Midwest Emergency Associates-Elgin, Ltd. v. Harmony Health Plan of Illinois, Inc.

888 N.E.2d 694, 382 Ill. App. 3d 973
CourtAppellate Court of Illinois
DecidedMay 15, 2008
Docket1-07-0039
StatusPublished
Cited by7 cases

This text of 888 N.E.2d 694 (Midwest Emergency Associates-Elgin, Ltd. v. Harmony Health Plan of Illinois, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Midwest Emergency Associates-Elgin, Ltd. v. Harmony Health Plan of Illinois, Inc., 888 N.E.2d 694, 382 Ill. App. 3d 973 (Ill. Ct. App. 2008).

Opinion

JUSTICE CAMPBELL

delivered the opinion of the court:

This is an appeal by plaintiffs, Midwest Emergency AssociatesElgin, Ltd., and Sullivan Urgent Aid Centers, Ltd., from an order of the circuit court of Cook County dismissing an action against defendants, Harmony Health Plan of Illinois, Inc., Amerigroup Illinois, Inc., and United Healthcare of Illinois, Inc., under section 2 — 619 of the Code of Civil Procedure. 735 ILCS 5/2 — 619 (West 2006). 1 This appeal concerns only Harmony Health Plan of Illinois, Inc., and Amerigroup Illinois, Inc. (collectively Harmony Health). 2

Midwest Emergency Associates-Elgin, Ltd. (Midwest), and Sullivan Urgent Aid Centers, Ltd. (Sullivan or, collectively, Midwest), are healthcare providers licensed by the State of Illinois, and Harmony Health administers Medicaid managed care programs. Midwest filed a putative class action against Harmony Health, seeking to recover the full billed amount for emergency medical services that Midwest provided to Medicaid beneficiaries enrolled in Harmony Health’s managed care plans.

We find that Harmony Health reimbursed Midwest in accordance with federal and state law, as well as the parties’ individual agreements as Medicaid providers, and therefore affirm the trial court’s order granting Harmony Health’s motion to dismiss.

STATUTORY BACKGROUND: MEDICAID REIMBURSEMENT

Medicaid is a joint federal and state government entitlement program that provides financial resources to needy persons for healthcare services. In Illinois, the Illinois Department of Healthcare and Family Services (HFS) is responsible for providing healthcare coverage to individuals who are eligible for Medicaid.

The Federal Medicaid Program

Title XIX of the Social Security Act (42 U.S.C. §1396 et seq. (2000)) creates a medical assistance program (Medicaid) that provides resources to low-income individuals and families for healthcare services. Harris v. McRae, 448 U.S. 297, 65 L. Ed. 2d 784, 100 S. Ct. 2671 (1980). The Medicaid program is a jointly funded federal and state government endeavor.

The United States Centers for Medicare and Medicaid Services (CMS) administers the Medicaid program at the federal level. See Pediatric Specialty Care, Inc. v. Arkansas Department of Human Services, 364 F.3d 925, 933 (8th Cir. 2004). State participation in this program is optional; however, once a state elects to participate in the Medicaid program, it must comply with certain federal requirements as a condition precedent to federal funding. 42 U.S.C. §§1396a(a), (b) (2000); Harris, 448 U.S. at 301, 65 L. Ed. 2d at 794, 100 S. Ct. at 2680.

Participating states have wide latitude in designing and administering state Medicaid programs. For example, states may administer Medicaid benefits via either: (1) “fee-for-service” programs or (2) managed care programs. See Medicaid Managed Care, 63 Fed. Reg. 52022, 52022 (September 29, 1998).

Fee-for-Service

In the traditional fee-for-service arrangement, the state enters into direct provider plan agreements with healthcare service providers. Providers that filed a provider plan agreement with the state’s Medicaid agency can submit claims for reimbursement directly to that agency. 42 U.S.C. §1395(a) (2000). Reimbursement rates are predetermined by a fee schedule fixed by the state, and provider agreements provide that such payments constitute “payment in full.” Specifically, the Social Security Act provides that “[a] State plan must provide that the Medicaid agency must limit participation in the Medicaid program to providers who accept, as payment in full, the amounts paid by the agency plus any deductible, coinsurance, or co-payment required by the plan to be paid by the individual.” 42 C.F.R. §447.15 (2007). This regulation is intended to minimize the financial strain on state Medicaid programs.

Managed Care

In a managed care arrangement, the state contracts with managed care organizations (MCOs) to provide medical benefits to Medicaid recipients. 42 U.S.C. §1396b(m) (2000). In order to administer Medicaid benefits, an MCO must enter into an agreement with the state in which the MCO agrees to comply with all rules and regulations governing the Medicaid program.

MCOs then enter into private contracts with healthcare providers to establish provider networks. 42 U.S.C. §1936b(m)(1)(A)(i) (2000). Medicaid beneficiaries are required to seek medical treatment from approved providers within their MCO’s established network(s). The MCOs reimburse network providers for services at rates mutually agreed upon by contract. In exchange, MCOs receive a set monthly premium per Medicaid member from the state. 42 U.S.C. §1396b(m)(2)(A)(iii) (2000).

The Illinois Medical Assistance Program

Illinois participates in the federal Medicaid program. 305 ILCS 5/5 — 1 et seq. (West 2006). The HFS is the state agency responsible for providing healthcare coverage for adults and children who qualify for Medicaid. American Society of Consultant Pharmacists v. Garner, 180 F. Supp. 2d 953, 958 (N.D. Ill. 2001).

Illinois’s Medicaid participants can receive benefits through either a fee-for-service or a managed care arrangement. In the fee-for-service arrangement, HFS unilaterally sets the rate of reimbursement for the medical assistance for which payment is authorized. 89 Ill. Adm. Code §140.23(d), amended at 8 Ill. Reg 6785 (eff. April 27, 1984). In order to provide services to Illinois Medicaid recipients, providers must file with HFS an agreement for participation in the Illinois medical assistance program (HFS provider agreement); HFS provider agreements require providers to comply with certain minimum federal and state standards in order to participate in the state’s Medicaid program; the agreements also govern the direct commercial relationship between HFS and providers. 89 Ill. Adm. Code §140.11(a)(6), amended at 28 Ill. Reg. 4958 (eff. March 3, 2004).

In accordance with federal law, HFS regulations state:

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Bluebook (online)
888 N.E.2d 694, 382 Ill. App. 3d 973, Counsel Stack Legal Research, https://law.counselstack.com/opinion/midwest-emergency-associates-elgin-ltd-v-harmony-health-plan-of-illappct-2008.