Federal judge orders the return of $90 million in Medicaid credits

The state of Georgia may be the mouse that roared after convincing a federal court last week to force the government to return a bungled $90 million credit, even after ruling Health & Human Services had every right to reject the state's request.

“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,” the court wrote in its summary opinion Feb. 10.

The Georgia Department of Community Health mistakenly issued $90 million in credits to HHS in 2005 and 2006, and compounded the error by requesting a return of the money after a two-year statute of limitations had expired. The HHS's Departmental Appeals Board correctly ruled Georgia had no statutory basis in 2009 to reclaim the funds, but the U.S. District Court in Washington, DC, found the state had no available legal remedy to reclaim the money. 

Moreover, as the court ruled, Georgia's claim that HHS benefitted from an “unjust enrichment” was valid under legally defined “equitable principles.”

“While it is not disputed that Georgia is in its current position as a result of the very egregious errors it made, that does not change the fact that CMS is now in possession of $90 million of Georgia's credits to which it is not entitled,” the court noted.