Medicare Reimbursement Lawsuit Dismissed for No Payment

After a hospital chain was sold to another operator, several of the sold hospitals were hit with millions of dollars in Medicare cost assessments.  The buyer and the seller “tag teamed” a lawsuit, in an effort to squeeze the CPA firm of the sold chain into paying the assessments on the grounds that financial statement audits had been inadequately reserved for the risk of subsequent assessment, and had failed to properly disclose the risk in footnotes.  Moss & Barnett’s defense team used creative discovery to demonstrate that the parties specifically bargained for the risk of a future Medicare assessment in their purchase price, and aggressive case management techniques (including an appearance at a mediation and refusing to offer any payment for settlement) – and the use of an engagement letter indemnity clause to force the dismissal of the lawsuit without any payment.

Bottom line:  The lawsuit was dismissed without any payment.