Community Mental Health Services v. Mental Health & Recovery Board

395 F. Supp. 2d 644, 2004 U.S. Dist. LEXIS 28565, 2004 WL 3561992
CourtDistrict Court, S.D. Ohio
DecidedApril 22, 2004
DocketC2-03-581
StatusPublished
Cited by7 cases

This text of 395 F. Supp. 2d 644 (Community Mental Health Services v. Mental Health & Recovery Board) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Community Mental Health Services v. Mental Health & Recovery Board, 395 F. Supp. 2d 644, 2004 U.S. Dist. LEXIS 28565, 2004 WL 3561992 (S.D. Ohio 2004).

Opinion

OPINION AND ORDER

FROST, District Judge.

This matter is before the Court upon the Motion to Dismiss of Defendant Michael F. Hogan (“Hogan”), Director of the Ohio Department of Mental Health (“ODMH”), Both In His Official and Individual Capacities (Doc. # 70); Brief of Defendants MHR Board and Linda Pickenpaugh In Support of Motions to Dismiss and for Summary Judgment on Plaintiffs Second Amended Complaint (Doc. # 71); Plaintiffs Memorandum In Opposition to the Motions to Dismiss of Defendants Hayes and Hogan (Doc. # 75); Plaintiffs Memorandum In Opposition to the Motion to Dismiss or In The Alternative For Summary Judgment Of Defendants MHRB And Pickenpaugh (Doc. #76); Reply Memorandum of Defendant Thomas Hayes In Support of Defendant’s Motion to Dismiss (Doc. # 83); Reply Memorandum In Support of Defendant Hogan’s Motion to Dismiss (Doc. # 84); Reply of MHR Board and Linda Pickenpaugh In Support of Defendants’ Motion to Dismiss (Doc. # 85).

I. NATURE OF PROCEEDINGS

Plaintiff Community Mental Health Services of Belmont, Harrison and Monroe Counties, Ohio (“CMHS”) Second Amended alleges four claims against defendants. All defendants have filed motions to dismiss plaintiffs claims for lack of subject matter jurisdiction and failure to state a claim for which relief may be granted. Additionally, Defendants Hogan and Hayes move the Court to dismiss plaintiffs claims against them in their individual capacity. Defendant MHRB argues that, as a political subdivision acting as an extension of the state, it is immune from liability pursuant to the 11th Amendment. Plaintiff opposes defendants’ motions, arguing that plaintiff has set forth valid claims against defendants, individual defendants Hogan and Hayes are not entitled to qualified immunity, and that Defendants MHRB and Pickenpaugh are not entitled to 11th Amendment immunity.

II. FACTS

Plaintiff CMHS is a non-profit corporation organized in the State of Ohio whose principal purpose is to provide mental health services to the areas of Belmont, Harrison and Monroe counties. (Second Am. Compl. at 3, ¶ 6.) CMHS contracts with the Mental Health Recovery Board (the MHRB) to provide mental health services to both Medicaid and non-Medicaid recipients in the above counties. Id. at 5, ¶ 18. Pursuant to this contract, CMHS receives reimbursement for the mental health services that it has provided to Medicaid eligible individuals from the combination of federal, state and local matching funds. Id. ¶ 17.

Defendant MHRB is a political subdivision of the State of Ohio (defined in Ohio Revised Code § 340.01(B)). The MHRB receives Medicaid and other funds from the Ohio Department of Mental Health (“ODMH”) for purpose of contracting with third parties to provide mental health services to individuals who are eligible for *648 Medicaid as well as individuals who are not Medicaid-eligible in the counties of Belmont, Harrison and Monroe, Ohio (the “District”). The MHRB has been designated to administer the community mental health services Medicaid program (“Community Medicaid Program”) by Defendants Hogan and Hayes. (Second Am. Compl. at 3, ¶ 7). Defendant Pickenpaugh is the Executive Director of MHRB. Id. ¶ 8.

