Snodgrass-King Pediatric Dental Assocs., P.C. v. Dentaquest U.S. Ins. Co.

SNODGRASS-KING PEDIATRIC DENTAL ASSOCIATES, P.C.and DAVID J. SNODGRASS, D.D.S., Plaintiffs, v. DENTAQUEST USA INSURANCE CO., INC., Defendant.

No. 3:14-cv-654

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

December 16, 2015

Senior Judge Haynes

Magistrate Judge Brown

Jury Demand

To: The Honorable William J. Haynes, Jr., Senior United States District Judge

REPORT & RECOMMENDATION

Pending before the Court are Defendant DentaQuest USA Insurance Company, Inc.'s ("DentaQuest's") Motion for Summary Judgment (Docket Entry 120) and Snodgrass-King Pediatric Dental Associates, P.C., and Dr. David J. Snodgrass' (collectively referred to as "Snodgrass-King") Motion for Partial Summary Judgment (Docket Entry 129). For the following reasons, the Magistrate Judge RECOMMENDS the following: (1) Snodgrass-King's motion be DENIED; (2) DentaQuest's motion be DENIED as to the issue of state action, the equal protection and First Amendment retaliation claims, and the availability of compensatory and punitive damages; and (3) DentaQuest's motion be GRANTED as to the procedural due process and Medicaid (42 U.S.C. § 1396u-2) claims and to the request for injunctive relief.

I. Procedural History

The complaint in this case was filed under seal on March 10, 2014. (Docket Entry 1). A redacted version of the complaint is also available. (Docket Entry 61). Snodgrass-King alleges that DentaQuest¹ wrongfully excluded Snodgrass-King from the TennCare dental benefits program. (Docket Entry 61, p. 12-15). According to Snodgrass-King, DentaQuest is a state actor under 42 U.S.C. § 1983 and its conduct violated the equal protection, free speech, and procedural due process rights guaranteed by the United States and Tennessee Constitutions, as well as violated federal Medicaid law, 42 U.S.C. § 1396u-2. (Docket Entry 61, p. 15-20). Snodgrass-King also alleged several state law claims. (Docket Entry 61, p. 21-23). The District Judge later dismissed part of the equal protection claim and all of the state law claims. (Docket Entry 72).

On August 17, 2015, DentaQuest moved for summary judgment. (Docket Entry 120). Snodgrass-King responded, and DentaQuest replied. (Docket Entries 143 and 179). The State of Tennessee thereafter filed a brief amicus curiae in support of DentaQuest's Motion. (Docket Entry 186). Snodgrass-King then responded to the State's brief. (Docket Entry 199).

II. Factual Background

"TennCare" is the State of Tennessee's Medicaid program. (Docket Entry 142 ¶ 2). Among other benefits, TennCare provides dental coverage for individuals under the age of 21. (Docket Entry 142 ¶ 6). The Bureau of TennCare is charged with administering TennCare. (Docket Entry 142 ¶ 3). The State of Tennessee does not require that dental benefits managers ("DBMs") include any willing provider in TennCare provider networks. (Docket Entry 142 ¶ 4).

Beginning in 2002, the State of Tennessee began contracting with private DBMs to administer the TennCare dental program. (Docket Entry 142 ¶ 7). DBMs are selected through a competitive bidding process. (Docket Entry 142 ¶ 8). From 2002 to 2010, Doral Dental of Tennessee, LLC ("Doral") and DentaQuest of Tennessee, LLC ("DentaQuest of TN") served as DBMs for TennCare. (Docket Entry 145-6 ¶ 3). DentaQuest, LLC acquired Doral andDentaQuest of TN in 2004. (Docket Entry 145-6 ¶ 2). The Defendant in this lawsuit, DentaQuest USA, is a wholly-owned subsidiary of DentaQuest, LLC. (Docket Entry 145-6 ¶ 1).

In 2003, Doral terminated Snodgrass-King from its provider network. (Docket Entry 145-6 ¶ 4). DentaQuest, LLC's current CEO, Steven Pollock, participated in the termination decision. (Docket Entry 145-6 ¶ 7). In response to the termination notice, Dr. Snodgrass placed a sign in his office window which stated that his TennCare contract had been terminated and requested that his patients contact TennCare regarding the termination. (Docket Entry 145-6, p. 40) (Docket Entry 180 ¶ 12). David Florsheim, circulated this information to other Doral employees, Ronald Brummeyer, Steven Pollock, Marcel Telzlaff, Brett Bostrack, and Bryan Roberts. (Docket Entry 145-6, p. 40). A little over a week later, an email was sent to James Gillcrist,² and Doral employees Michele Blackwell, and Diane Bergshneider, among others, stating that Dr. Snodgrass had sent letters to pediatricians to let them know he had been "kicked off" the TennCare network. (Docket Entry 145-6, p. 41). Michele Blackwell was aware of a Channel 4 news story in which Dr. Snodgrass criticized Doral's administration of TennCare. (Docket Entry 145-6 ¶ 10).³

In 2006, two Snodgrass-King providers were not invited into the Doral network even though Doral employee Michele Blackwell stated that Doral could have used pediatric dentists. (Docket Entry 145-6 ¶ 17). A year later, in 2007, Doral refused to invite five Snodgrass-King providers into the Doral Network, prompting State Representative Charles Sargent, Jr. to ask Doral for an explanation. (Docket Entry 145-6 ¶ 19-20). Michele Blackwell responded to the State Representative on behalf of Doral. (Docket Entry 145-6, p. 46). Later, Mary Jo Blank sent an email to Ronald Price, Michele Blackwell, Brett Bostrack, and James Thommes, in which shestated, "It is my understanding that [Dr. Snodgrass] is applying pressure within the political framework in Tennessee to be allowed back into the network." (Docket Entry 145-6, p. 44). Several months later, Michele Blackwell stated that she had been informed that Dr. Snodgrass had requested to appear before the TennCare Oversight Committee which would likely occur due to Dr. Snodgrass' legislative contacts. (Docket Entry 145-6, p. 45).

