United Healthcare of Miss. Inc. v. Mississippi's Cmty. Mental Health Commissions

335 So.3d 1055

UNITED HEALTHCARE OF MISSISSIPPI INC. and United Behavioral Health Inc.

v.MISSISSIPPI'S COMMUNITY MENTAL HEALTH COMMISSIONS, Region One Mental Health ("Region 1"); North MS Commission on ML/MR d/b/a Communicare ("Region 2"); Northeast Mental Health-Mental Retardation Commission, Region III d/b/a Lifecore Health Group ("Region 3"); Region IV Mental Health Services d/b/a Timberhills ("Region 4"); Region 6 Community Mental Health Commission, d/b/a Life Help ("Region 6"); Region VII Mental Health/Intellectual Disabilities Commission d/b/a Community Counseling Services ("Region 7"); Region 8 Mental Health Services ("Region 8"); Hinds Behavioral Health Services ("Region 9"); Region 10 State of MS d/b/a Weems Community Mental Health Center ("Region 10"); Southwest Mississippi Mental Health and Retardation Commission-Region 11 d/b/a Southwest Mississippi Mental Health Complex ("Region 11"); Region XII Commission on Mental Health and Retardation d/b/a Pine Belt Mental Healthcare Resources ("Region 12"); Gulf Coast Mental Health Center ("Region 13"); Singing River Mental Health/mental Retardation Services, Region XIV ("Region 14"); and Warren Yazoo Behavioral Health, Inc. ("Region 15")

United Healthcare of Mississippi Inc. and United Behavioral Health Inc.

v.Mississippi's Community Mental Health Commissions: Region One Mental Health ("Region 1"), North MS Commission on MI/MR d/b/a Communicare ("Region 2"), Northeast Mental Health-Mental Retardation Commission, Region III d/b/a Lifecore Health Group ("Region 3"), Region IV Mental Health Services d/b/a Timberhills ("Region 4"), Region 6 Community Mental Health Commission d/b/a Life Help ("Region 6"), Region VII Mental Health/Intellectual Disabilities Commission d/b/a Community Counseling Services ("Region 7"), Region 8 Mental Health Services ("Region 8"), Hinds Behavioral Health Services ("Region 9"), Region 10 State of MS d/b/a Weems Community Mental Health Center ("Region 10"), Southwest Mississippi Mental Health and Retardation Commission-Region 11 d/b/a Southwest Mississippi Mental Health Complex ("Region 11"), Region XII Commission on Mental Health and Retardation d/b/a Pine Belt Mental Healthcare Resources ("Region 12"), Gulf Coast Mental Health Center ("Region 13"), Singing River Mental Health/Mental Retardation Services, Region XIV ("Region 14") and Warren Yazoo Behavioral Health, Inc. ("Region 15")

NO. 2020-CA-00697-SCT

NO. 2020-IA-00683-SCT

Supreme Court of Mississippi.

March 24, 2022

ATTORNEYS FOR APPELLANTS: TIMOTHY JOHN STERLING, CHARLES G. COPELAND, REBECCA SUZANNE BLUNDEN, Ridgeland

ATTORNEYS FOR APPELLEES: GEORGE H. RITTER, CHARLES EDWARD COWAN, JOHN P. SNEED, Jackson

BEFORE RANDOLPH, C.J., COLEMAN AND CHAMBERLIN, JJ.

RANDOLPH, CHIEF JUSTICE, FOR THE COURT:

¶1. In 2012, United Healthcare of Mississippi (United) entered into provider agreements with Mississippi's fourteen Community Mental Health Centers (CMHCs) to provide Medicaid services under the Division of Medicaid's (DOM's) managed care program established under Mississippi Code Section 43-13-117(H) (Rev. 2021). From 2012 until 2019, United paid the CMHCs an agreed upon amount for Medicaid services—100 percent of the medicaid fee schedule rates. In July 2019, United unilaterally imposed a 5 percent rate cut, retroactive to January 1, 2019, and later demanded that the CMHCs refund 5 percent of all payments made from July 1, 2018, through December 31, 2018, all of which totaled more than $1 million. The CMCHs demanded that United immediately cease and desist from the 5 percent rate cut and recoupments. When United refused, the CMHCs filed a Complaint for Damages and Injunctive Relief in the Circuit Court of the First Judicial District of Hinds County, specifically requesting, inter alia , a preliminary injunction.

¶2. United responded with a motion to compel arbitration and to stay the proceedings. After a two-day evidentiary hearing, the circuit court denied United's motion to compel arbitration, granted the CMHCs’ request for injunctive relief, and issued a preliminary injunction.

