Aetna Better Health of N.C., Inc. v. N.C. Dep't of Health & Human Servs., COA21-97

Docket NºNo. COA21-97
Citation866 S.E.2d 265, 279 N.C.App. 261
Case DateSeptember 21, 2021
CourtCourt of Appeal of North Carolina (US)

279 N.C.App. 261
866 S.E.2d 265


North Carolina Provider Owned Plans, Inc., d/b/a My Health by Health Providers, Intervenor,
WellCare of North Carolina, Inc., Blue Cross and Blue Shield of North Carolina, AmeriHealth Caritas North Carolina, Inc., UnitedHealthcare of North Carolina, Inc., and Carolina Complete Health, Inc., Respondents-Intervenors.

No. COA21-97

Court of Appeals of North Carolina.

Filed September 21, 2021

Hedrick Gardner Kincheloe & Garofalo LLP, Raleigh, by Patricia P. Shields, Linda Stephens, M. Duane Jones, and Tatiana M. Terry ; Hunton Andrews Kurth LLP, Charlotte, by Nash Long and Kevin J. Cosgrove ; Hahn Loeser & Parks LLP by Marc J. Kessler and E. Sean Medina, for Petitioner-Appellant Aetna Better Health of North Carolina, Inc.

Haynswoth Sinkler Boyd, P.A., by Robert Y. Knowlton, Elizabeth H. Black, Boyd B. Nicholson, Jr. ; and Attorney General Joshua H. Stein, by Special Deputy Attorney General Colleen M. Crowley, and Special Deputy Attorney General John R. Green, Jr., for Respondent-Appellee North Carolina Department of Health and Human Services.

Alexander Ricks PLLC, Charlotte, by Rodney E. Alexander and Mary K. Mandeville, and Mayer Brown, LLP, by Rodger V. Abbot, Luke Levasseur, and Marcia G. Madesen, for Respondent-Intervenor-Appellee AmeriHealth Caritas of North Carolina, Inc.

Brooks, Pierce, McLendon, Humphry & Leonard, LLP, by Jennifer K. Van Zant, Greensboro, Jessica Thaller-Moran, and Eric F. Fletcher, Greensboro, for Respondent-Intervenor-Appellee Blue Cross and Blue Shield of North Carolina.

Wyrick Robbins Yates & Ponton, LLP, Raleigh, by Lee M. Whitman, Paul J. Puryear, Jr., for Respondent-Intervenor-Appellee Carolina Complete Health, Inc.

Alston & Bird LLP, by Jessica L. Sharron ; and Tharrington Smith LLP, Raleigh, by F. Hill Allen and Colin Shive, for Respondent-Intervenor-Appellee UnitedHealthcare of North Carolina, Inc.

Morningstar Law Group, Raleigh, by Shannon R. Joseph ; and Holland & Knight, by Karen D. Walker, for Respondent-Intervenor-Appellee Wellcare of North Carolina, Inc.

Parker Poe Adams & Bernstein LLP, Raleigh, by Matthew W. Wolfe, Robert A. Leandro, and Melanie Black Dubis, for Respondent-Intervenor-Appellee North Carolina Provider Owned Plans, Inc. d/b/a My Health by Health Providers.

TYSON, Judge.

866 S.E.2d 267
279 N.C.App. 263

¶ 1 Aetna Better Health of North Carolina, Inc. ("Aetna") appeals from an order entered dismissing their petition for lack of subject matter jurisdiction and denying their motion for an extension of time for service of process. We affirm.

I. Background

¶ 2 The North Carolina Department of Health and Human Services ("DHHS") is responsible for overseeing and operating North Carolina's Medicaid plan. DHHS is transitioning North Carolina's Medicaid delivery system from a fee-for-service model to a managed care model operated by Prepaid Health Plans, pursuant to North Carolina's Medicaid Transformation Act. S.L. 2015-245; see N.C. Gen. Stat. § 122C-115(e) (2019). This Act directed DHHS to develop a request for proposals to award prepaid health contracts. S.L. 2015-245, § 4. In 2018, DHHS formed an evaluation committee ("Committee") to review and score proposals.

