FTLF Wins Significant Case for Two South Carolina FQHCs in SC District Court on Violations of FQHC Payment Rights

By , Published On: December 17, 2015

Feldesman Tucker Leifer Fidell LLP is pleased to announce a significant victory for South Carolina FQHCs on December 9, 2015.  Led by Managing Partner, Edward Waters, Associate Greg Cumming and Partner Susannah Vance Gopalan, FTLF successfully represented two South Carolina FQHCs in arguing for the U.S. District Court for the District of South Carolina to enjoin the state’s policy of improperly reimbursing federally qualified health centers (“FQHC”) for services provided to beneficiaries enrolled in Medicare and Medicaid, which is known as the “full-benefit dual eligible” patient population.  Prior to the Court’s order, the state limited total reimbursement for services provided to those beneficiaries to only FQHCs’ Medicare rates, rather than their (usually) higher Medicaid prospective payment system (“PPS”) rates.

The Court found that South Carolina’s payment policy, which was based on a Medicaid State Plan amendment limiting Medicaid’s payment to the amount of the Medicare coinsurance, violated the Plaintiff FQHCs’ payment rights under 42 U.S.C. § 1396a(bb). The Court found that FQHCs’ specific payment rights dictate that Medicaid programs fully compensate health centers at their PPS rates, and that those specific payment rights controlled over Medicare and Medicaid’s more general third-party liability provisions.  Finally, the Court found that any approval of South Carolina’s State Plan Amendment by the Centers for Medicare and Medicaid services was not entitled to deference because the statutory language providing for specific FQHC payments was clear and unambiguous.  All told, the Court declared South Carolina’s payment policy contrary to federal law and enjoined the State from reimbursing FQHCs at less than their PPS rates for services provided to dual eligible beneficiaries.

In ruling that the state’s payment policy violates the FQHC’s payment rights, the U.S. District Court for the District of South Carolina’s has set precedence for similar decisions across the country.

If you have questions or need a consultation about this ruling, please contact the Health Care group at Feldesman Tucker Leifer Fidell LLP, www.ftlf.com or 202-466-8960.