Carespring Healthcare Mgmt., LLC v. Dungey

• Decision Date: 02 March 2018
• Docket Number: Case No. 1:16-cv-1051
• Parties: CARESPRING HEALTHCARE MANAGEMENT, LLC, et al., Plaintiffs, v. CYNTHIA C. DUNGEY, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

CARESPRING HEALTHCARE MANAGEMENT, LLC, et al., Plaintiffs, v. CYNTHIA C. DUNGEY, et al., Defendants.

Case No. 1:16-cv-1051

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION

March 2, 2018

Judge Timothy S. Black

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS (Doc. 23) AND TERMINATING THIS CASE IN THIS COURT

This civil action is before the Court on Defendants' motion to dismiss (Doc. 23) and the parties' responsive memoranda (Docs. 25, 29).

I. BACKGROUND

Under the Medicaid Act and implementing regulations, Medicaid recipients who require long-term care in a nursing home facility are required to use some of their monthly income to pay for the cost of care. The parties refer to this payment as "patient monthly liability." An individual Medicaid recipient's patient monthly liability varies based on their monthly income. Regulations promulgated by the Centers for Medicare & Medicaid Services ("CMS") include instructions directed to state Medicaid authorities specifying how the state must calculate patient monthly liability.

Plaintiffs Carespring Healthcare Management, LLC ("Carespring") and The Good Shepherd Home for the Aged ("Good Shepherd") operate nursing homes in various Southern Ohio locations. They have brought this suit against Defendants Cynthia C. Dungey, the Director of the Ohio Department of Job and Family Services ("ODJFS"), and Barbara Sears, the Director of the Ohio Department of Medicaid ("ODM"), alleging that one or both of these entities improperly calculated the patient monthly liabilities for several of their residents in a manner contrary to law. (Doc. 18, at 2-3). Each of the individual beneficiaries identified in the second amended complaint (hereinafter referred to collectively as "the residents"), and the alleged impropriety in Defendants' calculation of that person's benefits, shall be outlined in turn:

John Houston: John Houston is an elderly resident at Indianspring of Oakley, an Ohio nursing home run by Plaintiff Carespring. (Doc. 18, at 3). As Mr. Houston's designated authorized representative for Medicaid purposes, Carespring submitted an application through ODM for Medicaid benefits for Mr. Houston on March 5, 2015. ODM determined that Mr. Houston's patient liability was $3,276.00 per month. (Id. at 6). The income used by ODM to calculate Mr. Houston's monthly patient liability includes $300 per month in court-ordered spousal support benefits that are deducted from Mr. Houston's pension payments prior to any deposit being made into Mr. Houston's bank account. (Id.). Carespring alleges that the inclusion of this $300 per month in calculating Mr. Houston's total $3,276.00 monthly patient liability is unlawful.

Samuel Morris: Samuel Morris was a resident at the Good Shepherd Home run by Defendant Good Shepherd until his death on November 23, 2015. Mr. Morris received Medicaid benefits throughout his residency at Good Shephard. Sometime following the initial determination of his monthly patient liability, Mr. Morris was granted a divorce from his wife. As part of the divorce, Mr. Morris was ordered to pay spousal support of $1600.00 per month. In late 2014, the Ashland County Department of Job and Family Services ("JFS") recalculated Mr. Morris's monthly patient liability to $3,643.00 per month. This liability figure was based on an income that included Mr. Morris's mandated spousal support. Good Shephard, as Mr. Morris's authorized Medicaid representative, requested an administrative hearing with ODM in which it was requested that Mr. Morris's monthly patient liability be reduced. Following the hearing held on March 14, 2016, the administrative examiner determined that Mr. Morris's mandated spousal support payments were properly included in his monthly patient liability. (Doc. 23-1).

Leola Amburgey: Leola Amburgey is a resident of Hillspring of Springboro, a nursing home run by Plaintiff Carespring. In February 2016, Carespring submitted an application for Medicaid benefits on Ms. Amburgey's behalf through ODM. On February 18, 2016, ODM approved Ms. Amburgey's application and determined her monthly patient liability to be $704.00. (Doc. 18, at 8). Plaintiffs contend that Ms. Amburgey's social security and/or pension payments, which were used to determine her monthly patient liability, are sent directly to her son, who converts the funds for entirely his own benefit. Accordingly, Plaintiffs contend that those funds are improperly counted by ODM in calculating Ms. Amburgey's monthly patient liability. Ms. Amburgey has unpaid patient liability payments owed to Carespring in excess of $5,846.00. (Id.). Carespring sent Defendants a request for reimbursement of these unpaid liabilities, but have received no answer.

