Samantha Burgess, Alyssa Skeens, George Grover, Jessica Halstead, and Sunshine Holstein v. West Virginia Department of Human Services, Bureau of Medical Services, and Holistic, Inc. v. West Virginia Department of Human Services, Bureau for Medical Services

IN THE INTERMEDIATE COURT OF APPEALS OF WEST VIRGINIA

FILED
Spring 2024 Term
June 12, 2024
_____________________ released at 3:00 p.m.
ASHLEY N. DEEM, DEPUTY CLERK
INTERMEDIATE COURT OF APPEALS
No. 23-ICA-11 OF WEST VIRGINIA
No. 23-ICA-39
_____________________

SAMANTHA BURGESS, ALYSSA SKEENS, GEORGE GROVER,
JESSICA HALSTEAD, and SUNSHINE HOLSTEIN,
Petitioners Below, Petitioners,

v.

WEST VIRGINIA DEPARTMENT OF HUMAN SERVICES,
BUREAU FOR MEDICAL SERVICES,
Respondent Below, Respondent.

And

HOLISTIC, INC.,
Petitioner Below, Petitioner,

v.

WEST VIRGINIA DEPARTMENT OF HUMAN SERVICES,
BUREAU FOR MEDICAL SERVICES,
Defendant Below, Respondent.

___________________________________________________________

Appeal from the West Virginia Department of Human Services,
Bureau for Medical Services

AFFIRMED, in part, and REMANDED, in part, with INSTRUCTIONS
_________________________________________________________

Submitted: February 7, 2024
Filed: June 12, 2024
William D. Wilmoth, Esq. Patrick Morrisey, Esq.
Justin M. Wilson, Esq. Attorney General
Steptoe & Johnson, PLLC Brent Wolfinbarger, Esq.
Wheeling, West Virginia Senior Deputy Attorney General
Counsel for Individual Petitioners Gary L. Michels, Esq.
Assistant Attorney General
J. Zak Ritchie, Esq. Michael R. Williams, Esq.
Isaac R. Forman, Esq. Principal Deputy Solicitor General
Skyler A. Matthews, Esq. Spencer J. Davenport, Esq.
Hissam Forman Donovan Ritchie Assistant Solicitor General
PLLC Charleston, West Virginia
Charleston, West Virginia Counsel for Respondent
Counsel for Petitioner, Holistic

JUDGE GREEAR delivered the Opinion of the Court.
CHIEF JUDGE SCARR concurs, in part, and dissents, in part, and reserves the right to file
a separate opinion.
GREEAR, JUDGE:

Petitioners Samantha Burgess, Alyssa Skeens, George Grover, Jessica

Halstead, Sunshine Holstein, (“Individual Petitioners”) and Holistic, Inc. (“Holistic”)1

(collectively referred to as “Petitioners”) appeal the December 7, 2022, decision of the

West Virginia Department of Human Services2 (“DHS”), Bureau for Medical Services

(“BMS”) denying Petitioners’ request to rescind or suspend, in whole or in part, the

suspension of all Medicaid payments to Holistic and the Individual Petitioners pending

completion of a fraud investigation by the Medicaid Fraud Control Unit (“MFCU”). On

appeal, Petitioners argue that BMS’ decision to suspend Medicaid payments was arbitrary

and capricious in that BMS did not consider whether good cause existed, under 42 C.F.R.

§ 455.23(e), to not suspend said payments, in whole or in part. Further, Petitioners allege

that BMS acted arbitrarily and capriciously in failing to provide “adequate specific detail

of the allegations in its pre-suspension notices” to Petitioners.

1
By order dated January 19, 2024, this Court, on its own motion, consolidated the
appeal filed collectively by the Individual Petitioners (Case No. 23-ICA-11) with the
appeal filed by Holistic (Case No. 23-ICA-39) for argument, consideration, and decision.
2
Pursuant to West Virginia Code § 5F-2-1a (2024), the agency formerly known as
the West Virginia Department of Health and Human Resources was terminated. That
agency is now three separate agencies: the Department of Health Facilities, the Department
of Health, and the Department of Human Services. See West Virginia Code § 5F-1-2. The
West Virginia Department of Health and Human Resources, Bureau for Medical Services
is now known as the Department of Human Services, Bureau for Medical Services.
1
After our review of the record and consideration of the oral and written

arguments of counsel, we find no merit in Petitioners’ claims. Here, Petitioners received

adequate notice of the suspension of their Medicaid payments, as required under 42 C.F.R.

