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Jefferson County sues state over Medicaid reimbursements

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Jefferson County has filed suit against the state Department of Health in an attempt to recoup Medicaid reimbursements the county claims it is due.

The county filed a state Supreme Court Article 78 action Thursday at the county clerk’s office claiming it is owed $189,516 in expenses incurred before 2006.

The state Office of Temporary Disability Assistance denied the claim in a form letter dated Feb. 16, stating that the reimbursements are barred by legislation, including by what the county contends is a “technical and obscure” 2005 legislative enactment. While it was the Office of Temporary Disability Assistance that denied the claim, the county is suing the Department of Health, contending that it is that agency’s policies that prompted the denial.

According to court documents, in the 1970s the state developed a policy designed to deinstitutionalize mentally ill and developmentally disabled people by releasing them to less restrictive community-based residences. Recognizing that medical assistance costs associated with the policy change would dramatically increase for counties, the state Legislature enacted several statutes requiring reimbursement of costs related to indigent mentally disabled people.

To further rein in counties’ costs, the Legislature passed the “Human Services Overburden” law in 1982 to help alleviate the problem, providing full reimbursement for expenses associated with care for the indigent mentally disabled. In 2006, the state placed a cap on the amount, using 2005 as a “base year” for county Medicaid expenditures, in an attempt to prevent future expenditures from rising unreasonably.

The county claims that the 2006 cap calls for the state, through the Department of Health, to reimburse counties 100 percent of their local share of Medicaid expenses paid on behalf of “overburden-qualifying mentally disabled persons” prior to Jan. 1, 2006, which the county contends represents $189,516.

Through its action, the county is asking that a judge nullify the February determination denying its claim and direct the Department of Health to pay it.

Several other counties, including St. Lawrence, have made successful claims against the state for reimbursement, with St. Lawrence County receiving about $430,000 in 2009.

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