Clarification of Answer by
16 Sep 2004 16:19 PDT
[ooops....sorry about that erroneous click...here's the full answer]
Thanks for getting back to me on this...I'm glad to hear the cases I
provided earlier were on target for your needs.
Here are citations and excerpts from a few more cases that I think
you'll find directly relevant.
Before rating this answer, please let me know if you need any
additional information. Just post a Request for Clarification, and
I'll be happy to assist you further.
MADISON-KEDZIE, INC., Claimant, v. THE STATE OF ILLINOIS, Respondent.
COURT OF CLAIMS OF ILLINOIS
December 31, 1986, Opinion Filed
[This is a welfare payments case, but it references the a key 1977
State Supreme Court decision regarding withholding authority for
medicaid payments...this may well be the Illinois case you were asking
The decision in I & D Pharmacy was based upon the ruling of the
Illinois Supreme Court in Bio-Medical Laboratories, Inc. v. Trainor
(1977), 68 Ill. 2d 540, 370 N.E.2d 223, 12 Ill. Dec. 600. In
Bio-Medical the director of IDPA attempted to terminate a vendor from
participation... in the Medicaid program for welfare recipients. The
supreme court found that the director was not entitled to suspend a
vendor where there were no intelligible standards provided to guide
the director in the exercise of his discretion. In the absence of
...statutory authority, the director may not suspend a vendor. In
addition section 12--15 of the Illinois Public Aid Code (Ill. Rev.
Stat. 1977, ch. 23, par. 12--15) provides that the Attorney General
may file suit against vendors to recover overpayments made to vendors.
Since the decision in Bio-Medical, the General Assembly has enacted
section 12--4.25 of the Illinois Public Aid Code (Ill. Rev. Stat.
1977, ch. 23, par. 12--4.25), which allows under certain conditions
the IDPA to terminate or suspend a medical vendor and withhold
payments. This statute was effective on December 1, 1977. Pursuant to
section 12--4.26 of the Illinois Public Aid Code (Ill. Rev. Stat.
1977, ch. 23, par. 12--4.26), the powers conferred by section 12--4.25
are effective only subsequent to the effective date of December 1,
1977 (with certain enumerated exceptions not relevant in this case).
[Here is a recent article that references several pertinent cases,
some involving withheld payments as a means of recouping overpayments]
June 17, 2004
Medicaid Overpayment May Be Deducted From Payment for Post-Petition Services
The Health Care Financing Administration's post-petition efforts to
collect pre-petition Medicaid overpayments to a Chapter 11 debtor did
not violate the automatic stay because they were in the nature of
recoupment, and constituted neither voidable preferences nor
violations of the automatic stay, the U.S. Court of Appeals for the
First Circuit held June 8 (Holyoke Nursing Home Inc. v. Health Care
Financing Administration (In re Holyoke Nursing Home Inc.), 1st Cir.,
No. 03-1933, 6/8/04).
BELEN B. FERNANDEZ, M.D., Appellant, v. IOWA DEPARTMENT OF HUMAN SERVICES, Appellee
No. 206 / 84-1841
Supreme Court of Iowa
October 16, 1985, Filed
Belen B. Fernandez, M.D., a licensed psychiatrist, appeals from a
district court decision affirming an agency ruling. The Iowa
Department of Social Services...(department) held that Dr. Fernandez
had violated agency rules that were established to administer the
Medical Assistance Act (medicaid). Iowa Code chapter 249A (1981). The
department found that Dr. Fernandez improperly signed claims and
received payment for medicaid services from February 1 through
September 21, 1982, in the amount of $87,727.58. These claims were
based primarily on services provided by two psychologists,...Barbara
Cavallin and Susan McNeil, employees of Cavallin & Associates, P.C. As
a sanction, the department suspended and withheld medicaid payments to
Dr. Fernandez until the department was able to offset the amount of
We conclude that the hearing officer's interpretation that the
administrative rules gave the department authority to recover from the
appellant any incorrectly paid assistance by suspending or withholding
medicaid payments is neither plainly erroneous nor inconsistent with
chapter 249A. We agree that section 249A.5 (1981) should not be
interpreted to prohibit the department from recovering incorrectly
paid medicaid payments to the appellant-provider. More importantly, as
a department of the state government it had a duty and implied
authority to recoup from the provider payments incorrectly made when
the payments were made because of rule violations by the provider....
See, e.g., Jacquet v. Westerfield, 569 F.2d 1339, 1342 (5th Cir.
1978)... The court in Jacquet stated, "no express statutory
authorization is required to permit the government to recoup monies
wrongfully paid." 569 F.2d at 1342. We hold the hearing officer's
decision that the department could...withhold future payments from the
provider to recoup the $87,727.58 was a correct conclusion of law.
GOOD SHEPHERD HEALTH FACILITIES OF COLORADO, INC., a Colorado
corporation, Plaintiff-Appellee, v. The DEPARTMENT OF HEALTH OF the
State of Colorado; Thomas M. Vernon, Executive Director of the
Colorado Department of Health; Department of Social Services of the
State of Colorado; Irene Ibarra, Executive Director of the Colorado
Department of Social Services, Defendants-Appellants
Court of Appeals of Colorado, Division One
August 17, 1989, Filed and Enter
Defendants, Colorado Department of Health and the Colorado Department
of Social Services (Social Services), appeal a district court order
requiring Social Services to pay certain Medicaid reimbursements to a
receiver appointed for the Montclair Health Care Center owned by
plaintiff, Good Shepherd Health Facilities, Inc. (Good Shepherd). We
The sole issue on appeal is whether Social Services has the authority
to withhold the final month's payment claimed by the receiver...
...it is apparent that the receiver does not stand in the shoes of the
facility's owner with reference to day to day operation of the
facility. It is further apparent that the statutory purpose of the
receivership could be totally frustrated if funds required for that
purpose may be withheld by Social Services. The receiver could not
fulfill his duties, and those employees of the facility who assisted
the patients in avoiding the prescribed trauma would not Be
compensated for up to 30 days of work. Accordingly, we hold that
Social Services Regulation No. 8.444F may not be relied upon to
withhold...payments due the receiver.
Again, I trust you'll find these case to be right on target. But if
you have need for any additional information, just let me know.
All the best,
search strategy: searched Google and numerous legal databases for
combinations of the terms: [ medicaid payment withold OR withheld ]