I want to celebrate a recent win and provide a warning.
When a state agency suspends a healthcare provider’s Medicaid payments, the consequences can be swift and devastating — especially for practices that serve the most vulnerable patient populations. In August, an Administrative Law Judge in North Carolina issued a decisive Temporary Restraining Order for my client, reaffirming a critical principle: providers who serve Medicare and Medicaid beneficiaries deserve due process, and agencies must not wield the suspension power as a blunt instrument where the evidence does not support it.
My client delivers comprehensive services — including deep sedation, general anesthesia, facial trauma care, lesion removal, biopsy procedures, and corrective jaw surgery — that few other practitioners in the state can offer. Because the practice does not limit the number of Medicaid patients it accepts, Medicaid recipients account for approximately 75% to 80% of the 2,300 to 2,600 surgical procedures the team performs each year. In a region with multiple federally designated medically underserved areas, the practice is not just a business — it is a lifeline.
The dispute began with a routine RAC post-payment audit by Public Consulting Group, a contractor for the Division of Health Benefits. The RAC auditor examined roughly six months of claims and identified just $6,288.69 in alleged billing discrepancies — a remarkably modest sum relative to the volume of services rendered. The agency classified the findings as “program abuse” and required the practice to complete an online training course and submit a corrective action plan. At that stage, the matter appeared to be a straightforward administrative correction.
Then, without warning, the situation escalated dramatically. The Division’s Office of Compliance and Program Integrity issued a letter claiming it had received a “credible allegation of fraud” and suspended all Medicaid payments to the doctor’s practice. The justification cited vague references to “data-mining” patterns and the same audit findings that had already been addressed as a billing documentation issue — not fraud. Notably, the agency later rescinded its own tentative notice of decision, effectively acknowledging the weakness of its initial findings, yet it refused to restore Medicaid payments.
The Administrative Law Judge saw through the agency’s overreach. In granting the Temporary Restraining Order, the court weighed the evidence and found that the billing discrepancies reflected, at most, back-office documentation errors — not intentional misrepresentation or concealment. The judge pointedly noted that “fraud” requires proof of intent to deceive, a standard the state’s evidence fell far short of meeting. A plausible explanation for the perceived billing anomalies was the addition of two more doctors to the practice, which naturally increased patient volume and billings.
The court further recognized that suspending payments to the practice would cause irreparable harm — not only to the provider but to the Medicaid beneficiaries who depend on his rare expertise in a medically underserved area. Federal regulations themselves provide “good cause” exceptions to payment suspensions in precisely these circumstances, and the judge found a high probability that such good cause existed here.
This ruling sends a powerful message. Healthcare providers who dedicate their practices to underserved communities should not be punished with blanket payment suspensions based on thin allegations unsupported by evidence of actual fraud. Agencies and their contractors must exercise their enforcement authority responsibly, distinguishing genuine fraud from routine billing imperfections. When they fail to do so, the courts stand ready to intervene.
For providers facing similar enforcement actions, this decision is a reminder that the law offers meaningful protections — and that fighting back can make all the difference. This is also a reminder that every audit should be taken seriously. This suspension of all Medicaid reimbursements stemmed from a $6k audit.