¶3. The limited issues presented to this Court are whether the trial court properly enjoined United from imposing a 5 percent rate cut and whether the trial court erred by denying arbitration. For the reasons set forth below, we affirm the trial court's decision to grant a preliminary injunction and to deny the motion to compel arbitration. We remand for proceedings consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

¶4. Mississippi has fourteen regional health commissions established under Mississippi Code Sections 41-19-31 and -33 (Rev. 2018). Each regional commission operates a CMHC to provide facilities and services for the prevention and treatment of mental illnesses, mental disorders, developmental and learning disabilities, alcoholism, narcotic addiction, drug dependence, and related conditions. All CMHCs participate in Mississippi's Medicaid program.

¶5. The state of Mississippi contracts with managed care organizations (MCOs) or coordinated care organizations (CCOs) to provide Medicaid services through its Mississippi Coordinated Acess Network or "MississippiCAN" program. United is one of those MCOs. United is paid to enter into provider agreements with network providers that provide necessary services at agreed rates. In turn, United, rather than the state, reimburses providers for healthcare services rendered to the Mississippi beneficiaries enrolled with United. In its contract with the state of Mississippi, United was instructed to develop and implement innovative payment models that incentivize improvements in healthcare quality, outcomes, or value, as determined by the DOM. See Miss. Code Ann. § 43-13-117(H)(l)(c) (Rev. 2021). Subsection (H)(l)(c) places a condition on the negotiated rates: "As a condition for the approval of any program under this subsection (H)(l), the division shall require that no program may ... (c) [p]ay providers at a rate less than the normal Medicaid reimbursement rate."

¶6. As part of the program, Mississippi pays United a capitation fee, which is a set fee based on the number of members enrolled in United's Medicaid health plan. In exchange for that fee, United assumes the risk that it will incur a loss if the cost of the health services it provides exceeds the capitation fee. Mississippi pays United a capitation fee of approximately $718,870,179 annually to provide services to patients enrolled in its MississippiCAN health plans. In 2018, United's parent company reported revenues of more than $226 billion and net earnings of more than $11.9 billion.

¶7. United and each of the fourteen CMHCs entered into provider agreements to provide behavioral health services to Medicaid patients. Each agreement contained the same basic rate, requiring United to pay the CMHCs the fee maximums published on the DOM's website as the "Medicaid statewide uniform fee schedule." The agreed-upon fees were paid to the CMHCs for the years beginning 2012 until July 2019. United unilaterally imposed an across-the-board 5 percent rate cut on all payments retroactive to January 1, 2019, and then demanded a 5 percent refund on all payments made from July 1, 2018, through December 31, 2018. United unilaterally began a rate cut of 5 percent on its payments. Overpayments claimed by United for the 2018-to-2019 time frame ranged from $17,284 to $161,599. At stake is $1,001,391. If prospective, the 5 percent rate cut would reduce annual funding for the treatment of the mentally ill citizens of Mississippi who are eligible for Medicaid by more than $2 million.

¶8. The CMHCs filed suit, seeking, inter alia , temporary and permanent injunctive relief. The CMHCs alleged that United breached its agreements by unilaterally imposing a 5 percent reduction dating back to July 1, 2018. The CMHCs also asserted that United's acts violated statutes, including (1) section 43-13-117(H)(l)(c), which prohibited MCOs and CCOs from paying providers rates less than the normal Medicaid reimbursement rates; (2) Mississippi Code Section 43-13-117(A)(1)(e) (Rev. 2015), which provided that no service benefits or reimbursement under subsection (A)(l) applied to payments under a coordinated care program; and (3) subsection 43-13-117(A)(2)(d) (Rev. 2021), which provided that no service benefits or reimbursement under subsection (A)(2) applied to payments under a coordinated care program. The CMHCs further averred that any claimed arbitration provisions were unenforceable and did not deprive the trial court of jurisdiction because:

a. they violate article 4, section 100, of the Mississippi Constitution ;

b. they are procedurally and substantially unconscionable; [and]

c. they were not approved by Plaintiffs’ governing boards ....

¶9. United responded with a motion to compel. United argued that an arbitration provision in each of the fourteen agreements¹ required arbitration of any dispute stemming from its business relationships with the CMHCs. United contended that the dispute arose from the parties’ fee disputes under the agreements.

¶10. The trial court entered two separate orders. First, it denied United's motion to compel arbitration, finding that the dispute did not fall within the scope of the arbitration agreements. Next, the trial court granted the preliminary injunction. The trial court found that Mississippi Code Section 43-13-117(B) (Rev. 2015) applied only to the DOM; therefore, no statutory language permitted MCOs and CCOs to apply the 5 percent rate reduction specifically granted to the DOM. The trial court found that the CMHCs "will likely succeed on this element as [United has] likely breached [its] contracts by modifying the payment rate to Medicaid providers and, in doing so, attempted to evade the plain language of its authorizing statute. Miss. Code Ann. § 43- l 3-117(H)(d)(1) (Rev. 2021). The trial court ordered:

1. that [United] be prohibited from applying the 5 percent Rate Cut to payments for services provided to

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