I FILED IN DISTRICT COURT IN THE DISTRICT COURT OF OKLAHOMA COUQWHOMA COUNTY STATE OF OKLAHOMA JUL 2 1 2017 SHADOW MOUNTAIN BEHAVIORAL RICK HEALTH SYSTEM, LLC, 00 COURT CLERK Plaintiff, v. Case No. (Judge Thomas E. Prince) OKLAHOMA HEALTH CARE AUTHORITY, Defendant. DEFENDANT OKLAHOMA HEALTH CARE RESPONSE TO MOTION FOR TEMPORARY INJUNCTION AND CROSS-MOTION TO DISMISS PETITION COMES NOW, Defendant Oklahoma Health Care Authority by its undersigned attorneys, and hereby responds to Plaintiff Shadow Mountain Behavioral Health System, (?Shadow Mountain?) Motion for Temporary Injunction and cross-moves to dismiss the Petition for failure to state a claim upon which relief can be granted. For its response and in support of its cross-motion, OHCA states as follows: Shadow Mountain?s Petition and motion ask this Court to magically transform no?cause termination of Shadow Mountain?s Provider Agreement an avenue expressly contemplated by the parties? contract into one for cause, entitling it to a pre- and post- termination hearing process not otherwise afforded by law or contract.1 The law is clear that such treatment is not appropriate. A ?without-cause? termination does not mean ?without a 1 The issues raised in this case are thus discernibly different from those challenging the adequacy of procedures available in the wake of a for-cause termination. Unlike a for-cause termination, which triggers post- and possibly pre-termination administrative procedures under O.A.C. and with which this Court is familiar, a without-cause termination does not implicate any regulatory review given that both parties are permitted, for any reason, to terminate the contract on 60 days? notice and regulations expressly provide that, as such, ?there is no right to appeal or review.? O.A.C. reason,? as Shadow Mountain seems to suggest. Indeed, if that were the case, decision to terminate would likely be subject to attack as being arbitrary and capricious. Consequently, even without-cause terminations are typically supported by reasons for the action being taken. But Plaintiff goes too far. By equating ?for a reason? to ?for cause,? it essentially renders the without-cause option which is authorized by both the contract and regulation ?meaningless; all ?without-cause? terminations would, in effect, be turned into for?cause terminations, subject to myriad pre? and post-termination procedures not otherwise available. Bottom line, Shadow Mountain?s position must be rejected. Shadow Mountain cannot demonstrate any constitutionally-protected property or liberty interest on which to base its claim, particularly where, as here, the process that OHCA followed is one expressly permitted by lawful regulation and one to which Shadow Mountain agreed in contracting to be a Medicaid provider. As a result, the motion for emergency relief should be denied and Shadow Mountain?s Petition which seeks only declaratory and injunctive relief should be dismissed. BACKGROUND Shadow Mountain provides acute care, residential treatment and ?threshold? care for sexual offenders to Medicaid and non?Medicaid patients alike at its South Sheridan Road facility in Tulsa, Oklahoma. Through July 31, 2017, Shadow Mountain remains a contracted Medicaid provider under its agreement with OHCA, the single state agency responsible for overseeing and administering Medicaid in Oklahoma, also known as ?SoonerCare.?2 This case arises out of decision to terminate its relationship with Shadow Mountain ?without 2 The OHCA has discretionary authority to enter into contracts with providers for the delivery of health care. 63 Okla. Stat. OHCA is not required to contract with any particular provider. OHCA currently has contracts with approximately 42,500 providers throughout Oklahoma. Each of those contracts can be terminated by OHCA for cause on 30 days? notice; for cause immediately for quality, license, or fraud concerns; or without cause on 60 days? notice. See SoonerCare General Provider Agreement, Art. 8.1, attached hereto as Exhibit 1. As importantly, Shadow Mountain?s agreements are, by their terms, set to expire on August 31, 2017. Thus, under no circumstances could Plaintiff have had any reasonable expectation of a continuing contractual relationship with OHCA beyond this timeframe. See Geriatrics, Inc. v. Harris, 640 F.2d 262, 264 (10th Cir. 1981). 2 cause? under the terms of its Provider Agreements and pursuant to O.A.C. 31722-1-12, effective July 31, 2017. See Letter dated June 1, 2017 (the ?Notice of Intent to Terminate?), attached hereto as Exhibit 2.3 decision was not spur-of-the?moment nor, as Shadow Mountain alleges, based on the April 11, 2017 BuzzFeed report.4 It was, instead, preceded by a rocky relationship that spanned years and involved repeated instances involving deficiencies in Shadow Mountain?s compliance with regulatory requirements at its Tulsa facility, repeated assurances by Shadow Mountain, through a series of corrective action plans, that it would address de?ciencies, and repeated failures by Shadow Mountain to address concerns. See Affidavit of Melody Anthony (?Anthony attached as Exhibit 3. It also comes in the wake of various reports, acknowledged in Shadow Mountain?s Petition, based on surveys conducted by the Oklahoma Department of Human Services, the Oklahoma Department of Health, and the Joint Commission, all of which indicated various deficiencies at the facility. It was this history, and not the BuzzFeed article, that lead OHCA to make the business decision to sever its relationship with Shadow Mountain. Pursuant to O.A.C. and Subsection 8.1(ii) of the Provider Agreement, on June 1, 2017, OHCA sent notice of its intent to terminate Shadow Mountain ?without cause,? effective July 31, 2017. Notice of Intent to Terminate complied in all respects with the notice requirements set out in O.A.C. 3 In part, OHCA opted for a no?cause termination in order to provide a longer period of time for its members to complete ongoing 3 OHCA actually has three separate agreements governing services at the Shadow Mountain facility in Tulsa, each of which are subject to the same general terms as spelled out in Exhibit 1. For ease of reference, these will be referred to collectively as Shadow Mountain?s ?Provider Agreement?. 4 Shadow Mountain?s mantra that OHCA acted based upon the BuzzFeed article, while not accurate, is something of a red herring in any event, given that governing regulations and its contract with Shadow Mountain permit either party to terminate their agreement for any reason on 60 days? notice. See discussion infra at 6-7. 3 treatment or within which alternative arrangements could be made. Typically, stays in Shadow Mountain?s acute units average six days in duration; stays in its residential treatment facility average 27 days; and stays in its ?threshold? sex offender units average 144 days. As a result, it was plan, and it remains expectation, that most of the SoonerCare members who had been admitted to Shadow Mountain on or before the June 1, 2017 noti?cation date could be discharged or transitioned prior to the July 31, 2017 contract termination date.5 ARGUMENT AND AUTHORITIES 1. Shadow Mountain?s Motion Fails to Demonstrate an Adequate Basis for Entry of Temporary Injunctive Relief. A. Standards governing injunctions. The purpose of an emergency application for temporary injunctive relief is to maintain the status quo pending resolution of the underlying claim. A party seeking a temporary injunction must demonstrate by clear and convincing evidence that: (1) it has a substantial likelihood of prevailing on the merits; (2) it will suffer immediate irreparable injury in the absence of emergency relief; (3) the threatened injury outweighs the harm that the temporary order might cause the opposing party; and (4) public policy favors entry of the order. See, e. Da?in v. State of Oklahoma ex rel. Oklahoma Dept. of Mines, 2011 OK 22, 251 P.3d 741, 745. The nature of the claimed injury must be clear and cannot be speculative in nature. Id. Far from being a matter of routine, as Shadow Mountain asserts, see Motion at 1?2 n.2, Oklahoma courts have consistently held that an injunction is an extraordinary remedy that should not be granted. See, Dowell v. Fletcher, 2013 OK 50, 916,304 P.3d 457, 460; Luker v. 5 records re?ect that there were 15 SoonerCare members in the acute units at Shadow Mountain on June 1, and all have been discharged. Consequently, none need to be moved. There were 82 total members in a residential treatment unit on June 1, only 19 of whom remained as of July 17. See Af?davit of Jennifer King (?King attached hereto as Exhibit 4. OHCA has been contacting parents of its members to discuss options including alternative placement, dependent upon each child?s individual progress and needs and the expressed desires of his/her parents/guardians. Id. Board of County Comrs. of Greer County, 2002 OK CIV APP 108, 84 P.3d 773, 776.6 This is particularly true where, as here, granting emergency relief and/or a preliminary injunction would effectively alter the status quo and mandate action by the State (effectively granting the relief sought by the underlying Petition). Consequently, a Court must apply an even more stringent standard, one which generally requires the moving party to demonstrate that each of these factors ?weigh[s] heavily and compellingly in its favor.? Kikumura v. Hurley, 242 F.3d 950, 955 (10th Cir. 2011). See also 0 Central Espirita Beneficiente Uniao Do Vegeta v. Ashcroft, 389 F.3d 973, 975-76 (10th Cir. 2004). Shadow Mountain?s Petition and motion fall far short of demonstrating entitlement to such relief. B. Shadow Mountain cannot demonstrate a likelihood of success on the merits because no protected liberty or property interest is at stake in this case. The threshold question in assessing a due process claim is whether a protected liberty or property interest is at stake. Stern v. University