Exceptional Persons, Inc. v. Iowa Dep’t of Human Servs.

In response to a 2009 executive order announcing a ten percent reduction in state departments and agencies for the fiscal year ending June 30, 2010, the Iowa Department of Human Services (IDHS) promulgated temporary rules adjusting the reimbursement rates paid to Medicaid service providers. Thereafter, the legislature passed a law directing IDHS to continue for the next fiscal year the rate reductions as specified under the 2009 executive order. Accordingly, IDHS promulgated permanent rules implementing certain rate reductions. IDHS, however, inadvertently omitted a reduction for one component of the rate calculation for certain Medicaid service providers. Nevertheless, IDHS continued to reimburse those service providers at the reduced rates established under the temporary rules. In an administrative proceeding, Plaintiffs, several providers, challenged the rate calculation, arguing that, even if the “missing” rule was an oversight, IDHS could not reimburse them at the reduced rate without a rule authorizing it to do so. An administrative law judge granted summary judgment for IDHS, and the decision was affirmed on review. The district court reversed. The Supreme Court reversed, holding that the statute provides sufficient authority for IDHS to reimburse service providers at the reduced rates without a rule authorizing it to do so. View "Exceptional Persons, Inc. v. Iowa Dep’t of Human Servs." on Justia Law