Gary Boseman: Gary Boseman is a resident at Indianspring of Oakley, an Ohio nursing home run by Plaintiff Carespring. In September 2016, Carespring submitted an application on Mr. Boseman's behalf for Medicaid benefits through ODM. At the time of this application, an automatic deduction in the amount of $231.15 per month for back taxes to the IRS was subtracted from Mr. Boseman's monthly social security income. (Id. at 9). Defendants approved Mr. Boseman's Medicaid benefits effective September 1, 2016, with a calculated monthly patient liability of $1,596.00. (Id.). The income used to determine Mr. Boseman's patient liability included the monthly deduction for back taxes. Plaintiffs contend that the use of Mr. Boseman's back taxes payments in calculating his patient liability was contrary to law.

Betty Conger: Betty Conger is a resident of Hillspring of Springboro, a nursing home run by Plaintiff Carespring. Following her admission to Hillspring in October 2015, Carespring submitted an application for Medicaid benefits on Ms. Conger's behalf. ODM determined that Ms. Conger's monthly patient liability would be $0.00 from October 2, 2015 through December 31, 2016 to allow her to repay social security for a previous overpayment of benefits and would be raised to $737.00 effective January 1, 2017. (Id. at 10). Ms. Conger had not completed the repayment of social security benefits by January 1, 2017, but her monthly patient liability still increased as planned.

Calvin Hardy: Calvin Hardy is a resident of Hillspring of Springboro, a nursing home run by Plaintiff Carespring. Following Mr. Hardy's admission to Hillspring on July 30, 2013, Carespring submitted anapplication for Medicaid benefits on Mr. Hardy's behalf. ODM determined that Mr. Hardy's monthly patient liability would be $348.00 from September 1, 2013 through December 21, 2013 and $349.00 per month effective January 1, 2014. (Id. at 11). Plaintiffs allege that Mr. Hardy's family members and girlfriend have been receiving his social security and/or pension payments and misappropriating them for personal use. (Id.). Carespring sent Defendants a request for reimbursement of $1,497.00 owed by Mr. Hardy, but no action has been taken. (Id. at 12).

Eugene Horn: Eugene Horn was a resident of Hillspring of Springboro, a nursing home run by Plaintiff Carespring, until his death on December 17, 2016. On January 12, 2016, Mr. Horn was approved for Medicaid benefits. Contemporaneous with that approval, ODM determined that Mr. Horn's monthly patient liability was $888.00. (Id. at 12). Plaintiffs contend that Mr. Horn never received any of his social security and/or pension payments because they were sent to Mr. Horn's daughter, who misappropriated them for her own benefit. Carespring claims it is owed over $1,219.00 in patient liability and has sent Defendants a request for reimbursement, but that the request has not been granted to date. (Id. at 13).

Virginia Newell: Virginia Newell is a resident of Hillspring of Springboro, a nursing home run by Plaintiff Carespring. On March 2, 2016, Ms. Newell's application for Medicaid benefits was approved. (Id.). Ms. Newell's monthly patient liability was initially determined to be $1,746.00 but was adjusted to $1,712.00 effective June 1, 2015. (Id. at 13-14). Plaintiff Carespring, which manages Ms. Newell's income, claims that it receives less income for Ms. Newell than her monthly patient liability. (Id. at 14). Carespring filed a request for reimbursement with Defendants; to date, that request has not been granted.

Betty Smith: Betty Smith is a resident of Shawneespring of Harrison, a nursing home run by Plaintiff Carespring. On November 10, 2016, Ms. Smith was approved for Medicaid benefits effective December 1, 2016. (Id. at 16). Contemporaneous with that approval, ODM determined that Ms. Smith's monthly patient liability was $1,568.00 for June 2016 and $1,212.00 moving forward. (Id.). Plaintiffs contend that Ms. Smith never received any of his social security and/or pension payments because they were sent to her family members, who misappropriated them for their own benefit. Carespring sent Defendants a request for reimbursement of unpaid medical bills, but that the request has not been granted to date. (Id.).

Nancy Webb: Nancy Webb is a resident of Shawneespring of Harrison, a nursing home run by Plaintiff Carespring. On May 20, 2016, Ms. Webbwas approved for Medicaid benefits effective June 1, 2016. (Id. at 15). Contemporaneous with that approval, ODM determined that Ms. Webb's monthly patient liability was $1,459.00. (Id.). At the time of Ms. Webb's Medicaid application, her social security income was subject to a deduction for the payment of a U.S. Treasury loan. (Id.). ODM's monthly patient liability calculation did not deduct Ms. Webb's loan payments from the income used to determine her monthly patient liability.

Mary Kim: Mary Kim was a resident of Heritagespring of West Chester, a nursing home run by Plaintiff Carespring until her death on February 16, 2017. (Id. at 16). On June 11, 2016, Ms. Kim was approved for Medicaid benefits. (Id. at 17). Contemporaneous with that approval, ODM determined that Ms. Kim's monthly patient liability was $1,391.00. (Id.). Plaintiffs contend

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