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United Cerebral Palsy of Georgia, Inc. v. Georgia Dep't of Behavioral Health & Developmental Disabilities

Court of Appeals of Georgia

March 27, 2015


Cert. applied for.

Medicaid. Fulton Superior Court. Before Judge Downs.

Parker, Hudson, Rainer & Dobbs, Eric Jon Taylor, Jonathan L. Rue, Rebeccah L. Bower, Jeyaram & Associates, Deepak Jeyaram, for appellants.

Samuel S. Olens, Attorney General, Dennis R. Dunn, Deputy Attorney General, Shalen S. Nelson, Senior Assistant Attorney General, Jennifer L. Dalton, Assistant Attorney General, Troutman Sanders, Jaime L. Theriot, J. Nick Phillips, Robbins Ross Alloy Belinfante Littlefield, Joshua B. Belinfante, Vincent R. Russo, Jr., Kimberly K. Anderson, for appellees.

Arnall Golden Gregory, Jordan R. Kearney, amicus curiae.


Page 252

McFadden, Judge.

United Cerebral Palsy of Georgia, Inc. and others filed a putative class action lawsuit against the Georgia Department of Behavioral Health and Developmental Disabilities, the Georgia Department of [331 Ga.App. 617] Community Health, and those agencies' commissioners, alleging that the defendants erred in administering the state Medicaid program. The superior court granted the defendants' motion to dismiss on the ground that the plaintiffs had not exhausted their administrative remedies. The plaintiffs appeal, arguing that they were excused from the exhaustion requirement because the defendants did not give them required notice of the adverse action at issue. We agree and therefore reverse.

1. Background.

We review a ruling on a motion to dismiss for failure to exhaust administrative remedies under a de novo standard of review. Miller County Bd. of Ed. v. McIntosh, 326 Ga.App. 408, 411 (1) & n. 5 (756 S.E.2d 641) (2014). The facts regarding the issue of exhaustion of administrative remedies are largely undisputed. The plaintiffs are nonprofit corporations that provide services to Georgia Medicaid patients with intellectual and developmental disabilities (" providers" ), the patients who receive those services (" recipients" ), and the recipients' family representatives. The defendants are the state agencies that administer the Medicaid program in Georgia and those agencies' commissioners. OCGA § 49-4-142.

" Medicaid is a cooperative federal-state program through which the federal government furnishes financial assistance to the states so that the states may provide necessary medical, rehabilitation, and other services to low-income persons." Prado-Steiman v. Bush, 221 F.3d 1266, 1268 (I) (a) (11th Cir. 2000). Although participation in the program is voluntary, states that choose to participate must develop and have approved by the federal government a state Medicaid plan that complies with the requirements of the Medicaid Act. Wilder v. Virginia Hosp. Assn., 496 U.S. 498, 502 (I) (A) (110 S.Ct. 2510, 110 L.Ed.2d 455) (1990). With federal approval, states may enact waiver programs that exempt them from certain otherwise-mandated federal Medicaid requirements. 42 U.S.C. § 1396n (b).

In 2007, the federal government approved the two waiver programs at issue in this case: the New Options Waiver Program, which the parties refer to as NOW, and the Comprehensive Supports Waiver Program, which the parties refer to as COMP. NOW and COMP allow the defendants to permit the providers to furnish services to recipients in home and community-based settings rather than in institutions. The waiver programs became part of Georgia's Medicaid plan and were incorporated into a provision of the contracts -- known as statements of participation -- between the defendants and the providers. See Pruitt Corp. v. Ga. Dept. of Community Health, 284 Ga. 158, 160 (2) (664 S.E.2d 223) (2008) (provider that signs a statement of participation that incorporates by reference the Department of Community [331 Ga.App. 618] Health's policy manual enters into a contractual relationship with the department).

Under the provisions of the waiver programs and the statements of participation, Medicaid service providers are entitled to be paid certain rates for their services. According to the plaintiffs, since 2008, the defendants have not paid the providers the approved rates and have limited the amount of services recipients can receive, sometimes to below the amount that is medically necessary. The plaintiffs allege that the defendants made these reductions without public notice ...

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