Updated on: September 27, 2019

Preliminary injunction filed in federal court on behalf of providers dismissed from Virginia Medicaid program

By
Original story posted on: September 26, 2019

More than two dozen providers are listed as plaintiffs, with more expected to join.  

More than two dozen Virginia behavioral healthcare providers have filed a preliminary injunction in federal court to halt and reverse their recent sudden, unexpected dismissal from the state’s Medicaid ranks at the hands of six insurer defendants.

A Village Youth and Family Services, Inc. et al v. The Commonwealth of Virginia et al was filed Wednesday in the United States District Court of the Eastern District of Virginia, setting up a legal battle with potentially wide-reaching ramifications.

Nearly all of the plaintiff providers’ clients are covered by Medicaid, and excluding the providers from the program, the suit asserts, is essentially tantamount to throwing them out of business. The litigation lists five claims for relief, asserting that:

  • The defendants’ actions violate Virginia patients’ statutorily protected right to choose their caregivers;
  • The move violated the 14th Amendment’s Equal Protection clause by singling the plaintiffs out for unfavorable treatment without adequate justification;
  • The defendants discriminated against the plaintiffs solely on the basis of their Medicaid certifications;
  • The action violated the provisions of the federal Medicaid statutes; and
  • By eliminating the providers from enrollment in Medicaid, the defendants breached their respective contracts with those providers.

The suit includes a demand for a trial by jury and a request for the presiding Court to accept jurisdiction, issue declaratory preliminary judgments that their claims have merit, and issue preliminary (followed by permanent) injunctive relief, along with granting reimbursement for expenses.

“The Plaintiffs remain in good standing with the Medicaid Program and DMAS (Virginia’s Medicaid program). There is no allegation of fraud, no allegation of services rendered with subpar quality, and/or no allegations of services being rendered without medical necessity,” the suit reads. “These terminations are arbitrary, capricious, outside the MCOs’ scope of legal authority, erroneous, and without due cause.”

RACmonitor has requested comment from multiple plaintiffs, defendants, and others involved in this matter, and will be publishing a more comprehensive follow-up article in the near future.

Mark Spivey

Mark Spivey is a national correspondent for Auditor Monitor, RACmonitor, and ICD10monitor who has been writing and editing material about the federal oversight of American healthcare for more than a decade. He can be reached at mcspivey@hotmail.com.

This email address is being protected from spambots. You need JavaScript enabled to view it.

Related Articles

  • Identity Theft in Long-Term Care
    There are resources available to help prevent wrongdoers from successfully targeting vulnerable patient populations. A dirty little secret of the long-term care industry is that the problem of identity theft arises more often than is reported.  In all fraud, there…
  • “Let’s not Point Fingers:” Feds cut $253 billion from Hospital Payments
    The recent study was commissioned by the American Hospital Association and the Federation of American Hospitals. A report released last week found that the federal government has reduced Medicare and Medicaid payments to hospitals by nearly $253 billion, through 12…
  • The Devil’s in the Details of Two New Proposed Rules
    More than 700 pages of text make up proposed changes to the federal Stark and anti-kickback statutes. On Wednesday, Oct. 9, federal healthcare officials announced two new proposed rules.  While the main focus of both proposals is to remove perceived…