Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 1 of 11 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

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1 Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 1 of 11 PROVIDENT CARE MANAGEMENT, LLC, vs. Plaintiff, WELLCARE HEALTH PLANS, INC., CAREPOINT PARTNERS, LLC, and BIOSCRIP, INC. Defendants. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA ORDER ON MOTION TO REMAND THIS CAUSE is before the Court upon Plaintiff s Motion to Remand, ECF No. [17] (the Motion ), asking the Court to remand the proceedings to the Seventeenth Judicial Circuit in and for Broward County, Florida. The Court has carefully reviewed the Motion, the record, all supporting and opposing filings, the exhibits attached thereto, and is otherwise fully advised. For the reasons that follow, the Motion is granted. I. BACKGROUND Plaintiff, Provident Care Management, LLC ( Plaintiff ), originally filed this action in the Seventeenth Judicial Circuit in and for Broward County, Florida. See ECF No. [1-2]. According to the Amended Complaint, Provident provides Medicare-approved case management services, such as directing and managing home nursing care to approved Medicare patients. Id. at 12. Defendant, WellCare Health Plans, Inc. ( WellCare ), is a Medicare Advantage Organization ( MAO ) that provides health care services to its members through a prepaid Medicare plan and receives funds from the United States government for the provision of such

2 Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 2 of 11 services. Id. at The Amended Complaint alleges that WellCare, in turn, enters into contracts either directly with providers, such as Provident, or through intermediary entities, such as Defendants CarePoint Partners, LLC ( CarePoint ) or BioScrip, Inc. ( BioScrip ), to provide services for its enrolled members at contracted rates. Id. at 17. As it relates to Provident, the Amended Complaint alleges it is a case management provider that arranged for and managed home and non-hospital nursing care for WellCare s enrollees in accordance with their Medicare benefits. Id. at 18. In addition, Provident alleges that BioScrip provided pharmaceutical and infusion equipment in connection with home care services for WellCare s enrollees and that Provident provided the qualified nurses for such services. Id. at 20. Provident and all three Defendants allegedly agreed to a continuous series of volume discount contracts under which WellCare received a discount from Provident s billed charges for services provided to its enrollees. Id. at 25 and 26. WellCare purportedly accepted these agreements by permitting, authorizing, approving, or enabling its enrollees from receiving medical services provided through Provident and by failing to prevent or prohibit its enrollees from receiving such services. Id. at 27. As part of this agreement, Provident states that WellCare agreed to pay the charges at the contract rates within thirty-five days of submission of a claim. Id. at 34. However, WellCare allegedly failed to pay Provident for the services within the appropriate time period and has reduced, delayed, and ignored claims submitted for health care services. 1 Id. at 39. Based on these facts, Provident asserts claims for breach of impliedin-fact contract, open account, unjust enrichment, and unfair and deceptive trade practices against WellCare. 1 Although Plaintiff also makes claims against CarePoint and BioScrip, the Court s analysis here focuses on the claims against Wellcare as the removing party asserting federal officer jurisdiction. 2

3 Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 3 of 11 On August 5, 2016, WellCare removed the lawsuit to this Court invoking federal officer jurisdiction as the basis for removal. See ECF No. [1]. Shortly thereafter, Plaintiff filed the instant Motion seeking remand to state court as well as attorneys fees and costs for an improper removal. See ECF No. [17]. WellCare filed a Response and Plaintiff filed a Reply. See ECF Nos. [24] and [27]. 2 WellCare then sought leave to file a Sur-Reply, which was granted, and also filed a Notice of Supplemental Authority. See ECF Nos. [29], [33], [35], and [36]. The Court has considered all of the parties filings and the Motion is now ripe for review. 3 II. LEGAL STANDARD Although [r]emoval is a matter of federal right, on a motion to remand, ambiguities are generally construed against removal. Butler v. Polk, 592 F.2d 1293, 1296 (5th Cir. 1979) 4. In this case, WellCare removed this lawsuit on the basis of federal officer jurisdiction. See ECF No. [1]. A state-court action against any person acting under the direction of an officer of the United States or its agencies can be removed to federal court pursuant to 1442(a)(1). Marley v. Elliot Turbomachinery Co., Inc., 545 F. Supp. 2d 1266, 1271 (S.D. Fla. 2008). Even where federal jurisdiction may not be apparent within the four corners of a complaint, Congress has provided 1442(a)(1) as means for a federal court to hear cases where federal officials must 2 CarePoint and BioScrip filed a Memorandum in Opposition to Plaintiff s Motion for Remand in which they joined in the argument made by WellCare. See ECF No. [25]. Plaintiff filed a Reply in which it incorporated all arguments made in response to WellCare s Reply and argued that CarePoint and BioScrip lack standing to join in WellCare s opposition. See ECF No. [28]. 3 This case was originally pending before the Honorable William T. Zloch. On January 11, 2018, Judge Zloch entered an Order of Recusal and this case was then randomly assigned to the undersigned judge pursuant to 28 U.S.C In Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc), the Eleventh Circuit Court of Appeals adopted as precedent all decisions issued by the former Fifth Circuit Court of Appeals prior to October 1,

