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The Iowa Supreme Court says the Department of Human Services doesn’t have to pay Medicaid providers more money after it screwed up a rule.
Then Governor Chet Culver issued an executive order in October of 2009 cutting the spending of all departments and agencies in the state by 10 percent for the fiscal year that ended June 30th. The Iowa Legislature passed a law making the rules permanent for the next fiscal year.
The Department of Human Services wrote rules to implement the cut in payments to Medicaid providers, but inadvertently left out the rules covering an inflation adjustment. Exceptional Persons Incorporated sued, saying DHS can’t cut the inflation adjustment, because it is not covered in the rules.
The district court and Court of Appeals ruled the state had to pay the higher rate. The Iowa Supreme Court however, overturned those rulings, saying the law clearly stated the legislature’s intent to make the cut, and the law controls the department’s action when it is in conflict with the rules.
See the full ruling here: DHS Medicaid ruling PDF