Case 4:22-cv-10003-JEM Document 1 Entered on FLSD Docket 01/13/2022 Page 1 of 15
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF FLORIDA
`KEY WEST DIVISION
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`Case No.:_________________________
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`MENTAL HEALTH NETWORK, INC.
`a Florida Corporation
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`Plaintiff,
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`v.
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`SIMONE MARSTILLER, as Secretary of the
`STATE OF FLORIDA, AGENCY FOR
`HEALTH CARE ADMINISTRATION,
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`Defendant.
`_____________________________________/
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`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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`Plaintiff, MENTAL HEALTH NETWORK, INC. (“Plaintiff”), by and through its
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`undersigned counsel, Duane Morris LLP, brings this action for declaratory and injunctive relief
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`against Defendant, SIMONE MARSTILLER, in her capacity as Secretary of the STATE OF
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`FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION (“Defendant” or “AHCA”),
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`and alleges as follows:
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`NATURE OF THE CASE
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`1.
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`This is an action of declaratory and injunctive relief based upon AHCA’s
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`unlawful attempt to summarily terminate Plaintiff’s Medicaid Provider Agreement (“Provider
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`Agreement”) with no opportunity to be heard, which is in violation of federal law and
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`regulations and violates Plaintiff’s right to due process of law. The manner in which AHCA has
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`attempted to terminate Plaintiff’s Provider Agreement consists of sending a letter notifying
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`Plaintiff that, pursuant to the terms of the Provider Agreement, AHCA is electing its right to
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`terminate the Provider Agreement on 30-days written notice. Enforcement of this contractual
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`provision violates the federal law that governs the Medicaid Program. This was made clear to
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`AHCA when Federal District Court Judges Whittemore and Jordan rebuffed AHCA’s attempt to
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`terminate the Medicaid provider agreements of three Florida nursing homes and a home health
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`care agency without cause. Vencor Nursing Centers East, LLC, et al. v. King-Shaw, Case No.
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`8:00-cv-02051-JDW, [D.E. 38] (M.D. Fla. Oct. 11, 2000); Yema Home Health Care, Inc. v.
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`Levine, Case No. 1:05-cv-21183, [D.E. 6] (S.D. Fla. May 3, 2005).
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`2.
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`AHCA’s action violates the federal laws governing the Medicaid Program.
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`Unless the Court enjoins AHCA’s unlawful action, a respected and well-established mental
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`health care agency which provides care to juvenile and dependent Medicaid recipients and which
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`has faithfully served the Tavernier community over the past year will be destroyed.
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`JURISDICTION AND VENUE
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`3.
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`This is a civil action arising under the Medicaid Act, 42 U.S.C. §§ 1396, et seq.;
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`the Declaratory Judgment Act, 28 U.S.C. §§ 2201-02; and 42 U.S.C. § 1983.
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`4.
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`This Court has jurisdiction of this action under 28 U.S.C. §1331 and 28 U.S.C. §
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`1367 with respect to Plaintiff’s state law claim.
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`5.
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`6.
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`Venue is proper in this District pursuant to 28 U.S.C. § 1391(b).
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`PARTIES
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`Plaintiff is a Florida Corporation, with its principal place of business in Monroe
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`County, Florida. Plaintiff is owned and operated by Roxana Valderrama. Now with a staff of
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`over twenty-five (25) therapists and technicians, Plaintiff provides quality at-home Behavioral
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`Health Services to the Tavernier community. The home care agency’s clientele consists entirely
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`of Medicaid recipients, all of whom are under the age of twenty.
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`7.
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`Defendant Simone Marstiller is Secretary of AHCA and is sued in her official
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`capacity. As Secretary of AHCA, Defendant Marstiller is responsible for the development,
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`promulgation and administration of the unlawful policies challenged in this action.
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`STATUTORY AND REGULATORY BACKGROUND
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`8.
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`The Medicaid Program is a cooperative state-federal program that provides
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`medical assistance to needy persons.
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`9.
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`To be eligible for Medicaid, an individual must meet certain income and asset
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`tests and other specific criteria.
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`10.
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`To participate as a provider in any State’s Medicaid Program, federal regulations,
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`and Florida’s Medicaid Statute, section 409.907, Fla. Stat., provide that health care providers
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`must enter into a contractual provider agreement with AHCA.
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`11.
