An agreement has been reached in a long-standing dispute over Medicaid eligibility in Pennsylvania.

The fight began in July 2011 when the Pennsylvania Department of Public Welfare went through a backlog of paperwork to redetermine the eligibility of about 385,000 Medicaid recipients.

The department must continuously evaluate whether people qualify for this program to comply with federal guidelines.

Advocates, who said thousands of recipients were cut off for no reason during this process, threatened a lawsuit.

Attorney Richard Weishaupt from Community Legal Services says people will receive letters asking them to reapply for Medicaid.

"Part of the agreement provides that if people were incorrectly terminated they will have an opportunity to have their benefits restored and to be reimbursed for any out-of-pocket expenses that they had," he said.

Officials at the Department of Public Welfare say they have set up a special unit to deal with these requests to process them quickly.