Case 1:20-cv-01280-STA-jay Document 1 Filed 12/22/20 Page 1 of 19 PageID 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TENNESSEE
`EASTERN DIVISION
`
`DYERSBURG FAMILY WALK-IN CLINIC,
`INC.,
`
`Plaintiff,
`
`v.
`
` Case No. 1:20-cv-1280
`
`TENNESSEE DEPARTMENT OF FINANCE
`AND ADMINISTRATION; BUTCH ELEY,
`in his official capacity as Commissioner of the
`Tennessee Department of Finance and
`Administration; BUREAU OF TENNCARE;
`and STEPHEN SMITH, in his official capacity
`as Deputy Commissioner and Director of the
`Bureau of TennCare,
`
`Defendants.
`
`COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF
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`COMES NOW Plaintiff Dyersburg Family Walk-In Clinic, Inc. (hereinafter “Plaintiff”),
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`by and through its undersigned counsel, and sues Defendants Tennessee Department of Finance
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`and Administration; Butch Eley, in his official capacity as Commissioner of the Tennessee
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`Department of Finance and Administration; Bureau of TennCare; and Stephen Smith, in his
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`official capacity as Deputy Commissioner and Director of the Bureau of TennCare (collectively,
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`“Defendants”), and alleges as follows:
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`INTRODUCTION
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`1.
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`In this action, Plaintiff files this Complaint to: (a) enjoin Defendants from violating and
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`continuing to violate federal Medicaid payment requirements applicable to rural health clinics; and
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`(b) seek a declaration that Defendants’ policy of requiring TennCare managed care organizations
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`first to make payments to rural health clinics before Defendants will make supplemental payments
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`to rural health clinics is contrary to federal law and violates Plaintiff’s rights created by federal
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`statute; and (c) a declaration or order directing or ensuring that Plaintiff receives its full
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`reimbursement under federal law for rural health clinic services rendered to TennCare patients at
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`qualifying patient visits. Defendants’ failures in regard to these objectives have already caused
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`and, without this Court’s intervention, will continue to cause harm to Plaintiff, its patients, rural
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`health clinics, and the rural, medically underserved communities they serve.
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`
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`2.
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`The primary federal statute that lies at the foundation of this case is 42 U.S.C. §
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`1396a(bb)(5)(A), which provides, in relevant part:
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`(5) ADMINISTRATION IN THE CASE OF MANAGED CARE
`
`(A) In general
`
`In the case of services furnished by a Federally-qualified health center or rural
`health clinic pursuant to a contract between the center or clinic and a managed care
`entity (as defined in section 1396u–2(a)(1)(B) of this title), the State plan shall
`provide for payment to the center or clinic by the State of a supplemental payment
`equal to the amount (if any) by which the amount determined under paragraphs (2),
`(3), and (4) of this subsection exceeds the amount of the payments provided under
`the contract.
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`JURISDICTION AND VENUE
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`3.
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`This action arises under the provisions of Title XIX of the Social Security Act, 42
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`
`
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`U.S.C. §§ 1396 et seq., 42 U.S.C. § 1320a-2, and 42 U.S.C. § 1983.
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`
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`4.
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`This Court has jurisdiction over this case pursuant 28 U.S.C. §§ 1331, 1343(a),
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`1357, and 42 U.S.C. § 1320a-2. Venue in this District is proper under 28 U.S.C. § 1391(b). The
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`declaratory and injunctive relief and other relief sought in this action are authorized under 28
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`U.S.C. §§ 2201, 2202, and 42 U.S.C. § 1983.
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`THE PARTIES
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`5.
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`Dyersburg Family Walk-In Clinic, Inc. is a Tennessee corporation that owns and
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`operates rural health clinics in Dyersburg, Dresden, and Union City, Tennessee that are certified
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`by the United States Department of Health & Human Services’ Center for Medicare and Medicaid
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`Services (“CMS”) as “rural health clinics,” as defined for purposes of the Medicaid program in 42
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`U.S.C. § 1396d(l)(1). The foregoing Plaintiff-owned clinics shall be referred to herein from time
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`to time as the “Clinics.”
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`6.
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`Defendant Tennessee Department of Finance and Administration is, and at all times
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`mentioned herein was, the “single state agency” that is designated to administer and supervise the
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`administration of Tennessee’s Medicaid plan, the TennCare program. The Tennessee
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`Comptroller’s Office operates under the Tennessee Department of Finance and Administration.
