Forest Health Systems, Inc. v. Missouri Department of Social Services, Division of Medical Services

879 S.W.2d 566, 1994 Mo. App. LEXIS 600
CourtMissouri Court of Appeals
DecidedApril 12, 1994
DocketNo. WD 47985
StatusPublished
Cited by2 cases

This text of 879 S.W.2d 566 (Forest Health Systems, Inc. v. Missouri Department of Social Services, Division of Medical Services) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Forest Health Systems, Inc. v. Missouri Department of Social Services, Division of Medical Services, 879 S.W.2d 566, 1994 Mo. App. LEXIS 600 (Mo. Ct. App. 1994).

Opinion

KENNEDY, Judge.

The Division of Medical Services claims the right to recoup certain alleged Medicaid overpayments made by the Division to Forest Health Systems, for services rendered to Medicaid patients by Springfield Park Central Hospital, an acute care psychiatric hospital operated by Forest in Springfield, Missouri.

The years in question in this case are 1985 through 1988. The Division sought to recoup a part of the amounts paid to Park Central for those years, and Park Central commenced the present proceeding before the Administrative Hearing Commission, challenging the Division’s right to recoupment in any amount, and also challenging the amount sought to be recouped.

The Division pays the hospital, virtually automatically, without audit, upon the hospital’s statement for services rendered to Medicaid patients. The statement is audited later. If the Division finds, upon audit, that it has overpaid the hospital, it seeks to recoup from the hospital the amount of the overpayment.

The Administrative Hearing Commission held the Division had a right to pursue the recoupment. Park Central appealed to the Circuit Court of Cole County, which affirmed the Administrative Hearing Commission decision.

Park Central has appealed to this Court. We affirm the judgment of the circuit court.

Park Central, in this appeal, challenges that part of the Division’s claim for recoup[568]*568ment which is for excessive days of inpatient hospital care billed by the hospital, and paid by the Division. The Division has established, for purposes of Medicaid reimbursement, a maximum of the 75th percentile of the Professional Activity Study (PAS), a nationwide study that determines the average length of stay for patients for various categories of illnesses. The 75th percentile represents the maximum number of days at which 75 percent of all patients with a given illness would be hospitalized.

The hospital, however, may not discharge a patient when the patient reaches the time limit. It must continue to render inpatient care to a patient until he or she is discharged by a physician. In many instances, Medicaid patients receive hospital services beyond the maximum for Medicaid reimbursement. Since Medicaid patients are normally without financial means, the hospital is unable to collect the deficiency from them.

I.

The first issue on this appeal is whether the Division may recoup any Medicaid payments for the years in question, even allowing that the payments were in excess of the allowable maximum.

The hospital claims none of the Medicaid payments it received during the years in question are subject to recoupment by the Division, because the aggregate Medicaid payments for any year do not exceed the Hospital’s aggregate Medicaid charges for that year.1 The Administrative Hearing Commission ruled against the hospital on this point, and we affirm that ruling.

The hospital bases its argument upon 13 CSR 70-15.010, paragraph 1, which says in part: “As described in paragraph (5)(D)2. of this plan, as part of each hospital’s fiscal year-end cost settlement determination, a comparison of total Medicaid-covered aggregate charges and total Medicaid payments will be made and any hospital whose aggregate Medicaid per-diem payments exceed aggregate Medicaid charges will be subject to a retroactive adjustment.” (emphasis supplied). “Charges,” in the hospital’s interpretation of this rule, are simply the established rates charged by the hospital to its patients. (We hold, however, as hereafter explained, this argument misinterprets the terms “Medicaid-covered aggregate charges” and “Medicaid charges.”)

The hospital’s Medicaid payments for none of the years in question exceeded its charges to Medicaid patients. That being so, according to Hospital’s argument, the Division, under the terms of its above-cited rule, has no claim for recoupment of any amount.

The Division, however, points to 13 CSR 70-15.010(5)(D)2., which says: “... the state shall perform any reviews or audit confirmations deemed appropriate to fulfill the requirement that Title XIX payments do not exceed reasonable Title XIX costs. If Title XIX payments do exceed reasonable Title XIX costs, the overpayment will be recouped. With the exception of those hospitals identified by the Medicare intermediary as nominal charge providers, the lower of aggregate per-diem cost or aggregate per-diem charge requirement will be applied to all hospitals.” (emphasis supplied).

This latter rule, says the Division, supports its claim for recoupment, since aggregate Medicaid payments by Division to Hospital exceeded Hospital’s Medicaid costs in each of the years in question.

We must give effect to all the language of the rule, reconciling seemingly inconsistent or contradictory language, if it is possible to do so. We may not disregard any of the language of the rule. Community Fed. Sav. & Loan Ass’n v. Director of Reve[569]*569nue, 752 S.W.2d 794, 798 (Mo. banc), cert. denied, 488 U.S. 893, 109 S.Ct. 231, 102 L.Ed.2d 221 (1988).

We have concluded that the Division’s claim for recoupment is supported by the cited rules. We would find it curious that the Division could recoup Medicaid overpay-ments only upon a showing that its aggregate Medicaid payments to a hospital for a given year did not exceed the hospital’s aggregate charges to Medicaid patients — even though those payments clearly exceeded allowable costs in serving the Medicaid patients. Such an interpretation of the rules would defeat nearly every claim for recoupment by the Division. Since Medicaid payments to hospitals are paid virtually automatically upon claims submitted by the hospitals, the Division’s later audit of those claims, upon which claims for recoupment are made, would in most instances be a useless thing.

In the present case, for example, the hospital’s Medicaid and third-party payments for Medicaid patients totalled $1,957,833 for fiscal 1985, whereas its charges for those patients totalled $2,692,460. For the fiscal years 1986 through 1988, its Medicaid and third-party payments totalled $6,479,800, while its charges were $9,751,723.

We nowhere find any support for the hospital’s assumption that the term “Medicaid-covered charges” or “Medicaid charges,” as those terms are used in 13 CSR 70.15.010, paragraph 1, have the same meaning as the hospital’s established rates, as if the word “charges” were not modified by “Medicaid-covered” or “Medicaid.” “Medicaid-covered charges” and “Medicaid charges” refer to that part of the hospital charges which are allowable for Medicaid payment; the terms do not include all the charges which the hospital may make to the patient. There is, then, no difference among “Medicaid-covered charges” and “Medicaid charges,” of Paragraph 1, and “reasonable Title IX costs” of Paragraph 2. The terms are used interchangeably. The terms refer to the hospital’s recoverable costs for hospital services and supplies furnished to Medicaid patients. This interpretation of “Medicaid-covered charges” and “Medicaid charges” is borne out by the clause “As described in paragraph (5)(D)2. of this rule ...,” which introduces the sentence from paragraph (1) upon which the hospital relies.

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Bluebook (online)
879 S.W.2d 566, 1994 Mo. App. LEXIS 600, Counsel Stack Legal Research, https://law.counselstack.com/opinion/forest-health-systems-inc-v-missouri-department-of-social-services-moctapp-1994.