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`For States, such as Florida, that have chosen to participate in the Medicaid
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`Program, they are required to administer their state Medicaid Program in accordance with the
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`Title XIX of the Social Security Act, 42 U.S.C. §§ 1396, et seq. (“Medicaid Act”), its
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`implementing regulations, which are located throughout Volume 42 of the Code of Federal
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`Regulations, and various manuals promulgated by the Secretary of the U.S. Department of
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`Health and Human Services (“the Secretary”) and the Centers for Medicare and Medicaid
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`Services (“CMS”), a subdivision of the Department of Health and Human Services.
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`12.
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`Section 1902(a)(23) of the Medicaid Act requires that all individuals eligible for
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`medical assistance, including those who are enrolled in a Medicaid managed care organization,
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`may obtain healthcare services from any institution, agency, or person who undertakes to provide
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`such services and is qualified to do so. 42. U.S.C. § 1396(a)(23). This provision is referred to as
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`“freedom-of-choice” and has been recognized to impose a requirement of complete free choice
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`by the Medicaid recipient in the selection of his source of healthcare services. At the same time,
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`however, in recognition that some providers may abuse the Medicaid Program, the Medicaid
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`Act, provides states with an exception to the freedom-of-choice requirement that would allow
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`some limited restriction on a provider’s participation in the Medicaid Program. 42 U.S.C. §
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`1396n(a). If a State elects to restrict provider participation in conformance with these specified
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`procedures, the State will not be deemed to violate the federal statutory mandate of freedom of
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`choice. Federal law balances the Medicaid recipients’ right to freedom-of-choice with the
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`State’s need to protect the public trust.
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`13.
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`CMS has implemented federal law to clearly provide the limited manner in which
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`states may restrict a provider’s participation in the Medicaid Program. 42 C.F.R. 431.54(f); 42
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`C.F.R. § 455.422. These regulations set forth specific criteria that must be followed by any state
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`that elects to terminate a provider from participating in the Medicaid program. Under 42 C.F.R.
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`§ 431.54(f), a state is only allowed to restrict a provider from participating in the Medicaid
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`program for a reasonable period of time, and prior to imposing any such restriction, the state’s
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`Medicaid agency must meet certain conditions: (1) give the provider notice and an opportunity
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`for a hearing; (2) find that the provider engaged in certain bad conduct: and (3) ensure that the
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`restrictions do not result in denying reasonable access to Medicaid services. Similarly, 42 C.F.R.
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`§ 455.422 requires a state to give terminated providers “any appeal rights available under
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`procedures established by State law or regulations.”
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`14.
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`The Medicaid Act and regulations require that each participating state must create
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`and maintain a Medicaid State Plan, and that such a State Plan must receive prior approval by the
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`Secretary. See 42 U.S.C. 1396a, et seq; 42 C.F.R. §§ 430.10 and 430.12. A states submission of
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`its State Plan is a prerequisite to receiving federal grants and is necessary to assure CMS that it
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`complies with all applicable federal statutes and regulations. 45 C.F.R. § 92.11(c).
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`15.
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`Florida created a Medicaid State Plan, entitled State Plan Under Title XIX of the
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`Social Security Act (“Florida State Plan”). Consistent with this requirement, the Florida State
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`Plan contains assurances that AHCA will comply with the requirements contained in 42 C.F.R. §
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`431.54(f) as well as 42 C.F.R. § 455.422, both of which require the state to provide terminated
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`providers with appeal rights. See Florida State Plan §§ 4.10 and 4.46 attached hereto as Exhibit
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`A.
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`16.
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`Contrary to these federal authorities, section 409.907(2), Fla. Stat., provides, in
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`pertinent part, that all Medicaid provider agreements may be terminable by either party after
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`reasonable notice, but does not offer any right to appeal.
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`17.
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`Florida’s State Plan, the one that CMS has approved, does not contain a provision
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`that permits termination of a Medicaid provider agreement pursuant to section 409.907(2), Fla.
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`Stat.
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`18.
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`The Medicaid Act and regulations also require each State plan to include a
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`statement providing that the State plan will be amended whenever necessary to reflect material
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`changes in a State’s law or in a State’s operation of the Medicaid program, 42 C.F.R. §
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`430.12(c)(1)(ii), and that any amendments will be submitted to CMS for approval. 42 C.F.R. §
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`430.12(c)(2)(i).
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`19.