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`7.
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`Defendant Butch Eley is the Commissioner of the Tennessee Department of
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`Finance and Administration and, in that capacity, is responsible for the overall administration of
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`the Tennessee Department of Finance and Administration, the designated “single state agency.”
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`Defendant Eley is being sued in his official capacity.
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`8.
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`Defendant Bureau of TennCare is the state of Tennessee’s managed Medicaid
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`agency.
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`9.
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`Defendant Stephen Smith is the Deputy Commissioner and Director of TennCare
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`and, in such capacity, has been delegated and/or works closely in conjunction with the
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`Commissioner to administer the TennCare program, including communicating TennCare coverage
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`and reimbursement policies on behalf of the Tennessee Department of Finance and Administration.
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`Defendant Smith is being sued in his official capacity.
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`10.
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`Defendants Eley and Smith, by virtue of their respective official statuses, had the
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`power to manage and control the actions of the Tennessee Department of Finance and
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`Administration and TennCare, and either actively approved or did not disapprove the actions of
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`the Tennessee Department of Finance and Administration or TennCare as described in this
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`Complaint.
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`11.
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`The Defendants may be referred to in this Complaint from time to time, jointly or
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`separately, generally as the “State.”
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`MEDICAID RURAL HEALTH CLINIC PROGRAM
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`12.
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`In 1965, Congress enacted Title XIX of the Social Security Act, more generally
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`referred to as The Medicaid Act, to provide states with funding to furnish medical assistance to
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`needy individuals whose income and resources are insufficient to meet the costs of necessary
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`medical services. (42 U.S.C. §§ 1396 et. seq.; Wilder v. Va. Hosp. Ass'n, 496 U.S. 498, 502
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`(1990)). The Medicaid program authorizes federal financial support to states for medical
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`assistance to low income persons who are aged, blind, disabled, or members of families with
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`dependent children. The program is jointly financed by the federal and state governments and is
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`administered by the states with federal financial participation. The states, in accordance with
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`federal law, determine eligibility of particular types of beneficiaries, types and ranges of services,
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`payment levels, and administrative and operative procedures. States voluntarily elect to participate
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`in the Medicaid program. Once such an election is made, states must comply with all federal
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`requirements.
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`13.
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`A state that participates in Medicaid must submit to and have approved by the
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`Centers for Medicare & Medicaid Services a state Medicaid plan, through which the state defines,
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`inter alia, groups of individuals covered, eligibility conditions, medical care and services,
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`reimbursement, and federal-state requirements. See generally 42 U.S.C. §§ 1396 et seq. and 42
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`C.F.R. Part 430.
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`14.
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`States have the option of implementing their Medicaid programs through managed
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`care systems. In such systems, a state contracts with and pays managed care organizations
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`(“MCOs”) to provide and manage Medicaid services for those segments of the Medicaid
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`population for which the subject MCOs are responsible. In an MCO system generally, the state
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`pays the MCOs and the MCOs pay the medical providers.
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`15.
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`Tennessee, through its Medicaid State Plan (the “State Plan”), adopted, and CMS
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`approved, an MCO system that is known as the TennCare Program. The TennCare Program
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`currently contracts with four (4) MCOs or MCO plans: BlueCare, Amerigroup, United Healthcare,
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`and TennCare Select.
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`
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`16.
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`Under federal law, patients have a right to certain services that must be provided
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`by a state as a condition of a state’s participation in the Medicaid program. 42 U.S.C. §1396a. In
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`the Omnibus Budget Reconciliation Act of 1989, Pub. L. No. 101-239, “rural health clinic
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`services” became medical services to which Medicaid beneficiaries have a right. 42 U.S.C. §§
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`1396d(a)(2)(B) and 42 U.S.C. § 1396a(a)(10)(A).
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`
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`17.
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`In order to qualify as a CMS-certified “rural health clinic” (“RHC”), a clinic must
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`be located in an area that is rural and that has been determined to be located in a designated Health
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`Professional Shortage Area or a Medically Underserved Area. 42 U.S.C. §§ 1396d and 1395x(aa).
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`CMS will formally certify a clinic as an RHC upon satisfactory application and procedure.