of Ohio Bd. of Regents, 1992 OK CIV APP 138, 841 P.2d 1168, 1170-71. Property interests ?are not created by the due process clause but by independent sources such as a state or federal statute, a municipal charter or ordinance, or an implied or express contract. . .. To have a property interest in a bene?t, a person must have a legitimate claim of entitlement to it.? Id. (citing Bd. of Regents of State Colleges v. Roth, 408 US. 564 (1972)). Accord City ofJenks v. Stone, 2014 OK 11 7, 321 P.3d 179. ??To have a property interest. . ., a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to Id. (quoting Bd. of Regents v. Roth, supra, 408 US. at 577. Accord Personal 6 None of the cases cited by Plaintiff involve a without-cause termination, as here. Indeed, Plaintiff can point to no authorities, and OHCA is aware of none outside the limited context of family planning and abortion, where an injunction has been entered in connection with a provider?s without-cause termination. To the contrary, no-cause termination provisions are commonplace, and courts have routinely upheld them against challenge. See discussion infra at 9-11. Care Products, Inc. v. Hawkins, 635 F.3d 155, 158?59 (5th Cir. 2011) (quoting Bd. of Regents of State Colleges v. Roth, 408 US. 564, 577 (1972)) (?nding no protected property interest in the continuation of payments under a Medicaid provider agreement). As a starting place, a health care provider is not entitled to a Medicaid contract, and does not have a protected property interest in the continuation of a provider agreement or in the continued receipt of Medicaid payments. See, e. Geriatrics, Inc. supra, 12. Harris, 640 F.2d 262, 264 (10th Cir. 1981) (rejecting provider?s claim that it had a protected property interest in its expectation of continued participation in the Medicaid program); Alohacare v. Hawai Dept. of Human Services, 567 F.Supp. 1238, 1262-63 (D. Hawai?i 2008) (provider failed to identify a protected property interest as the Medicaid agency was not required to award provider a Medicaid contract); River Nile Invalid Coach and Ambulance, Inc. v. Velez, 601 F.Supp.2d 609, 618-19 (D.N.J. 2009) (Medicaid transportation provider does not have vested interested in continuing participation; where provider can still pursue livelihood, property interest is limited or non-existent); Senape v. Constantino, 936 F.2d 687, 689 (2d Cir. 1991) (?In light of the broad discretion offered state officials charged with administering the Medicaid program, a provider has no reasonable claim of entitlement to continued enrollment in that program? adequate to create a protected property interest). Instead, any ?legitimate? interests that Shadow Mountain may have must spring from its Provider Agreement with the OHCA and from the statutes and regulations that govern the parties? relationship. The Provider Agreement expressly provides that OHCA can unilaterally terminate the contract for cause on 30 days? notice, or immediately to protect the health and safety of members, or for any reason without cause) on 60 days? notice. Moreover, by its terms, the Provider Agreement is set to expire August 31, 2017, even if OHCA took no action. Thus, Plaintiff can have no expectation that it will continue to receive Medicaid payments indefinitely. Moreover, in contracting with the OHCA, Shadow Mountain expressly acknowledged that does not guarantee PROVIDER will receive any patients, and PROVIDER does not obtain any property right or interest in any SoonerCare Member business by this Agreement.? Exh. 1, SoonerCare General Provider Agreement 9.5. It is perhaps telling that Shadow Mountain?s Petition and motion fail even to reference, let alone distinguish, the Oklahoma Court of Civil Appeals? decision in Choices Institute, Inc. v. Oklahoma Health Care Authority, 2013 OK CIV APP 71, 308 P.3d 177. In Choices, the Court of Civil Appeals specifically considered what process was due to a provider that was unhappy with the administrative procedures available to it for appealing an adverse audit determination. In reversing the District Court?s determination that a violation of due process had occurred, the Court of Civil Appeals looked to the parties? provider agreement as the starting place, holding that the right to appeal, appeal format and administrative procedures were all part of the regulatory scheme with which the provider had agreed when it entered into a provider agreement to perform Medicaid services. All providers of medical services operating under the Medicaid program in Oklahoma are required to have an approved provider agreement on file with the OHCA in order to be eligible for Medicaid payments. O.A.C. Through the agreement, the provider assures it will ?compl[y] with all applicable Federal and State regulations.? 2013 OK CIV APP 71, 308 P.3d at 180 (citations omitted). Like the audit appeals process at issue in Choices, the state regulations governing contract terminations are ?part of the regulatory scheme [Shadow Mountain] agreed to comply with when it entered into its provider agreement to perform Medicaid services and seek Medicaid reimbursement.? Id. Like the provider in Choices, Shadow Mountain agreed to abide by ?applicable statutes, regulations, policies, and properly promulgated rules of including rules and regulations governing contract terminations and provider appeals. See Exh. 1, Art. IV, As a result, Shadow Mountain, like the provider in Choices, ?must operate within the rules or work to change them.? Id. Providers who serve the Medicaid program make an application in order to serve as a Medicaid provider. The program is administered according to an interrelated web of state and federal statutes, federal regulations and state agency rules and regulations. On matters of reimbursement of services, providers must either follow the rule or get the rule changed, and if providers ?cannot persuade the Secretary to act they must vote with their feet.? Choices, 2013 OK CIV APP 71, ?11 12, 308 P.3d at 180 (citations omitted) (quoting Long Term Care Pharmacy Alliance v. Ferguson, 362 F.3d 50, 59 (1St Cir. 2004)). Stated otherwise, Shadow Mountain agreed to the without?cause termination provisions in its contracts with OHCA, provisions that are specifically countenanced by governing regulations, and cannot be heard now to complain otherwise. Shadow Mountain?s reliance on the Sixth Circuit?s decision in Cathedral Rock of North College Hill, Inc. v. Shalala, 223 F.3d 354, 365 (6th Cir. 2000) is misplaced. Plaintiff relies on the case for the proposition that ?under well?established federal law, the Due Process Clause of the Fourteenth Amendment requires that after its Medicaid provider contract is terminated (regardless of whether with or without cause), a Medicaid provider be afforded a hearing to challenge its contract?s termination.? Motion at 12. Even a cursory reading of Cathedral Rock makes clear that it does not stand for the proposition cited. First, the case arises in the entirely disparate context of a for-cause termination based upon the provider?s failure to comply with federal program requirements. Second, the case nowhere suggests, let alone holds, that a termination hearing must be held in every instance. Instead, it relies on the existence of regulations and an administrative process applicable to for-cause terminations to decide whether the Court was without jurisdiction as a result of the provider?s failure to exhaust administrative remedies. Shadow Mountain?s reliance on Cathedral Rock is all the more remarkable given that the Court goes on to side with the US. Court of Appeals for the Seventh Circuit in holding that the provider has no entitlement to a pre-termination hearing, precisely the relief sought by Shadow Mountain?s motion. Id., 223 F.3d at 364-65 (noting that the provider?s interest is ?not particularly strong? given that it is ?not the intended beneficiary? of the program). Furthermore, to the extent that Cathedral Rock can be read to stand for the proposition that due process requires that a hearing be held in every instance (which it can?t), it is plainly at odds with the mainstream of decisions relating to the enforcement of without-cause terminations of Medicaid providers. Without?cause termination provisions in Medicaid provider agreements are hardly unique to Oklahoma. See, e. Fla. Stat. 409.907(2) (Florida); 437.1 1(c) (Louisiana); RCWA 74.09.290, Wash. Admin. Code 182?502-0040 (Washington State); 18 ?504.7(a) (New York). More to the point, without?cause terminations, based upon statutory, regulatory and/or contractual provisions or terms like those at issue here have been consistently upheld against constitutional challenge with court after court ?nding 1) that they do not implicate any protected property or liberty interest and 2) that they do not require a post?termination hearing. See, e. Diaz v. Fla. Agency for Health Care Admin, 65 So.3d 78, 80?83 (Fla. 2011); Umbrella Family Waiver Servs., LLC v. Indiana Family and Soc. Servs. Admin, 7 272, 275-76 (Ind. App. 2014); Crestwood Nursing Home v. White, 52 Ohio App.2d 274, 277?78 (1977); Rivera v. Perales, 185 350 (N.Y.A.D. 1992); Cohen v. Bane, 853 F.Supp. 620, 628-29 (E.D.N.Y. 1994); Khawaja v. Kaladjian, 207 398, 399 (N.Y.A.D. 1994); Bora v. N. Y.S. Dept. ofSoc. Servs., 152 10, 12-13 (N.Y.A.D. 1989); 70] Pharmacy Corp. v. Perales, 930 F.2d 163, 165-67 (2d Cir. 1991); Kelly Kare, Ltd. v. O?Rourke, 930 F.3d 170, 176 (2d Cir. 1991). These cases almost invariably involve terminations based upon the provider?s de?cient performance under an agreement, but that are nevertheless characterized and handled as a no? cause termination, as is the case here. See, e. Rivero v. Perales, 185 AD. at 350 (contract action based upon findings relating to lack of critical information as to patients? history, physical exam results and Billing issues); HMR Pharmacy Corp. v. Perales, 204 639, 640 (N.Y.A.D. 1994) (no-cause termination based upon provision of de?cient services to Medicaid clients); Bora v. N. Y.S. Dept. ofSoc. Servs., 152 at 12-13 (no?cause termination based on ?summary of factors? characterized as ?unacceptable?); Diaz 12. Fla. Agency for Health Care Admin, 65 So.3d at 80 (no-cause termination based upon ?disputes between [provider and Florida?s Medicaid agency]? relating to site inspections). Moreover, the argument that a reason to terminate transforms the termination into one for cause has been expressly rejected in circumstances virtually identical to those before this Court: [P]etitioner seeks to avail himself of the protection set forth in 18 504.7(b) [governing for-cause terminations] by alleging that this termination was grounded on respondent?s finding that he was guilty of ?unacceptable practices,? thus entitling him to a full evidentiary hearing under 18 parts 515 and 519. Recognizing that absolute entitlement to a hearing exists under 18 petitioner would bootstrap the provisions of this regulation onto 18 504.7(a) [governing no-cause terminations] by arguing that the ?summary of factors? enclosed in respondent?s termination letter implicitly charged him with ?unacceptable practices,? thereby triggering his right to a hearing. Petitioner also characterizes respondent?s action as arbitrary and capricious and as nothing more than an attempt to circumvent his right to a hearing. [W]e cannot agree. The termination here was made without cause under 18 504.7(a) and merely ended the parties? contractual relationship. None of the stigmas resulting from a formal determination that petitioner had committed unacceptable practices attached to said termination. turn away petitioner?s attempt to convert his mere expectancy to continue as a Medicaid provider into a constitutionally protected property interest by characterizing his termination as one for cause. 10 Bora, 152 at 958?58. The same holds true here.7 Lastly, Shadow Mountain?s reliance in its Petition on case law relating to bad faith terminations of so-called ?contracts of convenience? have no bearing on this case. See Petition 53?56. See also TigerSwan, Inc. v. United States, 110 Fed. Cl. 336 (Fed. C1. 2013). Preliminarily, OHCA has some question as to whether the tenets applied in TigerSwan even apply in this context, see Davis v. PMA Companies, Inc., 2013 WL 866893 *4 (W.D. Okla. 2013) (noting Oklahoma?s reticence to expand upon the duty of good faith and fair dealing and recognizing a claim for tortious breach in only special circumstances). However, assuming that it does, the standard adopted in TigerSwan and its progeny serves to demonstrate the absence of any bad faith on part in terminating Shadow Mountain?s Provider Agreement. In order to even adequately allege, let alone prove, bad faith, Tiger Swan requires a plaintiff to demonstrate that the termination was made with the ?intent to injure? the contractor, proved through a showing of actual animus, demonstrated abuse of discretion, or proof that the agency never intended for the contract to go forward. 110 Fed. Cl.at 346. What is more, [t]he contractor?s burden to prove the Government acted in bad faith is, however, very weighty. ?Any analysis of a question of Governmental bad faith must begin with the presumption that public of?cials act ?conscientiously in the discharge of their duties.? Due to this heavy burden of proof, contractors have rarely succeeded in demonstrating the Government?s bad faith. Krygoski Const. Co., Inc. v. United States, 94 F.3d 1537, 1541 (Fed. Cir. 1996). 7 Indeed, a liberty interest is implicated only if 1) a statement by the agency impugns the reputation or good name of a provider; is false; is made during the course of termination and forecloses other opportunities; and is disclosed publicly by the agency. See, e. McDonald v. Wise, 769 F.3d 1202, 1212 (10?h Cir. 2014); Blanton v. Housing Auth. of City of Norman, 1990 OK 38, 794 P.2d 412. While Shadow Mountain vaguely alludes to a liberty interest being at play, clearly it is not, inasmuch as the termination was without cause, and OHCA is not alleged to have made any statements regarding the basis for its action. See also Khawaja v. Kaladjian, 207 at 399 (Medicaid provider did not have a right to a name-clearing hearing as no?cause termination did not subject it ?to the stigma and sanctions resulting from a termination of participation for cause and [provider] did not demonstrate that [the state Medicaid agency] publicly disseminated the reason it terminated [provider?s] participation?) (Citations omitted). 11 Against this backdrop, Shadow Mountain?s allegations of bad faith fall short. Here, there has neither been (nor could there be) any suggestion that OHCA entered into its agreements with Shadow Mountain without intent to proceed. Indeed, as Shadow Mountain concedes, the agreements have been in force for years. Second, Plaintiff nowhere alleges that OHCA acted with the intent to injure Shadow Mountain. Lastly, the long history of issues between Shadow Mountain and OHCA clearly demonstrates that actions in terminating its relationship with Shadow Mountain under the without-cause provisions of the parties? agreement was not arbitrary and capricious. See, e. Khawaja v. Kaladjian, 207 at 399 (decision to terminate provider under without-cause provision in regulations based on suspicion of wrongdoing not arbitrary or capricious or made in bad faith); HMR Pharmacy Corp. v. Perales, 204 at 639-40 (agency?s decision to terminate an ?at-will? relationship must be sustained unless it is found to have been made in bad faith; termination based on alleged de?cient services to Medicaid clients was not in bad faith or arbitrary and capricious); Rivera v. Perales, 185 at 350 (same). It strains credulity to suggest that OHCA can be painted with bad faith when the action that it took was expressly permitted by regulation and contract, not to mention applicable case law and the underlying facts in this case. Nor does the case involve the kind of ?self?dealing? that the court recognized as potentially actionable in TigerSwan. 110 Fed. Cl. at 347 (agency decision to terminate contract in order to obtain a better price for itself was abuse of discretion). Here, the action taken was based on the deterioration of the parties? relationship, a record of apparent continuing problems at the facility, and the interests of members. OHCA respectfully submits that Shadow Mountain has failed to demonstrate any likelihood of prevailing on the merits. To the contrary, the case law is clear that Shadow 12 Mountain has neither a protected liberty interest nor a protected property interest at stake and is thus not entitled, as spelled out in governing regulations, to a pre- or post?termination evidentiary hearing. In addition, based as it was on a long-running history of issues between the parties and need for additional time to allow for the discharge or transfer of SoonerCare members, decision to sever its relationship with Shadow Mountain pursuant to the without-cause provisions in O.A.C. 3 17:2?1? 12 and the parties? agreement was not arbitrary and capricious or made in bad faith. C. Shadow Mountain has not established a threat of immediate Irreparable injury. Shadow Mountain claims two different kinds of injury in support of its request for emergency relief: First, Shadow Mountain claims that it faces financial loss by operation of EMTALA and/or limitations it claims are imposed by federal law on its ability to recoup for services rendered beyond 30 days from the date the contract is terminated, and by loss of Medicaid business on which it has come to rely. Second, it claims that SoonerCare members face a risk of harm as a result of the disruption in their treatment and the prospect of being placed in a facility that will be less convenient for members? families. Shadow Mountain is wrong, both as a matter of fact and of law. Shadow Mountain alleges it will face financial jeopardy due to the fact that it has an obligation pursuant to the EMTALA laws to screen children and stabilize those in acute crisis. Shadow Mountain claims it will no longer receive SoonerCare reimbursement for these services. As an initial matter, OHCA questions whether Shadow Mountain even quali?es as a ?dedicated emergency department? as defined in federal regulations at 42 CFR Only a ?dedicated emergency department? as defined by the regulation is required to abide by the provisions of EMTALA and Shadow Mountain has offered no explanation or authority as to why 13 it is obligated to comply. In fact, Shadow Mountain?s own website advises patients ?if you are experiencing an emergency, please dial 911 or go to the nearest emergency room?. Shadow Mountain?s website also does not appear to have any information regarding EMTALA or if Shadow Mountain serves as an emergency room. (Shadow Mountain?s website can be accessed at Certainly, directing someone elsewhere for an emergent situation tends to demonstrate that Shadow Mountain does not consider itself a dedicated emergency department which might trigger the requirements of EMTALA. But even assuming that Shadow Mountain is required to comply with EMTALA, its argument regarding ?nancial loss of SoonerCare payments only goes so far. 42 USC 1395dd requires that when a person presents at a hospital emergency room requesting treatment, the hospital must provide for a medical screening examination to determine if the person has an emergency situation. If the person does have an emergency situation, the emergency room must either stabilize and/or transfer the person to another medical facility. The emergency room must provide the screening and stabilization/transfer without inquiring on the person?s method of payment or insurance coverage. EMTALA does not obligate a facility to admit the patient once stabilized, and its screening and stabilization requirements apply to all