Foley Client Prevails in California Medicaid Underpayment Claim

California’s Medicaid agency must pay a federally qualified health care center and firm client 100 percent of its costs for providing Medicaid beneficiaries with certain defined services, a California appeals court has held.

The California Court of Appeal, Second District, ruled Oct. 16 that federal law requires the state’s health department to pay Tulare Pediatric Health Care Center its full clinic rate of $168 a visit under Medicaid’s prospective payment system.

The health department had reduced its payment to Tulare by about one-third based in part on an auditor’s conclusion that the physician Tulare contracted with to run its pediatric clinic had no documentation to support his overhead cost claims.

But the appeals court said Congress had adopted the Medicaid Act’s 100 percent requirement specifically to ensure that providers wouldn’t be forced to dip into grants they receive under the Public  Health Services Act to pay for care provided to Medicaid beneficiaries.

Associate Adam Hepworth represented Tulare in the case.