§ 455.23(b). We also find no error in BMS’ discretionary determination that good cause

did not exist for the lifting of the suspension of Petitioners’ Medicaid payments, in whole

or in part, except as to Individual Petitioner Sunshine Holstein. As expressly noted by BMS

in its Supplemental Brief to this Court, “MFCU’s investigation [of Holistic and the

Individual Petitioners] did not yield sufficient evidence to warrant pursuing civil remedies

against Sunshine Holstein.” BMS therein noted its plan to restore Ms. Holstein’s “ability

to bill Medicaid.” To the extent that such action has not already been taken by BMS, we

hereby direct BMS to lift its suspension of Ms. Holstein’s Medicaid payments forthwith.

Accordingly, we affirm BMS’ December 7, 2022, decision, and remand this matter for

further proceedings only as it pertains to the lifting of the suspension of Medicaid payments

of Sunshine Holstein.

I. FACTUAL AND PROCEDURAL BACKGROUND

We begin our factual recitation with a brief discussion of the Medicaid

program in West Virginia and the general processes in that program for identifying,

investigating, and, if necessary, prosecuting Medicaid fraud or abuse. Authorized under

Title XIX of the Social Security Act, Medicaid is an entitlement program financed by the

state and federal governments and administered individually by each state. See 42 U.S.C.

§ 1396-1. In Forloine v. Persily, No. CV 3:23-0450, 2024 WL 1316237, at *1 (S.D.W. Va.

2
Mar. 27, 2024) (memorandum decision), the United States District Court for the Southern

District of West Virginia described Medicaid as a “cooperative federal-state program.” See

Douglas v. Indep. Living Ctr. of S. Cal., Inc., 565 U.S. 606, 610 (2012). Thus, in exchange

for federal funds, states agree to follow “congressionally imposed conditions” in the

Medicaid program. See Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. 320, 323

(2015).

In West Virginia, BMS is the agency responsible for administering the

Medicaid program. See Your Guide to Medicaid 2023, effective April 1, 2023, at page 2.3

It is the mission statement of BMS to, in part, administer the Medicaid program, “while

maintaining accountability for the use of resources, in a way that assures access to

appropriate, medically necessary, and quality health care services for all members.” Id.

Within BMS is the Office of Program Integrity (“OPI”). The OPI was formed

in July of 1995, as a result of funding by the West Virginia Legislature, to monitor the

utilization of Medicaid services in West Virginia to ensure compliance with federal

Medicaid requirements. In that regard, OPI conducts post-payment reviews and is

responsible for identifying potential fraud, waste, and abuse cases. OPI uses a combination

of processes to identify potential fraud cases, including referrals, data analysis, and data

3
The West Virginia Legislature has identified BMS as the “State Medicaid agency”
charged with administration and supervision of the state Medicaid program. See West
Virginia Code § 9-1-2 (2024).
3
mining (which uses algorithms that sort Medicaid claims data for further review and

identifies program outliers).

OPI’s functions also include oversight of the Medicaid Managed Care

Special Investigation Unit (“SIU”), which is tasked with managing policies and procedures

for Medicaid Managed Care Organizations (“MCO”) to detect and deter fraud, waste, and

abuse in the Medicaid program. The SIU must notify OPI of all incidents of fraud, waste,

and abuse it discovers, and must work with BMS and MFCU to administer effective

prevention, detection, and resolution of fraud, waste, and abuse.

For the purpose of investigating and further controlling fraud and abuse in

medical programs in West Virginia, the West Virginia Legislature created the MFCU

(previously established within the West Virginia DHS, but now part of the West Virginia

Office of the Attorney General). As to the necessity for MFCU, in West Virginia Code §

9-7-1 (2019), the Legislature expressly stated the following:

It is the finding of the Legislature that substantial sums of
money have been lost to the state and federal government in
the operation of the medical programs of the state due to the
overpayment of moneys to medical providers. Such
overpayments have been the result of both the abuse of and
fraud in the reimbursement process.

