BOISE - A group of 12 severely disabled residents are suing the state after the Idaho Department of Health and Welfare refused to disclose why it cut their Medicaid benefits by as much as 40 percent.

The plaintiffs in the case are represented by Idaho Legal Aid attorney Ritchie Eppink, who describes his clients as Idaho's most vulnerable residents. All of them need supervision - some require 24-hour care - and all have multiple medical or mental health problems or developmental disabilities. The lawsuit refers to them only by their initials or first names because of the plaintiffs' privacy concerns.

All of the plaintiffs access Medicaid benefits through the state's developmentally disabled waiver program. Normally, the state assigns those clients an "individual budget" for the year, which is essentially a cap on how much each client may spend on medical needs or other care.

But the plaintiffs say in the lawsuit that their budgets were cut dramatically, leaving them without enough funds to get the care they need, and that the state won't tell them how it came up with the new budget numbers. That makes it nearly impossible to appeal the decisions, Eppink says in the lawsuit.

But the Idaho Department of Health and Welfare says there's a good reason for the secrecy - the formula for computing budgets is a trade secret, the agency contends in its reply to the lawsuit. The department also told the plaintiffs that it was barred from releasing the formula under Idaho's public records law.

Once the lawsuit was filed last month, the state stepped back from the public records exemption claim, however. Instead, department officials told Eppink that his clients could review all the information used to set their budgets as long as they signed a confidentiality agreement, pledging to keep the information a secret. Eppink's clients refused.

U.S. District Judge B. Lynn Winmill has given both sides until Wednesday to figure out the confidentiality issue; if they don't reach an agreement, he'll issue an order on the matter. He's also told the state to bump the plaintiffs' budgets back up to earlier, higher levels until a hearing can be held later this month.

The lead plaintiff in the lawsuit is a 30-year-old man identified only as K.W. He has severe epilepsy and developmental disabilities, and according to the court document functions at about the level of a 15-month-old toddler. K.W. was allotted more than $102,000 for the year in 2010, but last year, Idaho Legal Aid contends, the state cut that budget by roughly $20,000 with no explanation.

The state's own hearing officer reviewed the case and reversed that budget decision, finding that the only other option for K.W. was to be institutionalized at a much higher cost to the state, according to the lawsuit. But Eppink says K.W. is facing the same situation this year: The Idaho Department of Health and Welfare calculated K.W.'s 2012 budget at just over $72,000, a roughly 29 percent cut, according to the lawsuit.

Another plaintiff in the case, 59-year-old Marcia S., was institutionalized at the Idaho State School and Hospital until 1993 when she was moved to a certified family home, according to the lawsuit. She was assigned a budget of just over $43,000 in 2010, and was able to increase it to more than $48,000 through the state's reconsideration and appeal process.

But in 2011, the reconsideration process isn't available, according to the lawsuit, and the state has set her budget at $36,854. The lawsuit contends that's not enough money to provide the services needed for Marcia S., who has moderate mental retardation, schizophrenia and other medical problems and functions at about the level of a 2-year-old.