State can seek repayment for its mistake

Missouri's Medicaid program can legally demand repayment for overpayments a family received, the St. Louis district appeals court ruled Tuesday.
But in a decision written by Presiding Judge Sherri B. Sullivan, the panel wondered if the state should pursue repayment - since the state's miscalculation caused the overpayment.
The court also ordered the Social Services department to hold a new hearing in the case because "when viewed in full, the sequence of events in this case demonstrates due process rights were violated.
"While the Adverse Action Notice meets the bare minimum requirements, the notice combined with the lack of adequate hearing procedures violated (those) due process rights," the ruling read.
In March 2011, Sedzida Dolic applied for MO HealthNet for Families (MHF) benefits for her infant daughter, Edna, and supplied the Family Support Division's eligibility specialist with her 2010 federal income tax return.
Based on her income tax form, the division worker advised Dolic she and her husband also qualified for coverage. Dolic applied for coverage for all three and received an approval notice the next day.
But in 2012, the division discovered its representative incorrectly used Dolic's adjusted gross income instead of gross income in determining the entire family's eligibility.
The division notified Dolic the entire family's MHF coverage was discontinued as of April 20, 2012. Four months later, the division sent the Dolics a notice claiming the family owed $8,367.66 for public assistance they received from March 2011-April 2012.
They asked for a hearing, and in November 2013, the division offered 12 exhibits supporting its actions.
The state didn't present any testimony regarding how the claim was calculated but offered a five-page computer printout showing the total amount of medical overpayment from March 2011-April 2012 was $8,367.66.
The appeals court noted Dolic said at the hearing: "I feel like I haven't done anything wrong. All I've done is applied, (and) all they requested from (me) was a copy of my taxes in order to qualify."
Noting she only had applied for benefits for her daughter but was encouraged to apply for the whole family, Dolic also told the hearing: "I don't know what they did and how they counted it to come up with this - and why they didn't check this sooner that I'm not this far into debt."
After the hearing, the director upheld the department's charges. The St. Louis County Circuit Court agreed but lowered the debt by $990 because the daughter qualified for assistance.
In her appeal, Dolic argued the division was wrong to collect an overpayment "when the benefits were not received through misrepresentation or nondisclosure of material facts."
The appeals court ruled the state could recover the money even though the agency encouraged her to apply for benefits she was not seeking. But the judges also rule the state must hold a new hearing in the case because the right procedures weren't following in the first hearing.
"As an aside, the Division has acknowledged there is no federal or state mandate requiring it to collect the overpayment of Medicaid benefits occasioned by governmental error," Sullivan wrote for the court.
"Conferred with such discretion, the Division should exercise it in a way that comports with common sense, equity and fairness. In circumstances such as these perhaps the State should consider whether collection against an individual whose income is (so low) that her daughter is, nevertheless, entitled to receive medical benefits from the State, is the optimal use of its resources.
"The State might be better served if those resources were allotted to efforts to improve the system which caused this unnecessary error and expense."