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`Plaintiff’s Clinics are located in designated Health Professional Shortage Areas and/or Medically
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`Underserved Areas.
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`18.
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`The RHC program requires states to pay supplemental reimbursement to rural
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`health clinics (such as Plaintiff’s Clinics) which provide primary care services to low-income
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`patients in medically underserved and health professional shortage areas. The RHC program was
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`established to increase access to health care in rural areas by creating special reimbursement
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`mechanisms that allow physicians and clinicians to practice and to continue to practice in
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`underserved, rural areas when such providers otherwise may not be able to maintain financial
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`viability. Frequently, RHCs provide necessary, prompt, and available patient care where there is
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`a lack of availability and accessibility of a nearby hospital emergency department. In light of the
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`unavailability of and continued closures of rural hospitals and the difficulty and challenges faced
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`by low-income patients in these areas in transporting to the nearest hospital emergency
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`departments, RHCs play a vital role for needy patients.
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`19.
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`An RHC must provide “rural health clinic services” during an “Eligible RHC Visit”
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`in order to be entitled to supplemental payments from the State for TennCare patient visits. “Rural
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`health clinic services” encompass a number of types of services but, generally, such services are
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`primarily outpatient services much like those offered by any primary care health clinic (such as
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`the services of physicians and nurse practitioners) as well as “any other ambulatory services”
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`provided under a state's Medicaid program. 42 U.S.C. § 1396d(a)(2)(B). An “Eligible RHC Visit”
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`generally means a medically-necessary, face-to-face encounter between a TennCare patient and a
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`physician, nurse practitioner, or other eligible provider during which time one or more “rural health
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`clinic services” are rendered.
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`20.
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`The primary federal statute at issue in the present case was enacted as part of the
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`Medicare, Medicaid, and SCHIP Benefits Improvement Act of 2000 (“BIPA”). In BIPA, Congress
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`moved to a prospective payment system (“PPS”) for RHCs so that an RHC’s per-visit patient rate
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`(a “Per-Visit Rate” or a “PPS Per-Visit Rate”) is set in advance by the state, does not change over
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`the years once it is originally set (except in two (2) circumstances), and the state pays to RHCs
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`their prospectively determined set rate for every RHC patient visit that the RHC reports to the state
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`on a quarterly basis, less payments received from MCOs.
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`21.
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`In 42 U.S.C. § 1396a(bb), BIPA provides in part:
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`(5)ADMINISTRATION IN THE CASE OF MANAGED CARE
`
`(A) In general
`
`In the case of services furnished by a Federally-qualified health center or rural health
`clinic pursuant to a contract between the center or clinic and a managed care entity (as
`defined in section 1396u–2(a)(1)(B) of this title), the State plan shall provide for payment
`to the center or clinic by the State of a supplemental payment equal to the amount (if any)
`by which the amount determined under paragraphs (2), (3), and (4) of this subsection
`exceeds the amount of the payments provided under the contract.
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`(B) Payment schedule
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`The supplemental payment required under subparagraph (A) shall be made pursuant to a
`payment schedule agreed to by the State and the Federally-qualified health center or rural
`health clinic, but in no case less frequently than every 4 months.
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`22.
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`Pursuant to BIPA, RHCs submit quarterly reports to the State C omptroller’s Office
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`
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`that list the number of Eligible RHC Visits and all MCO payments received for those visits (the
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`“Quarterly Visit Reports”) and the State is required to make quarterly supplemental payments to
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`the RHCs in the amount of the number of Eligible RHC Visits on the Quarterly Visit Report
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`multiplied by the Per-Visit Rate less MCO payments received, with such payments to be made
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`within four (4) months. These supplemental State payments are called “Wraparound Payments.”
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` 23.
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`The Tennessee State Plan (Attachment 4.19B) provides that Tennessee will pay for
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`rural health clinic services in accordance with the methodology required in BIPA. (Aopy of the
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`RHC-relevant sections of Attachment 4.19B to the State Plan is attached hereto as Exhibit 1 and
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`is hereby referred to and incorporated herein by reference).
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`24.
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`Pursuant to BIPA, TennCare must make Wraparound Payments in compliance with
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`BIPA for “Eligible RHC Visits” listed on the Quarterly Visit Reports irrespective of and without
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`regard to any MCO payments.
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`
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`25.
