A recent Florida case concerned competing Medicaid rights—a Medicaid recipient’s right to choose a Medicaid provider without state interference, and a state’s right to maintain quality medical treatment for some of its most vulnerable citizens. Miracles House operates two group homes that offer healthcare services to the permanently disabled.
In Florida, the Agency for Health Care Administration regulates assisted living facility licenses and oversees the quality of care at those facilities. Florida’s Agency for Persons with Disabilities is responsible for monitoring group homes and issuing licenses to group-home operators. Miracles had licenses to operate its facilities.
Medicaid Providers Requirements
Miracles was a Medicaid provider. Qualified Medicaid providers must maintain a facility license and enter into a Medicaid Provider Agreement with Florida’s Agency for Persons with Disabilities. These qualified providers have “Medicaid Provider Authorization,” which allows them to obtain a Medicaid provider number and receive Medicaid reimbursement for certain healthcare services. If a Medicaid provider loses its Medicaid Provider Authorization—such as by the suspension of its license or termination of its Medicaid Provider Agreement—the provider loses the right to furnish Medicaid services and receive payment from Medicaid.
In July 2017, Florida’s Agency for Health Care Administration suspended Miracles’ Assisted Living License because of deficient patient care. Because of this, the Agency for Healthcare Administration suspended Miracles’ Assisted Living License and closed another of its facilities.
But Miracles held two licenses—the suspended Assisted Living License and the Group Home License. So, even though it lost its Assisted Living License, it retained its Group Home License—allowing it to continue operating both of its group homes.
Plaintiffs emphasized the separateness of the group homes and Amazing Wonders, arguing that the problems at Amazing Wonders didn’t impact the quality of care administered at Miracles’ group homes. Plaintiffs argued that the events at Amazing Wonders shouldn’t affect Miracles’ status as a qualified Medicaid provider in its group homes.
Defendants said that they effectively treated the facilities as one in the same, arguing that Amazing Wonders’ deficiencies reflect Miracles’ medical competence and qualifications—or lack thereof. According to the Defendant, the problems at Amazing Wonders, and subsequent suspension of Miracles’ Assisted Living License “led [the Agency for Health Care Administration] to conclude that Miracles was no longer fit to perform Medicaid services in a professionally competent, safe, legal and ethical manner under 42 C.F.R. § 431.51(b)(1).” In other words, the state determined that Miracles’ ownership of an assisted living facility with such extensive deficiencies undermined Miracles’ fitness to provide Medicaid services even at entirely separate entities.
The Agency for Health Care Administration terminated Miracles’ Medicaid Provider Authorization, and it no longer qualified as a Medicaid Services Provider, prompting the Agency for Persons with Disabilities to terminate its Medicaid Provider Agreement with Miracles.
In short, Plaintiffs alleged that Defendants “imposed a sanction of exclusion from Medicaid on Miracles House without a finding of a ‘violation’ by Miracles House and without providing Miracles House the opportunity for a pre-deprivation hearing as state law requires.” It asked the Court for a temporary restraining order and a preliminary injunction restraining Defendants, his employees, agents, and successors in office from terminating the Medicaid provider agreements of Plaintiff Miracles House.
Plaintiffs claimed that the state terminated Miracles’ Medicaid Provider Authorization and Provider Agreements for reasons unrelated to its fitness to perform safe, effective medical services—a violation of the free-choice-of-provider provision.
United States District Judge Federico A. Moreno wrote in his opinion that the federal Medicaid statute includes a free-choice-of-provider provision. Courts agree that the free-choice-of-provider provision creates a private right, but only Medicaid recipients—not Medicaid providers—can enforce that right.
Defendants argued that because Miracles House, Inc. is a (former) Medicaid provider, it lacked standing to assert a claim. The Court agreed. However, the individual Miracles Plaintiffs in this action—as Medicaid recipients—did have standing to pursue the requested relief under the free-choice-of-provider provision.
Medicaid’s free-choice-of-provider provision guarantees Medicaid recipients “the right to choose among a range of qualified providers without government interference.” However, this right to choose is limited to qualified providers. And states have the right enforce minimum standards of care for Medicaid providers.
Here, the Plaintiffs’ motion for emergency temporary restraining order and preliminary injunction was denied, and the Defendants’ partial motion to dismiss Miracles House for lack of standing was granted. Miracles House, Inc. v. Senior, 2017 U.S. Dist. LEXIS 186336 (S.D. Fla. November 9, 2017).
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