Supreme Court Agrees with WHA-led Amicus Brief; Invalidates Medicaid “Perfection Rule”

July 09, 2020

In a 6-0 decision, the Wisconsin Supreme Court reinstated a 2016 circuit court order prohibiting the Wisconsin Department of Health Services (DHS) from recouping Medicaid payments made to Medicaid providers “if the provider's records verify that the services were provided and the provider was paid an appropriate amount for such services, notwithstanding that an audit identified other errors or noncompliance with [DHS] policies or rules.”
 
The Supreme Court labeled DHS’s recoupment policy for such services provided a “perfection policy” and held that such a policy was not consistent with Wisconsin’s Medicaid recoupment statute or administrative rules.
 
“Nowhere does [the Medicaid statute] or any DHS rule say that DHS may recoup payments from service providers based on any particular documentation shortcomings or imperfections,” Justice Annette Ziegler wrote for the Court.  “No statute or rule states that a particular documentation imperfection renders a claim inappropriate or inaccurate under [the Medicaid statute]. Nor has DHS made any effort to link the Perfection Policy to an inability to verify that a covered service was actually provided, that the claim for the service was appropriate, or that the claim for the service was accurate.”
 
“We note that § DHS 106.02(9)(g) does not state that mere record imperfections of any kind may be grounds for recoupment. Rather, it states that the complete failure or refusal ‘to prepare and maintain records or permit authorized [DHS] personnel to have access to records’ at all constitutes grounds for recoupment,” the Court stated.  “The difference between imperfect records and no records at all is a significant one.”
 
WHA led a group of health care provider association in developing and filing joint amicus briefs with the Court of Appeals and Supreme Court opposing DHS’s recoupment policy as overbroad. WHA hailed the Court’s decision.
 
“Today’s decision restores common sense for hospitals and other health care providers who take care of Medicaid patients,” WHA President and CEO Eric Borgerding said. “The ‘Perfection Policy’ the state used to take back payments even when legitimate Medicaid services were provided needed to be addressed, and we’re pleased the court unanimously decided that the policy wasn’t valid under state law.”
 
For additional information about the Court’s decision, contact Matthew Stanford, WHA General Counsel, at mstanford@wha.org

This story originally appeared in the July 09, 2020 edition of WHA Newsletter