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`Federal law requires TennCare to count as a visit and to pay for medically
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`necessary, face-to-face encounters when an RHC provides rural health clinic services with an
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`Eligible RHC Visit. There are no additional qualifications for payment that have to be met under
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`federal law when an RHC actually provides covered rural health clinic services under its roof to a
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`TennCare patient in order for the State’s federal Wraparound Payment obligation to arise under
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`BIPA.
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`26.
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`Thus, under federal law, whether a TennCare MCO actually pays for a visit is not
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`relevant to whether an Eligible RHC Visit occurred or is required to be reimbursed by the State
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`under BIPA - if an RHC actually sees a TennCare patient for an RHC Medicaid-covered service,
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`then the RHC is entitled to list the visit on the Quarterly Visit Report and to be paid for such visit
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`by the State, regardless whether a TennCare MCO makes any payment whatsoever toward the cost
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`of such visit.
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`27.
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`In the usual situation, an MCO will pay for services rendered at a patient visit at
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`that particular MCO’s negotiated rate contained in a contract between the MCO and the RHC
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`and/or RHC providers. The RHC normally submits a claim to the MCO and the MCO is required
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`by contract to pay to the RHC its negotiated contractual rate for the services rendered.
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`28.
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`By way of an example, assume an RHC’s final Per-Visit Rate is set at $110.00 by
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`the State, a TennCare Medicaid patient has an Eligible RHC Visit, and a TennCare MCO pays to
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`the RHC $70.00 for such visit. Under these circumstances, TennCare is required to make up the
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`difference between the $110.00 Per-Visit Rate and the $70.00 MCO payment in the form of a
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`supplemental $40.00 Wraparound Payment to the RHC. Under federal law (and using the above
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`example) if an RHC’s Per-Visit Rate were set by the State at $110.00 and if an MCO failed to pay
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`anything toward the cost of the TennCare Medicaid patient encounter, then BIPA requires that
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`TennCare make a supplemental Wraparound Payment to the RHC in the amount of the Per-Visit
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`Rate, less $0 paid by the MCO, or $110.00.
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`29.
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`Sometimes, an MCO will fail to pay (in whole or in part) for rural health clinic
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`covered services rendered at an actual Eligible RHC Visit due to no fault of an RHC.
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`30.
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`Regardless whether an MCO denies payments for claims for services rendered
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`during Eligible RHC Visits due to their own issues, errors, practices, or other reasons, the State of
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`Tennessee, not the RHCs, bears the ultimate risk of BIPA-required payments for TennCare
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`Eligible RHC Visits.
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`31.
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`Aside from the State Plan, which says that the Tennessee State Plan will comply
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`with BIPA, there is no existing and legally enforceable Tennessee law, statute, rule, regulation,
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`policy, or practice that was properly and legally adopted under the Tennessee Uniform
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`Administrative Procedures Act or that otherwise that governs the issue at hand, to wit: whether
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`under BIPA, an MCO must first pay a claim before an RHC is entitled to Wraparound Payments
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`from the State under BIPA for Eligible RHC Visits where RHC services were actually provided to
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`TennCare patients at an RHC facility.
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`32.
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`Regardless, Defendants have engaged in the practice of denying Wraparound
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`Payments for Eligible RHC Visits that were not paid by MCOs for many years. Representatives
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`of Defendants have instructed and directed Plaintiff and numerous other RHCs that unpaid MCO
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`Eligible RHC Visits should not and must not be included on the Quarterly Visit Reports. Upon
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`information and belief, Defendants have instructed and directed Tennessee RHCs in this manner
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`based upon some unofficial, unpublished practice or policy, and/or based upon the subjective
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`opinions of their representatives, and/or based upon anerroneous interpretation of BIPA. This
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`unofficial policy or practice and the representations made by Defendants and their representatives
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`to Plaintiff and to other RHCs, upon which Plaintiff and other RHCs relied on to their detriment
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`in reporting Eligible RHC Visits, violate BIPA.
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`FACTUAL BACKGROUND
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`
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`33.
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`Plaintiff, which does business under the registered assumed name of Reelfoot
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`Family Walk-In Clinic, Inc. and other assumed names registered with the Tennessee Secretary of
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`State, owns and operates CMS-certified RHCs that include healthcare clinics in Dyersburg,
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`Dresden, and Union City, Tennessee.
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`34.