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`Upon information and belief, the State of Florida has neither requested nor
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`obtained approval from CMS for any State Plan amendment that would permit termination of a
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`Medicaid provider agreement pursuant to section 409.907(2), Fla. Stat., and/or without following
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`the requirements contained in 42 C.F.R. § 431.54(f) or 42 C.F.R. § 455.422. To the contrary, the
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`existing State Plan provides that AHCA will comply with these regulations. Florida State Plan §§
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`4.10 and 4.46. See Exhibit A.
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`20.
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`The Florida Administrative Procedure Act (“APA”), section 120.54, Fla. Stat.,
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`provides detailed procedures whereby Florida administrative agencies, such as AHCA, may
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`promulgate rules that effectuate their authority to regulate business pursuant to a grant of
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`authority by the Legislature. AHCA has promulgated its termination policy by rule, however, it
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`does not include appeal rights consistent with 42 C.F.R. § 431.54(f) or 42 C.F.R. § 455.422.
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`FACTUAL BACKGROUND
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`21.
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`Plaintiff was established as a Behavioral Analysis Group in September of 2020. It
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`entered into the required standard Medicaid Provider Agreement to provide Behavioral Analysis
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`(“BA”) services to Medicaid beneficiaries, and was assigned Medicaid Provider Number:
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`108007500, effective September 14, 2020 through September 13, 2025. See Exhibit B.
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`22.
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`BA services were added as covered Medicaid service, effective March 31, 2016,
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`pursuant to an amendment to the Florida State Plan. BA services are limited to recipients under
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`the age of twenty-one (21) who suffer from a variety of conditions and disorders, which includes
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`patients with autism, spectrum disorders and other behavioral health conditions and are intended
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`to address maladaptive behaviors and restore them to their best possible functional level. BA
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`services are highly structured interventions, strategies, and approaches provided to restore
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`appropriate behaviors by decreasing maladaptive behaviors. BA services can be provided up to
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`40 hours per week and it is expected that recipients can received services for six months, a year
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`or longer.
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`23.
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`Plaintiff’s patients range in age from three years to nineteen years of age. The
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`majority of these patients have autism, which they will have for their entire lives. On average,
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`Plaintiff’s patients receive treatment approximately five to six days a week for five (5) hours per
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`day, but this, of course, varies by patient as some may require additional care depending on their
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`particular circumstances and medical needs.
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`24.
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`The care that Plaintiff provides is focused on assisting patients in decreasing
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`maladaptive behaviors in order for them to improve their activities of daily living. Each patient
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`has its own individualized behavior plan, which proposes specific interventions to reduce or
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`eliminate the maladaptive behavior as well as replacement appropriate behaviors for the patients
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`to engage in instead of the maladaptive behaviors. Plaintiff also provides training of the
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`recipient’s family, caregivers, and other involved persons on the implementation of the behavior
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`plan and intervention strategies.
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`25.
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`Examples of the type of behavior analysis interventions include discrete trial
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`teaching, task analysis training, differential reinforcement, non-contingent reinforcement,
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`conducting task analyses of complex responses and teaching using chaining, prompting, fading,
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`shaping, response cost and extinction.
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`26.
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`Further, on a daily basis, Plaintiff collects data on each patient regarding their
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`maladaptive behaviors and replacement skills. This data is used to determine if the patient is
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`improving or if there are any modifications that need to be made for the patient’s individualized
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`treatment plan.
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`27.
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`In order to provide this level of service Plaintiff employs a staff of twenty-six (26)
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`practitioners who are Board Certified Behavior Analysts or Behavior Technicians who have
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`passed Board Examination and two (2) office staff.
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`28.
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`Due to their conditions, it is difficult for these children to develop strong
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`relationship with their caregivers; however, over time, the performance of these highly intimate
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`and personal duties, the children do develop a strong relations ship with their therapists. The
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`abrupt termination of the Provider Agreement would disrupt these hard won relationships and
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`break these bonds, which would be traumatic and impede the subsequent formation of good
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`working relationships with other caregivers to whom these children may be transferred if
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`Plaintiff is no longer able to provide their care.
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`29.
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`Further, in order to transfer these children to other providers, the re-approval and
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`certification process that each recipient would have to undergo to initiate services with a new
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`provider, if one was available, would cause a break in services. It would significantly delay the
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`continuation of services at another provider, thereby inflicting additional trauma. In addition,
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`because there are only three (3) other Medicaid-participating BA providers in Tavernier, Florida,
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`it may be difficult to locate another provider to assume the care for Plaintiff’s patients. Overall,
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`forcing these patients to locate alternative caregivers will cause great disruption to their
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`emotional well-being.
