Texas sues HHS to reverse $25M in Medicaid repayments

Morgan Haefner - Print  | 

The state agency that administers Medicaid to Texans filed a lawsuit to keep tens of millions of dollars in payments the federal government argues it is owed.

In the Dec. 2 lawsuit filed in the U.S. District Court for the Northern District of Texas, the Texas Health and Human Services Commission calls for the reversal of an HHS decision requiring the state department to repay $25 million in supplemental Medicaid payments. The lawsuit also calls for review of a decision made by the HHS Departmental Appeals Board on Aug. 7, 2018, that sustained a disallowance by CMS of the payments to certain private hospitals.

CMS notified the state department it disallowed $26.8 million in federal share uncompensated care payments to private hospitals in the state's Dallas and Tarrant counties for the fourth quarter of fiscal year 2015. CMS argued the hospitals provided charity care to patients who had already received it, which constituted impermissible provider-related donations. The state department called for the decision to be reversed, but CMS later affirmed the disallowance.

The state department called the final disallowance "arbitrary and capricious, an abuse of discretion, in excess of and not in accordance with law, made without observance of procedure required by law, and unsupported by substantial evidence."

Becker's reached out to HHS for comment on the lawsuit, which concerns payments made to Dallas-based Baylor Scott & White Health, Methodist Hospitals of Dallas and Texas Health Resources in Arlington. HHS and CMS said they don't comment on pending litigation as a matter of policy.

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