Alexandre v. Ill. Dep't of Healthcare & Family Servs.
| Decision Date | 15 September 2021 |
| Docket Number | 20 C 6745 |
| Court | U.S. District Court — Northern District of Illinois |
| Parties | DR. MICHELLE ALEXANDRE, M.D., Plaintiff, v. ILLINOIS DEPARTMENT OF HEALTHCARE & FAMILY SERVICES and PATRICK CONLON, in his official capacity as Acting Inspector General of the Illinois Department of Healthcare & Family Services, Defendants. |
On January 28, 2020, Plaintiff Dr. Michelle Alexandre received a letter from Defendant Patrick B. Conlon, Acting Inspector General of Defendant Illinois Department of Healthcare & Family Services, informing her that a preliminary audit of her Medicaid billing suggested a potential for fraud. For that reason, the Department would be withholding all of her Medicaid payments until the issues were resolved, for a maximum of three years. Despite Plaintiff's inquiries the Department has provided Plaintiff with little additional information about what irregularities the preliminary audit revealed, and it has continued to withhold her Medicaid payments. On November 13, 2020, Dr. Alexandre filed this lawsuit [1] against Defendant Conlon and Defendant Illinois Department of Healthcare & Family Services. Dr. Alexandre claims violation of her rights under the Due Process clause of the Fourteenth Amendment, enforced via 42 U.S.C. § 1983 and the doctrine of Ex parte Young. Defendants move to dismiss [8] for failure to state a claim. As explained here, the motion is granted in part and denied in part.
Plaintiff Dr. Michelle Alexandre (“Alexandre”) is a physician engaged in family practice in Melrose Park Illinois. As part of her practice, Alexandre provides care to persons in various low-income communities in the greater Chicago area. (Id.) Alexandre has “participated in” public healthcare programs for the last twenty years or so and is currently authorized to provide healthcare through the Illinois Medical Assistance Program-Illinois's Medicaid service. (Id. ¶¶ 5-6.) On January 28, 2020, Dr. Alexandre received a letter from Defendant Patrick B. Conlon, the Interim Inspector General of Defendant Illinois Department of Healthcare & Family Services (“HFS”). (Id. ¶¶ 6-7, 29.) Conlon's letter informed Dr. Alexandre that HFS would temporarily withhold Medicaid payments from her because “[a] preliminary audit and review of your company's business practices suggests various billing irregularities arising out of the medical services you provided.” (Ex. A to Compl. [1-1] (hereinafter “Jan. 28, 2020 Letter”), at 1.) The letter informed Alexandre that, under 305 ILCS § 5/12-4.25(K) and 89 Ill. Adm. Code § 140.44, HFS had the authority to withhold such payments for up to three years unless HFS determined sooner that there was “insufficient evidence of fraud or willful misrepresentation or if legal proceedings are completed.” (Id.) Finally, the letter informed Alexandre of her rights to “submit written evidence for reconsideration of the withholding of payments” and to request “full or partial release of withheld payments.” (Id. at 2.) The letter provided no details explaining the nature of the reported “billing irregularities.” (Id. at 1-2.)
Alexandre alleges that she “made oral inquiries” through counsel, seeking more specific information from HFS, but those requests were denied. (Compl. ¶ 33.) On February 21, 2020, Alexandre's attorney sent HFS a letter requesting additional information that would allow Alexandre to respond to HFS's allegations. (Id. ¶ 34; Ex. B to Compl. [1-2] (hereinafter “Feb. 21, 2020 Letter”).) Counsel's letter acknowledged that Dr. Alexandre was aware of one episode that might have drawn the Department's attention: Between August 18, 2018 and September 6, 2018, the Illinois Department of Financial and Professional Regulation (“IDFPR”) had suspended Dr. Alexandre's medical license due to an issue relating to her personal income tax filings. (Feb. 21, 2020 Letter at 1.) During that time, Alexandre contracted with another physician, Dr. Otto Garcia, to provide care for her patients, including patients enrolled in Medicare and Medicaid. (Id.) Dr. Alexandre told her third-party billing service that she was not providing care during this time, but the billing service continued to submit reimbursement claims under Dr. Alexandre's billing identification numbers. (Id.) Upon learning of this error, Dr. Alexandre terminated her contract with the billing service and directed her new service provider to submit amended claims using Dr. Garcia's identification numbers. (Id.) Ten of the erroneous claims had been submitted to Medicare for payment, however, leading the Center for Medicare & Medicaid Services (“CMS”) to revoke Dr. Alexandre's Medicare enrollment for three years based on CMS's conclusion that the “incident reflected a ‘pattern or practice of submitting claims that fail to meet Medicare requirements.'” (Id.) Ultimately, an ALJ reviewed that decision de novo and overturned CMS's decision, holding that Dr. Alexandre's circumstances did not justify such a revocation. (Id. at 2.) Alexandre's attorney recounted these events to HFS but noted that “[w]ithout more information, it is impossible to speculate what other issues might have arisen” surrounding the “billing irregularities” that HFS identified. (Id.)
