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3 N.J.A.R. 351

Preakness Hospital v. Medical Assistance & Health Services, Division of
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Citation: 3 N.J.A.R. 351
Decision Date: 1981
Synopsis: Preakness Hospital challenged the attempt by the Division of Medi- cal Assistance and Health Services (DMAHS) to recover over $50,000 against Medicaid billings for services provided from December 1, 1980 to December 3, 1980. The hospital was decertified as a Medicaid provider during that period of time and was therefore ineligible for Medicaid reimbursement. Arguing that the termination of its provider agreement was made without adequate and timely notice, the Hospi- tal asserted that a new provider agreement signed between the parties on December 4, 1980 should be given retrospective effect to cover the period of December 1 through 3, 1980. The administrative law judge found that on August 7, 1980, the Department of Health, which is designated by DMAHS to conduct compliance surveys of Medicaid providers, notified the acting super- intendent of the Hospital that its dietetic services were not in compli- ance with federal health and safety requirements. On August 18, 1980, the director of DMAHS sent a letter to the Hospital advising it that in the event the Health Department's recom- mendation stood, the Division would not make any Medicaid per diem reimbursement to the hospital beyond the 30th day after the date of termination of the provider agreement, i.e., November 30, 1980. The judge found that on November 26, 1980, the Hospital was advised by DMAHS that it was unable to renew the Medicaid agree- ment, and thus, after November 30, 1980, per diem reimbursement would be terminated. The Hospital was also advised of its right to a hearing on the matter. Subsequently, the facility was recertified and entered into a new agreement with DMAHS on December 4, 1980. The administrative law judge rejected the Hospital's argument that it was entitled to a hearing prior to a denial of reimbursement and concluded that the letters sent to the Hospital contained the elements necessary for adequate notice. Since the Hospital's certification was properly revoked and since, pursuant to 42 C.F.R. 442.15 the effec- tive date of a provider agreement may not precede the date on which the participating provider meets all federal requirements, the adminis- trative law judge ordered the recovery of the improperly reimbursed Medicaid Funds. Michael GIovin, Assistant County Counsel for Petitioner Ivan J. Punchatz, Deputy Attorney General for Respondent (James R. Zazzali, Attorney General of New Jersey, Attorney)