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`Years ago, the Comptroller’s Office assigned each of Plaintiff’s Clinics final PPS
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`Per-Visit Rates.
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`35.
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`Plaintiff has operated the Clinics so that after the end of each quarter, the Clinics
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`submit Quarterly Visit Reports to the Tennessee Comptroller’s Office. The Quarterly Visit
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`Reports contain the number of Eligible RHC Visits that occurred in the Clinics and the amount of
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`revenue the Clinics received from TennCare MCOs during such quarter. Clinics also submit
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`amended Quarterly Visit Reports from time-to-time.
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`36.
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`In response to such quarterly reports, the Comptroller’s Office was and is obligated
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`by BIPA to make quarterly, supplemental Wrapround Payments to the Clinics in the amount of the
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`number of Eligible RHC Visits shown on the Quarterly Visit Reports multiplied by the Per-visit
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`Rates less the MCO payments received and reflected on such Quarterly Visit Reports.
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`37.
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`During the course of past dealings between Plaintiff and Defendants (through their
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`agents and representatives), the Comptroller’s Office and/or TennCare have expressly told and
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`instructed Plaintiff that it could and should not include any patient visits for which the MCOs had
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`not made payment in the Quarterly Visit Reports, and that the Comptroller’s Office would not
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`make Wraparound Payments therefor.
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`38.
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`Plaintiff has followed and relied upon these instructions, representations, and
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`practices in submitting its Quarterly Visit Reports, as this was what the State instructed Plaintiff
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`to do.
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`39.
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`During all years prior to the filing of this Complaint and as of the date of the filing
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`of this Complaint, there existed and exists no Tennessee statute, law, rule, or regulation that
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`requires MCOs to have first paid for Eligible RHC Visits before the State is obligated to make the
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`Wraparound Payments required by BIPA.
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`40.
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`In February of 2018, as a result of a self-audit, Plaintiff discovered, and voluntarily
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`and in good faith self-reported, to the State Comptroller’s Office that it had previously submitted
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`Eligible RHC Visits that had occurred, but that had not been paid by MCOs, on certain prior
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`Quarterly Visit Reports.
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`
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`41. Most (but not all) of the Eligible RHC Visits that Plaintiff self-reported involved a
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`change in MCOs’ practices regarding patient assignment for primary care services. In July of
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`2015, BlueCare and TennCare Select sent a notice to providers regarding a new process or practice
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`it had adopted regarding assignment of TennCare patients to primary care providers. This notice
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`contained a separate paragraph that specifically addressed RHCs (as well as schools, FQHCs, and
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`others) as “PCPs Providing Services in Non-Traditional Office Settings” and stated, “”[W]hen a
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`PCP provides services to unassigned members at any of the locations below, we encourage you to
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`file the appropriate location code on the claim in order to avoid claim denials.” The location code
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`for RHCs was listed as Code 72.
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`42.
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`Despite the fact that Plaintiff, as instructed in the BlueCare/TennCare Select letter,
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`included Code 72 on claims, BlueCare and TennCare Select denied many of Plaintiff’s claims for
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`services rendered at Eligible RHC Visits; however, these MCOs’ own adopted primary care
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`provider claim practices were and are irrelevant to whether the State was federally required to
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`make Wraparound Payments for Plaintiff’s Eligible RHC Visits.
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`43. MCOs frequently deny payment for claims for RHC services rendered at Eligible
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`RHC Visits for reasons that are not the fault of the RHCs. Such reasons include, without limitation:
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`internal processing errors; human and technical errors; coding errors; incorrect credentialing
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`information in the MCO systems; failure to maintain adequate communications and sharing of
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`information among the Comptroller’s Office, TennCare, and the MCOs (e.g., in this case, the State
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`possessed the information that the Clinics were RHCs, but one or more MCOs either did not have
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`this information or failed to observe it); MCOs’ erroneously showing TennCare patients as out of
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`network where RHCs confirmed TennCare eligibility at the time of service for a TennCare patient
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`but where, by the time the MCO processes the claim, the patient is disenrolled from TennCare;
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`MCOs’ requiring unreasonable documentation of proof of services or assignment where adequate
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`proof has previously been furnished; and in other ways not specifically listed herein. These errors
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`often result in RHCs’ ultimately being unable to meet the MCOs’ timely filing requirements. The
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`risk of these MCO errors or MCOs’ not making payment for claims through no fault of the RHCs
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`lies on the State with respect to making RHC Wraparound Payments. It is the State’s responsibility
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`to administer TennCare through its MCO plans in compliance with federal law, and BIPA
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`unequivocally requires the States to make Wraparound Payments for Eligible RHC Visits without
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`regard to whether the MCOs make mistakes or how MCOs administer their MCO plans. The
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`State’s policy or practice of requiring MCO payment prior to making Wraparound Payments and
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`the State’s requirement that RHCs must go through the MCOs’ internal appeals process prior to
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`receiving Wraparound Payments fails to guarantee the full PPS Per-Visit Rate compensation
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`within the four (4)-month statutory payment time requirement for Eligible RHC Visits.
