In Lee Quality Home Care LLC v. DHS (2017AP1216), the Court of Appeals District IV held that the Wisconsin Department of Health Services (DHS) has the authority to recoup payments from a personal care provider for services performed by workers not trained according to DHS rules.
First, the court affirmed that the plaintiff Lee Quality Home Care did not train its workers according to DHS rules (Wis. Admin. Code § 105.17(1n)). Lee Quality argued that guidance documents from DHS relaxed personal care worker training requirements, but the court ruled that these documents did not change the administrative rules.
Because Lee Quality had not trained its workers according to DHS rules, the court held that DHS had the authority to recover Medicaid reimbursement payments from Lee Quality. Wis. Stat. § 49.45(2)(a)10.a. and Wis. Admin. Code § 108.02(9)(a) state that DHS can recover “improper” payments from providers. Federal code defines “improper payment” as a payment “made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirement” (42 C.F.R. § 431.958). The court determined that DHS’s payments to Lee Quality were “improper” because Lee Quality failed to comply with DHS’s “legally applicable” training requirements.
Among other arguments, Lee Quality contended that DHS cannot recover payments for services actually provided and that the payments were not “improper.” Lee Quality said Wis. Admin. Code § DHS 105.17(4)(c) provides that DHS give notice to noncompliant providers requiring providers to correct the noncompliance by a certain date. Instead of recollecting the Medicaid reimbursement payments, DHS should have allowed Lee Quality the opportunity to comply. The court rejected these arguments, allowing DHS to recover reimbursement payments to Lee Quality’s providers for services that they had performed.
Other Medicaid reimbursement cases regarding DHS authority are also making their way through Wisconsin courts. The Court of Appeals District III held in 2018 case Newcap, Inc. v. DHS (2017AP1432) that DHS has the authority to recoup Medicaid reimbursement payments for services provided when providers fail to maintain required records. However, Newcap did not have to repay DHS because the specific records in its case were not required by statutes or DHS rules.
In Kathleen Papa v. DHS, the Court of Appeals District II will decide whether DHS has the authority to recover Medicaid reimbursement payments for services provided when the provider fails to follow documentation requirements. The Great Lakes Legal Foundation and Wisconsin Manufacturers & Commerce have filed a joint amicus brief in this case.