Medicaid May Recover Erroneous Payments Made Prior to Termination Notice

A local Medicaid agency's right to recover erroneous Medicaid payments accrued when the erroneous payments were made, not later when the agency terminated future payments. Nededog v. Colorado Dept. of Health Care Policy (Colo. Ct. App., No. 03CA1005, Aug. 12, 2004).

Until October 1998, Patricia Nededog received Supplemental Security Income (SSI), which made her eligible for Medicaid benefits. However, through no fault of her own, Ms. Nededog continued to receive Medicaid benefits after her SSI eligibility ended. The Larimer County Department of Human Services did not discover its mistake until September 2000. On September 19, 2000, the Department gave Ms. Nededog written notice terminating her Medicaid benefits effective September 30, 2000. The Department then sought recovery of $5,795.40 in benefits erroneously paid to Ms. Nededog from September 1999 to September 2000.

Ms. Nededog contested the recovery claim, arguing that because the Department could not terminate her Medicaid benefits until ten days after giving her notice, it could not recoup the erroneous payments going back to September 1999. According to her, to do so would be an unlawful retroactive determination of her ineligibility. An administrative law judge (ALJ) concluded that the Department could recover the erroneous Medicaid payments, a decision that was upheld by the district court.

The Court of Appeals of Colorado affirms, finding no conflict between requiring advance notice to terminate eligibility for Medicaid benefits and allowing recovery of benefits paid erroneously before notice of termination. The court notes that since recoveries of erroneous payments are usually retroactive in nature, Ms. Nededog's argument would preclude many such recoveries.

For the full text of this decision, go to:  https://www.cobar.org/opinions/opinion.cfm?OpinionID=4748

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