West Virginia’s MFCU has the responsibility for the investigation and

referral for prosecution of all violations of applicable state and federal laws pertaining to

4
the provision of goods or services under the medical programs of the state, including the

Medicaid program. MFCU receives referrals from BMS.

We now turn our attention to the specific facts relevant to our analysis of the

instant case. In 2018, Holistic, a company that provided primary medical care, counseling

services (including substance abuse counseling), and medically assisted treatment for

substance use disorder, operated two facilities in Kanawha County, West Virginia.4 As part

of its services, Holistic had an in-house laboratory where it processed urine drug tests and

pregnancy tests. In July of 2018, Holistic entered into a contract with UniCare (a West

Virginia Medicaid MCO) to accept payments for medical services provided to West

Virginia Medicaid recipients.

In 2018-2019, as a result of data mining, Holistic was identified by the SIU

as an outlier for Medicaid billing and was found to have “aberrant billing practices that

appeared to be unjustifiable based upon normal business practices.” These practices

include “high” billing of several current procedural terminology (“CPT”) codes.5 As part

of SIU’s investigation,

4
Holistic was incorporated in West Virginia on January 4, 2018, and opened for
business in West Virginia in April of 2018.
5
CPT codes have been used for more than fifty years and have been described as
the “primary medical language to communicate across health care.” CPT codes provide a
“uniform nomenclature for coding medical procedures and services.” CPT Codes,
5
[e]ight, (8) medical records [of Holistic patients] with eight
hundred and sixty two, (862) dates of services were reviewed.
The results of the review found a potential overutilization,
and/or unbundling of CPT codes 80307, 81025, 82075, 99212,
99213, 99214, 99401, 99402, 99406 and 99407.6 The data
show[ed] a consistent trend of billing patients [for] a drug
screen test, ([CPT] 80307)[;] alcohol breath screen test, ([CPT]
82075)[;] E & M [established medical patient office visits]
([CPT] 99213, 99214)[;] preventive medicine counseling
([CPT] 99401, 99402)[;] and tobacco cessation counseling
([CPT] 99406, 99407). The codes [were] repeated weekly for
these eight patients. In addition, there appears to be a trend of
high daily volume for time-based codes and potential for
impossible day billing. The data show[ed] a consistent pattern
of billing timed preventative medicine counseling codes, with
tobacco use cessation codes and obesity screening/weight loss
counseling. These codes represent a unit of time and must be
documented showing that time. In all of the [eight] records
reviewed with the dates of service for these specific codes,
there is no time documented[,] and the provider lists the dates
on a common template sheet.

In September of 2019, an SIU investigator conducted a telephone interview

with Holistic’s president, Shawn Blankenship.7 During this interview, Mr. Blankenship

American Medical Association Catalog of Topics, http://ama-assn.org/topics/cpt-codes
(last visited June 10, 2024).
6
CPT code 80307 is presumptive drug screening test; CPT code 81025 is urine
pregnancy test; CPT code 82075 is alcohol breath test; CPT code 99212 is established
patient office or other outpatient visit of 10-19 minutes; CPT code 99213 is established
patient office or other outpatient visit of 20-29 minutes; CPT code 99214 is established
patient office or other outpatient visit of 30-39 minutes; CPT code 99401 is preventive
medicine counseling of approximately 15 minutes; CPT code 99402 is preventive medicine
counseling of approximately 30 minutes; CPT code 99406 is smoking cessation counseling
from 3-10 minutes; and CPT 99407 is smoking cessation counseling in excess of 10
minutes.
7
Mr. Blankenship is a nurse practitioner and co-incorporator of Holistic, along with
his wife Julie Blankenship, who serves as the vice president and business manager of
6
was asked questions regarding Holistic’s counseling staff, billing of CPT codes 81025 and

82075 for urine drug screens and pregnancy tests (including billing for pregnancy tests for

several women who had no possibility of pregnancy), medical record keeping (specific to

CPT codes 99401, 99402, 99406, and 99407), and Holistic’s relationship with Dr. Ghali

