Law Street Media

Rural Medical Clinic Sues Tenn. Over Medicaid Payments

Two doctors discussing information on a tablet.

Shot of two young doctors using a digital tablet late at night in a modern hospital

Dyersburg Family Walk-In Clinic, Inc. filed a complaint against the Tennessee government on Tuesday in the Western District of Tennessee Eastern Division, alleging that the government had not paid the clinic for qualifying visits. The Tennessee Department of Finance and Administration, its commissioner, The Bureau of TennCare, and its commissioner and the bureau’s director were named as defendants.

 The plaintiff “owns and operates rural health clinics” (RHCs) in Tennessee,” that are “certified by the United States Department of Health and Human Services’ Center for Medicare and Medicaid Services.” Rural health clinics are located in designated underserved areas.

Tennessee “implement(ed) their Medicaid program through a” managed care system, in which the state “contracts with and pays managed care organizations (MCOs) to provide and manage Medicaid services for those segments of the Medicaid population for which the subject MCOs are responsible.” Generally, “the state pays the MCOs, and the MCOs pay the medical providers.” Tenessee’s Medicate State Plan adopted Tenncare as their MCO system, which “contracts with four MCOs;” “BlueCare, Amerigroup, United Healthcare, and TennCare Select.”

The plaintiff alleged that the “RHC program requires states to pay supplemental reimbursement.” The complaint stated that the SCHIP Benefits Improvement Act of 2000 (BIPA) requires the State to make supplemental “Wraparound Payments” to reimburse RHC providers for costs not covered by MCOs for eligible RHC visits.

The issue presented is “whether, under BIPA , an MCO must first pay a claim before an RHC is entitled to Wraparound Payments from the State under PIPA for Eligible RHC Visits.” The plaintiff alleged that the defendants “den(ied) Wraparound Payments for Eligible RHC Visits that were not paid by MCOs for many years.” The complaint lists various reasons why MCOs may not pay, despite the visits being eligible RHC visits.

The clinic argued that there is no existing “Tenessee statute, law, rule, or regulation that requires MCOs to have first paid for Eligible RHC Visits before the State is obligated to make the Wraparound Payments Required by BIPA.” The plaintiff alleged that defendants not paying was “based upon some unofficial, unpublished practice or policy,” “based upon the subjective opinions of their representatives,” or “based upon an erroneous interpretation of BIPA.”

The complaint stated that the Chief Financial Officer of TennCare sent a letter to the plaintiff in late October, writing “if no MCO payment has been received by the RHC” for services provided, the RHC may not” “receive wraparound payments for those services.”

The plaintiff alleged that the “State has failed to make Wraparound Payments” for an estimated “1,820 Eligible RHC Visits.”  The clinic argued that the “loss of revenue has impeded and will impede Plaintiff’s and other Tennessee RHCs’ ability to provide and expand care to” “vulnerable, needy patient population(s) in rural areas.”

The plaintiff asked the court to declare the defendants’ “policy or practice of paying Wraparound Payments to RHCs only if and when an MCO has paid associated claims, violates Plaintiff’s rights.” The plaintiffs also requested that the court enjoin defendants from “withholding or denying Wraparound Payments due to plaintiff in a manner contrary to federal law” and that the court direct the plaintiff receive reimbursement for Eligible RHC visits. The plaintiff is also requesting the defendant to pay its attorneys’ fees and other costs incurred. Dyersburg Family Walk-In Clinic, Inc. is represented by Rainey, Kizer, Reviere & Bell, P.L.C.

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