Mississippi Division of Medicaid and Drew Snyder, in his Official Capacity as Director of Mississippi Division of Medicaid v. Windsor Place Nursing Center, Inc. d/b/a Windsor Place Nursing & Rehab Center, Billdora Senior Care, LLC, Lexington Manor Senior Care, LLC and Magnolia Senior Care, LLC

Summary

The Mississippi Supreme Court reviewed the Mississippi Division of Medicaid’s disallowance of legend-drug expenses reported by long-term-care providers for Medicaid per-diem reimbursement. The court held that drugs subject to direct reimbursement through the Medicaid drug program were nonallowable costs under the state plan and applicable Medicaid policies, and that the agency’s decision was supported by substantial evidence and within its authority. The court reversed the chancery court and rendered judgment reinstating the Division of Medicaid’s decision.

Holdings

1. Legend drugs covered by the Medicaid Drug Program and subject to direct reimbursement from Medicaid to dispensing pharmacists are non-allowable costs on a nursing facility's per-diem reimbursement cost report.
2. The Division's decision to disallow the claimed legend-drug costs was supported by substantial evidence, was not arbitrary or capricious, and was within the Division's authority.
3. The Division's adjustments to the providers' cost reports did not constitute an impermissible retroactive change in rate methodology; they corrected costs that were non-allowable under the State Plan and existing Medicaid policy.

Questions Presented

1. Whether the Division of Medicaid properly interpreted the Medicaid State Plan and Provider Policy Manual to classify legend drugs subject to direct Medicaid reimbursement as non-allowable costs on nursing-facility per-diem cost reports.
2. Whether the Division's disallowance of the providers' legend-drug costs was supported by substantial evidence, was arbitrary or capricious, or exceeded the Division's authority.
3. Whether the Division impermissibly applied a new policy retroactively by adjusting cost reports for reporting years before amendments to the cost-report instructions and State Plan.

Disposition

reversed_and_remanded