patients, regardless of ability to pay, not just to those covered by Medicare. Similarly, Shadow Mountain?s contention that the availability of payment for a limited period of 30 days somehow subjects it to irreparable injury is not compelling. These provisions, including 42 CFR 488.426 and 489.55 on which Plaintiff relies, by their terms apply only to Medicare contracts between nursing homes and CMS, not separate Medicaid agreements between OHCA and its contracted providers. They thus have no bearing on the parties? obligations in the wake of a no?cause termination of a state Medicaid provider agreement. In any 14 event, Shadow Mountain always retains the right to sue for a breach of contract, if it believes it has a basis for one, in connection with which it would be able to recover damages reasonably ?owing from that breach. In any event, the ?emergency? situation that Shadow Mountain finds itself in is one of its own making. OHCA provided Shadow Mountain with the required 60 days? notice of its intentions to terminate the Provider Agreement effective July 31, 2017. OHCA purposefully relied on this extended notice with the expectation that most of its members at Shadow Mountain on or before June 1 would be discharged or transferred prior to the contract termination date. In fact, of the 97 members at the facility on June 1, all but 19 are now gone. OHCA further sought to limit exposure to Shadow Mountain and impact on members by denying prior authorization requests for new admits to the facility, so that those members could begin treatment elsewhere. If Shadow Mountain nevertheless chose to admit these individuals, it did so at its own risk of not being compensated under the program. Lastly, Shadow Mountain suggests that because it has grown dependent upon Medicaid resources as a source of business, termination of the contract threatens closure of the facility. If this were an adequate basis for relief, no provider serving a significant Medicaid population could ever be terminated. Shadow Mountain has no reasonable expectation or protected interest in the continued receipt of Medicaid payments, particularly where, as here, its contract was to end on its own terms on August 31, 2017 just over a month from now. Providers simply are not the intended beneficiaries of the Medicaid program, and Medicaid receipts are no guarantee of financial success.8 As the Tenth Circuit observed in Geriatrics, supra, in rejecting a similar claim of potential injury by a provider: 8 It is worth noting again in this regard that agreement with Shadow Mountain expressly provides that does not guarantee PROVIDER will receive any patients, and PROVIDER does not obtain any property 15 Eventide [the provider] is not the intended beneficiary of the Medicaid program. Instead, the purpose underlying the funding program is to extend financial benefits to the patients eligible to receive their medical care at government expense. Eventide argues also that termination of benefits would force the Home to close and that it therefore has a significant financial interest to retain its certification. The Home?s ?nancial need for government assisted patients is incidental to the purpose and design of the program. Eventide?s operating license has not been rescinded and it may still operate as a nursing home and render care to private-pay patients. The unfortunate reality that it will probably encounter difficulty operating at capacity is not of constitutional significance. 640 F.2d at 265 (citations omitted). See also Cathedral Rock, 223 F.3d at 365 (?Although termination of its agreement may have a severe economic impact on the provider, ?a provider?s ?nancial need to be subsidized for the care of its Medicare patients is only incidental to the purpose and design of the [Medicare] program.?? (Citations omitted). Similarly, the no-cause termination does not in any way impact Shadow Mountain?s license or certificates, nor does it impair its ability to care for non-Medicaid private pay) patients. Unable to demonstrate irreparable injury to itself, Shadow Mountain seeks to bolster its motion by reference to the interests of bene?ciaries. Its claims in this regard fare no better. First, ?a pure injury to third parties should be reserved for the public-interest prong of the preliminary-injunction standard,? and not as a basis for a claimed irreparable injury to the movant. See, e. Arriva Medical LLC v. I.S. Dept. of Health and Human Servs., 2017 WL 943904 at *10 (D.D.C. 2017). More fundamentally, Shadow Mountain?s claims of harm to SoonerCare members are based on the erroneous and unsupported assertion that ?no efforts have been made to transfer children from the facility.? Far from ?doing nothing? to assure the well?being of members who were admitted to Shadow Mountain as of the June 1 date of notice, OHCA has been following the status of its members since June 1. In fact, one of the key reasons OHCA opted for a right or interest in any SoonerCare Member business by this Agreement.? Exh. l, SoonerCare General Provider Agreement 9.5. 16 without?cause termination was so that it could take advantage of the longer lag time between notice and the effective date of termination so that existing patients could complete therapy.9 As of July 17, 2017, of the 15 SoonerCare members admitted for acute care on or before June 1, 2017, none remained at the facility. Similarly, of the 82 members admitted to residential treatment, including the ?threshold? units, all but 19 had been medically discharged or transferred. Consequently, as of July 17, only 19 members who had been authorized to receive treatment remained at the facility, and OHCA has been actively considering options for their continuing care. OHCA respectfully submits that Shadow Mountain downplays the efforts made by OHCA to assure an orderly transition and overstates the potential threat to ongoing treatment.10 Lastly, Shadow Mountain?s assertion that it is the only facility at which SoonerCare members can be placed within a 100?mile radius is disingenuous at best. While it is true that the closest alternative facilities for ?threshold? care are located in Oklahoma City and Fayetteville, AR, alternatives for both acute (adolescents) and residential treatment (adolescents and children) exist in the Tulsa area. See Exh. 4, King Aff. Thus, the universe of members who may require transfer outside of Tulsa stands at 19 or less (depending upon the age of the three members remaining in acute care, and assuming none of the 16 remaining ?threshold? members are discharged prior to the July 31 termination date). 9 Contrary to Shadow Mountain?s unsupported assertions, records demonstrate that the average length of stay for a SoonerCare member admitted to Shadow Mountain?s acute care facility in 2016 was six days not six and a half months, as Shadow Mountain claims. Motion at 15. The average stay for an admitted member for residential treatment in 2016 was 27 days, not 45 days as Shadow Mountain claims, and the average length of stay for a member admitted to Shadow Mountain?s ?threshold? units was 144 days. 10 Shadow Mountain?s reliance on Path?nder Healthcare, Inc. v. Thompson, 177 F.Supp.2d 895 (ED. Ark. 2001) is a perfect example. Motion at 15. The harm attendant the transfer of ?developmentally disabled or mentally challenged? patients who have been ?institutionalized for their entire lives,? is a far cry from the disruption caused by the transfer of patients whose average stays run from between six days to three months. While OHCA does not mean to belittle the importance of continuity of care, that alone should not forever tether OHCA to a provider relationship it believes has run its course, particularly where, as here, the ?emergency situation? is one of the provider?s own making. See discussion supra at 15 . 17 D. Harm to Medicaid outweighs the threatened harm to the Shadow Mountain. Because Shadow Mountain has no reasonable or protected expectation in the continued receipt of Medicaid payments and because it is not otherwise harmed or prevented from seeing non?Medicaid patients as part of its practice, it is not harmed by a continuation of the status quo going forward. On the other hand, ordering the immediate reinstatement of a provider agreement that was terminated in the wake of an on-again, off-again relationship during which the provider was given every opportunity to address concerns interferes with statutory and regulatory obligations to manage the State?s Medicaid program, consistent with the broad authority delegated to it by the Oklahoma Legislature. Under these circumstances, OHCA respectfully submits that the balance of harms tips decidedly toward OHCA, and not Shadow Mountain. E. The public interest does not support entry of temporary injunctive relief. Lastly, OHCA submits that the public interest strongly favors the ability of OHCA to oversee and manage spending and the administration of medical services to its members. It does not favor the continued payment of funds for services to providers having a long and troubled record of contract compliance, including multiple corrective action plans, over a span of years. Nor does the public interest favor the entry of an order that essentially ignores properly promulgated state regulations and processes to which the Shadow Mountain expressly agreed it would adhere in asking to be approved as a Medicaid provider. And, as discussed, the impact on individual members as a result of the termination should be minimal. The OHCA is duty-bound to safeguard its members and the public ?sc in order to maximize the beneficial reach of its programs to Oklahoma program participants. As Shadow Mountain?s Petition itself makes evident, OHCA is not alone among Oklahoma state agencies to 18 have concerns about the manner in which services are provided by Shadow Mountain. Petition 23-26 (summarizing investigations by DHS, OSDH and the Joint Commission). As another court faced with a virtually identical request reasoned in denying requested emergency relief, ?