4 Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 4 of 11 raise defenses arising from their official duties. Id. at 1271 (quoting Magnin v. Teledyne Cont l Motors, 91 F.3d 1424, 1427 (11th Cir. 1996)). A private party seeking to remove under the federal officer removal statute must satisfy four criteria: (1) it must be a person; (ii) it must be acting under a federal officer or agency, (iii) it must be sued for actions under color of such office; and (iv) it must have a colorable federal defense. Assocs. Rehab. Recovery, Inc. v. Humana Med. Plan, Inc., 76 F. Supp. 3d 1388, 1391 (S.D. Fla. 2014). See also Einhorn v. CarePlus Health Plans, Inc., 43 F. Supp. 3d 1268, (S.D. Fla. 2014) (stating that a defendant asserting federal officer removal must advance a colorable defense arising out of [its] duty to enforce federal law and must establish that there is a causal connection between what the officer has done under asserted official authority and the action against him. ) (internal citations omitted). With these factors in mind, the Court must determine whether it has subject-matter jurisdiction over Plaintiff s claims. III. DISCUSSION Provident contests the existence of federal officer jurisdiction and consequently the existence of subject-matter jurisdiction over Plaintiff s claims. Although it agrees that WellCare is a person for purposes of federal officer removal, Provident challenges WellCare s ability to satisfy the remaining three factors: (a) whether WellCare was acting under the direction of a federal agency or officer, (b) whether there is a causal nexus between the actions taken under color of such office and Plaintiff s claims, and (c) whether WellCare asserts any colorable federal defenses. Because the Court finds that WellCare cannot demonstrate a causal nexus between its actions as an MAO and the claims asserted in the Amended Complaint, the Court 4

5 Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 5 of 11 concludes that it lacks jurisdiction over Plaintiff s claims, requiring remand of this lawsuit to state court. 5 Under Medicare Part C, MAOs, such as WellCare, contract with the Centers for Medicare & Medicaid Services ( CMS ), responsible for administering Medicare, to provide medical services for Medicare enrollees. Tenet Healthsystem GB, Inc. v. Care Improvement Plus South Central Ins. Co., 875 F. 3d 584, 586 (11th Cir. 2017). CMS pays the MAO a pre-negotiated lump sum per enrollee for each year of enrollment and the MAO, in turn, assumes the financial risk of treating enrollees. Id. Under Medicare Part C, the MAOs provide enrollees all programs offered under Medicare Parts A and B with additional benefits. Id. To provide such services to enrollees, MAOs pay third-party healthcare providers in one of two ways: (1) the MAO enters into an express, written contract with the provider in which it agrees to pay specific rates for specific categories of treatment, known as contract providers, or (2) an out-of-network provider provides treatment to an enrollee and then seeks reimbursement from the MAO on a later date, known as noncontract providers. Id. at In the case of contract providers, the Medicare Act allows an MAO to enter into such agreements and imposes few limitations. Id. at 587. When determining whether a provider s claim falls within the scope of the Medicare Act for purposes of exhausting administrative remedies, the Eleventh Circuit recently drew a critical distinction between contract providers and non-contract providers that is significant for purposes of the Court s analysis. Id. at 590. The Eleventh Circuit stated that Medicare regulations treat noncontract providers differently than contract providers by allowing contract providers and MAOs to define the terms of their own agreements without reference to the 5 The Court is aware that Wellcare asserts the federal defenses of failure to exhaust administrative remedies and preemption. In this Order, the Court makes no determination as to the applicability of either defense to this action. Such a decision will be up to the presiding state court judge at the appropriate time. 5