Ibrahim-Bacha.8 The SIU investigator’s findings were contained in a Report of

Investigation Case Summary that identified several instances of fraud and/or abuse

committed by Petitioners, which were reported to BMS on January 24, 2020. Thereafter,

on March 23, 2020, BMS referred the matter, via a Medicaid Fraud Referral Form

(“Form”), to MFCU. In the Factual Explanation of the Allegation part of the Form, BMS

noted:

[t]he provider [Holistic] was identified as an outlier for
utilizing high level [E/M] services in the UniCare market,
specifically CPT codes (99213, 99214). As well as CPT codes,
alcohol breath, (82075), preventative medicine counseling,
(99401, 99402), smoking/tobacco cessation counseling,
(99406, 99407), and presumptive drug screening, 80307.

The Form further classified the referral as “a credible allegation of fraud”

referral. Credible allegation of fraud is defined in 42 C.F.R. § 455.2 as “. . . an allegation,

Holistic. The record reflects that Mr. Blankenship provided all records and documentation
requested by the SIU during its investigation and that he “fully cooperat[ed] with the
government’s inquiry.”
8
Dr. Bacha was identified as a medical director of Holistic. During his SIU
interview, Mr. Blankenship stated that Dr. Bacha does not see patients at Holistic but comes
into Holistic’s office once a week to review and authorize records. Mr. Blankenship had
no explanation as to how Holistic’s billing records (submitted for payment through
Medicaid) indicated that Dr. Bacha saw forty (40) patients at Holistic, other than simply
claiming a billing error.
7
which has been verified by the State from any source, including . . . (2) [c]laims data

mining.” By letter dated May 2, 2022, BMS notified Holistic that BMS intended to

suspend [Medicaid] payments to Holistic, Inc. in whole
effective May 16, 2022. This suspension applies to all of your
Medicaid claims and the entirety of the organization(s).
Federal law requires that Medicaid payments be suspended
pending the investigation of a “credible allegation of fraud”
against any individual or entity, unless the state determines that
there is good cause not to suspend payments. 42 U.S.C. §
1396b(i)(2)(C); 42 C.F.R §§ 455.2, 455.23. This suspension is
due to an ongoing investigation by the West Virginia [MFCU].

Further, the letter stated:

[p]ursuant to federal law, the suspension of payments based on
a credible allegation of fraud is temporary and will end upon
the determination that there is insufficient evidence of fraud,
or on the completion of legal proceeding(s) related to the
alleged fraud by Holistic, Inc. 42 C.F.R. § 455.23(c)(1).

Similar letters were sent that same day from BMS to the Individual

Petitioners, for whom Holistic had billed services, notifying each of them that their

Medicaid payments would also be suspended on May 16, 2022. In response to the May 2,

2022, letter, counsel for Holistic, via a May 3, 2022, e-mail and a May 6, 2022, letter,

requested an administrative hearing and additional information regarding the specific

findings against Petitioners. BMS responded to the e-mail from Holistic’s counsel via e-

mail on May 4, 2022, which acknowledged receipt of the May 3, 2022, e-mail and indicated

that a response would be forthcoming, “as soon as possible.”

8
By letter dated May 16, 2022, BMS again wrote to Holistic to advise that

suspension of Medicaid payments, in whole, would become effective on May 23, 2022.

The May 16, 2022, letter contained the same language as the May 2, 2022, letter (cited

above), but with the addition of two sentences, which indicated that

BMS reviewed all good cause exceptions to payment
suspension allowed by statute and determined none are
applicable in this instance. . . This investigation concerns
allegations of knowingly billing for services never rendered.9

On May 19, 2022, Holistic filed a Verified Petition for Writ of Prohibition in

the Circuit Court of Kanawha County seeking an order prohibiting BMS from

implementing the suspension of Medicaid payments.10 A joinder of the Individual

Petitioners in the petition for writ of prohibition was filed on May 20, 2022. In response to

Petitioners’ petition, BMS provided copies of both the SIU Report of Investigation Case