[t]he public deserves the utmost diligence in the protection of its financial resources. This factor weighs heavily against the issuance of a Lehigh Valley Community Mental Health Centers, Inc. v. Dep?t of Human Services, et al., 2015 WL 6447171 *4 (ED. Pa. 2015). The same holds true here, where protection of the ?sc is combined with the agency?s responsibility for assuring the highest possible quality of treatment for its members. 2. The Petition Should Be Dismissed for Failure to State a Claim. OHCA respectfully submits that, for the same reasons that Shadow Mountain?s Motion for Temporary Injunction should be denied on the merits, its Petition should be dismissed pursuant to 12 0.8. for failure to state a claim upon which relief can be granted. Absent a protected liberty or property interest, Shadow Mountain cannot claim entitlement to a pre? or post-termination evidentiary hearing, either by application of contract law, rule, or constitutional law. As a result, the Petition is deficient on its face and should be dismissed with prejudice. 19 CONCLUSION For all of the reasons set forth herein, Shadow Mountain?s Motion for Temporary Injunction should be denied, and the underlying Petition should be dismissed for failure to state a claim upon which relief can be granted. 20 Respectfully submitted, Nicole M. antois General Counsel Nicole M. Nantois, OBA #16965 Joseph H. Young, OBA #22349 Rebecca I. Burton, OBA #20174 Oklahoma Health Care Authority PO. Drawer 18497 Oklahoma City, OK 73154 Tel.: 405-522?7585 Fax: 405-530-3444 nicole.nantois@okhca.org hank.young@okhca.org becki.burton@okhca.org ATTORNEYS FOR DEFENDANT OKLAHOMA HEALTH CARE AUTHORITY Exhibit 1 SOONERCARE GENERAL PROVIDER AGREEMENT ARTICLE 1. PURPOSE The purpose of this Agreement is for Oklahoma Health Care Authority (OHCA) and PROVIDER to contract for health-care services to be provided to members in Oklahoma Medicaid, known as SoonerCare, programs. ARTICLE II. PARTIES AND DEFINITIONS 2.1 2.2 2.3 OHCA a) OHCA is the single state agency that the Oklahoma Legislature has designated through 63 Okla. Stat. 5009 (B) to administer the Oklahoma Medicaid program, known as SoonerCare. b) OHCA has authority to enter into this Agreement pursuant to 63 Okla. Stat. The OHCA Chief Executive Officer has authority to execute this Agreement on behalf of OHCA pursuant to 63 Okla. Stat. c) The mailing address for OHCA is: Oklahoma Health Care Authority, Attention: Provider Contracting, PO. Box 54015, Oklahoma City, OK 73154. PROVIDER a) PROVIDER is an individual or entity that has supplied. Provider information to OHCA and executed this Agreement in order to order, refer, and/or provide health- care services to SoonerCare Members. b) If PROVIDER indicates in the Provider Information that he/she is enrolling only as an ?Ordering/Referring Provider?, the following paragraphs of this Agreement do not apply to PROVIDER: Section 4.l paragraphs d, f, and 1; Sections 4.2, 4.3, 4.4, and 4.5. DEFINITIONS a) Choice means a medical home program where Members choose a primary care provider for care coordination and primary care provider. All other services are reimbursed on an FS basis, but services not rendered by the primary care provider may require a referral. b) Insure Oklahoma/Oklahoma Employer/Employee Partnership for Insurance Coverage Individuals Plan (10 IP) means a comprehensive SoonerCare package that requires Members to share in the cost through premiums and co-payments. IO Members choose a primary care provider who is paid a rate for case management. 10 reimburses all other Member benefits on a fee-for?service basis, but services not rendered by the primary care provider may require a referral. This Program will end on December 31, 2014. c) Member means a person receiving health care bene?ts from a SoonerCare program. d) OHCA means Oklahoma Health Care Authority. e) Provider Information means all information requested from and supplied by PROVIDER to OHCA through its Electronic Provider Enrollment (EPE) system or through a paper application form or other written communication from PROVIDER. f) SoonerCare means all OHCA medical benefit packages including Traditional, Choice, Insure Oklahoma, SoonerPlan and Supplemental. 1 General Agreement 2014-1 g) SoonerPlan means a limited package of family planning bene?ts. h) Supplemental means a SoonerCare plan that provides medical bene?ts to supplement those services covered by Medicare (sometimes called ?crossover?.) i) Traditional means a comprehensive SoonerCare package that pays providers for services on a fee-for-service basis. j) Type means the category of health-care provider as delineated in OAC 317:30-1-l-et seq. ARTICLE TERM 3.1 3.2 This Agreement shall be effective upon completion when: (I) it is executed by the Provider; (2) all necessary documentation has been received and veri?ed by the and (3) it has been accepted by the OHCA. OHCA acceptance is complete only upon written noti?cation to the PROVIDER by mail or electronic mail. The term of this Agreement shall expire as indicated in the Special Provisions for PROVIDER Type. PROVIDER shall not assign or transfer any rights, duties, or obligations under this Agreement without prior written consent from OHCA except as otherwise provided in this Agreement and applicable Addenda. ARTICLE IV. SCOPE OF WORK 4.1 General Provisions Unless otherwise speci?ed in the Special Provisions for Type, PROVIDER agrees: a) To provide health-care services to SoonerCare Members appropriate to Type and in accordance with applicable professional standards; b) That all Provider Information supplied by PROVIDER is correct; PROVIDER may correct or update Provider Information through EPE or in writing (facsimile acceptable) to c) To comply with all applicable statutes, regulations, policies, and properly promulgated rules of (I) That the state has an obligation under 42 USC l396a(a)(25)(A) to ascertain the legal liability of third parties who are liable for the health care expenses of Members under the care of PROVIDER. Because of this obligation, PROVIDER agrees to assist OHCA, or its authorized agents, in determining the liability of third parties; e) To maintain all applicable licenses, certi?cations and/or accreditations as speci?ed in the Special Provisions for type during the term of this Agreement. Should licenses, certi?cations and/or accreditations be modified, suspended, revoked, or in any other way impaired, PROVIDER shall notify OHCA in writing within three business days of such action. In the event licenses, certi?cations and/or accreditations are modi?ed, PROVIDER shall abide by the terms of the modi?ed licenses, certi?cations and/or licenses. In the event of suspension, revocation, or other action making it unlawful for PROVIDER to provide services under this Agreement, the Agreement shall terminate immediately. A violation of this paragraph, at the time of execution or during any part of the Agreement term, shall render the Agreement immediately void; 2 General Agreement 2014?] 4That provision of services for purposes of this Agreement shall be limited to those services within the scope of the Oklahoma Medicaid State Plan reflected by properly promulgated rules; to the extent that services are not compensable under SoonerCare, the services may be provided but shall not be compensated by PROVIDER acknowledges that covered services may vary between SoonerCare bene?t plans; To maintain a clinical record system as follows: i. The system shall be maintained in accordance with written policies and procedures, which shall be produced to OHCA or its agent upon request; ii. PROVIDER shall designate a professional staff member to be responsible for maintaining the records and for ensuring they are completely and accurately documented, readily accessible, and systematically organized; Each patient?s record shall include, as applicable and in addition to other items set forth herein: Member identification and personal, demographic and social data; evidence of consent forms; pertinent medical history; assessment of patients health status and health-care needs; report of physical examination; brief summary of presenting episode and disposition; education and instruction to patient; all physician orders; diagnostic and laboratory test results; consultative ?ndings; reports of treatments and medications; immunization records; preventive services; and other pertinent information necessary to monitor the patient. All entries must be legible, dated and include signatures of the physician and other health care professionals rendering the care to the patient; To render services in an appropriate physical location, which shall include barrier? free access, adequate space for provision of direct services, appropriate equipment, proper exit signs, and a safe environment for patients; To train staff in handling medical and non-medical emergencies to ensure patient safety; To have a preventive maintenance program to ensure essential mechanical, electrical, and patient?care equipment is maintained in safe operating condition; To develop and enforce policies and procedures in accordance with laws regarding communicable diseases. These policies and procedures shall include universal precautions. Including precautions related to Human immunode?ciency Virus (HIV) serologically positive patients, which equal or exceed such standards established by the US. Occupational Safety and Health Administration; To comply and certify compliance with 42 USC 1395 l39500(f), and l396a(w) which require SoonerCare providers to provide patients with information about patients? rights to accept or refuse medical treatment. PROVIDER shall educate staff and SoonerCare Members concerning advance directives. PROVIDER shall include in each Member?s individual