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River Nile Invalid Coach and Ambulance, Inc. v. Velez

March 9, 2009

RIVER NILE INVALID COACH AND AMBULANCE, INC., PLAINTIFF,
v.
JENNIFER VELEZ, ESQ., AS COMMISSIONER, NEW JERSEY DEPARTMENT OF HUMAN SERVICES, AND JOHN GUHL, AS DIRECTOR, NEW JERSEY DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, AND DAVID ROUSSEAU, AS TREASURER, NEW JERSEY DEPARTMENT OF THE TREASURY, AND JOHN V. NIAMAN, JR., AS DIRECTOR, DIVISION OF PURCHASE AND PROPERTY, DEFENDANTS.



The opinion of the court was delivered by: Debevoise, Senior District Judge

FOR PUBLICATION

OPINION

On December 1, 2008, plaintiff River Nile Invalid Coach and Ambulance, Inc. ("River Nile") filed a verified complaint in support of an order to show cause and for preliminary injunctive relief against Jennifer Velez, Esq., as Commissioner of the New Jersey Department of Human Services ("DHS"); John Guhl, as director of the New Jersey Division of Medical Assistance and Health Services ("DMAHS"); David Rousseau, as Treasurer of the New Jersey Department of the Treasury ("Treasury"); and John Naiman, Jr., as director of the Division of Purchase and Property ("DPP") (collectively, the "Defendants"). River Nile seeks an injunction to prevent Defendants from awarding a contract to an independent broker for non-emergency medical transportation ("NEMT") services pursuant to a request for proposal issued in April 2008 by Treasury. The court issued the order to show cause and held a hearing on December 15, 2008. At the hearing, the Defendants agreed to provide River Nile with written notice ten days prior to awarding a contract pursuant to the request for proposal. On December 1, 2008, an unsuccessful bidder filed a protest that is pending before the DPP, so the award of the contract has been delayed. River Nile now moves for summary judgment and the Defendants cross move for summary judgment. For the reasons set forth below, River Nile's motion will be denied and the Defendants' motion will be granted.

I. BACKGROUND

A. The Parties

DHS includes and oversees the operation of DMAHS, which is a division within DHS.

The New Jersey State Department of Health and Senior Services ("HSS") is the state agency responsible for overseeing and regulating the licensing and operation of, among others, providers of medical transportation services in New Jersey. DHS is the state agency responsible for DMAHS, the designated state Medicaid agency for New Jersey. DMAHS is the state agency responsible for implementing and managing the Medicaid program, in which licensed providers of medical transportation services participate to provide medical transportation services that are statutorily mandated in New Jersey to Medicaid beneficiaries.

River Nile is an ambulance coach service with its principal place of business in East Orange, New Jersey. River Nile is authorized to provide at least two types of transportation services:

(1) ground ambulance transportation services, which are non-emergency medical transportation services, in a vehicle that is licensed, equipped, and staffed in accordance with New Jersey State Department of Health and Senior Services rules, as specified in N.J.A.C. 8:40; and

(2) mobility assistance vehicle ("MAV") services, which are non-emergency health care transportation services, in a vehicle that is licensed, equipped, and staffed in accordance with New Jersey State Department of Health and Senior Services Rules to provide non-emergency health care transportation as specified in N.J.A.C. 8:40 & 41 by certified trained personnel, for sick, infirm or otherwise disabled individuals, who are non-ambulatory or require such assistance and are under the care and supervision of a physician, and whose medical condition is not of sufficient magnitude or gravity to require transportation by ambulance, but whose medical condition requires transportation door-to-door for medical care.

River Nile has a "provider agreement" with DMAHS, which was signed on June 3, 2004 by Ibrahim Ahmed, President of River Nile. The agreement contains the following termination provision: "The provider or DMAHS may, on 60 days written notice to the Division, terminate this Agreement without cause."

B. Medicaid

Medicaid is a federally-created, state-implemented program designed, in broad terms, to afford access to necessary medical care to those who otherwise cannot afford it. See 42 U.S.C. § 1396, et seq. (the "Medicaid Statute"). The program "was created to provide medical assistance to the poor at the expense of the public." Mistrick v. Div. of Med. Assistance & Health Servs., 154 N.J. 158, 165 (1998) (citing Atkins v. Rivera, 477 U.S. 154, 156 (1986)). It is an "optional cooperative program in which '[t]he Federal Government shares the costs . . . with States that elect to participate in the program.'" Id. at 165-66, 188 (quoting Atkins, 477 U.S. at 156-57). States that participate "are required to comply with Title XIX of the Social Security Act, and the regulations adopted by the Secretary of Health and Human Services." Id. at 166 (citing Atkins, 477 U.S. at 157). New Jersey has elected to participate in the program by enacting the Medical Assistance and Health Services Act, N.J.S.A. 30:4D-1 to -19.5.

The Commissioner of DHS is granted the authority to do or cause to be done all things necessary to secure the maximum benefits under the Medicaid program for the State of New Jersey, "to the extent authorized by the medical assistance program plan." N.J.S.A. 30:4D-7. This authority is granted with the general requirement that it be carried out "consistent with fiscal responsibility and within the limits of funds available for any fiscal year," and includes the ability to enter into contracts to carry out the provisions of the Medicaid act. Id. Further, the State must develop and employ methods and procedures regarding the utilization of, and the payment for, care and services available under Medicaid as necessary to safeguard against unnecessary utilization of such care and services and "to assure that payments are consistent with efficiency, economy, and quality of care." 42 U.S.C. § 1396a(a)(30); N.J.S.A. 30:4D-12.

C. NEMT Brokerage Programs

Under the provisions of the federal Deficit Reduction Act of 2005, States are authorized to establish an NEMT brokerage program for beneficiaries who need access to medical care but have no other means of transportation. States that adopt a brokerage program may contract with a broker who, among other things,

(i) is selected through a competitive bidding process based on the State's evaluation of the broker's experience, performance, references, resources, qualifications, and costs;

(ii) has oversight procedures to monitor beneficiary access and complaints and ensure that transport personnel are licensed, qualified, competent, and courteous; [and]

(iii) is subject to regular auditing and oversight by the State in order to ensure the quality of the transportation services provided and the adequacy of beneficiary access to medical care and services.

42 U.S.C. § 1396a(a)(70)(B)(i)-(iii). The Centers for Medicaid and Medicare Services ("CMS"), within the U.S. Department of Health and Human Services, recently promulgated rules regarding the NEMT brokerage programs, which provide:

At the option of the State, . . . a State plan may provide for the establishment of a non-emergency medical transportation brokerage program in order to more cost-effectively provide non-emergency medical transportation services for individuals eligible for medical assistance under the State plan who need access to medical care or services, and have no other means of transportation . . . .

(i) Non-emergency medical transportation services may be provided under contract with individuals or entities that ...


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