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ATTORNEYS FOR APPELLANT Bruce N. Munson Muncie, Indiana William P. Tedards, Jr. Washington, D.C.

ATTORNEYS FOR APPELLEE Gregory F. Zoeller Attorney General of Indiana Thomas M. Fisher Solicitor General of Indiana Frances Barrow Deputy Attorney General Indianapolis, Indiana

In the

FILED
Mar 20 2012, 2:21 pm
of the supreme court, court of appeals and tax court

Indiana Supreme Court
No. 29S02-1110-PL-598 RANDALL L. WOODRUFF, TRUSTEE, U.S. BANKRUPTCY COURT, ON BEHALF OF LEGACY HEALTHCARE, INC. D/B/A NEW HORIZON DEVELOPMENTAL CENTER,

CLERK

Appellant (Plaintiff below), v. INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION, OFFICE OF MEDICAID POLICY AND PLANNING, Appellees (Defendants below).

Appeal from the Hamilton Superior Court, No. 29D05-0605-PL-01104 The Honorable Wayne A. Sturtevant, Judge On Petition to Transfer from the Indiana Court of Appeals, No. 29A02-1002-PL-00220

March 20, 2012 Shepard, Chief Justice.

After an inspection revealed deplorable health conditions for its residents, an intermediate care facility for a particularly vulnerable segment of the population was decertified for Medicaid reimbursement. As a result, until the State appointed a receiver nine months later, it operated without receiving federal or state dollars. The instant case is a common-law claim for expenses the facility laid out in the meantime for the individuals still residing there.

A trial court denied the facility restitution for the unpaid months under a theory of quantum meruit, afforded relief under related breach of contract claims, but offset that judgment by the amount the State paid for its receiver. The net result was a wash for both sides. We affirm.

Facts and Procedural History

To say this case has been complex would understate the matter. Counting this most recent decision, the Court of Appeals addressed issues in this action five times1 and the U.S. District Court for the Southern District of Indiana has done so at least once. 2 We attempt to lay out the underlying procedures and facts as concisely as possible here, with more detail later as needed.

Legacy Healthcare, Inc. v. Barnes & Thornburg, 837 N.E.2d 619 (Ind. Ct. App. 2005), reh'g denied, trans. denied; Ind. Family & Soc. Servs. Admin. v. Woodruff, 831 N.E.2d 1264 (Ind. Ct. App. 2005) (table); Ind. Family & Soc. Servs. Admin. v. Legacy Healthcare, Inc., 756 N.E.2d 567 (Ind. Ct. App. 2001); Ind. State Dep't of Health v. Legacy Healthcare, Inc., 752 N.E.2d 185 (Ind. Ct. App. 2001), reh'g denied, trans. denied.
1 2

See Legacy Healthcare, Inc. v. Feldman, 2000 WL 1428667 (S.D. Ind. Mar. 8, 2000). This decision was appealed, but the Seventh Circuit's resulting opinion was not selected for inclusion in the federal reporters. Legacy Healthcare, Inc. v. Feldman, 11 Fed. App'x 589 (7th Cir. 2001).

2

A. Operation of the Medicaid Statutes. Federal statutes establish a joint federal-state scheme for administering Medicaid. If a state chooses to participate in Medicaid programs, it must comply with those federal statutes and related regulations. That regime requires the state to establish a Medicaid agency, through which the federal funding is channeled and the state program is administered. 42 U.S.C.

Download Randall L. Woodruff, Trustee, U.S. Bankruptcy Court, on Behalf of Legacy Healthc

Indiana Law