OIG Argues Funds Taken from Payment Holds Never Have to be Returned

Legal documentsOn May 29th, lawyers for Harlingen Family Dentistry and the Texas HHSC-OIG appeared in Travis County District Court before The Honorable Judge Amy Clark Meachum.

As outlined in a previous article “Harlingen Family Dentistry Seeks Court Order for Return of “Credible Allegation of Fraud” Payment Hold Funds,” HFD was seeking a writ of mandamus to have the court have OIG return $1.3 million that was withheld by OIG improperly under a “credible allegation of fraud” payment hold. Judges from HHSC and the State Office of Administrative Hearings had found that OIG did not have the right to withhold the funds on that basis as the judges found no evidence of fraud or misrepresentation committed by HFD dentists in their Medicaid ortho billings. The judges had also ruled that HFD did not have a near 100% error rate as alleged by OIG but more realistically 9%.

OIG argued that the court did not have jurisdiction on a number of counts eg. HFD had not yet exhausted all its administrative remedies as they had not yet gone to an overpayment hearing, OIG officials had discretionary powers, and others.

Most incredibly OIG also argued that they were never obligated to return any monies they had collected on “credible allegation of fraud” payment holds even if they were incorrect.

“Despite an apparent attempt to avoid the well-established sovereign immunity of the state from suits for money,’ HFD’s suit seeks money from the state, Retrospective monetary claims are barred by sovereign immunity, even to recover money unlawfully withheld after the court finds defendant officials have acted in violation of a law.”

The whole of OIG’s jurisdictional argument can be read here.

The judge went onto to hear the merits of the case and has reserved her decision.