Central Mississippi Medical Center v. Mississippi Division of Medicaid and Drew L. Snyder, in his Official Capacity as Executive Director of Mississippi Division of Medicaid, 294 So.3d 1121

Background

Central Mississippi Medical Center (CMMC) bought a two‑campus hospital; the North Campus closed mid‑FY2000, so CMMC submitted an amended Medicaid cost report excluding North Campus costs and days.
Medicare intermediary (Mutual of Omaha) issued a Notice of Program Reimbursement (NPR) in 2003 based on Medicare cost reports; CMMC received the NPR and had 180 days to challenge it but did not do so.
Due to administrative delays, the Mississippi Division of Medicaid (DOM) did not receive the NPR until ~7 years later; DOM used the NPR per the State Plan to compute final Medicaid reimbursement and sought recoupment of $1.226 million.
CMMC administratively appealed; a DOM hearing officer denied relief; Hinds County Chancery Court affirmed; CMMC appealed to the Mississippi Supreme Court.
The Supreme Court affirmed: DOM followed Attachment 4.19‑A of the Mississippi State Plan by relying on the Medicare NPR; DOM’s action was not arbitrary or capricious, did not exceed authority, and did not violate statutory or constitutional rights.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether DOM acted arbitrarily/capriciously by using the Medicare NPR instead of CMMC's amended cost reports	DOM should have used CMMC’s amended Medicaid cost reports or been allowed to amend the NPR; relying on an allegedly erroneous NPR is arbitrary	The State Plan (Attachment 4.19‑A) mandates DOM use the Medicare NPR to establish final reimbursement; DOM cannot amend NPR and followed the Plan	DOM properly relied on the NPR per the Plan; action was not arbitrary or capricious; CMMC had opportunity to challenge the NPR and did not timely do so
Whether Miss. Code §§ 43‑13‑117(J) and 43‑13‑118 bar DOM’s post‑payment adjustments/recoupment	§ 43‑13‑117(J) forbids “cuts” in hospital payments; § 43‑13‑118 requires 5‑year record retention and was argued to limit recoupment	Other statutory text (then § 43‑13‑117(D) and § 43‑13‑121(1)(j)) and the Plan authorize adjustments and recovery of incorrect payments; § 43‑13‑118 governs recordkeeping, not a limitations bar; statutes should be read harmoniously	Court harmonized statutes: DOM had authority/duty to convert prospective to final reimbursement and to recover overpayments; §§ cited do not prohibit DOM’s adjustment or recoupment
Whether DOM violated CMMC’s due‑process rights (procedural or substantive) by adjusting reimbursement	CMMC was deprived of a protected property interest without adequate process	CMMC had opportunities: 180‑day NPR challenge to Medicare, administrative DOM hearing, chancery court review, appellate review; DOM’s recoupment is authorized	No due‑process violation: CMMC had procedural avenues and judicial review; DOM’s claim to overpayment is enforceable

Key Cases Cited

Crossgates River Oaks Hosp. v. Miss. Div. of Medicaid, 240 So. 3d 385 (Miss. 2018) (recent Mississippi decision on DOM compliance with State Plan)
Sierra Club v. Miss. Envtl. Quality Permit Bd., 943 So. 2d 673 (Miss. 2006) (principles on deference to agency interpretation of rules)
Tower Loan of Miss. v. Miss. State Tax Comm’n, 662 So. 2d 1077 (Miss. 1995) (discussed standard for judicial deference to agency regulation interpretation)
Bd. of Regents v. Roth, 408 U.S. 564 (U.S. 1972) (standard for constitutionally protected property interest in due process analysis)
Div. of Medicaid v. Miss. Indep. Pharmacies Ass’n, 20 So. 3d 1236 (Miss. 2009) (agency interpretation not entitled to deference if clearly erroneous)
Adams v. Miss. State Oil & Gas Bd., 139 So. 3d 58 (Miss. 2014) (standard for judicial review of agency orders)