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State responsible for costs in relocating Medicaid patients

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Indiana Family and Social Services must reimburse an Arcadia, Ind., long-term care facility for the costs the facility paid in caring for Medicaid patients after FSSA ended its provider agreement based on the conditions at the facility, the Indiana Court of Appeals ruled Monday.

In Randall Woodruff, trustee, U.S. Bankruptcy Court, on behalf of Legacy Healthcare Inc. v. Indiana Family & Social Services Administration, Office of Medicaid Policy and Planning, No. 29A02-1002-PL-220, Legacy Healthcare Inc. operated New Horizon Development Center, an intermediate care facility for the mentally disabled from November 1993 to November 2000. It was certified and licensed, and was able to receive funds from FSSA to operate its facility until September 1999 when the FSSA terminated its provider contract after discovering poor conditions and care at the facility. New Horizon didn’t appeal, and continued to operate the facility for another year without a Medicaid provider agreement and to bill FSSA for its services. Eventually the facility went into bankruptcy and receivership, and all the patients were transferred by December 2001.

At issue is who is responsible for the costs New Horizon paid after its agreement was ended and before it went into receivership. The trial court ruled New Horizon was responsible for the nearly $4 million in costs.

But it was the FSSA’s responsibility as the state Medicaid agency to transfer the residents and ensure their safety once the agreement was terminated, and so that agency should bear the costs, the Court of Appeals concluded. The judges cited the State Operations Manual prepared by the Centers for Medicare and Medicaid Services to support their ruling.

Once the provider agreement was involuntarily terminated, the FSSA neither accepted primary responsibility for relocating the residents nor paid for their care, wrote Judge Nancy Vaidik. The judges rejected the agency’s argument that it couldn’t legally reimburse New Horizon for the care of the Medicaid recipients because the facility was decertified.

“Although there is evidence that FSSA took some initial steps to transfer the Medicaid patients from New Horizon once New Horizon’s provider agreement was terminated, the bottom line is that FSSA left them at New Horizon and let New Horizon pay for them until New Horizon ran out of money, thereby necessitating the appointment of a receiver,” she wrote.

The judge noted it may sound attractive for New Horizon to pay the nearly $4 million because the facility allowed the care of the patients to deteriorate to the point that its contract was terminated, but FSSA’s responsibility to transfer the patients is triggered when the provider agreement is either voluntarily or involuntarily terminated.

The appellate court ordered summary judgment be entered in favor of New Horizon on its quantum meruit claim in the amount of $3.96 million. The judges also reversed the trial court in allowing FSSA to set off the nearly $1 million it owed to New Horizon for breach of contract against the costs FSSA incurred in operating the receivership.

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  1. All the lawyers involved in this don't add up to a hill of beans; mostly yes-men punching their tickets for future advancement. REMF types. Window dressing. Who in this mess was a real hero? the whistleblower that let the public know about the torture, whom the US sent to Jail. John Kyriakou. http://www.nytimes.com/2013/01/26/us/ex-officer-for-cia-is-sentenced-in-leak-case.html?_r=0 Now, considering that Torture is Illegal, considering that during Vietnam a soldier was court-martialed and imprisoned for waterboarding, why has the whistleblower gone to jail but none of the torturers have been held to account? It's amazing that Uncle Sam's sunk lower than Vietnam. But that's where we're at. An even more unjust and pointless war conducted in an even more bogus manner. this from npr: "On Jan. 21, 1968, The Washington Post ran a front-page photo of a U.S. soldier supervising the waterboarding of a captured North Vietnamese soldier. The caption said the technique induced "a flooding sense of suffocation and drowning, meant to make him talk." The picture led to an Army investigation and, two months later, the court martial of the soldier." Today, the US itself has become lawless.

  2. "Brain Damage" alright.... The lunatic is on the grass/ The lunatic is on the grass/ Remembering games and daisy chains and laughs/ Got to keep the loonies on the path.... The lunatic is in the hall/ The lunatics are in my hall/ The paper holds their folded faces to the floor/ And every day the paper boy brings more/ And if the dam breaks open many years too soon/ And if there is no room upon the hill/ And if your head explodes with dark forbodings too/ I'll see you on the dark side of the moon!!!

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