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`44.
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`In the latter part of 2018 and 2019, TennCare attempted to enact formal rules and
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`regulations that, if approved by the State and approved by CMS, would have caused Tennessee to
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`have a TennCare regulation that only Eligible RHC Visits actually paid by the MCOs would be
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`reimbursed by the State. In other words, the State attempted to enact its first “paid claims” rule
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`and regulation that would have required MCO payment before the State would make Wraparound
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`Payments. These proposed rules were strenuously challenged by RHC, rural health, and FQHC
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`stakeholders, primarily on grounds that they violated BIPA. TennCare withdrew the proposed rules
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`in the latter part of 2019, thereby leaving Tennessee with no enforceable, published law, rule, or
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`regulation that would require Eligible RHC Visits to have been paid by MCOs first in order for
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`the State to be required to make Wraparound Payments. Even if the proposed RHC rules had not
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`been withdrawn by TennCare and had been enacted in accordance with the proper rulemaking
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`process under the Uniform Administrative Procedures Act, it is Plaintiff’s position that any such
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`TennCare regulation requiring MCO payments first as a condition precedent to the State’s
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`obligation to make Wraparound Payments likely would have been determined by CMS and/or a
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`by a federal court to have violated BIPA based on federal case law on this issue.
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`45.
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`Beginning in 2018, in response to Plaintiff’s self-reporting regarding unpaid MCO
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`visits, the State has recouped and/or reconciled over $290,000.00 from Plaintiff due to the unpaid
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`visit issue.
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`46.
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`On September 26, 2019, TennCare published a notice that the proposed RHC rules
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`(which included adoption of a “paid claims” regulation) were being withdrawn by TennCare.
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`13
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`Case 1:20-cv-01280-STA-jay Document 1 Filed 12/22/20 Page 14 of 19 PageID 14
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`47.
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`On April 29, 2019, Plaintiff submitted a Notice of Appeal to TennCare to appeal,
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`through TennCare’s administrative appeals process, the primary issue of TennCare’s failure to
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`make Wraparound Payments for unpaid MCO Eligible RHC Visits.
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`48.
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`As of June 30, 2019, the date of the filing of the Notice of Appeal, Plaintiff
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`calculated that it had over 1,700 Eligible RHC Visits, unpaid by MCOs, that had actually occurred
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`at its Clinics with respect to which the State took the position that it was not obligated to pay
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`Wraparound Payments.
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`49.
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`Following the filing of Plaintiff’s Notice of Appeal, TennCare notified Plaintiff that
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`its appeal was being desk reviewed by TennCare.
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`50.
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`In May of 2019, Plaintiff sent to TennCare all documents and information
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`neccessary to evidence of Plaintiff’s claims in its appeal.
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`51.
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`During its review, TennCare requested additional information from Plaintiff and
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`requested that Plaintiff to go back and input the information Plaintiff had already sent to TennCare
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`in an Excel worksheet format prepared by TennCare. Plaintiff complied with these requests.
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`52.
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`On July 19, 2019, TennCare advised Plaintiff that it intended to complete its review
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`of the appeal within thirty (30) days. However, Plaintiff was not notified that TennCare had
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`completed its review or the results of that review until Plaintiff received a letter from TennCare’s
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`CFO dated May 21, 2020. (Copy of letter attached hereto as Exhibit 2 and hereby referred to and
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`incorporated herein by reference).
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`53.
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`During the desk review and information exchanges between TennCare and
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`Plaintiff, certain numbers regarding visits and amounts owed by the State were modified or
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`adjusted by the parties.