6 Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 6 of 11 Medicare regulations. Id. at 591. As a result, a contract provider s claims are determined entirely by reference to the written contract, not the Medicare Act. Id. at 591. See also Rencare, Ltd. v. Humana Health Plan of Tx., 395 F.3d 555, 559 (5th Cir. 2004) (holding that because the MAO chose to fulfill its obligations to its enrollees by entering into a contract with a provider, which extinguished the government s risk, any dispute was pursuant to a contract between private parties and did not involve a claim for Medicare benefits); American Health Supply, Inc. v. Care Improvement Plus of Md., No CIV-GRAHAM/LYNCH, 2014 WL , at *4 (S.D. Fla. March 26, 2014) (finding that claim did not fall within the scope of the Medicare Act because there was a contract between the provider and the MAO for the provision of durable medical equipment to its enrollees; therefore, the provider was seeking payment only from the MAO and the federal government had no financial interest in the dispute). On the other hand, under Medicare regulations, noncontract providers cannot charge more than Medicare reimbursement rates, and thus may not assert higher independent contracted rates. Tenet Healthsystem, 875 F. 3d at 591. Under this scenario, the only viable claim a noncontract provider can pursue is its right to recover the same reimbursement an enrollee is entitled to receive under the Medicare Act. Id. at 590. The Court finds this distinction equally significant in the context of federal officer removal and the parties here do not dispute that a distinction should be drawn between contract providers and noncontract providers. In fact, the parties dispute centers on whether Provident should be considered a contract or noncontract provider. For example, WellCare argues that without a contract between Provident and WellCare establishing rates, Provident is a noncontracting provider and, if Provident were found to be entitled to payment for services it provided to WellCare Medicare Advantage plan subscribers, such payment would be limited to 6

7 Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 7 of 11 what Provident would collect if the patient were enrolled in the original Medicare fee-for-service program. ECF No. [24] at 5-6. In support of this argument, WellCare relies on a series of cases where there was no contractual relationship between the provider and the MAO and the courts ultimately found the claims arose under the Medicare Act. See Tenet Healthsystem GB, Inc. v. Care Improvement Plus South Central Ins. Co., 162 F. Supp. 3d 1307, (N.D. Ga. Feb. 11, 2016) ( The Medicare Act requires MA plans to cover emergency services provided by non-contracted providers, like Plaintiffs. ); James Voglino, M.D., P.A. v. HealthOptions, Inc., Case No CIV-MORENO ( Plaintiff is a non-contracting health care provider. ); Torrent & Ramos, M.D., P.A. v. Neighborhood Health P ships, Case No CIV-HUCK/TURNOFF (Plaintiff admits that it has no written contract with NHP, but claims that a contract implied-inlaw for emergency services provided for over one hundred thousand submitted claims exists... ). 6 Conversely, Provident argues that it was either a contracting provider or a deemedcontracting provider and relies upon cases where the provider had a contract with the MAO to argue that no basis for federal officer jurisdiction exists. See Baptist Hospital of Miami, Inc. v. Humana Health Inc., No. 1:15-cv UU, 2015 WL , *5 (S.D. Fla. Aug. 19, 2015) (finding no federal officer removal jurisdiction when the provider sued for Humana s failure to pay rates negotiated in the Hospital Participation Agreement); Rencare, 395 F.3d at 559; Kennedy v. HealthOptions, Inc., 329 F. Supp. 2d 1314 (S.D. Fla. 2004) ( The contractual 6 The Court recognizes that Wellcare also relied upon Assoc. Rehab. Recovery, Inc., which found that federal officer removal jurisdiction existed despite the existence of a contract between the provider and the MAO. 76 F. Supp. 3d at Unlike this case, there was no motion for remand briefed. The district court only had the benefit of the notice of removal at the time it sua sponte reviewed the basis for jurisdiction before addressing the merits of a motion to dismiss. In addition, when the district court analyzed whether administrative remedies should be exhausted under the Medicare Act despite the existence of a contract, the district court did not have the benefit of the Eleventh Circuit s recent published decision in Tenet Healthsystem GB, Inc. in which it explained that a contract provider s claims are not determined by reference to the Medicare Act. 875 F.3d at

8 Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 8 of 11 relationship between intermediaries and the Health Care Financing Administration does not in itself constitute the direct and detailed control that is required to assert federal jurisdiction. Accordingly, removal of this action pursuant to 28 U.S.C. 1442(a)(1) is not proper ) (internal citations omitted). Thus, the Court must determine Provident s status vis-à-vis WellCare to analyze whether the claims arise under a contract or under the Medicare Act. In its Reply, Provident contends that it is either a direct-contracting provider or a deemed-contracting provider. See ECF No. [27] at 4-5. Within the category of direct-contracting provider, Provident argues that it also qualifies for a subcategory of direct-contracting provider, known as a downstream entity. Id. In its Sur- Reply, WellCare takes the position that Provident qualifies as neither a direct nor a deemedcontracting provider and is instead a noncontracting provider. See ECF No. [36]. The Medicare Managed Care Manual defines all of these terms. A provider is a directcontracting provider if the provider has a signed contract or agreement with a PFFS [Private Feefor-Service] plan to deliver covered services to a plan s members also known as network providers. See Medicare Managed Care Manual ( Manual ), Chapter 16a, 40.1, available at IOMs-Items/CMS html?DLPage=1&DLEntries=50&DLSort=0&DLSortDir=ascending (last visited Jan. 31, 2018). Within the category of direct-contracting provider, the Court notes that there are first-tier entities and downstream entities. A first-tier entity means any party that enters into a written arrangement with an MA organization or contract applicant to provide administrative services or health care services for a Medicare eligible individual. Id. at Chapter 11, 10. A downstream entity means any party that enters into an acceptable written arrangement below the level of the arrangement between an MA organization (and contract 8