Summary and the Medicaid Fraud Referral Form and noted that the suspension of

9
The record does not contain a copy of a second letter sent by BMS to the Individual
Petitioners extending the deadline for suspension of Medicaid payments and indicating that
no good cause existed to stop suspension of payments, similar to the May 16, 2022, letter
sent to Holistic. While no letters to the Individual Petitioners dated May 16, 2022, are
contained in the record, the record does reflect that Medicaid payments for the Individual
Petitioners were not suspended until May 23, 2022, the extended deadline set forth in the
May 16, 2022, letter. Further, during the oral arguments held before this Court, counsel for
the Individual Petitioners made reference to two letters received from BMS regarding the
suspension of Medicaid payments.
10
That case was styled Holistic, Inc. v. West Virginia Department of Health and
Human Resources, Bureau for Medical Services, Civil Action No. 22-P-184 and was
assigned to Judge Louis H. Bloom.
9
Petitioners’ Medicaid payments was proper under federal law. By Final Order dated July

7, 2022, the writ of prohibition was denied. Specifically, the circuit court determined that

a writ of prohibition was inappropriate as Petitioners had “another adequate remedy in the

form of an administrative appeal,” and, further, those Petitioners “failed to demonstrate

any legal error committed” by BMS.

Despite their filing of the writ of prohibition, Petitioners appeal of the BMS

suspension of their Medicaid payments continued without delay and, on July 1, 2022, an

expedited Document/Desk Review (“DDR”) Decision was completed by General Counsel

for BMS. This DDR Decision upheld suspension of Medicaid payments to all Petitioners

effective May 23, 2022, noting the finding of a credible allegation of fraud against

Petitioners and no good cause for exception to the payment suspension requirement, in

whole or in part, found.

Petitioners appealed the DDR Decision and requested an administrative

hearing, which was held before Hearing Examiner Lewis Brewer on August 18, 2022. By

decision dated September 7, 2022, the hearing examiner found no error on the part of BMS.

Specifically, he noted that by “accepting federal appropriations [BMS] has assented to the

conditions imposed by applicable federal laws, rule and regulations.” Further, he found

that “[w]here there is a credible allegation of fraud, [BMS] is required to suspend Medicaid

payments, unless one of the ‘good cause’ exceptions in 42 C.F.R. § 455.23 is found to

exist.” Here, the hearing examiner determined that “Petitioners failed to demonstrate that

10
[BMS’] determination that a credible allegation of fraud existed in this matter resulted from

arbitrary and capricious decision making.” As to good cause, the hearing examiner

concluded that determination of good cause is left to the discretion of the state.

Additionally, he found that Petitioners had no constitutional right to receive Medicaid

payments and that nothing in the applicable state and federal law entitled Petitioners to

Medicaid payments during a pending fraud investigation. By letter dated December 7,

2022, BMS accepted, without modification, the hearing examiner’s September 7, 2022,

recommended decision.

In January and early February of 2023, Petitioners filed their underlying

appeals before this Court, challenging BMS’ December 7, 2022, decision. Thereafter, on

May 17, 2023, Holistic filed in the Circuit Court of Kanawha County a Petition for Writ of

Certiorari seeking additional and similar relief from BMS’ order suspending their Medicaid

payments.11 A hearing was held before the circuit court on August 30, 2023. By order

entered September 6, 2023, the circuit court gave BMS sixty days from the date of the

August 30, 2023, hearing to provide Petitioners the claims and dollar amounts for all

alleged fraudulent activity. Once those dollar amounts were identified, BMS was ordered

to pay the outstanding balance of Petitioners’ Medicaid payments that were not under

11
The Petition for Writ of Certiorari filed by Petitioners below was filed in the
existing case of Holistic, Inc. v. West Virginia Department of Health and Human
Resources, Bureau for Medical Services, Civil Action No. 22-P-184 and remained assigned
to Judge Louis H. Bloom.
11
investigation, less the amount being investigated. As to the remainder of the issues raised

by Holistic in its Petition for Writ of Certiorari, the circuit court held those issues in

abeyance pending resolution of the appeal before this Court.

