Preliminary injunction filed in federal court on behalf of providers dismissed from Virginia Medicaid program

More than two dozen providers are listed as plaintiffs, with more expected to join.  

More than two dozen Virginia behavioral healthcare providers have filed a preliminary injunction in federal court to halt and reverse their recent sudden, unexpected dismissal from the state’s Medicaid ranks at the hands of six insurer defendants.

A Village Youth and Family Services, Inc. et al v. The Commonwealth of Virginia et al was filed Wednesday in the United States District Court of the Eastern District of Virginia, setting up a legal battle with potentially wide-reaching ramifications.

Nearly all of the plaintiff providers’ clients are covered by Medicaid, and excluding the providers from the program, the suit asserts, is essentially tantamount to throwing them out of business. The litigation lists five claims for relief, asserting that:

• The defendants’ actions violate Virginia patients’ statutorily protected right to choose their caregivers;
• The move violated the 14^th Amendment’s Equal Protection clause by singling the plaintiffs out for unfavorable treatment without adequate justification;
• The defendants discriminated against the plaintiffs solely on the basis of their Medicaid certifications;
• The action violated the provisions of the federal Medicaid statutes; and
• By eliminating the providers from enrollment in Medicaid, the defendants breached their respective contracts with those providers.

The suit includes a demand for a trial by jury and a request for the presiding Court to accept jurisdiction, issue declaratory preliminary judgments that their claims have merit, and issue preliminary (followed by permanent) injunctive relief, along with granting reimbursement for expenses.

“The Plaintiffs remain in good standing with the Medicaid Program and DMAS (Virginia’s Medicaid program). There is no allegation of fraud, no allegation of services rendered with subpar quality, and/or no allegations of services being rendered without medical necessity,” the suit reads. “These terminations are arbitrary, capricious, outside the MCOs’ scope of legal authority, erroneous, and without due cause.”

RACmonitor has requested comment from multiple plaintiffs, defendants, and others involved in this matter, and will be publishing a more comprehensive follow-up article in the near future.