Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Maine Department of Health and Human Services v. Getchell Agency

United States District Court, D. Maine

April 17, 2018

MAINE DEPARTMENT OF HEALTH AND HUMAN SERVICES, Plaintiff,
v.
THE GETCHELL AGENCY, et al., Defendant.

          ORDER DENYING LEAVE TO APPEAL

          JOHN A. WOODCOCK, JR. UNITED STATES DISTRICT JUDGE

         A creditor state governmental agency seeks leave to appeal the Bankruptcy Judge's interlocutory order confirming that the automatic stay applies to the agency's effort to terminate the debtor's Medicaid provider agreement. The Bankruptcy Judge addressed two issues: (1) whether the Bankruptcy Court has jurisdiction over any challenge to the termination of the provider agreements, and (2) whether the automatic stay applies because the provider agreements are not “property of the estate” under 11 U.S.C. § 362(a)(3). The Court concludes that these issues do not warrant interlocutory appeal.

         I. FACTUAL AND LEGAL BACKGROUND

         The Getchell Agency (Getchell) is a small healthcare business located in Bangor, Maine. The Maine Department of Health and Human Services (MDHHS) is the state agency that administers the state's Medicaid program, also called MaineCare. Getchell operates under two executed MaineCare provider agreements, dated March 5, 2010 and March 9, 2010. Stipulations ¶ 4 (Bankr. ECF No. 609). Through the provider agreements, Getchell provides residential and support services to individuals with physical, emotional, and intellectual disabilities. Id. ¶ 6. The number of Getchell's clients typically fluctuates between sixty-five and seventy. Id. ¶ 7.

         Around August 19, 2013, MDHHS conducted an audit on Getchell's premises, after which MDHHS's Program Integrity Unit determined that Getchell violated MaineCare rules in its provision and documentation of services. Id. ¶ 8. On September 11, 2015, MDHHS issued a Notice of Violation seeking to recoup MaineCare overpayments totaling roughly $1.04 million, and issued a Final Informal Review Decision affirming the conclusion on January 11, 2016. Id. ¶¶ 11-12. Getchell timely appealed that decision. Id. ¶ 13.

         On March 25, 2016, Getchell filed a voluntary Chapter 11 bankruptcy petition. Voluntary Petition for Non-Individuals Filing for Bankruptcy (Bankr. ECF No. 1). As a result, the administrative process was automatically stayed. Stipulations ¶ 13. On July 12, 2016, MDHHS filed a claim for the roughly $1.04 million it had determined it overpaid Getchell for MaineCare services. Id. ¶ 14; Proof of Claim (Bankr. Claim No. 28-1).

         The relevant automatic stay provisions of the bankruptcy code block (1) “the commencement or continuation, including . . . administrative . . . proceeding[s] against the debtor that was or could have been commenced before the commencement of the case . . ., ” 11 U.S.C. § 362(a)(1), and (2) “any act to obtain possession of property of the estate . . . or to exercise control over property of the estate.” Id. § 362(a)(3). There is an exception, however, for “an action or proceeding by a government unit . . . to enforce such governmental unit's . . . police and regulatory power . . . .” Id. § 362(b)(4).

         On April 21, 2017, MDHHS asked the Bankruptcy Court to declare that “the automatic stay would not apply to its efforts to terminate Debtor [Getchell] from participation in [MaineCare].” MDHHS' Mot. for an Order Confirming that the Automatic Stay does not Apply (Bankr. ECF No. 565) (Pl.'s Stay Mot.). On May 30, 2017, Getchell filed a response. The Getchell Agency's Objection to Mot. for for [sic] an Order Confirming that the Automatic Stay does not Apply (Bankr. ECF No. 599) (Def.'s Stay Opp'n). The parties addressed three issues: (1) whether the Bankruptcy Court has jurisdiction over any challenge to MDHHS's termination of the provider agreements; (2) whether the automatic stay applies because the provider agreements are not “property of the estate” under 11 U.S.C. § 362(a)(3); and (3) whether MDHHS' decision to terminate the provider agreements satisfies the automatic stay exception for police and regulatory powers under § 362(b)(4). Pl.'s Stay Mot. at 2; Def.'s Stay Opp'n at 1-2.

         On May 30, 2017, the Bankruptcy Judge scheduled a hearing and the parties agreed to bifurcate the proceeding to consider only the first two questions, preserving the third issue. Scheduling Order Relating to: Plan Confirmation and Mot. of State of Maine Department of Health and Human Services for Order Determining that the Automatic Stay is not Applicable (Bankr. ECF No. 601). On June 22, 2017, the Bankruptcy Judge held the hearing and ruled against MDHHS on the first two questions. Min. Entry (Bankr. ECF No. 625).

         This appeal followed with MDHHS' notice of appeal and motion for leave to appeal on June 30, 2017. Maine Department of Health and Human Services' Notice of Appeal and Statement of Election (ECF No. 1) (Bankr. ECF No. 638); Maine Department of Health and Human Services' Mot. for Leave to Appeal (ECF No. 4) (Bank. ECF No. 639) (Pl.'s Appeal Mot.). On August 14, 2017, Getchell filed a response. The Getchell Agency's Obj. to Maine Department of Health and Human Services' Mot. for Leave to Appeal (ECF No. 5) (Bankr. ECF No. 664) (Def.'s Appeal Opp'n).

         II. THE PARTIES' POSITIONS

         A. MDHHS' Motion for Leave to Appeal

         MDHHS asserts that the Bankruptcy Judge erred regarding the jurisdictional question because it believes it has the discretion to terminate Medicaid provider agreements and such a decision constitutes non-final agency action beyond the reach of the Bankruptcy Court. Pl.'s Appeal Mot. at 3-4 (citing Board of Governors of the Federal Reserve System v. MCorp Financial, Inc., 502 U.S. 32, 41 (1991)). MDHHS contends that termination actions are non-final because providers may appeal that decision through its administrative process. Id.

         MDHHS claims the Bankruptcy Judge erred regarding the second question about “property of the estate” because it believes, “Getchell has no protectable property interest in the MaineCare Provider Agreements.” Id. at 4. MDHHS maintains that there is no property interest because “[a] state may discontinue its participation in Medicaid - or any of the particular Medicaid services provided . . . .” Id. MDHHS ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.