Tri-Area Community Health (TACH), a Federally Qualified Health Center serving Carroll, Floyd, Franklin, Grayson, and Patrick counties and the City of Galax, has asked a Virginia circuit court to review a Final Agency Decision related to Medicaid reimbursement issued by the Virginia Department of Medical Assistance Services (DMAS).
The dispute concerns how DMAS calculated Medicaid reimbursement owed to TACH after the health center expanded services and locations over several years. TACH’s position is straightforward: when a safety-net health center expands services for Medicaid patients, Medicaid reimbursement should be calculated fairly and in accordance with the laws and regulations governing Federally Qualified Health Centers, and that, at the end of each fiscal year, reconciliation should be conducted to ensure TACH receives adequate reimbursement from DMAS to cover the costs of TACH providing services to Medicaid patients.
An independent Hearing Officer who presided over TACH’s formal administrative appeal agreed with TACH on the central reimbursement issues. After reviewing the evidence and testimony, the Hearing Officer recommended that TACH met its burden to show that DMAS’s reimbursement calculations were erroneous and recommended that DMAS pay TACH approximately $7.48 million in additional reimbursement to make up for over a decade of underpayment.
DMAS Director Steve Ford subsequently issued the agency’s Final Agency Decision rejecting the Hearing Officer’s recommendation. TACH respectfully disagrees with the Final Agency Decision and has appealed.
“This is not about stepping away from Medicaid patients — it is the opposite,” said James Werth, Jr., CEO of Tri-Area Community Health. “We serve rural communities where many patients have limited alternatives for primary care, behavioral health, pharmacy, and other services. To keep providing and expanding those services, we need public programs to pay health centers fairly for the care we deliver so that we can cover our costs.”
TACH is a nonprofit community health center and rural safety-net provider. The organization continues to invest in services intended to meet unmet needs across its six-jurisdiction service area. When reimbursement does not keep pace with the reasonable cost of serving Medicaid patients, resources that could otherwise support workforce, access, new services, and community programs must be used to cover the gap.
“We recognize that reimbursement rules are complex and that DMAS has taken a different legal position,” Werth said. “That is why judicial review is appropriate. We are asking the court to review the agency decision and determine what the law requires.”
TACH’s services to Medicaid patients will continue while the appeal proceeds. The organization’s focus remains on maintaining access to affordable, high-quality care for patients and communities throughout its service area.
Tri-Area Community Health is a Federally Qualified Health Center serving rural communities in Carroll, Floyd, Franklin, Grayson, and Patrick counties and the City of Galax. TACH provides comprehensive health services and serves patients regardless of their ability to pay.
