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[APPEALS] Rescare Health Services, Inc. v. Indiana Family and Social Services Admin., 20A-MI-1025

Monday, January 25, 2021 1:00pm to 1:40pm

[APPEALS] Rescare Health Services, Inc. v. Indiana Family and Social Services Admin., 20A-MI-1025
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This case revolves around the reimbursement by Medicaid of over-the-counter (OTC) medicines prescribed by a physician to ResCare’s patients.

ResCare operates private intermediate care facilities in Indiana for the care of individuals with intellectual disabilities, known as “ICF/IIDs.”  Medicaid reimburses ResCare for the costs of its services based on a per diem rate.  This rate is subject to annual adjustments in response to ResCare’s annual cost-reporting.   For its 2014 report, ResCare sought to recover the costs of OTC drugs that it provided to its residents.  FSA removed those costs because OTC drugs are not among the services included in ResCare’s per diem rate calculations and because Medicaid reimburses pharmacy providers for OTC drugs listed on the Medicaid formulary. 

ResCare filed for administrative review of the proposed adjustment.  Both the ALJ and the final agency decision were unfavorable to ResCare.

ResCare petitioned for judicial review and requested a declaratory judgment that it could bill its residents for OTC drug costs that were disallowed by Indiana Medicaid.  The trial court’s decision was in line with the ALJ and agency conclusion and ResCare appealed to this court.

ResCare presents this court with 3 issues

  • Whether Medicaid regulations require the State to compensate providers like ResCare for OTC drugs;
  • Whether FSA’s reimbursement policy is a taking under the Indiana Constitution; and
  • Whether the trial court abused its discretion when it denied ResCare’s request for a declaratory judgment.

The scheduled panel members are Judges Najam, Riley, and May.

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