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`30.
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`One hundred percent (100%) of Plaintiff’s patient population is comprised of
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`Medicaid recipients. Termination of Plaintiff’s provider number will result in the complete
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`closure of Plaintiff’s business operations. This would result in the termination of employment of
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`all twenty-eight (28) of Plaintiff’s employees and an annual loss of revenue in the amount of
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`approximately $500,000.
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`31.
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`From its inception, there has never been any complaint regarding the quality of
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`the care provided or Plaintiff’s compliance with all Medicaid rules and regulations. Further,
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`AHCA has not advised Plaintiff that there were any problems with the services it rendered nor
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`has AHCA found that a in a significant number or proportion of cases, Plaintiff either furnished
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`Medicaid services at a frequency or amount not medically necessary, or furnished Medicaid
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`services of a quality that does not meet professionally recognized standards of health care. In
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`fact, AHCA has not denied one claim for BA services that Plaintiff has rendered.
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`32.
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`By letter dated December 16, 2021, which was received by Plaintiff on January 4,
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`2022, AHCA notified Plaintiff that it was terminating the provider agreement 30 days from the
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`date of receipt of the letter (“Termination Letter”). See Exhibit C. The Termination Letter
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`merely stated that “the Agency has elected to exercise its termination rights under Section 8 of
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`the provider agreement.” The Termination Letter did not articulate any reason for terminating
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`Plaintiff’s Medicaid Provider Agreements; nor did it provide any information concerning the
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`rationale for AHCA’s determination.
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`33.
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`The Termination Letter did not articulate any reason for terminating Plaintiff’s
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`Medicaid Provider Agreements; nor did it provide any information concerning the rationale for
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`AHCA’s determination.
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`34.
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`Additionally, the Termination Letter stated that “pursuant to Section 409.913,
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`Florida Statutes, Medicaid will no longer pay for claims for reimbursement … after the date of
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`termination.”
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`35.
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`However, Section 409.913, Fla. Stat., does not include such language and it only
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`provides AHCA with authority to conduct oversight of the integrity of the Medicaid program.
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`Lastly, Plaintiff received the Termination Letter on January 4, 2022. While the Termination
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`Letter states that Plaintiff’s Provider Agreement will not be terminated until thirty (30) days after
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`receipt, which is February 3, 2022, on Wednesday, January 12, 2022, Plaintiff became aware that
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`AHCA’s online Provider Master List indicates that it intends to terminate Plaintiff’s Provider
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`Agreement effective Friday, January 14, 2022, more than 2 weeks early. Notably, AHCA did
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`not provide Plaintiff with notice of this early termination.
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`36.
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`AHCA must comply with the entire Medicaid Act if it desires to continue
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`participating in the Medicaid Program and receiving federal funding. The summary termination
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`procedure engaged in by AHCA is directly contrary to the freedom-of-choice provision of the
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`Medicaid Act in that a summary, without cause termination does not fit within the very limited
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`exceptions set forth in 42 U.S.C. 1396n(a) as implemented by 42 C.F.R. 431.54(f). Specifically,
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`AHCA did not afford Plaintiff a hearing prior to termination, nor has AHCA found that a in a
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`significant number or proportion of cases, Plaintiff either furnished Medicaid services at a
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`frequency or amount not medically necessary, or furnished Medicaid services of a quality that
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`does not meet professionally recognized standards of health care. In fact, to the contrary, all
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`claims submitted by Plaintiff were approved and then paid by AHCA.
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`37.
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`Similarly, while AHCA referred to section 409.913, Fla. Stat., in its Termination
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`Letter, it did not make the appeal process required under that section available to Plaintiff, nor
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`did it make the appeal process set out in Chapter 120, Fla. Stat., in accordance with 42 C.F.R
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`§ 455.422. However, it appears that it might reflect that the termination was, in fact, for cause,
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`which would be subject to section 409.913, Fla. Stat.
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`38.
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`Had AHCA made allegations of misconduct by Plaintiff, AHCA would have had
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`to provide a hearing prior to termination. 42 U.S.C. § 1396n(a); 42 C.F.R. § 431.54(f). AHCA’s
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`failure to follow these criteria put it out of compliance with federal law.
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`39.
