BOISE — A federal judge has ordered Idaho to increase Medicaid reimbursement rates for businesses that provide residential care to developmentally disabled residents. The ruling could cost the state $4 million.

U.S. District Judge B. Lynn Winmill made the ruling Monday. The decision came after five residential habilitation companies sued the state in 2009, contending the Idaho Department of Health and Welfare was using reimbursement rates calculated in 2006, even though the department’s own subsequent studies showed that the cost of providing services had increased considerably.

According to the lawsuit, the 2006 daily rate for one type of service was $268 — compared to the daily rate of $496 suggested by the department’s study. But lawmakers failed to give the department funding for the increase.

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