Gardens Regional Hospital and Medical Center, Inc. v. State of CA
- Summarized by Alexandra Schnapp , U.S. Bankruptcy Court, Northern District of Georgia
- 7 years 10 months ago
- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- CC-17-1198-LKuF (9th Circuit, Mar 12,2018) Not Published
- Tag(s):
-
- Ruling:
- The bankruptcy court did not err in ruling that withholding of a percentage of (Medi-Cal Payments and Supplemental
HQA Payments) payments owed to the debtor to recover unpaid quarterly fees was permissible under the doctrine of equitable recoupment and was not a violation of the automatic stay.
- Procedural context:
- Debtor filed a motion alleging the California Department of Health Care Services violated the automatic stay by withholding certain payments to the debtor because the debtor had failed to pay required quarterly fees to the Department. The Department opposed the motion. The bankruptcy court considered argument and denied the debtor's motion to compel the Department to turn over the withheld funds. Debtor appealed.
- Facts:
- Debtor operated a hospital; it had an Medi-Cal Provider Agreement with the Department and provided healthcare services to Medi-Cal beneficiaries. Debtor was required to pay a quarterly hospital quality assurance fee to the Department, which collects the fees (and matching federal funds) and redistributes them to hospitals. Because debtor provided healthcare to Medi-Cal beneficiaries, it was entitled to receive certain payments from the Department. After debtor filed bankruptcy, it fell behind on its quarterly fees. The Department withheld payments owed to the debtor on account of its failure to pay the quarterly fees.
- Judge(s):
- Lafferty, Kurtz, and Faris
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