Recently, the Texas Health and Human Services Commission-Office of Inspector General ("HHSC-OIG") suffered a substantial blow to its overall strategy for imposing payment suspensions. In an unequivocal opinion, the Third Circuit Court of Appeals concluded that the specific rules utilized by HHSC-OIG for imposing payment suspensions, in the absence of a finding of a credible allegation of fraud, exceed statutory authority and are thus invalid. See, Harlingen Family Dentistry, P.C.; and Trueblood Dental Associates, P.A., vs. Texas Health and Human Services Commission and Office of the Inspector General. Specifically, the Third Circuit Court in Harlingen sided with providers who argued that particular rules found in the Texas Administrative Code, which permitted imposing a payment suspension as long as there was a finding of a "program violation," were inconsistent with the intent of the original law relating to payment suspensions.
This strategy of imposing a payment suspension in cases where there is absolutely no evidence of fraud (an allegation that necessitates a culpable state of mind) is a relatively new pursuit for the OIG. This attempted expansion of its authority-on full display in the Harlingen case-is presumably an attempt to increase OIG's collections of overpayments and has most recently been employed in dozens of cases against Speech Language Pathologists (SLPs), primarily in the Rio Grande Valley area. Rivas Goldstein, LLP has represented many of these providers. On our clients behalf, we have consistently argued (as supported by the decision in Harlingen), that if the OIG could legitimately impose a payment suspension without a finding of fraud (i.e., where only a finding of a "program violation" is necessary) that this virtually unrestrained authority would produce absurd results. It would mean that the OIG could impose a payment suspension for literally any billing error since any billing error technically qualifies as a "program violation." OIG's interpretation of the law would also mean that it would make no difference how small the error, how much money was at issue, or whether the violation was intentional. Fortunately, the Court in Harlingen recognized that payment suspensions can often mean the death penalty for a business, and thus, the power to impose such a substantial sanction must have clear and meaningful limitations.
The fallout from the Harlingen case has been swift; as many payment suspensions have been lifted as a seemingly direct result of the Court's decision. In fact, in the weeks preceding the release of the opinion, several SLP payment suspensions were suddenly lifted without any change in the existing evidence. It could very well be that the OIG simply realized its overstep in authority, either because it sensed that the Third Circuit Court of Appeals was going to rule for the providers in Harlingen; because of recent SOAH administrative hearings involving the same issue, which have also been favorable to the provider; or perhaps because of public/political pressure following the recent release of the extremely critical Sunset Report. Whatever the reason, the release of the opinion in Harlingen is a strong validation of the arguments we have championed in our representations of these SLP providers. It still remains to be seen whether the OIG will pursue an appeal of the Harlingen decision.