Last month, Pinnacle MultiCare Nursing and Rehabilitation Center (Pinnacle) filed a federal action to stop the U.S. Department of Health and Human Services (HHS) from recouping tens of millions of dollars in Medicare Part A payments made to Pinnacle during the COVID-19 pandemic. According to its Complaint, Pinnacle received a letter from HHS’s Centers for Medicare & Medicaid Services (CMS) on January 29, 2026, demanding recoupment of $31,227,884 by February 27, 2026. The letter included a notice that, absent Pinnacle’s timely compliance, interest would be assessed at a rate 12%.
HHS’s Office of Inspector General (OIG) allegedly found a 99% error rate in Pinnacle’s claims submitted between 2020 and 2021. According to OIG, the “errors occurred because Pinnacle’s clinical and billing staff did not always follow its procedures to properly assign reimbursement rate codes in accordance with Medicare requirements and provide sufficient clinical review to verify that enrollees required skilled nursing services.” Pinnacle filed its action on February 26, one day before the letter’s deadline.
Pinnacle asserts that HHS’s recoupment efforts are “riddled with constitutional violations,” inconsistent with federal and state law, and go back on CMS’s directive during the pandemic for providers to put “patients over paperwork.” According to Pinnacle, CMS’s directive expressly gave providers “temporary relief from many paperwork, reporting and audit requirements” to allow “focus on providing needed care to Medicare and Medicaid beneficiaries affected by COVID-19.”
Pinnacle also points to a New York Executive Order during the pandemic that “relieved” providers from certain “recordkeeping requirements” and conveyed “immunity” to providers “acting reasonably and in good faith.” According to Pinnacle, compliance with New York law would also convey federal immunity pursuant to the Public Readiness and Emergency Preparedness (PREP) Act, which protects against legal claims related to health emergencies. HHS issued a “PREP Act Declaration” in March 2020 relating to the administration or use of “covered countermeasures” during the pandemic.
Pinnacle, located in the Bronx’s Co-op City community, maintains that it acted “consistent with state and federal directives to put patients over paperwork, [and] charting by exception allowed Pinnacle to save lives, at the extremely modest expense of some documentation that might have been produced under normal circumstances.” The Court has not yet made any substantive decisions, but Pinnacle’s action is worth tracking as its outcome may have broader implications to recoupments related to the pandemic.
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