Georgia stands to recover $90 million in Medicaid payments following a federal court ruling in Washington. But the details of the judge’s decision paint an unflattering picture of the state agency that handles billions of health care dollars.
Through a series of mistakes, Georgia overpaid the $90 million to the federal government for Medicaid services and didn’t discover the erroneous payments for years. By then, it was well past the time states have to file claims for mistaken payments.
Despite the state's blunders, a U.S. district judge last week ruled that the federal government must return the money. The state's incompetence aside, the judge wrote that hundreds of thousands of Georgians could otherwise be harmed.
“It is Georgia’s poor, elderly, disabled, and pregnant populations that will suffer the most should these administrative errors stand uncorrected,” says the ruling by U.S. District Judge Gladys Kessler in Washington, D.C.
“Georgia’s ineptitude in making errors and delay in discovering them is confounding, but does not justify permitting the federal government keeping the $90 million in credits to the detriment of Georgia’s 1.89 million Medicaid recipients,” she wrote.
The state’s Department of Community Health (DCH) went to court to recover the payments, after the federal Centers for Medicare and Medicaid Services refused the state’s pleas.
But the department’s complaint acknowledged glaring problems with its own computer system, accounting and budgeting.
Troubles started in early 2003, when the department launched a new computer system for processing claims of Medicaid providers. That system proved to be severely flawed, causing significant delays paying doctors, hospitals, clinics and other medical providers. A crisis ensued when they threatened to stop treating Medicaid patients unless they were paid.
The department’s solution was to give medical providers advance payments until its claims process system could be fixed. It was understood that those advance payments would later be reconciled with actual claims and the federal government would pay its share of those Medicaid expenses.
But the way that Georgia handled and reported the claims apparently led DCH to mistakenly credit $45 million too much to the federal agency in 2005, and another $45 million in 2006.
It wasn’t until 2008, after an external auditor flagged other concerns, that DCH did its own in-depth review and discovered the mistakes. In 2009, it demanded that the federal agency reverse the credits and return the $90 million. Too late, said the federal government. Under rules established by the Centers for Medicare and Medicaid Services, states get only two years to file claims for mistaken payments.
Since then, the case has wound through administrative appeals until Georgia filed its complaint with the federal district court.
In her ruling, the judge found the federal agency’s stance was reasonable. But the judge was persuaded by the state’s argument that the federal government was unjustly enriched at Georgia’s expense.
Kessler noted that Georgia, “measured against many metrics,” is not a wealthy state. “Approximately 18.2% of Georgia’s population lives in poverty, giving it the undesirable distinction of having the eighth highest poverty level in the 50 United States,” she wrote in the Feb. 10 order. “With regard to personal income per capita, Georgia again has the undesirable distinction of ranking 40th out of all 50 states.”
The Department of Community Health declined to comment. The federal government can still appeal the ruling, so it is considered pending litigation, said spokesman Jeremy Arieh.
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