On February 1, 2008, Dr. Snodgrass filed a lawsuit against Doral regarding its administration of TennCare dental care. (Docket Entry 145-6 ¶ 26) (Docket Entry 180 ¶ 15). This lawsuit was settled. (Docket Entry 145-6 ¶ 31). Dr. Snodgrass filed a second lawsuit, this one against DentaQuest of TN, in March 2010 with similar allegations. (Docket Entry 145-6 ¶ 42) (Docket Entry 180 ¶ 15). This lawsuit also settled. (Docket Entry 145-6 ¶ 43). The following individuals were aware of Dr. Snodgrass' prior lawsuits against Doral and DentaQuest of TN before Snodgrass-King was not invited into the 2013-2016⁴ DentaQuest provider network: the current CEO of DentaQuest, LLC, Steven Pollock, and the following DentaQuest, LLC current and former employees: Michele Blackwell, Mary Jo Blank, Ronald Price (in-house lawyer), Jim Hawkins (in-house lawyer), Bob Lynn, Mark Sniegocki, Todd Cruse, Brett Bostrack, James Thommes, Marcel Tetzlaff, Cheryl Polmatier, Barry Major, Vicki Coates, Mary Murack, John Luther, and Fay Donahue. (Docket Entry 145-6 ¶ 48, 50-64) (Docket Entry 180 ¶ 17).

Immediately prior to the 2013-2016 DentaQuest contract, Delta Dental administered TennCare's dental program from 2010 to 2013 and included Dr. Snodgrass as a provider. (Docket Entry 132-7, p. 23-24) (Docket Entry 175 ¶ 97-98). At the end of 2012, DentaQuest anticipated that there would soon be a new TennCare contract opportunity. (Docket Entry 145-6 ¶ 116). In contemplation of the upcoming request for proposals ("RFP"), on December 6, 2012, Ron Price, Jim Hawkins, and Bob Lynn reviewed the settlement agreement from Dr. Snodgrass'2008 lawsuit against Doral. (Docket Entry 145-6 ¶ 116). Later, on January 2, 2013, Todd Cruse told Bob Lynn and Steven Pollock in an email regarding network preparations for the RFP, "Ron has sent me the Snodgrass settlement and I need to review to make sure we don't have problems with his settlement language." (Docket Entry 145-6, p. 52).

According to DentaQuest, Cheryl Polmatier and Barry Major, were involved in the creation of the DentaQuest TennCare network. (Docket Entry 142 ¶ 53). On December 20, 2012, Cheryl Polmatier emailed Kimberly Johnson, Michele Blackwell, and Mark Sniegocki to set up a meeting to discuss "concerns that Todd, Mark and Bob shared about the State's position on large groups, Snodgrass and others that we need to 'keep out' of the network." (Docket Entry 145-4, p. 22). A week later, Cheryl Polmatier told Mark Sniegocki, Bob Lynn, Barry Major, and Todd Cruse in an email, "It's my understanding from previous conversations that there are certain providers and large provider groups that Tenncare would prefer that we not have in our network. . . . Let me know who knows which offices (besides Snodgrass) . . . ." (Docket Entry 145-4, p. 25) (emphasis removed). In further communications from Cheryl Polmatier to Bob Lynn, Mark Sniegocki, and Ron Price on January 8, 2013, Cheryl Polmatier discussed amending the CoverKids network without Snodgrass, stated that she and Mark Sniegocki did not know "who the other providers are specifically that the State is not interested in," and suggested they "await the analysis and any further information from the state/Gilcrest [sic]⁵ on who they don't want to work with." (Docket Entry 145-1, p. 1-3). In January 2013, Cheryl Polmatier had spoken with Michele Blackwell, Ron Price, Jim Hawkins, Bob Lynn, and Mark Sneigocki about Dr. Snodgrass and Snodgrass-King. (Docket Entry 145-6 ¶ 109). At this time, Cheryl Polmatier was aware of Dr. Snodgrass' previous litigation. (Docket Entry 145-6 ¶ 110). She intended to keep Dr. Snodgrass and Snodgrass-King out of the future DentaQuest network. (Docket Entry 132-7,p. 31). In January 2013, Barry Major also had a preference to not invite Dr. Snodgrass into any future DentaQuest network. (Docket Entry 145-6 ¶ 111). A DentaQuest document predating the decision to exclude Snodgrass-King from the provider network describes Dr. Snodgrass as "well-connected politically, very vocal, and not a supporter of DentaQuest." (Docket Entry 145-6 ¶ 45).

The RFP for the 2013-2016 TennCare contract was issued on February 1, 2013. (Docket Entry 124 ¶ 7). Dr. James Gillcrist, the Dental Director of TennCare, helped create the RFP. (Docket Entry 180 ¶ 5). James Gillcrist also scored the RFP,...