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`Case 1:20-cv-01280-STA-jay Document 1 Filed 12/22/20 Page 15 of 19 PageID 15
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`54.
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`Since the filing of the Notice of Appeal, Defendants have continued the policy or
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`practice of requiring RHCs in Tennessee to exclude unpaid MCO visits on the Quarterly Visit
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`Reports and denying Wraparound Payments for unpaid MCO Eligible RHC Visits. Upon
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`information and belief, Tennessee has and continues its practice of disallowing or recouping or
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`reconciling substantial sums of money to and from Tennessee RHCs as a result of its violation of
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`BIPA.
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`55.
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`As of October 30, 2020, Plaintiff calculates that the State has failed to make
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`Wraparound Payments for a total of a reasonably estimated 1,820 Eligible RHC Visits. The
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`foregoing numbers have and will increase as the State continues its policy or practice in this regard
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`in violation of BIPA.
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`56.
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`Plaintiff received a letter dated May 21, 2020 from William Aaron, Chief Financial
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`Officer of TennCare, (copy attached as Exhibit 2) stating that there is no formal appeal process
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`for disputing visit counts through TennCare. Therefore, approximately ten (10) months after
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`TennCare advised Plaintiff that it would have its review completed,TennCare first advised Plaintiff
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`that it could not appeal through TennCare the issue of whether the State’s policy or practice of
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`requiring Eligible RHC Visits to have been paid by MCOs before the State is required by federal
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`law to make Wraparound Payments. Plaintiff is entitled to due process regarding the foregoing
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`issue and has, based on TennCare’s letter, exhausted its administrative remedies in connection
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`with the same.
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`57.
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`In such letter, Mr. Aaron states that, according to BIPA, “TennCare is required to
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`make supplemental payments to RHCs equal to the difference, if any, between the amounts paid
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`by the contracted MCO and the amount that the RHC would have received under the Prospective
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`Payment System (PPS). This means that the RHC must have received an MCO payment for every
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`15
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`Case 1:20-cv-01280-STA-jay Document 1 Filed 12/22/20 Page 16 of 19 PageID 16
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`visit reported.” Mr. Aaron further states in the letter, “If no MCO payment has been received by
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`the RHC for the services provided (service not eligible; patient not eligible at time of service; claim
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`rejected by MCO), the RHC may not submit visits to receive wraparound payments for those
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`services.”
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`58. Mr. Aaron’s letter cites no State law, rule, regulation, policy, or procedure in
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`support of his interpretation of federal law, thereby confirming that there is no applicable State
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`law, rule, regulation, policy, or procedure in Tennessee regarding the federal question at issue in
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`this case.
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`59. Mr. Aaron points out in his letter that the federal cases which Plaintiff submitted to
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`TennCare in support of its appeal only addressed payments to FQHCs and that none of the cases
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`dealt with payments to RHCs. Mr. Aaron drew a distinction between how the State treats FQHCs
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`and RHCs for Wraparound Payment purposes. He reasoned that FQHCs should be treated
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`differently from RHCs because FQHCs are required to see patients regardless of ability to pay.
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`He states, “This distinction supports the position requiring RHCs to submit only MCO-paid claims
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`for reimbursement.”
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`60.
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`The State’s position of distinguishing FQHCs from RHCs under BIPA on the issue
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`whether claims must be paid by MCOs before the State is obligated to make Wraparound Payments
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`is simply incorrect under the plain language of BIPA. BIPA (Section 1396a(bb)(5)(A) makes no
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`distinction on the issue of Wraparound Payments between RHCs and FQHCs, but rather, treats the
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`two exactly the same. The primary statute at issue, 42 U.S.C. §1396a(bb)(5)(A), provides, “In the
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`case of services
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`furnished by a Federally-qualified health center or rural health
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`clinic pursuant to a contract between the center or clinic and a managed care entity (as defined
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`in section 1396u–2(a)(1)(B) of this title), the State plan shall provide for payment to the center
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`16
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`Case 1:20-cv-01280-STA-jay Document 1 Filed 12/22/20 Page 17 of 19 PageID 17
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`or clinic by the State of a supplemental payment equal to the amount (if any) by which the
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`amount determined under paragraphs (2), (3), and (4) of this subsection exceeds the amount of the
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`payments provided under the contract.” (Emphasis added).
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`61.
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` If it is determined that the State has paid or does pay Wraparound P