Court: Indiana can’t deny welfare without reason

The Indiana Supreme Court said Thursday that the state Family and Social Services Administration can't deny Medicaid, food stamps or welfare to people without first doing a better job of telling them why.

The unanimous ruling came in a four-year-old class action lawsuit that challenged the way the outsourcing of the state's welfare system dealt with clients. The system has since been modified, but a lawyer for the American Civil Liberties Union of Indiana, which filed the lawsuit in 2008, said the problem persists.

In a 23-page opinion, the justices said FSSA violated applicants' due process rights when it sent them notices that stated their benefits were denied because they had failed to cooperate without citing a specific reason. The 2008 lawsuit argued that the FSSA sent notices denying or cutting off Medicaid, welfare or food stamps because of missing documents in clients' applications, but never told clients which documents were missing.

In one case, the agency cut off Medicaid to a woman with hearing problems and other disabilities after a telephone interview that she had trouble understanding and refused to meet with her in person. The justices said the agency's treatment of the woman violated federal law including the Americans with Disabilities Act.

The woman had wanted to talk with a caseworker, but the ruling said only that FSSA must accommodate her disability but wasn't obligated to provide a caseworker.

"I think a lot of those issues have likely been resolved by the fact that they did get away from the modernization effort and revamped their offices so there is a little more person-to-person contact," ACLU attorney Gavin Rose said.

The woman whose benefits were cut off sued on behalf of all people who applied for or received public benefits from the FSSA. Rose said that could be as many as a million people.

FSSA spokesman Neal Moore said the agency was reviewing the ruling and had no comment.

The modernization effort involving a team of private vendors began in 2007 and introduced call centers, the Internet and fax machines as means to apply for benefits. It took away specific state caseworkers assigned to each household. But Gov. Mitch Daniels canceled the contract with IBM, the main vendor, in 2009 following problems that included lost documents, lengthy hold times for its call centers and too many errors in processing of food stamps and Medicaid.

After Daniels fired IBM, FSSA took its place as the leader among several subcontractors in the automation project and has gradually introduced a new system, dubbing it "hybrid." The system adds more face-to-face caseworker interaction with clients during the welfare application process.