Dye v. Kinkade

• Decision Date: 19 November 2015
• Docket Number: Case No. 2:15-cv-04021-MDH
• Court: U.S. District Court — Western District of Missouri
• Parties: JAMES DYE, Plaintiff, v. BRIAN KINKADE, et al., Defendants.

JAMES DYE, Plaintiff, v. BRIAN KINKADE, et al., Defendants.

Case No. 2:15-cv-04021-MDH

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI CENTRAL DIVISION

November 19, 2015

ORDER

Before the Court is Defendants' Motion to Dismiss Plaintiff's First Amended Complaint (Doc. 29). Defendants argue each claim in Plaintiff's Amended Complaint is subject to dismissal because the court lacks jurisdiction to hear, or should abstain from hearing, the claim or because the allegations within Plaintiff's Amended Complaint fail to state a claim upon which relief can be granted. Upon careful review and consideration, the Court hereby GRANTS IN PART AND DENIES IN PART Defendants' motion.

I. BACKGROUND

Plaintiff is a licensed dentist practicing in the State of Missouri who initiated this lawsuit against certain individuals employed by the Missouri Department of Social Services acting in their official and individual capacities. Plaintiff alleges Defendants violated federal and state law by promulgating and following an "unauthorized" dental manual that allegedly disallows coverage and reimbursement for denture-related services for certain adult Medicaid recipients. Plaintiff alleges further that Defendants retaliated against Plaintiff for speaking out against the allegedly unlawful reimbursement policies and procedures. The allegations and claims asserted in Plaintiff's Amended Complaint are more fully outlined below.

A. Relevant Medicaid Background

The Supreme Court describes Medicaid as "a joint state-federal funding program for medical assistance in which the Federal Government approves a state plan for the funding of medical services for the needy and then subsidizes a significant portion of the financial obligations the State has agreed to assume." Alexander v. Choate, 469 U.S. 287, 290 n. 1, 105 S. Ct. 712, 714, 83 L. Ed. 2d 661 (1985). Although a state's participation in the Medicaid program is voluntary, once the state chooses to participate, it must comply with all federal statutory and regulatory requirements. See id. The federal government will subsidize medical-assistance services for a state only after the state has submitted a "plan" to the Secretary of the Department of Health and Human Services that meets the requirements of 42 U.S.C. 1396a(a) and the Secretary approves the plan. Lankford v. Sherman, 451 F.3d 496, 504 (8th Cir. 2006). A state's plan must provide certain categories of medical services and may provide optional categories of medical services. See 42 U.S.C. § 1396a(a)(10)(A). If the state chooses to provide an optional medical service, then it must comply with all federal statutory and regulatory mandates related to that service. Lankford, 451 F.3d at 504.

Dental services are considered an optional medical service under the Medicaid Act. See 42 U.S.C. § 1396a(a)(10)(A), 1396d(a)(10). Missouri has elected to provide dental services to "eligible needy persons" under its approved plan, so long as the dental services are "prescribed" and "medically necessary[.]" Mo. Rev. Stat. § 208.152.1. Missouri's approved plan states that such services are "subject to appropriations." Id. Missouri regulation further describes the scope of dental services covered under the plan:

(1) Administration. The MO HealthNet dental program shall be administered by the MO HealthNet Division, Department of Social Services. The dental services covered and not covered, the limitations under which services are covered, and the maximum allowable fees for all covered services shall be determined by the MO HealthNet Division and shall be included in the MO HealthNet Dental Provider Manual, which is incorpo by reference and made part of this rule as published by the Department of Social Services, MO HealthNet Division, 615 Hower-ton Court, Jefferson City, MO 65109, at its website at www.dss.mo.gov/mhd, November 1, 2011. This rule does not incorporate any subsequent amendments or additions. Dental services covered by the MO HealthNet program shall include only those which are clearly shown to be medically necessary. The division reserves the right to effect changes in services, limitations, and fees with proper notification to MO HealthNet dental providers.

. . .

(3) Participant Eligibility. . . . (C) For all other eligibility categories of MO HealthNet assistance [other than children, persons receiving HealthNet under a category of assistance for pregnant women or the blind, or participants living in nursing facilities] dental services will only be reimbursed if the dental care is related to trauma of the mouth, jaw, teeth, or other contiguous sites as a result of injury or as related to a medical condition when a written referral from the participant's physician states the absence of dental treatment would adversely affect the stated pre-existing medical condition.