medical record documentation as to whether the Member has executed an advance directive. PROVIDER shall not discriminate on the basis of whether an individual has executed an advance directive. Rights and Responsibilities Related to Member Co-payments and Collections General Agreement 2014-1 4.3 a) b) Pursuant to 42 CFR 447.15, payments made by OHCA shall be considered payment in full for all covered services provided to a Member, except for OHCA?allowed Member co-payments. PROVIDER shall not bill a Member or attempt in any way to collect any payment from a Member for any covered service, except for co-payments allowed by OHCA. This provision is in force even if PROVIDER elects not to bill OHCA for a covered service. Violation of this provision may result in suspension of payments, recoupment of OHCA reimbursements and/or contract action up to and including termination of this Agreement. shall not require Members to pay for services in advance, except for OHCA-allowed Member co-payments. PROVIDER may collect an OHCA allowed co-payment from a Member for a covered service and may use any legal means to enforce the Member?s liability for such co-payment. PROVIDER shall not deny covered services to eligible Members because oftheir inability to pay a co?payment unless Member is enrolled in the [0 IP bene?t plan. PROVIDER may deny covered services to eligible 10 IP Members if they are unable to pay a co- payment Provision of a covered service to a Member unable to pay a co- payment does not eliminate the Member?s liability for that co- payment. Payments I'rom OHCA a) b) Unless otherwise speci?ed in the Special Provisions for PROVIDER 3 Type, OHCA shall pay PROVIDER for services in accordance with the appropriate part of Provider Manual 317: 30- 1- 1- et seq., Coverage by category and limitations. PROVIDER agrees and understands that payment cannot be made by OHCA to vendors providing services under federally assisted programs unless services are provided without discrimination on the grounds of race color religion, sex, national origin or handicap. PROVIDER shall accept payment from OHCA by direct deposit to ?nancial institution. OHCA shall make payment in accordance with the information supplied by PROVIDER on the attached electronic funds transfer (hereafter EFT) f.orm PROVIDER shall update direct deposit information as needed by sending a signed EFT form to OHCA. PROVIDER shall release any lien securing payment for any SoonerCare compensable service. This provision shall not affect ability to ?le a lien for non- covered service or OHCA-permitted co-payment. Satisfaction ofall claims will be from, federal and state funds. Any false claims, statements, or documents, or any concealment of a material fact may be prosecuted. Payments will be made to PROVIDER within forty-?ve (45) days of submission of a ?clean claim? as such term is de?ned at 42 CFR PROVIDER is entitled to interest in accordance with 62 Okla. Stat. 41.48 (1991) for all payments not made within forty??ve days after the clean claim has been submitted to OHCA or its claims payment agent. General Agreement 2014-] 4.4 4.5 4.6 g) PROVIDER Certi?es with each claim for payment that the services or products for which payment is billed by or on behalf of PROVIDER were medically necessary as de?ned by OAC 317: 30- 3? 1(f) and were rendered by PROVIDER. Billing Procedures a) PROVIDER agrees all claims shall be submitted to OHCA in a format acceptable to OHCA and in accordance with OHCA regulations. Electronic and/or Internet submitted claims may receive priority handling. b) If PROVIDER enters into a billing service agreement, PROVIDER shall be responsible for the accuracy and integrity of all claims submitted on behalf of PROVIDER by the billing service. c) PROVIDER shall not use the billing service or any other entity as a factor, as de?ned by 42 CFR 447.10. 01) PROVIDER is responsible for verifying appropriate eligibility of a Member by contacting the OHCA Eligibility Veri?cation System (EVS). Secure Website a) OHCA may assign PROVIDER a user ID number and password that aliows PROVIDER to access the secure website for the purpose of retrieving information about SoonerCare programs and Members b) PROVIDER agrees to protect access to the website by safeguarding user ID numbers and passwords. c) Con?dentiality requirements in Article VII apply to all. Member Information on the secure website, including information related to third party and prior authorizations for medical services. d) Pursuant to 221 Okla. Stat. I953, any person who willfully missuses a computer or computer information may be prosecuted. e) Any violation of the terms of this section or the con?dentiality requirements of Article VII, including unauthorized use or modi?cation of any information on the secure website. may result in suspension or termination of access to the secure website. Telemedicine If serving as either an originating or distant site for telemedicine services, PROVIDER shall comply with telemedicine policy at OAC and attests that: a) It shall provide telemedicine services through an OHCA-approved network listed on the OHCA website; . b) That it shall provide services only to members residing in rural or underserved areas where there is a lack of medical specialty, or other mental health providers. ARTICLE V. LAWS APPLICABLE 5.1 The parties to this Agreement acknowledge and expect that over the term of this Agreement laws may change. Speci?cally. the parties acknowledge and expect federal Medicaid statutes and regulations, (ii) state Medicaid statutes and rules, state statutes and rules governing practice of health care professions. and (iv) any other laws cited in the Agreement may change. The parties shall be mutually bound by such changes. 5 General Agreement 20144, 5.2 5.3 5.4 5.5 As applicable, PROVIDER shall comply with and certi?es compliance with: a) Age Discrimination in Employment Act, 29 USC 621 et seq.; b) Rehabilitation Act, 29 USC 701 et seq.; 0) Drug-Free Workplace Act, 41 USC 701 et seq.; d) Title XIX of the Social Security Act, 42 USC 1396 et seq.; e) Civil Rights Act, 42 USC 2000d et seq. and 2000c et seq.; f) Age Discrimination Act, 42 USC 6101 et seq.; g) Americans with Disabilities Act, 42 USC 12101 et seq.; h) Oklahoma Worker?s Compensation Act, 85 Okla. Stat. 1 et seq.; i) 31 USC 1352 and 45 CFR 93.100 et seq., which (1) prohibit the use of federal funds paid under this Agreement to lobby Congress or any federal of?cial to enhance or protect the monies paid under the Agreement and (2) require disclosures to be made if other monies are used for such lobbying; j) Presidential Executive Orders 11141, 11246 and 11375 at 5 USC 3501 and as supplemented in Department of Labor regulations 41 CF 741.1-741.84, which together require certain federal contractors and subcontractors to institute affirmative action plans to ensure absence of discrimination for empioyrnent because of race, color, religion, sex, or national origin; k) The Federal Privacy Regulations and the Federal Security Regulations as contained in 45 CF Part 160 et seq. that are applicable to such party as mandated by the Health Insurance Portability and Accountability Act of (HIPPA), Public Law 104-191., 110 Stat. 1936, and HIPPA regulations at 45 CFR 160.101 et seq.; 1) Vietnam Era Veterans? Readjustment Assistance Act, Public Law 93-508, 88 Stat. 1578; m) Protective Services for Vulnerable Adults Act, 43A Okla. Stat. 10-101 et seq.; n) Debarment, Suspension and other Responsibility Matters, 45 CFR 76.105 and 76.110; 0) With regard to equipment (as de?ned by 2 CFR 225) purchased with monies received from OHCA pursuant to this Agreement, 74 Okla. Stat. and (C), 45 CF 74.34. 42 CFR 447.20 and 447.21. p) Federal False Claims Act, 31, USC 3729-3733; 31, USC 3801. q) Oklahoma Taxpayer and Citizen Protection Act of 2007, '25 Okla. Stat. 1313 and participates in the Status Veri?cation System. The Status Veri?cation System is de?ned at 25 Okla. Stat. 1312 and includes but is not limited to, the free Employment Veri?cation Program (e-Verify) available at The explicit inciusion of some statutory and regulatory duties in this Agreement shall not exclude other statutory or regulatory duties. All questions pertaining to validity, interpretation. and administration of this Agreement shall be determined in accordance with the laws of the State of Oklahoma, regardless of where any service is performed or product is provided. The venue for legal actions arising from this Agreement shall be in the District Court of Ok1ahoma County, State of Oklahoma. ARTICLE VI. AUDIT INSPECTION General Agreement 2014-1 6.1 6.2 6.3 6.4 6.6 As required under 42 CF 431.107, PROVIDER shall keep such records as are necessary to disclose fully the extent of services provided to Members and shall furnish records and information regarding any claim for providing such service to OHCA, the Oklahoma Attorney General?s Medicaid Fraud Control Unit (MFCU hereafter), and the US. Secretary of Health and Human Services (Secretary hereafter). PROVIDER agrees to keep records to disclose the services it provides "for seven years from the date of service. PROVIDER shall not destroy or dispose of records, which are under audit, review or investigation when the seven-year limitation is met. PROVIDER shall maintain such records until informed in writing by the auditing, reviewing or investigating agency that the audit, review or investigation is complete. Authorized representatives of OHCA, MF CU, and the Secretary shall have the right to make physical inspection of place of business and to examine records relating to ?nancial statements or claims submitted by PROVIDER under this Agreement and to audit ?nancial records as provided by 42 CF 431.107. If PROVIDER fails to submit records to OHCA or its agent within reasonable speci?ed timeframes, all SoonerCare payments to PROVIDER may be suspended until records are submitted. Pursuant