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June 3, 2020

Barclay Damon Health Care Litigators Secure Injunctive Relief for NYS Provider Hit With Retroactive Recoupment During COVID-19

On May 26, Barclay Damon’s Health Care Controversies Team obtained a preliminary injunction on behalf of an NYS Office for People With Developmental Disabilities (OPWDD) provider enjoining the state’s retroactive recoupment of disputed overpayments in the midst of the unprecedented COVID-19 crisis. The Supreme Court decision grants much-needed relief to the provider from the financial strain caused by inadequate reimbursement modelling and COVID-19-related pressures.

In early April, the provider commenced a hybrid Article 78 and declaratory judgment proceeding to challenge the determination of the state Department of Health and the OPWDD not to recalculate the provider’s recently issued retroactive 2019-2020 Group Day Habilitation Medicaid reimbursement rate. The provider demonstrated how the proposed below cost reimbursement rate would have a detrimental impact on the financial and operational health of those programs caring for individuals with developmental disabilities. Further compounding the unreasonably low rate of reimbursement was that the DOH and the OPWDD also sought to retroactively recoup hundreds of thousands alleged to have been excess payments under the new reimbursement model. The court’s decision means that this retroactive takeback of funds disbursed and expended long ago will be halted pending the court’s final decision in the case.

In noting the purpose of a preliminary injunction is to preserve the status quo, Dutchess County Supreme Court Judge Hal B. Greenwald  determined it would be equitable to maintain the status quo to lessen the financial stress on the provider and its programming pending a determination on the merits, especially during the challenges of the COVID-19 crisis.

Barclay Damon’s Health Care Controversies Team is particularly proud of this favorable outcome given that the statewide court system was almost completely shut down during the time the court’s decision was rendered. Our team will continue to zealously advocate for our health care provider clients as the legal system continues to reopen across New York State in an environment of extreme economic austerity.

A copy of the court’s decision and order is available upon request to our office.

If you have any questions regarding the content of this alert, please contact Linda Clark, Health Care Controversies Team Leader, at lclark@barclaydamon.com; Mary Connolly, associate, at mconnolly@barclaydamon.com; or another member of the firm’s Health Care Controversies Team. 

We also have a specific team of Barclay Damon attorneys who are actively working on assessing regulatory, legislative, and other governmental updates related to COVID-19 and who are prepared to assist clients. Please contact Yvonne Hennessey, COVID-19 Response Team leader, at yhennessey@barclaydamon.com or any member of the COVID-19 Response Team at COVID-19ResponseTeam@barclaydamon.com.

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