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`Because states in the Medicaid program are required to provide procedural
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`safeguards when they restrict provider’s participation in the Medicaid Program, AHCA’s
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`summary termination of a provider without any safeguards is completely contrary to the federal
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`Medicaid Act. 42 C.F.R. § 431.54(f); 42 C.F.R § 455.422. State agencies are not permitted to
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`sidestep federal due process requirements by terminating the provider agreement without any
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`articulation of its reason for their actions or a hearing to dispute any allegation. Id. Moreover,
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`because AHCA contends it has no responsibility to articulate any reason for its decision, there is
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`no safeguard to protect Plaintiff or any other provider from arbitrary and capricious decision-
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`making.
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`40.
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`Indeed, AHCA knows this. It has made assurances to CMS in its State Plan that it
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`will comply with 42 C.F.R. §§ 431.54(f) and 455.422 for all terminations of provider enrollment.
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`See Florida State Plan at §§ 4.46 and 4.10. Further, AHCA has not amended its State Plan to
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`allow it to terminate a provider “without cause.”
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`41.
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`Section 409.913, Fla. Stat., lists the various sanctions that can be imposed on a
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`Medicaid provider for failure to comply with Florida’s Medicaid program. All of the sanctions
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`listed in section 409.9131(13)-(16), Fla. Stat., are those imposed for cause. In conjunction with
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`this section, section 409.913(16), Fla. Stat., states that “The agency’s termination with cause is
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`subject to hearing rights as may be provided under chapter 120.” Thus, it is clear that under
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`Florida law a Medicaid provider is entitled to due process for the termination of a provider
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`agreement based on cause.
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`42.
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`Plaintiff owns two other providers that were participating Medicaid providers.
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`All three of these facilities provided different types of services, were located in different areas,
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`were in good standing with the Medicaid program, and did not have any claim denials or quality
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`issues. In fact, the other two providers had and still have Medicare provider numbers, yet AHCA
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`terminated these providers’ Medicaid agreements, and when Plaintiff applied to re-enroll after
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`being terminated, AHCA denied these applications at the same time, as follows:
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`Provider
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`Provider #
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`Provider
`Agreement
`Effective Date
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`Home
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`# 09671000
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`Jan. 9, 2017
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`Re-Application
`Denial
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`Provider
`Agreement
`Termination
`Date
`Aug. 16, 2021 Dec. 16, 2021
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`Today’s
`Health
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`Mental
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`DM2\15177541.4
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`Health # 105045200
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`Dec. 14, 2019
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`Aug. 16, 2021 Dec. 16, 2021
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`Network-Homestead
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`Health
`Mental
`Network-Tavernier
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`#108007500
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`Sept. 14, 2020
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`Dec. 16, 2021
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`
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`43.
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`Like its termination of Plaintiff’s Provider Agreement, AHCA did not provide any
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`reason for its termination of my other two participating Medicaid providers nor did AHCA
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`provide a reason for denying my re-applications.
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`44.
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`Based on the circumstances and the timing of the terminations and re-application
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`denials, coupled with lack of any reason(s) for its action, Plaintiff believes that the termination of
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`its Provider Agreement is a pretext and that AHCA has an unstated reason for termination.
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`45.
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`Contrary to the fundamental dictates of justice, due process, and Federal statutes
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`and regulations, Plaintiff has been afforded no opportunity whatsoever to explain, refute, and
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`rebut any concerns AHCA may have.
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`46.
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`AHCA’s decision to terminate Plaintiff’s Provider Agreement effective February
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`3, 2022, without explanation has resulted and will result in irreparable injury because Plaintiff’s
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`right to due process, as envisioned by 42 C.F.R. §§ 431.54(f) and 455.22 has been violated.
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`47.
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`AHCA’s action, if allowed to stand, will completely destroy both Plaintiff’s
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`business and the continuity of care of its patients, all of whom are under the age of twenty-one
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`(21) and suffer from a variety of conditions and disorders, which includes patients with autism,
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`spectrum disorders and other behavioral health conditions.
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`CLAIMS
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`COUNT I – VIOLATION OF THE MEDICAID ACT AND REGULATIONS
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`48.
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`Plaintiff re-alleges and incorporates paragraphs 1 though 47 as though they are set
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`forth herein.
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`49.
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`Defendant has acted beyond her authority under the Medicaid Act and regulations
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`by purporting to terminate Plaintiff’s Provider Agreement in violation of the Medicaid Act and
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`regulations, and the Florida State Medicaid Plan.
