Administrative – MassHealth – Recoupment – Limitations

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Where a plaintiff that provides services to clients of the Massachusetts Medicaid program (MassHealth) has filed a complaint against the Executive Office of Health and Human Services (EOHHS) to stop MassHealth from recouping certain payments made to the plaintiff in 2005, the complaint must be dismissed despite the plaintiff’s argument that the six-year statute of limitations governing contract claims bars MassHealth from clawing back the alleged overpayments.

“EOHHS has moved to dismiss this action pursuant to Mass. R. Civ. P. 12(b)(6) on the ground that the complaint does not state any claim upon which relief may be granted. It argues that [plaintiff] Suburban has not exhausted its administrative remedies and, in any case, that no statute of limitations bars recovery of the alleged overpayments.

“EOHHS’s failure-to-exhaust argument is unavailing. Suburban’s claims raise pure questions of law. Suburban may therefore assert those claims in court without exhausting possible administrative remedies before MassHealth.

“But Suburban’s complaint nonetheless fails to state a claim upon which relief may be granted. The contract statute of limitations applies only to civil actions, not to administrative collection procedures. Nor would that statute bar any future civil action to collect amounts owed by Suburban, as such claims will not accrue until the administrative hearing process is complete. And if MassHealth were instead to offset the alleged overpayments against future amounts it owes to Suburban, it could do so before the administrative hearing process is complete without violating statutory or constitutional due process requirements. The Court will therefore allow the motion to dismiss. …

“Suburban is understandably dismayed at being called upon to justify payments it received many years ago. It is troubling that MassHealth waited so long to seek to recoup money paid out in 2005. Though MassHealth identified a potential issue and started an audit process a few months after making the payments, it waited over a decade to issue an initial determination of overpayment. MassHealth then took three more years to evaluate Suburban’s response and issue a final determination. All told, over 14 years passed between the last of the contested payments to Suburban and MassHealth’s final determination of the amount it now seeks to recoup.

“Nonetheless, Suburban’s claim that MassHealth’s administrative demand for repayment is time-barred fails as a matter of law.

“In Count I of its complaint, Suburban contends that (i) it has a contractual relationship with MassHealth, and therefore any attempt by MassHealth to recoup alleged overpayments is a contract claim subject to the six-year statutory limitations period established in G.L.c 260, section2, (ii) MassHealth’s overpayment claims accrued in 2005 when it paid the contested amounts to Suburban, and (iii) those claims are therefore time barred.

“This statute of limitations claim is unavailing. The first part of this syllogism is incorrect with respect to MassHealth’s efforts to recoup the alleged overpayment through administrative means; those administrative procedures are not subject to the statute of limitations. The second part is incorrect with respect to any future court action by MassHealth to collect from Suburban; such a claim has not yet accrued. This claim therefore fails as a matter of law.”

Suburban Home Health Care, Inc. v. Executive Office of Health and Human Services (Lawyers Weekly No. 09-049-20) (9 pages) (Salinger, J.) (Suffolk Superior Court) (Docket No. 1984CV03125-BLS2) (March 23, 2020).

Click here to read the full text of the opinion.