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The federal government wants a court to toss Kindred Healthcare’s attempt to collect $10.1 million in dual-eligible payments, according to legal filings reported this week.

In mid-March, Kindred sued Health and Human Services Secretary Alex Azar for more than $10.1 million in lost reimbursements, saying a previous decision penalized some of the company’s long-term care hospitals and a skilled nursing facility for not joining certain states’ Medicaid programs.

At issue is how companies collect unpaid deductibles or copays for dual-eligible patients, meaning those who qualify for both Medicare and Medicaid coverage. To win Medicare reimbursement for that bad debt, providers must show that they attempted to make collections.

The Centers for Medicare & Medicaid Services’ must-bill policy requires companies to bill both Medicare and Medicaid and receive formal denials, or “remittance advice.”

But Kindred’s long-term care hospitals in Pennsylvania and Massachusetts and a skilled nursing facility in Tennessee were not part of those states’ Medicaid programs between 2006 and 2014. In the case of Pennsylvania, that state did not accept long-term care hospitals into Medicaid until 2012.

The Department of Health and Human Services denied the allegations, and in a response filed late last month, asked the U.S. District Court for the District of Columbia to dismiss the claims.

The response was reported by Bloomberg News Wednesday.

Experts described Kindred as being caught between state Medicaid programs and Medicare when neither side wants to be reimburse the company for care given to indigents.

“It’s a very good example of what happens all the time in the Medicare program,” Nancy LeGros, a partner at Bracewell in Dallas, told Bloomberg Law. “It’s just a feud between Medicare and the state. The state isn’t stepping up for these providers.”

In its response, HHS denied that Pennsylvania prevented long-term care hospitals from participating in its Medicaid program before 2012, and other allegations.The government argued that Kindred hasn’t stated a claim upon which relief can be granted.