1. Reimbursement for dental care shall be limited to those procedure codes identified in section (19) of the MO HealthNet Dental Provider Manual which may be referenced at www.dss.mo.gov/mhd; and

2. Participants must have a written referral from their physician stating the absence of dental treatment would adversely affect the stated pre-existing medical condition. This referral must be maintained in the patient's record and made available to the MO HealthNet Division or its agent upon request.

13 C.S.R. § 70-35.010.

The Dental Provider Manual (hereinafter "dental manual") published in November of 2011 and incorporated by reference into the above regulation reiterates that dental services for adults - except participants under a category of assistance for pregnant women, the blind, or vendor nursing facility residents - are covered only where the dental care is related to traumatic injury of the jaw, mouth, teeth, or other contiguous site above the neck or where the participant provides a written referral from the participant's physician stating that the absence of dental treatment would adversely affect a pre-existing medical condition. MO HealthNet Dental Provider Manual § 13.1 (2011). Section (19) of the dental manual lists reimbursement codes for services related to dentures and includes an asterisk that states "[c]overable for children under 21 or persons under a category of assistance for pregnant women, the blind or vendor nursing facility residents." MO HealthNet Dental Provider Manual § 19.1.G(1)-(9) (2011).

The dental manual was updated on or around July 26, 2012. The July 2012 dental manual includes largely the same language as cited in the November 2011 dental manual except that the July 2012 manual states that dental services excluding dentures may be provided to adults - except participants under a category of assistance for pregnant women, the blind, or vendor nursing facility residents - only in the case of traumatic injury or pre-existing medical condition. MO HealthNet Dental Provider Manual § 13.1 (2011). The July 2012 manual explicitly states that "[d]entures (full and partial) are not covered under the above noted pre-existing medical condition or trauma criteria." MO HealthNet Dental Provider Manual § 13.1 (2011). Section (19), which provides a list reimbursement codes, was not changed in relevant part. See MO HealthNet Dental Provider Manual § 19.1.G(1)-(9) (2012). The language used in the July 2012 manual, cited above, is incorporated into the current version of the dental manual.

B. Amended Complaint Allegations¹

Plaintiff alleges that, in 2012, the Missouri Department of Social Services (MDSS) published and began following a new dental manual that outlawed all forms of denture services for Missouri adults with limited Medicaid benefits. Plaintiff alleges that "[n]othing in the November 1, 2011 dental manual excluded dentures for adults with limited Medicaid dental benefits." Plaintiff states that the new dental manual "materially conflicts" with federal law, state law, and state regulations. Specifically, Plaintiff alleges that the new dental manual is not authorized under Missouri regulation 13 C.S.R. § 70-35.010(1); that the new dental manual conflicts with 13 C.S.R. § 70-35.010(1) and the 2011 dental manual; that Missouri's plan fails to comply with 42 U.S.C. § 1396a(a)(30)(A); that Missouri's plan, policies, practices, and procedures violate 42 U.S.C. § 1396a(a)(43); and that Missouri's plan fails in various respects with regard to ESPDT services, citing to 42 U.S.C. §§ 1396a(a)(10)(A), 1396a(a)(43), 1396d(a)(xiii)(4)(B), 1396d(r)(3) and 42 C.F.R. § 441.56(e).

Plaintiff alleges Defendant Cindy Lenger informed Plaintiff in early 2013 that Plaintiff could no longer provide denture-related services to Medicaid participants. Plaintiff alleges he responded by informing Defendants that Medicaid participants are legally entitled to denture-related services and that Plaintiff is entitled to reimbursements for the same. According to Plaintiff, Defendants maintained their position of non-coverage and non-reimbursement and instituted an audit of Plaintiff. Plaintiff alleges Defendants thereafter continued to deny Plaintiff's claims for reimbursement of denture-related services and Plaintiff continued to challenge such denials. Plaintiff states that "in direct response to Plaintiff's opposition to Defendants' position, Defendants imposed a sanction on Plaintiff requiring Plaintiff to submit to the pre-payment review process." According to Plaintiff, Plaintiff submits all denture claims to Defendants for pre-payment review and Defendants reject every claim submitted by Plaintiff. Plaintiff alleges further that, in 2013, Defendant Lenger referred Plaintiff to Medicaid Audit and Compliance Unit ("MMAC") investigations, which led to an on-site review where Defendant Lenger told Plaintiff that dentures are not covered for adults with limited benefits. Plaintiff alleges that Defendant Lenger sent Plaintiff a letter on behalf of MMAC stating: "Effective September 1, 2005 dentures were no longer covered for adults with limited benefits. The policy was...