children.

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According to the complaint, parents are responsible for providing continuous care, which includes feeding through a gastronomy tube, operating a ventilator, monitoring seizure activity, and administering medications.

The FSSA has announced its commitment to collaborating with families in order to identify alternative care options. However, according to the lawsuit, the newly proposed reimbursement rates are deemed inadequate.

According to the complaint, the alterations have the potential to place children requiring constant medical attention in an “institutional environment.” This is particularly concerning for parents who may have to go back to work to cover the costs of care. The lawsuit emphasizes that parents of children with disabilities often prioritize caring for their child themselves in order to meet their unique needs.

The mothers mentioned in the lawsuit are responsible for the well-being of two children. One is a 6-year-old boy diagnosed with a rare genetic disorder known as cri-du-chat syndrome, while the other is a 10-year-old child who suffers from hypoxic-ischemic encephalopathy, a specific type of brain damage.

Both children in the lawsuit have regular seizures that need constant monitoring along with additional assistance. The 10-year-old had a “horrendous experience” during their stay at a pediatric nursing home.

According to the lawsuit, the Americans with Disabilities Act mandates that state and local governments provide services in individuals’ homes and communities, making the placement of individuals in institutions a violation of this requirement.

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