Defendant Hayes is the Director of the Ohio Department of Job and Family Services (“ODJFS”), the agency of the State of Ohio designated as the single state agency to administer Ohio’s Medicaid program. (Second Am. Compl. at 3-4, ¶ 9.) Defendant Hogan is the Director of ODMH, which has been designated by ODJFS to administer the Community Medicaid Program. Id. at 4, ¶ 10.

In the state fiscal year (“SFY”) 1998, the MHRB and the CMHS had a Medicaid contract in place to provide mental health services to both Medicaid and non-Medicaid eligible individuals. (Second Am. Compl. at 5, ¶ 18.) In SFY 1998, the CMHS also contracted with the MHRB to provide non-Medicaid services. Id. Submitted with the non-Medicaid contract was a budget which identified the funds available to pay for mental health services that CMHS would provide to Medicaid and non-Medicaid eligible individuals alike. (Sec. Am. Compl. at 5, ¶ 19.) During SFY 1998, the CMHS also had a “Provider Agreement” with ODJFS in place. Id. at ¶ 18.

In the fall of 1998, MHRB’s auditors audited CMHS for SFY 1998. (Second Am. Compl. at 6, ¶ 22.) As part of the audit, the MHRB performed a “reconciliation,” which determines whether a contractor, like CMHS, has provided more units of service than budgeted to Medicaid-eligible individuals and/or others, and whether the contractor’s expenses for those services were less than those projected. Id. at ¶ 23. Upon the audit and reconciliation, MHRB’s auditors determined that the CMHS should refund Medicaid Federal Financial Participation funds to the MHRB. CMHS repaid these funds. The MHRB audit was subsequently finalized and closed. Id. ¶ 24.

After the audit was closed the MHRB demanded that the CMHS re-pay Medicaid matching funds in the amount of $73,166.76 for SFY 1998. (Second Am. Compl. at 6, ¶ 26.) In May and June of 2003, the MHRB unilaterally withheld $10,000.00 each month from payments due CMHS from its SFY 2003 contract to repay the alleged Medicaid match overpayment until it received $73,166.67. Id. at 7, ¶ 27.

Thereafter, Defendant Hogan directed the MHRB to stop withholding payments from CMHS in accordance with ODJFS’s request. (Second Am. Compl. at 7, ¶ 33.) The MHRB returned $20,000.00 to CMHS. Plaintiff submits that Defendant Hayes has threatened to take future action to recover funds paid to CMHS based upon its SFT 1998 audit. Id. at 35.

Plaintiff claims that on June 3, 2003, ODMH told CMHS that Hogan withheld approval of the MHRB’s Mutual System Performance Agreement (“MSPA”) because of the number of client grievances against CMHS. (Second Am. Compl. at 10, ¶ 48.) Additionally, plaintiff submits that on July 8, 2003, not less than six ODMH officials arrived at CMHS and attempted to conduct a search and seizure. Id. at ¶¶ 50-52. Plaintiff further states that ODMH contacted CMHS clients who had not requested such contact. Id. at ¶ 53.

First, Plaintiff claims that Defendants MHRB, ODMH and ODJFS deprived plaintiff of its rights within the meaning of *649 the Due Process Clause of the Fourteenth Amendment of the United States Constitution (the “Constitution”) when defendants “unilaterally and intentionally misappropriated funds due and owing to plaintiff’ for Medicaid services CMHS provided to the District. (Second Am. Compl. Count 1.) Plaintiffs Second Count sets forth a claim against MHRB and ODMH for the violation of plaintiffs due process rights by subjecting plaintiff to “continued harassment and interference with purported client rights investigations.” Id. Count 2. Count Three of Plaintiffs Second Amended Complaint alleges that ODMH has violated plaintiffs right to be free from unreasonable searches and seizures as guaranteed by the Fourth Amendment of the Constitution when ODMH arrived at plaintiffs facility and demanded access to its premises.

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Bluebook (online)
395 F. Supp. 2d 644, 2004 U.S. Dist. LEXIS 28565, 2004 WL 3561992, Counsel Stack Legal Research, https://law.counselstack.com/opinion/community-mental-health-services-v-mental-health-recovery-board-ohsd-2004.