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Justices affirm ruling in dispute between health care facility and FSSA

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The Indiana Supreme Court has affirmed the outcome of a case between Family and Social Services Administration and a decertified intermediate care facility, in which the net result was a wash for both sides.

In Randall L. Woodruff, Trustee, U.S. Bankruptcy Court, on Behalf of Legacy Healthcare, Inc.d/b/a New Horizon Develop. Center v. In. Family & Social Serv. Admin., Office of Medicaid Policy & Planning, No. 29S02-1110-PL-598, New Horizon Development Center was certified to receive Medicaid reimbursement from the state. However, an inspection found deplorable conditions and its certification was revoked. The facility operated without receiving federal or state funding for nine months, when the state then appointed a receiver. At issue in the case is whether Legacy Healthcare, which ran the center, is entitled to funding for the care of the patients, after it was decertified, until all the patients could be transferred to other facilities.

The trial court denied restitution for the unpaid months under a theory of quantum meruit, afforded relief under related breach of contract claims, but offset that judgment by the amount the state paid for its receiver. The parties received no net gain. The justices affirmed.

New Horizon couldn’t have reasonably foreseen payment from FSSA for its Medicaid-eligible patients after it was decertified, and the evidence clearly shows that it was aware that decertification would not result in immediate transfer of those patients to other facilities by the state. New Horizon then, can’t succeed as a matter of law in its claim for quantum meruit because it can’t show that it expected payment for any services it might have provided, wrote Chief Justice Randall T. Shepard.

Because FSSA did not have any contractual or equitable obligation to pay the health care costs of the Medicaid-eligible patients at New Horizon during the post-decertification period, there is no bar to the state’s counterclaim for a set-off pursuant to the receivership statutes, wrote Shepard.

The justices did reverse the trial court with respect to its findings on the issue of exhaustion, noting that the facility appealed its decertification through administrative channels and had sought relief in court.

 

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  1. I expressed my thought in the title, long as it was. I am shocked that there is ever immunity from accountability for ANY Government agency. That appears to violate every principle in the US Constitution, which exists to limit Government power and to ensure Government accountability. I don't know how many cases of legitimate child abuse exist, but in the few cases in which I knew the people involved, in every example an anonymous caller used DCS as their personal weapon to strike at innocent people over trivial disagreements that had no connection with any facts. Given that the system is vulnerable to abuse, and given the extreme harm any action by DCS causes to families, I would assume any degree of failure to comply with the smallest infraction of personal rights would result in mandatory review. Even one day of parent-child separation in the absence of reasonable cause for a felony arrest should result in severe penalties to those involved in the action. It appears to me, that like all bureaucracies, DCS is prone to interpret every case as legitimate. This is not an accusation against DCS. It is a statement about the nature of bureaucracies, and the need for ADDED scrutiny of all bureaucratic actions. Frankly, I question the constitutionality of bureaucracies in general, because their power is delegated, and therefore unaccountable. No Government action can be unaccountable if we want to avoid its eventual degeneration into irrelevance and lawlessness, and the law of the jungle. Our Constitution is the source of all Government power, and it is the contract that legitimizes all Government power. To the extent that its various protections against intrusion are set aside, so is the power afforded by that contract. Eventually overstepping the limits of power eliminates that power, as a law of nature. Even total tyranny eventually crumbles to nothing.

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