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`50.
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`As a result of Defendant’s unlawful action, Plaintiff has suffered and will
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`continue to suffer irreparable harm.
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`51.
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`Plaintiff has no adequate remedy at law to correct Defendant’s violation of the
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`Medicaid Act and regulations, and the Florida State Medicaid Plan.
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`COUNT II – VIOLATION OF DUE PROCESS OF LAW
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`52.
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`Plaintiff re-alleges and incorporates paragraphs 1 through 47 as though they are
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`set forth herein.
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`53.
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`Defendant’s action to summarily terminate Plaintiff’s Provider Agreement
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`without affording it any administrative or judicial appeal as required by 42 C.F.R. §431.54(f)
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`deprives Plaintiff of its rights to due process of law guaranteed under the Fourteenth Amendment
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`to the United States Constitution.
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`54.
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`As a result of Defendant’s unlawful action, Plaintiff has suffered and will
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`continue to suffer irreparable harm.
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`55.
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`Plaintiff has no adequate remedy at law to correct Defendant’s violation of the
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`Medicaid Act and regulations, and the Florida State Medicaid Plan.
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`COUNT III – ARBITRARY AND CAPRICIOUS ACTION
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`56.
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`Plaintiff re-alleges and incorporates paragraphs 1 through 47 as though they are
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`set forth herein.
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`57.
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`Defendant’s decision to summarily terminate Plaintiff’s Provider Agreement
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`without articulating any reason(s) to justify its action, is arbitrary and capricious and not
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`otherwise not in accordance with the law.
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`DM2\15177541.4
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`Case 4:22-cv-10003-JEM Document 1 Entered on FLSD Docket 01/13/2022 Page 14 of 15
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`58.
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`As a result of Defendant’s unlawful action, Plaintiff has suffered and will
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`continue to suffer irreparable harm.
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`59.
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`Plaintiff has no adequate remedy at law to correct Defendant’s violation of the
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`Medicaid Act and regulations, and the Florida State Medicaid Plan.
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`COUNT IV – DECLARATORY JUDGMENT
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`60.
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`Plaintiff re-alleges and incorporates paragraphs 1 though 47 as though they are set
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`forth herein.
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`61.
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`Plaintiff has standing to bring this action by virtue of its rights under the Provider
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`Agreement.
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`62.
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`Defendant’s summary termination of Plaintiff’s Provider Agreement, without
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`articulating and reason(s) to do so, has caused Plaintiff to suffer irreparable harm.
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`63.
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`If Defendant’s summary termination of Plaintiff’s Provider Agreement is not
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`prevented, Plaintiff will continue to suffer irreparable harm in the future.
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`64.
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`Plaintiff has no adequate remedy at law to correct Defendant’s violation of the
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`Medicaid Act and regulations, and the Florida State Medicaid Plan.
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`PRAYER FOR RELIEF
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`WHEREFORE, Plaintiff prays that this Court:
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`A.
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`Declare that Defendant’s summary termination of Plaintiff’s Provider Agreement
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`is unlawful because it is in direct conflict with the Medicaid Act and regulations,
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`and the Florida and United States Constitutions;
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`B.
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`Declare that Defendant’s summary termination of Plaintiff’s Provider Agreement
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`is arbitrary and capricious;
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`DM2\15177541.4
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`14
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`Case 4:22-cv-10003-JEM Document 1 Entered on FLSD Docket 01/13/2022 Page 15 of 15
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`C.
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`Enjoin AHCA from terminating Plaintiff’s Provider Agreement under Provider
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`Number: 108007500.
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`D.
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`E.
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`Award Plaintiff its costs, including reasonable attorney’s fees, of this action; and
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`Grant such other and further relief as this Court may deem reasonable and just.
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`Dated: January 13, 2022
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`Respectfully Submitted,
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`/s/ Julian A. Jackson-Fannin
`Julian A. Jackson-Fannin, Esq.
`Florida Bar No.: 93220
`DUANE MORRIS LLP
`201 S. Biscayne Boulevard, Suite 3400
`Miami, Florida 33131
`Telephone: (305) 960-2253
`Facsimile: (305) 402-0544
`jjfannin@duanemorris.com
`pnmendoza@duanemorris.com
`yarnavat-parga@duanemorris.com
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`Counsel for Plaintiff
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`DM2\15177541.4
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`15
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