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Pines Bach Wins Long-Awaited Supreme Court Victory for Medicaid Providers, Striking Down Unlawful State Recoupment Policy

Attorney Diane Welsh and her Pines Bach colleagues won a momentous victory for Medicaid providers and enrollees in the Wisconsin Supreme Court on July 9, as the Court unanimously agreed with the circuit court and with providers that a widespread payment recoupment standard imposed on providers by the Department of Health Services was unlawful.

Under the unlawful practice, the Department's Office of the Inspector General would recoup past payments made to Medicaid providers for days, weeks, or even months of care services that they had indisputably and appropriately provided, based solely on audit findings of documentation errors and other minor noncompliance with the program's myriad of program requirements. The Court agreed with Welsh that this was beyond the scope of the Department's statutory authority.

In addition to striking down the practice, which the Court referred to as the "Perfection Policy," the Justices clarified that, so long as the Department can verify that a covered service was actually provided, the claim was appropriate for the services provided, and the claim was accurate, it cannot recoup payments based on a record imperfection. The Court also held that the circuit court's supplemental order, clarifying and reinforcing the limits on DHS, there did not expand the scope of the court's original order, and that it should therefore be reinstated.

Welsh has spent years fighting on behalf of Medicaid providers. She brought this declaratory judgment action on behalf of Professional Homecare Providers, a non-profit association of nurses who provide home-based care to patients with complex medical needs enrolled in the Wisconsin Medicaid program, but its effect is universal throughout the state, applicable to all Medicaid providers. The Court's ruling will help ensure that Medicaid providers can keep serving patients and enrollees without fear of unjust recoupment efforts, and that Medicaid patients and enrollees have access to needed care. 

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