In late November of 2023, results of a Federal Bureau of Investigation

(“FBI”) investigation12 revealed that Holistic allegedly submitted Medicaid claims for drug

testing services purportedly rendered on dates when no patients or staff were present at the

Holistic facility where the service supposedly occurred. Holistic was further believed to

have “broken up” services rendered on a given day and billed those services as though they

were provided on different days purportedly because of an assumption that this would

improve the probability of reimbursement. Additionally, billing records were allegedly

submitted by Holistic for October 24-31, 2020, while the employees who purportedly

performed the services were on a retreat in Hilton Head, South Carolina, and not seeing

patients. It was also alleged that Holistic billed seemingly fraudulent pregnancy testing

(given to women who were incapable of being pregnant).

In December of 2023, Holistic filed a Motion for Contempt against BMS in

the Writ of Certiorari case pending in circuit court for its failure to abide by the circuit

12
The results of the FBI investigation were revealed following a November 30,
2023, order by United States Magistrate Judge Dwane L. Tinsley, directing the United
States Attorney to provide redacted copies of search warrant affidavits to Mr. Blankenship,
related to the underlying claims of Medicaid fraud in the United States District Court for
the Southern District of West Virginia in Charleston.
12
court’s September 6, 2023, order. On January 10, 2024, the circuit court13 issued a Rule to

Show Cause against BMS and set the matter for hearing on February 14, 2024.

On January 24, 2024, DHS filed a civil complaint in the Circuit Court of

Kanawha County against Holistic, Shawn Blankenship, Julie Blankenship, Samantha

Burgess, Dr. Ghali Bacha, George Grover, Alyssa Skeens, and Jessica Halstead alleging

Medicaid fraud and overpayments totaling, at a collective minimum, $3,852,343.98.14 In

the Complaint, DHS alleged that these parties “willfully made, attempted to make, and/or

caused to be made, certain claims for benefits, payments, or allowances” under the

Medicaid program when they “knew, or reasonably should have known, such claims were

false, fictitious or fraudulent, and thereby obtained payments which were ineligible for

payment, constituting fraud under West Virginia Code § 9-7-6.”15

13
With the retirement of Judge Louis H. Bloom on June 20, 2023, the matter is now
assigned to Judge Stephanie Abraham.
14
The case was styled West Virginia Department of Human Services v. Holistic,
Inc., Shawn Blankenship, Julie Blankenship, Samantha Burgess (aka Samantha Shawver),
Dr. Ghali Bacha (aka Dr Ghali Ibrahim-Bacha), George Grover, Alyssa Skeens, and
Jessica Halstead, Civil Action No. 24-C-60, and was assigned to Judge Tera Salango.
15
DHS further alleges fraud in billing for services not rendered (Counts Two and
Three); Causing submission of claims for fraudulent prescriptions (Count Four); Billing
for obesity and tobacco-related services not rendered and/or not medically necessary
(Count Five); Billing for urine drug screen (UDS) services not rendered and/or not
medically necessary (Count Six); Duplicate billing (Count Seven); Billing for UDS
services without required prior authorization (Count Eight); Billing for services not
rendered and/or not medically necessary in conjunction with COVID-19 tests (Count
Nine); Billing for services not rendered by Samantha Burgess (Count Ten); Billing for
13
Oral arguments in the instant case were held before this Court on February

7, 2024. Following those arguments, in a February 12, 2024, order, the parties were ordered

to file supplemental briefing to address “whether the payments for services and/or rights to

bill for services under the West Virginia Medicaid [p]rogram that were suspended in this

action due to the pending fraud investigation constitute a property interest triggering due

process concerns.” Supplemental briefing on this issue was submitted by all parties. In the

February 12, 2024, order, this Court determined that it had appellate jurisdiction over this

matter but noted that “a detailed opinion . . . would follow.”

II. STANDARD OF REVIEW

West Virginia Code § 16-1-22A(c) (2023)16 provides for judicial review of

contested cases and states that any party affected or aggrieved by a final decision of the

agency (BMS) may seek judicial review of said decision by appealing to this Court, as

provided by West Virginia Code § 29A-5-4, known as the State Administrative Procedures

Act.

