Google Answers Logo
View Question
Q: medicaid reimbursement for nursing home ( Answered 5 out of 5 stars,   1 Comment )
Subject: medicaid reimbursement for nursing home
Category: Miscellaneous
Asked by: rennya-ga
List Price: $200.00
Posted: 07 Sep 2004 15:08 PDT
Expires: 07 Oct 2004 15:08 PDT
Question ID: 398069
May a state medicaid agency  withold payment over failure to timely
seek a level of care? Need to find cases similar to the
following:Texas Department of Human Services, et al, Appellants v.
Christian Care Centers, Inc., Appellee, No.3-91-024-CV. Court of
Appeals of Texas,

Request for Question Clarification by pafalafa-ga on 10 Sep 2004 20:34 PDT
Hello rennya-ga,

I've found another key case in Texas (in addition to the Christian
Care case) that establishes precedent on the question of withholding
Medicaid payments.

Am I right in presuming that you are only looking for Texas case law on this topic?

Let me know.


Clarification of Question by rennya-ga on 11 Sep 2004 07:19 PDT
No. National. there should be an Illinois case. Perhaps others.

Request for Question Clarification by pafalafa-ga on 11 Sep 2004 08:12 PDT
Thanks for clarifying...I was concentrating on Texas cases, so your
feedback certainly broadens the scope.

One more clarification, if I may.  What, exactly, are you looking for?
 Do you simply want citations and links (if available!) to relevant
cases that address the withholding issue?  Or are you looking for
something beyond that?

Let me know.


Request for Question Clarification by umiat-ga on 12 Sep 2004 14:45 PDT
One other question....must the other case(s) deal specifically with
nursing homes, or will you accept relevant cases involving other
medical facilities? For example, I have found a similar case where
Medicaid payments were withdrawn for psychiatric care due to a failure
to supply required stay review documents. The lower court ruling that
the denial of reimbursement was justified was reversed on appeal.
Would this case be acceptable?


Clarification of Question by rennya-ga on 12 Sep 2004 19:01 PDT
Cases and links pro and con on this issue, particularly ones with links.
Other facilities will be useful, but obviously a second priority.
Analytical articles or federal commentaries would be aplus, but not
part of question. The brief are written for this level and we are
negotiating. I already have their counsel worried, but his client is
hanging tough. Just want to be able to see how tough I should
negotiate. Thanks for your thoughtful questions. I have never used
this ervice before.

Request for Question Clarification by pafalafa-ga on 13 Sep 2004 16:32 PDT
Hello rennya-ga,

The case that seems to me most relevant to your question is also a
Texas case usually known as the Texas Health Enterprises case, and
more formally as:

Appellants v. TEXAS HEALTH ENTERPRISES, INC., Appellee
No. 05-92-01322-CV
December 10, 1993

The court summarized the gist of the case this way:

...The Texas Department of Health (TDH) and the Texas Department of
Human Services (Human Services) appeal the trial court's summary
judgment granted to Texas Health Enterprises, Inc. (the nursing home).
Appellants... in three points of error, contend that summary judgment
is improper because the trial court lacked jurisdiction, rendered an
advisory opinion, and did not require the nursing home to exhaust its
administrative remedies. We conclude that the trial court properly
exercised jurisdiction over this cause. In point of error four,
appellants complain that the trial court erred in declaring that Human
Services is prohibited from withholding Medicaid vendor payments
pending the exhaustion of the nursing home's administrative appeal. We
conclude that Human Services did not have the statutory or contractual
authority... to withhold contract payments pending an administrative
challenge. We overrule appellants' points of error. We affirm the
trial court's judgment...

To paraphrase (in my entirely non-legal-experts's opinion):  Human
Services asked the appeals court to overturn a lower court finding. 
The appeals court instead upheld the lower court, and agreed that
Human Services did not have authority to withhold Medicaid payments
prior to "...the exhaustion of the nursing home's administrative

The Texas Health Enterprises case, along with the christian Care case
with which you are already familiar, strike me as the two most
relevant cases on the topic at hand.

I've found a number of other cases that strike me as more tangentially
relevant.  However, it's hard to know for sure what's on target and
what isn't.  For instance, the following case deals with Medicaid
withheld payments, but centers around concerns of fraud at the
institution involved:

Filed September 26, 2002
No. 01-55359


Please take a look at the material I posted on Texas Health
Enterprises, and at the link to Azer v Connell, and let me know how
well either (or both) of these hit the mark.

Also, what sort of timeframe are you working there a
deadline for this question I should be aware of?

And lastly, how many case citations would you consider to be adequate
for your needs?

Looking forward to hearing back from you.


Request for Question Clarification by pafalafa-ga on 15 Sep 2004 10:18 PDT
Hello rennya-ga,

Just checking you have any feedback on the above-mentioned cases?

Let me know.


Clarification of Question by rennya-ga on 16 Sep 2004 09:55 PDT
I think those cases work just fine. They are what I am looking for.

ONe or two more would be fine. If you could find the Illinois case
that would be great. Don't work too hard. This wil probably settle and
we can finalize this soon.
Subject: Re: medicaid reimbursement for nursing home
Answered By: pafalafa-ga on 16 Sep 2004 16:17 PDT
Rated:5 out of 5 stars

Clarification of Answer by pafalafa-ga on 16 Sep 2004 16:19 PDT
[ooops....sorry about that erroneous'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.




No. 77-CC-2478


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).



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
the overpayment.

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.


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

No. 88CA0914

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... 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 ]
rennya-ga rated this answer:5 out of 5 stars and gave an additional tip of: $10.00
This was as good or better than expectations for price and an effort
by a non legal professional. Many of them would have done worse or no

Subject: Re: medicaid reimbursement for nursing home
From: pafalafa-ga on 17 Sep 2004 09:34 PDT
Thanks you very kindly.  I appreciate the stars and the tip, of
course, but the comparison to the legal professionals was the most
welcome feedback of all.

Best of luck to you, and hope to see you back at Google Answers one day soon.


Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  

Google Home - Answers FAQ - Terms of Service - Privacy Policy