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Al-Khouri v. Oklahoma Health Care Authority

Court of Appeals of Oklahoma, Division III

September 29, 2017

HAISAM AL-KHOURI, M.D., Plaintiff/Appellee,
v.
OKLAHOMA HEALTH CARE AUTHORITY, and JOEL N. GOMEZ, in his capacity as Administrator of the Oklahoma Health Care Authority, Defendants/Appellants.

          Mandate Issued: 02/23/2018

         APPEAL FROM THE DISTRICT COURT OF OKLAHOMA COUNTY, OKLAHOMA HONORABLE DON ANDREWS, JUDGE

          Danny K. Shadid, RIGGS, ABNEY, NEAL, TURPEN ORBISON & LEWIS, Oklahoma City, Oklahoma, for Plaintiff/Appellee,

          Nicole M. Nantois, Joseph H. Young, Rebecca I. Burton, OKLAHOMA HEALTH CARE AUTHORITY, Oklahoma City, Oklahoma, for Defendants/Appellants.

          Kenneth L. Buettner, Chief Judge

         ¶1 Defendants/Appellants Oklahoma Health Care Authority and Joel N. Gomez, [1] in his capacity as Administrator of the Oklahoma Health Care Authority, (collectively, the OHCA) appeal from an order granting a temporary injunction prohibiting the OHCA from terminating Plaintiff/Appellee Haisam Al-Khouri, M.D.'s contract to provide health care services to SoonerCare (Medicaid) members. Dr. Al-Khouri sought declaratory relief that the administrative process for appealing the immediate termination of his SoonerCare provider agreement violated due process and injunctive relief prohibiting the OHCA from terminating his provider agreement. We hold the trial court abused its discretion by granting a temporary injunction. Dr. Al-Khouri does not have a property interest in continued participation in Medicaid programs and, therefore, has failed to demonstrate clear and convincing evidence of his likelihood of success on the merits of his due process claim. The temporary injunction is vacated and this case is reversed and remanded.

         ¶2 Dr. Al-Khouri is a licensed psychiatrist and has been a Medicaid provider in Oklahoma since 1993. In a letter dated September 23, 2016, the OHCA confirmed Dr. Al-Khouri's SoonerCare General Provider Agreement (Provider Agreement) had been received and updated. On November 29, 2016, the OHCA issued a letter immediately terminating Dr. Al-Khouri's Provider Agreement for multiple contract violations related to the quality of care provided to SoonerCare members, including failure to adhere to applicable professional standards and failure to adhere to the OHCA's patient medical record documentation requirements. The termination letter outlined the reasons for termination and that, based on those reasons, the OHCA was terminating Dr. Al-Khouri's contract immediately to protect the health and safety of its members. Dr. Al-Khouri did not appeal the termination of his contract pursuant to OAC 317: 2-1-12. [2] Rather, on December 16, 2016, Dr. Al-Khouri filed this lawsuit seeking injunctive and declaratory relief. Dr. Al-Khouri claims the recent changes to the OHCA's administrative procedures for reviewing the immediate termination of provider agreements, specifically OAC 317: 2-1-12, violate procedural due process protections afforded under the Fourteenth Amendment to the United States Constitution and Article II, § 7 of the Oklahoma Constitution and do not comply with Article II of Oklahoma's Administrative Procedures Act (APA), 75 O.S. §§ 308a-323. Dr. Al-Khouri argues the new rule provides only a "desk review" of the decision but that due process requires a full post-termination evidentiary hearing. The district court issued a temporary restraining order December 19, 2016, prohibiting the OHCA from terminating Dr. Al-Khouri's contract and temporarily reinstating him as a SoonerCare provider. The trial court held an evidentiary hearing December 28, 2016, took the matter under advisement, and extended the restraining order. On January 27, 2017, the trial court found the procedures provided in OAC 317: 2-1-12(2) violated due process and granted Dr. Al-Khouri's application for a temporary injunction. The trial court also found the OHCA was subject to Article II of the APA and that Dr. Al-Khouri was entitled to minimum due process, including a full post-termination evidentiary hearing. The OHCA appeals. [3]

         ¶3 Matters involving the grant or denial of injunctive relief are of equitable concern. Dowell v. Pletcher, 2013 OK 50, ¶ 5, 304 P.3d 457. A judgment issuing or refusing to issue an injunction will not be disturbed on appeal unless the lower court has abused its discretion or the decision is clearly against the weight of the evidence. Id. This Court will consider all the evidence on appeal to determine whether the trial court's grant of a temporary injunction was an abuse of discretion. See id.

         ¶4 The grounds for issuing a temporary injunction are: (1) the likelihood of success on the merits, (2) irreparable harm to the party seeking injunctive relief if relief is denied, (3) relative effect on the other interested parties, and (4) public policy concerns arising out of the issuance of injunctive relief. See Daffin v. State of Okla. ex rel., Okla. Dep't of Mines, 2011 OK 22, ¶ 7, 251 P.3d 741. The need for an injunction must be shown by clear and convincing evidence, and the nature of the injury must not be speculative in nature. Id.

         ¶5 The OHCA contends Dr. Al-Khouri failed to prove by clear and convincing evidence his likelihood of success on the merits of his due process claim and, therefore, a temporary injunction was unwarranted. "[A] procedural due process challenge first requires the existence of either a fundamental right or a constitutionally protected 'property or liberty' interest." Ross v. Peters, 1993 OK 8, ¶ 24, 846 P.2d 1107; see Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 569-71 (1972); The OHCA argues Dr. Al-Khouri does not have a protected property interest in continued participation in Medicaid programs and, therefore, he is not entitled to due process.

         ¶6 In his appellate brief, Dr. Al-Khouri does not respond to or cite any authority rebutting the OHCA's primary argument that he did not have a protected property interest and, therefore, did not demonstrate a likelihood of success on the merits. However, in his Petition, Dr. Al-Khouri claims that, based on the terms of the Provider Agreement and his long-time participation as a Medicaid provider, he had a reasonable expectation of continued participation in Oklahoma's Medicaid programs. Dr. Al-Khouri asserts that this reasonable expectation of continued participation in the Medicaid programs constitutes a protected property interest, thereby implicating due process. While the trial court in this case found OAC 317: 2-1-12 violates due process, it did not make specific findings of fact as to whether Dr. Al-Khouri had a protected property or liberty interest or as to his likelihood of success on the merits of his due process claim. [4] Whether a provider has a property interest in continued participation in Medicaid programs is an issue of first impression in Oklahoma.

         ¶7 Procedural due process applies only to property and liberty interests protected by state or federal constitutions. [5] See Board of Regents of State Colleges v. Roth, 408 U.S. 564, 569-71 (1972). To determine whether due process requirements apply, we must look to the nature of the interest at stake. See id. at 570-71.

To have a property interest in a benefit, 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 it.
Property interests, of course, are not created by the Constitution. Rather they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law--rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.

Id. at 577. A protected property interest must be based on an independent source such as a law, rule, or mutually explicit understanding. See Koerpel v. Heckler, 797 F.2d 858, 864 (10th Cir. 1986). Dr. Al-Khouri has not identified any state statute or regulation creating such a property interest. Rather, he points to the terms of the Provider Agreement and his long-time participation in the Medicaid program as the sources of his property interest. Dr. Al-Khouri ...


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