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.”

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