Judge’s order prevented closing of mental health clinic.
Last week, I won a permanent injunction for a healthcare facility that, but for the injunction, would be closed, its 300 staff unemployed, and its 600 Medicare and Medicaid consumers without access to their mental health and substance abuse providers, their primary care physicians, and the Suboxone clinic.
The judge’s clerk emailed us on Friday. The email was terse, although the clerk signified that the message was important by clicking the little red exclamation point. It simply stated: “after speaking with Judge X, she is dismissing the government’s MTD and granting petitioner’s permanent injunction. Petitioner’s counsel can send a proposed decision within 10 days.” Such a simple email affected so many lives!
Why was this company on the brink of closing down? The managed care organization (MCO) terminated the company’s Medicaid contract. Medicaid comprised the majority of its revenue. The MCO’s reason was that the company violated 42 CFR §455.106, which states:
“Information that must be disclosed: before the Medicaid agency enters into or renews a provider agreement, or at any time upon written request by the Medicaid agency, the provider must disclose to the Medicaid agency the identity of any person who:
The company’s former CEO – for years – had relied on professional tax accountants for his company’s taxes and his own personal taxes. His wife, who is a physician, relied on her husband to do their personal taxes as one of his “honey-do” tasks. The CEO relied on a sub-par accountant for a couple years, and pleaded guilty to failing to pay personal taxes for two years. The plea ended up in the newspaper, and the MCO terminated the contract.
We argued that the company, as an entity, was bigger than just the CEO. Quickly, we filed for a temporary restraining order (TRO) to keep the company open. Concurrently, we transitioned the company’s ownership from the CEO to his wife. She became CEO in a seamless transition. A long-time executive stepped up as HR management.
Yet, according to testimony, the MCO terminated the company’s contract when the local newspaper published the article about the CEO’s guilty plea. The article was published on April 9, and the termination notice was sent out April 19. It was a quick decision.
We argued that 42 CFR §455.106 didn’t apply, because the CEO’s guilty plea was:
- Personal and not related to Medicare or Medicaid; and
- Not a conviction but a voluntary plea agreement.
The judge agreed. We won the TRO for immediate relief. After a four-day hearing and 22 witnesses, we won the preliminary injunction. At this point, the MCO hired outside counsel with our tax dollars, which I did bring up in the final hearing on the merits.
New outside counsel was very excited to be involved. He immediately propounded a ton of discovery, asking for things that he already had and for criminal documents that we had no access to – because, by law, the government has the right to possession of them, while defendants do not.
It grew more litigious as the final hearing on the merits approached.
Finally, we presented our case for a permanent injunction, emphasizing the importance of the company and the smooth transition to the new CEO. Because we won, the company remains open, and providing medically necessary services to our most needy populations.
Lastly, I get the opportunity to draft the proposed decision.
Programming Note: Listen to Knicole Emanuel’s live RAC Report every Monday on Monitor Mondays, 10 Eastern.