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Court Upholds Most of D.C.’s Medicaid Sanctions

(CN) - The District of Columbia must pay more than $500,000 for failing to meet court-ordered deadlines based on a Medicaid settlement, the D.C. Circuit ruled. But the court reversed one sanction for $370,500, saying the district had been fined for more days than allowed under a previous court order.

The sanctions stemmed from a lawsuit filed by Medicaid recipients who claimed the District of Columbia shirked its obligations under the Social Security Act.

The district court found D.C. liable, and the parties settled in 1999.

In 2003, Medicaid recipients again took legal action to hold D.C. to its settlement obligations. A federal judge in 2006 granted their motion to establish a per-day fine for future violations.

Over the next two years, the plaintiffs filed five quarterly reports documenting penalties allegedly accrued by the district.

The lower court addressed each report and fined D.C. a total of about $930,000, including $370,500 in penalties for its alleged failure to "negotiate in good faith."

The district appealed, but the D.C. Circuit upheld all fines except the $370,500 contempt fine. For that sanction, the federal appeals court said the lower court "committed error in subjecting the District to a 126-day contempt fine."

Senior Circuit Judge Harry Edwards noted that the 2006 order "does not say that per diem fines can be imposed for failure to negotiate beyond, rather than within, the 10-day window."

The court reversed and remanded the failure-to-negotiate fine, but otherwise upheld the lower court's sanctions. The appellate panel said the district "failed to raise and preserve most of the claims that it now raises on appeal."

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