R.I. Nursing Homes Fight Medicaid ‘Clawback’

PROVIDENCE, R.I. (CN) — Over a dozen nursing homes claim in court that Rhode Island overpaid Medicaid benefits and is now dodging its responsibility by demanding the repayment of millions of dollars without notice.

Seventeen skilled nursing-home facilities sued Elena Nicolella, Medicaid director of the Rhode Island Executive Office of Health and Human Services, for alleged due process, Medicaid Act and Americans with Disabilities Act violations.

From October 2012 through May 2013, the Rhode Island Office of Health and Human Services paid out benefits on behalf of Medicare patients at rates that were never approved by the Centers for Medicare & Medicaid Services, according to the lawsuit filed Thursday in Rhode Island federal court.

In October 2015, without notice or a hearing, Rhode Island "demanded" that the nursing facilities pay back the overages, which is "improper and inconsistent with the applicable federal regulations," the 13-page complaint states.

The state's action, which the nursing homes call a "clawback initiative," is essentially an attempt "to shift responsibility from the state agency to the facilities," they claim.

The nursing facilities say that not only is Rhode Island disregarding their due-process rights, but federal law does not even allow state agencies to recover paid benefits from beneficiaries, "except under very specific circumstances."

"Rhode Island's clawback initiative disregards due process standards contained in [federal] regulations by failing to provide the Medicaid beneficiaries with a hearing process or notice of proposed action of the state agency's intent to demand reimbursement of benefits up to three years after paying the benefit," the lawsuit states.

The nursing homes seek a court order requiring Rhode Island to "automatically approve" the Medicaid benefits in question from the date of their original application. They are represented by Mary Cavanagh Dunn of Blish & Cavanagh in Providence.

The Rhode Island Office of Health and Human Services declined to comment on the pending litigation.

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