9 Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 9 of 11 applicant) and a first tier entity. These written arrangements continue down to the level of the ultimate provider of health and/or administrative services. Id. Although Provident attempts to fit itself into the first-tier entity definition when it argues it is a direct-contracting provider, it cannot qualify as such because it did not have a written contract with WellCare. See ECF No at 5. Instead, an affiliated entity, InfusionTech, entered into an Ancillary Provider Agreement with WellCare for services for Medicare enrollees. Id. Provident instead states that it was the provider of all home and ancillary services that were provided pursuant to and under these Agreements. Id. at 6. However, without a written contract, this is simply insufficient to be considered a first-tier entity. Provident alternatively argues that it is a downstream-contracted provider because it entered into an acceptable written contract with InfusionTech (and later CarePoint and BioScrip) who had an agreement with WellCare to provide administrative services or health care services for a Medicare eligible individual. Id. at 10. As evidence of one such contract, Provident directs the Court to the contract between Provident and BioScrip attached to the Amended Complaint as Exhibit A. Id. Significantly, WellCare s Sur-Reply recognizes this argument but fails to address its merits. WellCare does not challenge that Provident had a written contract with InfusionTech and later CarePoint and BioScrip. In fact, the Amended Complaint specifically alleges that CarePoint and BioScrip had contracts with WellCare for the provision of pharmaceutical and infusion equipment in connection with home care services to WellCare s Medicare enrollees, which required administration by qualified nurses provided by Provident. See ECF No. [1-2] at Provident s unchallenged argument, which is supported by the affidavit of Lori Kobetz and Exhibit A to the Amended Complaint, leads this Court to conclude that Provident was indeed a downstream-contracting entity. While it may not have had a written 9

10 Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 10 of 11 contract with WellCare, it had a contract with InfusionTech, Carepoint and BioScript all of which had contracts with WellCare to provide services for Medicare enrollees. As a downstream entity, the written arrangements continue down to the level of the ultimate provider of health and/or administrative services, in this case Provident. See Manual at Chapter 11, 10. See also Christus Health Gulf Coast v. Aetna, Inc., 237 S.W.3d 338, 344 (Tex. 2007) (finding that breach of contract claim filed by hospital that was a downstream contracting provider did not arise under the Medicare Act). As a downstream entity, Provident is a direct-contracting provider and its claims do not arise under the Medicare Act. 7 Because Provident s claims against WellCare arise out of a contractual relationship, there is no causal nexus between WellCare s actions under color of federal office and Plaintiff s claims. Without such a nexus, this Court lacks subject matter jurisdiction, requiring the remand of this case to the Seventeenth Judicial Circuit in and for Broward County, Florida. In addition to remand, the Motion seeks recovery of attorneys fees and costs pursuant to 28 U.S.C. 1447(c), which states: An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal. Such an award is within the discretion of the district court and should not be ordinarily granted any time an effort to remove a case fails. See Kennedy, 329 F. Supp. 2d at Here, the Court finds that WellCare made an objectively reasonable decision when it attempted to remove this action as there is no binding precedent directly on point. As a result, Plaintiff s request for attorneys fees and costs is denied. 7 Although the parties also dispute whether Provident is a deemed-contracting provider, the Court need not decide that issue as it has already determined that Provident is a downstream direct-contracting provider. 10

11 Case 0:16-cv BB Document 48 Entered on FLSD Docket 02/01/2018 Page 11 of 11 IV. CONCLUSION For the foregoing reasons, it is ORDERED AND ADJUDGED as follows: 1. Plaintiff s Motion to Remand, ECF No. [17], is GRANTED in part and DENIED in part. 2. The case is REMANDED to the Seventeenth Judicial Circuit in and for Broward County, Florida. 3. Plaintiff s request for attorneys fees and costs is DENIED. 4. The Clerk of Court is directed to CLOSE this case. 5. All pending motions in this matter are DENIED AS MOOT. DONE AND ORDERED in Miami, Florida, this 31st day of January, Copies to: BETH BLOOM UNITED STATES DISTRICT JUDGE Counsel of Record 11