to 74 Okla. Stat. 85.41, OHCA and the Oklahoma State Auditor and Inspector shall have the right to examine books, records, documents, accounting procedures, practices, or any other items relevant to this Agreement. PROVIDER shall submit, within thirty-?ve days ofa request by OHCA, MF CU, or the Secretary, all documents, as de?ned by '12 Okla. Stat. 3234, in its possession, custody, or control concerning the ownership of any subcontractor with whom PROVIDER has had business transactions totaling more than twenty-?ve thousand dollars during the twelve months preceding the date of the request, or (ii) any signi?cant business transactions between PROVIDER and any wholly owned supplier or between PROVIDER and any subcontractor during the ?ve years preceding the date of the request. If PROVIDER is an entity other than an individual person, PROVIDER shall provide OHCA with information concerning ownership in accordance with 42 CFR 455.100 et seq. PROVIDER agrees to update its Provider Information within twenty (20) days of any change in ownership. Ownership information is critical for determining whether a person with an ownership interest has been convicted of a program?crime under Titles V, XIX, XX and XXI of the federal Social Security Act, 42 USC 301 et seq. PROVIDER shall also furnish ownership information to OHCA upon further request. If PROVIDER participates in a Health Information Exchange/Health Information Organization PROVIDER agrees to allow OHCA access to any information related to practice contained in such HIE, for performance or contract monitoring, quality assurance or research purposes as well as payment, care management and treatment authorizations, subject to state and federal law. OHCA may share a member?s eligibility and claims data with all members who are treating the same patients for the purpose of payment, treatment and authorizations. General Agreement 2014-] ARTICLE VII. CONFIDENTIALITY 7.1 7.2 7.3 7.4 7.6 7.7 7.8 PROVIDER agrees that SoonerCare Member information is con?dential pursuant to 42 USC l396a(7), 42 CFR 431:300-306, and 63 Okla. Stat. 5018. PROVIDER shall not release the information governed by these requirements to any entity or person without proper authorization or permission from OHCA. PROVIDER shall have written policies and procedures governing the use and removal of patient records from facility. The patient?s written consent shall be required for release of information not authorized by law, which consent shall not be required for state and federal personnel working with records of Members. PROVIDER agrees that SoonerCare Member and provider information cannot be remarketed, summarized, distributed, or sold to any other organization without the express written approval of OHCA. PROVIDER agrees to comply with the Federal Privacy Regulations and the Federal Security Regulations as contained in 45 CPR. Parts 160 through 164 that are applicable to such party as mandated by the Health Insurance Portability and Accountability Act of 1996 (HIPPA) and 42 USC. l320d-1230d?8. PROVIDER must report a known breach of con?dentiality, privacy, or security, as de?ned under HIPPA, to the OHCA Privacy and Con?dentiality Of?cer within 48 hours of knowledge of an unauthorized act. Failure to perform may constitute immediate termination of the Agreement. PROVIDER agrees to report potential known violations of2l Okla. Stat. 1953 to the OHCA Legal Division within 48 hours of knowledge of an unauthorized act. In general, this criminal statute makes it a crime to willfully and without authorization gain access to, alter, modify, disrupt, or threaten a computer system. PROVIDER shall, following the discovery of a breach of unsecured PHI as de?ned in the HITECH (The Health Information Technology for Economic and Clinical Health Act) or accompanying regulations, notify the OHCA of such breach pursuant to the terms of 45 CFR 164.410 and cooperate in the breach analysis procedures, including risk assessment, if requested. A breach shall be treated as discovered by PROVIDER on the ?rst date on which such breach is known to PROVIDER, or, by exercising reasonable diligence. would have been known to PROVIDER. PROVIDER shall report to the OHCA any use or disclosure of PHI which is not in compliance with the terms of this Agreement of which it becomes aware. PROVIDER shall report to OHCA any Security Incident of which it becomes aware. For purposes of this Agreement, ?Security Incident? means the attempted or successful unauthorized access, use, disclosure, modi?cation, or destruction of information or interference with system operations in an information system. In addition, PROVIDER agrees to mitigate, to the extent practicable, any harmful effect that is known to PROVIDER of a use or disclosure of PHI by PROVIDER in violation of the requirements of this Agreement. ARTICLE TERMINATION 8.1 This Agreement may be terminated by three methods: Either party may terminate this Agreement for cause with a thirty-day written notice to the other party; (ii) either party may terminate this agreement without cause with a sixty-day written notice to the other 8 General Agreement 2014-] 8.2 8.3 party; or OHCA may terminate the Agreement immediately to protect the health and safety of Members, upon evidence of fraud, (0) pursuant to Paragraph 4.1 above. In the event funding of SoonerCare from State, Federal or other sources is withdrawn, reduced, or limited in any way after the effective date of this Agreement and prior to the anticipated Agreement expiration date, this Agreement may be terminated immediately by OHCA. In the event of termination, PROVIDER shall provide any records or other assistance necessary for an orderly transition of SoonerCare Members? health care. ARTICLE IX. OTHER PROVISIONS 9.1 9.2 9.3 9.4 9.5 The representations made in the memorialization of the Agreement constitute the sole basis of the parties? contractual relationship. No oral representation by either party relating to services covered by this Agreement shall be binding on either party. Any amendment to this Agreement shall be in writing, signed by PROVIDER and accepted by OHCA acceptance is complete only upon written noti?cation to PROVIDER by mail or electronic mail. Attachments to this Agreement which are made part of the Agreement and incorporated by reference are Special Provisions for Type; and (ii) Provider Information. If any provision of this Agreement is determined to be invalid for any reason, such invalidity shall not affect any other provision, and. the invalid provision shall be wholly disregarded. . Titles and subheadings used in this Agreement are provided solely for the reader?s convenience and shall not be used to interpret any provision of this Agreement. OHCA does not create and PROVIDER does not obtain any license by virtue of this Agreement. OHCA does not guarantee PROVIDER will receive any patients, and PROVIDER does not obtain any property right or interest in any SoonerCare Member business by this Agreement. General Agreement 2014?] Exhibit 2 REBECCA MARY FALLEN CHIEF EXECUTWE OFFICER STATE OF OKLAHOMA OKLAHOMA HEALTH CARE AUTHORITY June 15', 2017 CERTIFIED RECEIPT REQUESTED Shadow Mountain Behavioral Health System, LLC Attn: Michael Kistler 6262 S. Sheridan Rd. Tulsa, OK 74133 Re: Notice of Intent to Terminate SoonerCare Contracts Provider and Dear Mr. Kistler, This letter is written to notify you that the Oklahoma Health Care Authority (OHCA) intends to terminate Shadow Mountain?s SoonerCare General Provider Agreements (hereinafter ?contracts?) for the above-listed provider numbers. Pursuant to Article Section either party may terminate this contract without cause with a sixty-day written notice to the other party. This letter serves as written notice that Shadow Mountain?s contracts with OHCA will terminate effective July 315?, 2017. Please be advised that the decision to terminate Shadow Mountain?s contracts without cause with a sixty-day written notice is not appealable pursuant to OHCA rules at O.A.C. 317:2-1-12. Sincerely, Becki Burton Deputy General Counsel cc: Provider Enrollment 43-15 Lincoln Blvd..0kiahomn City.QX ??3135 I it?ii5?~m} I W31 13' Art Eqmri? meaty? Exhibit 3 AFFIDAVIT OF MELODY ANTHONY STATE OF OKLAHOMA ss. COUNTY OF OKLAHOMA) I, Melody Anthony, being of lawful age and upon my own personal knowledge, state under oath as follows: 1. I am an employee of the Oklahoma Health Care Authority (OHCA), where I serve as the Deputy State Medicaid Director. In my position as the Deputy State Medicaid Director, I am generally aware of the history of the business relationship between OHCA and Shadow Mountain (SM) and participated in the decision to terminate SM with a 60 day no?cause termination notice. Shadow Mountain has been advised of multiple non?compliance findings over the years and was on various corrective action plans (CAP) through the Behavioral Health Services Unit of OHCA for a variety of issues, including, but not limited to, failing to adhere to required staff to patient ratios; failing to have adequate RN staff as required on acute units; failing to report incidents required to be reported to OHCA and OKDHS pursuant to policy; building safety concerns; improper seclusion and restraint of patients; and improper documentation of patient records. These ?ndings and areas of concern were sent to SM in Inspection of Care Annual Inpatient Facility Reports for fiscal years 2012/2013, 2013/2014, and 2014/2015. As a result of continuing problems with compliance with the multiple CAPs, OHCA considered a possible contract action after SM, once again, had non?compliant findings based on an on?site review on February 12th, 2015. OHCA sent a 30 day notice to terminate contract to SM for #200006820 on March 25th, 2015 based on the February 12th, 2015 on?site review findings. Identi?ed issues included, but were not limited to, improper staffing ratios; not