Medicaid Act 21 Case: Kathleen Papa v. DHS

In Papa and PHP v. DHS, the Wisconsin District II Court of Appeals is reviewing whether the Wisconsin Department of Health Services (DHS) is required to promulgate as administrative rules certain bill auditing practices and policies regarding recoupment of paid reimbursements for services rendered by independent Medicaid health care providers providing in-home health services to children and adults with complex health care needs.

Under DHS practice and policy, referred to as a “Perfection Rule”, independent nurses who do not meet certain billing and record keeping requirements, contained in the Medicaid Provider Handbook Topic #66, when providing services to home health patients may have those services determined as “non-covered” and subject to recoupment of funds paid to them by DHS, sometimes years after the services were provided.

Plaintiffs Papa and PHP argue first that the auditing and recoupment policy and practices are inconsistent with and exceed the scope of DHS’s statutory authority to demand the return of payments from Medicaid providers. Further, plaintiffs allege that even if the Perfection Rule does not exceed DHS’s statutory authority, DHS has not promulgated the policy as an administrative rule.

Papa v. DHS Background

Case Status: On August 12, 2016 Waukesha County Circuit Judge Kathryn W. Foster issued an oral ruling, finding that The Medicaid Handbook Topic 66 was enforced by the DHS OIG as an administrative rule. Further, that the Topic 66 was not properly promulgated under Chapter 227, and thus exceeds the DHS’s authority of recoupment for provider non-compliance.

The court temporarily enjoined DHS from applying the Perfection Rule to Papa or any other similarly situated providers. DOJ appealed the underlying decision, and also the supplemental relief ordered by the circuit court enforcing its injunction. Both matters are currently under appeal in a consolidated case before the District II Court of Appeal. The DOJ’s brief is due June 12, 2017 with the Papa brief due thirty days later.

Nonparty Brief of WMC & Wisconsin Personal Services Association
Brief in Opposition to Defendant’s Motion to Stay Pending Appeal
(Apr. 27, 2017)
Defendant’s Brief in Support of Motion to Stay Pending Appeal (Apr. 14, 2017)
Brief in Opposition to Motion for Supplemental Relief (Jan. 27, 2017)
Brief in Support of Supplemental Relief (Jan. 12, 2017)
Defendant’s Brief (May 17, 2016)
Plaintiff’s Brief (March 17, 2016)





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