A group of private agencies that serve hundreds of severely developmentally delayed people across Idaho have asked a federal judge to allow them to broaden their lawsuit against the state and Medicaid over reimbursement rates.

The groups sued in April after the Idaho Department of Health and Welfare decided to cut Medicaid reimbursement payments by as much as 55 percent, contending the change would put them out of business, infringe on the care provided to more than 2,000 adults and children, conflict with federal law and violate state law because the rate structure was never vetted by the Idaho Legislature.

U.S. District Judge Justin Quackenbush temporarily blocked the scheduled cuts while the lawsuit went forward. And the state followed up with a surprising move: It asked the judge to make the injunction permanent.

"It was taking a lot of staff time, and we need to move forward. We need to work with the providers and come up with an equitable fee-for-service arragement," Idaho Department of Health and Welfare spokesman Tom Shanahan said.

James Piotrowski, the attorney representing the health care groups, said the state wanted the lawsuit to end rather than to comply with discovery requests from his clients, who wanted records of rate-changing decisions made back to 1997.

"We think we're going to find that previous rate cuts were just as illegal as the rate cut attempted in 2009," Piotrowski said last week. "We want to amend the complaint to say not only was the 2009 rate change invalid but some of the prior rate changes going back to 1997."

The state can't just change the reimbursement rates based on the money available in the budget, Piotrowski said _ it must make the changes based on methodology, and that methodology must be described in federal and state documents. The most recent methodology listed in the state plan and federal documents is from 1995, he said.

"We think we're going to find that the description of the rate-setting methodology hasn't changed until recently, despite rate changes so significant that they couldn't have been based on the methodology from 1995," he said.

The private providers don't want retroactive pay, he said.

"My clients have been paid the same rates for seven years, with no adjustments for new regulatory requirements, no cost of living increases," he said. "We just want to get to a legally valid rate-setting process."

Shanahan said the rates were set using methodology requested by the Centers for Medicare and Medicaid Services _ the federal agency that pays the bulk of Idaho's Medicaid bill.