¶ 3 Aetna is a managed-care provider, one of eight entities who submitted proposals for Medicaid managed-care services. The Committee issued its recommendations on 24 January 2019, which identified four statewide contracts for Medicaid managed care services to be awarded. On 4 February 2019, DHHS awarded contracts to WellCare of North Carolina, Inc. ("Wellcare"), Blue Cross and Blue Shield of North Carolina ("BCBS"), AmeriHealth Caritas of North Carolina ("AmeriHealth"), and UnitedHealthcare of North Carolina, Inc. ("United Healthcare"). DHHS also awarded a regional contract to Carolina Complete Health, Inc. ("CCH") (collectively "Intervenors").

¶ 4 Aetna, along with the two other entities who were not awarded contracts, protested DHHS’ contract and award decisions by filing contested case petitions in the Office of Administrative Hearings ("OAH"). Aetna filed its contested case petition and motion for preliminary injunction on 16 April 2019. The Administrative Law Judge ("ALJ") denied Aetna's motion for preliminary injunction on 26 June 2019. The ALJ consolidated all three petitions on 26 July 2019.

¶ 5 The ALJ entered an order on 9 September 2020 granting DHHS’ motion for summary judgment of all claims. The decision included a "notice of appeal," paragraph which provides:

279 N.C.App. 264
[u]nder the provisions of North Carolina General Statute § 150B-45, any party wishing to appeal the final decision of the Administrative Law Judge must file a Petition for Judicial Review in the Superior Court of the county where the person aggrieved by the administrative decision resides.... The appealing party must file the petition within 30 days after being served with a written copy of the Administrative Law Judge's Final Decision ... N.C. Gen. Stat. § 150B-46 describes the contents of the Petition and requires service of the Petition on all Parties.

¶ 6 Aetna timely filed its Petition for Judicial Review in superior court on 23 September 2020. The remaining companies not receiving an offer also filed a Petition for Judicial Review. Aetna served its Petition on counsel of record in the proceedings. Aetna filed a notice of Petition with the OAH, which transmitted notice to all counsel of record.

¶ 7 Aetna failed to serve a copy of its Petition on DHHS’ designated service of process agent, Lisa Granberry Corbett or any member of her office as required, pursuant to N.C. Gen. Stat. § 1A-1, Rule 4(j)(4) (2019). On 8 October 2020, Intervenors and DHHS filed motions to dismiss and served them on Aetna the same day. On 12 October 2020 at 9:00 a.m., Aetna personally served Corbett. At 10:18 a.m. the same day, Aetna filed an amended Petition for Judicial Review and personally served Corbett at 10:30 a.m.

866 S.E.2d 268

¶ 8 On 13 October 2020, Aetna moved for an extension of time to serve its Petition for Judicial Review and served the amended Petition for Judicial Review on Intervenors’ counsel. The superior court heard the motions to dismiss on 9 November 2020, denied Aetna's request for an extension of time for service of process, and granted DHHS’ and Intervenors’ motions to dismiss for lack of jurisdiction by order entered 23 November 2020. Aetna appeals.

II. Jurisdiction

¶ 9 Jurisdiction lies in this Court pursuant to N.C. Gen. Stat. § 7A-27(b) (2019).

III. Issues

¶ 10 Aetna raises four arguments in their brief. We consolidate and restructure their arguments as follows, whether the superior court erred by: (1) granting DHHS’ and Intervenors’ motion to dismiss; and, (2) denying Aetna's motion to extend the time for service.

279 N.C.App. 265

IV. Motion to Dismiss

¶ 11 Aetna argues the superior court erred by granting DHHS’ and Intervenors’ motion to dismiss.

A. Standard of Review

¶ 12 "This Court must conduct a de novo review of the pleadings to determine their legal sufficiency and to determine whether the trial court's ruling on the motion to dismiss was correct." Leary v. N.C. Forest...

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