On August 28, 2020, Defendant Conlon's office responded with another letter on behalf of the Office of Inspector General. (Ex. C to Compl. [1-3] (hereinafter “Aug. 28, 2020 Letter”).) In that letter, Conlon explained that Alexandre's case “is still active and under investigation, ” and that the inspector general's office had “received a 42 C.F.R. 455.23(d)(3)(ii) certification from the Illinois State Police Medicaid Fraud Control Bureau (ISP-MFCU)” regarding Alexandre's case- that is, a certification, issued quarterly, that a matter continues to be under investigation and that continuation of the corresponding suspension is warranted. (Id. at 2; 42 C.F.R. § 455.23(d)(3)(ii).) Conlon informed Alexandre that her requests for a hearing, reconsideration, and lifting of the Illinois Medicaid Payment suspension were denied, and such a suspension would remain in place until the ISP-MFCU had completed its investigation. (Aug. 28, 2020 Letter at 2.) The letter did not outline any procedure for appealing this denial.
Finally, on October 23, 2020, Alexandre's counsel sent another letter to the HFS Office of the Inspector General.[1] (Ex. D to Compl. [1-4] (hereinafter “Oct. 23, 2020 Letter”).) This letter again requested a hearing and noted that Dr. Alexandre had not yet received any explanation for HFS's withholding her Medicaid payments. (Id. at 1.) The letter also noted that “Dr. Alexandre practices in an underserved community that suffers from a lack of medical professionals and losing her as a source of medical care would be detrimental to that community.” (Id. at 3.) Dr. Alexandre's practice is located in Melrose Park, Illinois, an area which, according to the letter, the United States Health Resources & Services Administration has designated as containing a “medically underserved population.” (Id. at 3 n.1.) On November 13, 2020, Alexandre filed suit against both HFS and Conlon in his official capacity as Acting Inspector General of HFS. (Compl. at 1.) As of the time of suit, HFS had not responded to Dr. Alexandre's October 23, 2020 letter. (Compl. ¶¶ 37-38.)
Defendants move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), alleging Plaintiff failed to state a claim on which relief can be granted. (Mot. to Dismiss [8].) After all parties briefed that motion, the court requested that Defendants furnish Plaintiff with information concerning the current status of the HFS investigation. Defendant responded with an email stating simply that “the investigation remains actively ongoing and pertains to a variety of fraud allegations, including allegations of receiving kickbacks and administering expired vaccines.” (Aug. 27, 2021 Email from Def.'s Counsel to Pl.'s Counsel [21] at 1.)
A complaint must include a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A Rule 12(b)(6) motion to dismiss “challenges the viability of a complaint by arguing that it fails to state a claim upon which relief may be granted.” Fed.R.Civ.P. 12(b)(6); Firestone Fin Corp. v. Meyer, 796 F.3d 822, 825 (7th Cir. 2015) (citation omitted). While “detailed factual allegations are unnecessary, the complaint must have ‘enough facts to state a claim to relief that is plausible on its face.'” Pierce v. Zoetis, Inc., 818 F.3d 274, 277 (7th Cir. 2016) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). That task is “context-specific” and “requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. In deciding a motion to dismiss, the court accepts all factual allegations in the complaint as true and draws all reasonable inferences in favor of the plaintiff. Kanter v. Barr, 919 F.3d 437, 441 (7th Cir. 2019).
Defendant's motion to dismiss states that neither the federal Medicaid statute or regulation provide for a private right of action that the Eleventh Amendment bars claims against both the Illinois Department of Healthcare and Family Services and Inspector General Patrick Conlon in his official capacity; and that Plaintiff fails to allege a Fourteenth Amendment due process claim. (Mot. to Dismiss at 1.) Given the interrelation of Defendants' arguments, the court...
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