enough RNs to cover acute units as required; failure to report serious injuries or instances of abuse to OHCA pursuant to policy; and failure to adhere to previous CAPS. SM responded to the 30 day notice on April 5th, 2015 stating that it believed it was in compliance with rules. OHCA responded on August 19th, 2015, informing SM that after reviewing the documentation provided and conducting a follow-up on?site review it was not going to proceed with termination, but rather was placing the contract on a CAP. The details of the CAP included, but were not limited to, making clear that staffing requirements are unit specific and that staff members could not be dually counted in different units; RNs assigned to acute units could only be counted in that specific unit?s ratio and could not cover or otherwise be counted on other units; incidents involving use of force must be immediately reported to OHCA as well as incidents of abuse pursuant to policy; and any further non- compliance with rules, regulations, and/or the CAP would result in further action including possible contract termination. Subsequent to the above CAP being imposed for the contract at SM, OHCA sent 30 day notice to terminate the and contracts on December 30th, 2015. The termination notice referred to and incorporated the previous notice and resulting CAP for the contract, stating that the insuf?ciencies previously cited ?are a common and recurrent issue across all of your contracts at the Sheridan Road location.? Identi?ed issues included, but were not limited to, insufficient staffing ratios that do not comply with policy and contract; insuf?cient RN coverage for the specialty unit; continued lack of RN coverage for incidents 10. ll. of seclusion and restraint as required; and continued sharing and cross-counting of staff for different units in the facility especially for the specialized acute and residential units. Once again, SM, responded to the 30 day notice on January 15th, 2016 stating that it-believed it was in compliance with all previous CAPS and all regulatory standards, and that the issues identified by OHCA were isolated incidents and that it disagreed with OHCA interpretations of staffing requirements. OHCA responded on March 11th, 2016, informing SM that after reviewing the documentation provided and conducting a follow-up on-site review it was not going to proceed with termination, but rather was placing the and contracts on a CAP and again referenced and incorporated the previous notice and CAP on the contract. The CAP addressed without limitation: staffing requirements are unit specific and that staff members could not be dually counted in different units; there must be separate and distinct professional staff for both acute and residential units at all times and that staff could not be shared across units during the same shift hours; the required staffing ratios, including the specialized staff ratios and waking verse sleeping coverage requirements; RN staf?ng for acute units and that the RN assigned to an acute unit could not be cross-counted or utilized on any other unit; and any further non-compliance with rules, regulations, and/or the CAP would result in further action including contract termination. Subsequent to the above CAPS being imposed on SM for the and contracts, on November 18th, 2016 OHCA sent a notice of contract termination to SM for the contract for failure to comply with the CAP previously imposed on March 11th, 2016. All previous letters were incorporated by reference. Reasons for the termination included, but were not limited to, continued non-compliance with both the minimum staffing requirements found in O.A.C. 340:110?3?168 (OKDHS) and O.A.C. (OHCA) and federal and state rules and regulations regarding one RN per acute unit. OHCA speci?cally stated that it was only terminating the contract, but that OHCA was not precluded from taking further action should SM continue to fail to comply with state and federal requirements and the CAP requirements imposed by OHCA. OHCA also allowed for a seven day transition and relocation period of patients. 12. SM appealed the contract termination on December 6th, 2016. 13. The parties reached an agreement on December 215?, 2016 in which SM waived the appeal of the terminated contract and OHCA approved a new contract effective the same date. This contract was set to expire on August 315?, 2017. 14. After receiving reports from OKDHS that SM continued to be non?compliant in staffing requirements, among other non?compliance issues, OHCA participated in an on-site review with OKDHS on May 17th, 2017 wherein it was noted that two of the RNs assigned to acute units were not with the patients as required. 15. Taking the totality of the business relationship to date into account, and that despite repeated efforts to work with SM, OHCA decided that the business relationship had deteriorated to the point that the relationship and contracts should be terminated and, issued a 60 day no?cause termination notice to SM on June 2017 detailing that the contracts would terminate on July 315?, 2017. This is 30 days before the contracts were otherwise set to expire by their own terms on August 31?, 2017. Pursuant to 12 0.8. 426, I hereby state under penalty of perjury under the laws of Oklahoma that the foregoing is true and correct. QM Signature l/ Exhibit 4 AFFIDAVIT OF JENNIFER KING STATE OF OKLAHOMA ss. COUNTY OF OKLAHOMA 1, Jennifer King, being of lawful age and upon my own personal knowledge, state under oath as follows: 1. I am an employee of the Oklahoma Health Care Authority (OHCA), where I serve as the Director of the Behavioral Health Services Unit. As Director of the Behavioral Health Services Unit, I am generally aware of the history of the business relationship between OHCA and Shadow Mountain (SM) and participated in the decision to terminate SM with a 60 day no-cause termination notice. OHCA instituted a transition plan in order to assist SoonerCare members during the pendency of the 60 day contract termination notice period. As part of this transition plan, OHCA began reviewing the patient records of all SoonerCare members who were inpatient at SM on the day of the notice in order to determine the potential length of remaining treatment required. If it appeared that the member?s treatment could be completed prior to the expiration of the 60 day notice period, then OHCA made a decision to allow the member to complete the treatment at SM and those services are reimbursable by SoonerCare. If it appeared that the member?s treatment could not be completed prior to the expiration of the 60 day notice period, then OHCA attempted to find other inpatient placement for the member at another facility so that the member could be transferred and continue receiving treatment at a facility other than SM. Throughout the transition period, OHCA has been in touch with parents/guardians of its members to discuss options including alternative placement, dependent upon each child?s individual progress and needs and the expressed desires of his/her parents/ guardians. . Also as part of the transition plan, OHCA made the decision to deny any new admissions to SM after the date of the notice on June 2016. OHCA made this decision so that no other patients would need to be transferred to another facility during the middle of receiving treatment should the required treatment time exceed the 60 day notice period.' Patients who were denied admiSsion to SM could request to receive treatment at another facility which was contracted with OHCA and if the medical necessity requirement was met, these patients could then begin receiving treatment at another approved facility. . As of July 17th, 2017, all SoonerCare members who were patients on an acute unit at SM prior to June 15?, 2017 have been discharged. Any SoonerCare member who is still inpatient on an acute unit at SM was admitted by SM after June 2017 despite the prior authorization for treatment being denied by OHCA. . As of July 17th, 2017, only 19 SoonerCare members who were patients on a residential unit at SM prior to June 2017 remain. Any other SoonerCare members besides those 19 who are still inpatient on a residential unit at SM were admitted by SM after June 2017 despite the prior authorization for treatment being denied by OHCA. . Of the 97 members who were admitted to SM as of June 15?, 2017, 78 have thus far been either transferred or discharged. OHCA believes that most of the remaining 19 members will complete treatment and be discharged prior to the termination of the contract on July 315?, 2017 and is working to transfer to another contracted facility any member whose treatment will extend beyond July 31?, 2017. 8. During 2016, stays in acute units averaged six days in duration; stays in its residential treatment units averaged 27 days; and stays in its ?threshold? sex offender units averaged 144 days. 9. I have reviewed other contracted providers in or around the Tulsa metropolitan area and have determined that there is at least one other facility that offers acute care for adolescents and residential treatment for adolescents and children. There are other alternative facilities which provide ?threshold? services in the Oklahoma City and Fayetteville, Arkansas metropolitan areas. Pursuant to 12 0.3. 426, I hereby state under penalty of perjury under the laws of Oklahoma that the foregoing is true and correct. ?50117 0w 0% Dzite arid Place I CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing Response to Shadow Mountain?s Motion for Temporary Injunction and Cross-Motion to Dismiss the Petition was served by electronic mail and by US. mail, postage prepaid, this 20th day of July, 2017, on: Mark D. Spencer Anna E. Imose McAfee Taft, PC Two Leadership Square, 10th Floor 211 North Robinson Avenue Oklahoma City, OK 73102 mark.spencer@ mcafeetaftcom annaimose mcafeetaftcom l4 944va Joseph H. \Young