In Re: Tlc Hospitals, Inc., a California Corporation, Debtor. Charles Sims v. United States Department of Health and Human Services

CANBY, Circuit Judge:

TLC Hospitals, Inc. (“TLC”) was the operator of skilled nursing facilities that provided many of their services subject to reimbursement by Medicare, a health insurance program administered by the United States Department of Health and Human Services (“HHS”). In 1994, TLC filed a petition in bankruptcy but contin ued to provide Medicare nursing services for some time thereafter. Audits then revealed that HHS, at different times, had both overpaid and underpaid TLC for its services. The question before us is whether HHS can deduct pre-petition overpay-ments HHS made to TLC…