services not rendered by, and non-reimbursable services allegedly rendered by George
Grover, Alyssa Skeens, and Jessica Halstead (Counts Eleven, Twelve, and Thirteen).
16
West Virginia Code § 16-1-22A (2023) replaced West Virginia Code § 9-2-13
(2015), which was repealed by the West Virginia Legislature in 2023. West Virginia Code
§ 9-2-13(c) and (d) permitted judicial review of contested cases involving BMS by the
filing of a petition in the Circuit Court of Kanawha County. West Virginia Code § 9-2-
13(j) further allowed for the reversal, vacation, or modification of an agency decision only
as outlined in West Virginia Code § 29A-5-4(g) of the Administrative Procedures Act.
14
The State Administrative Procedures Act provides:

The court may affirm the order or decision of the agency or
remand the case for further proceedings. It shall reverse,
vacate, or modify the order or decision of the agency if the
substantial rights of the petitioner or petitioners have been
prejudiced because the administrative findings, inferences,
conclusions, decision, or order are:

(1) In violation of constitutional or statutory provisions;
(2) In excess of the statutory authority or jurisdiction of the
agency;
(3) Made upon unlawful procedures;
(4) Affected by other error of law;
(5) Clearly wrong in view of the reliable, probative, and
substantial evidence on the whole record; or
(6) Arbitrary or capricious or characterized by abuse of
discretion or clearly unwarranted exercise of discretion.

West Virginia Code § 29A-5-4(g) (2021); accord West Virginia Code § 16-1-22a (2023)

(stating that the exclusive remedy for judicial review of Board decisions is governed by

West Virginia Code § 29A-5-4(g)).

Recently in West Virginia HCR Manorcare Facilities v. West Virginia Dep't

of Health & Hum. Res., Bureau for Med. Servs., No. 23-ICA-207, 2024 WL 2381903, at

*6 (W. Va. Ct. App. May 23, 2024) (memorandum decision), this Court spoke regarding

administrative decisions issued by BMS. In HCR, we stated that in reviewing decisions by

BMS, “[t]he ‘clearly wrong’ and the ‘arbitrary and capricious’ standards of review are

deferential ones which presume an agency’s actions are valid as long the decision is

supported by substantial evidence or by a rational basis.” Id. (citing Syl. Pt. 3, In re Queen,

196 W. Va. 442, 444, 473 S.E.2d 483, 485 (1996)).

15
Because we must decide whether the hearing examiner was correct in its

interpretation of the federal law at issue, our review is further guided by the Supreme Court

of Appeals of West Virginia’s (“SCAWV”) recognition in syllabus point one of Chrystal

R.M. v. Charlie A.L., 194 W. Va. 138, 459 S.E.2d 415 (1995), that “[w]here the issue on

an appeal . . . is clearly a question of law or involving an interpretation of a statute, we

apply a de novo standard of review.” See also Young v. State, 241 W. Va. 489, 491, 826

S.E.2d 346, 348 (2019). With these standards in mind, we now consider the issues raised

on appeal.

III. DISCUSSION

As a preliminary matter, we must dispense of Holistic’s contention that this

Court lacks jurisdiction to hear Petitioners’ appeal. We disagree with Holistic, and, as noted

in our February 12, 2024, order, we find that this Court has jurisdiction over the instant

case. As cited above, West Virginia Code § 16-1-22A(c) provides that any party aggrieved

by a BMS final decision or order may seek judicial review of that decision by filing an

appeal with this Court. Accordingly, we find that this Court has jurisdiction to hear the

instant case.17

17
Likewise, in accordance with the statements made by counsel for Holistic during
the February 7, 2024, oral argument, we acknowledge that if this Court has jurisdiction
over the appeal of BMS’ decisions, then the Circuit Court of Kanawha County lacks such
jurisdiction.
16
On appeal, Petitioners raise two assignments of error. First, they argue that

BMS’ decision to suspend Medicaid payments to Petitioners was arbitrary and capricious

in that BMS did not consider whether good cause existed, under 42 C.F.R. § 455.23(e), to

not suspend said payments, in whole or in part. In order to properly address Petitioners’

claims, we must look to 42 U.S.C. § 1396(a)(37)(B), which provides that state Medicaid

programs must

provide for procedures of prepayment and [post payment]
claims review, including review of appropriate data with
respect to the recipient and provider of a service and the nature
of the service for which payment is claimed, to ensure the
proper and efficient payment of claims and management of the
program.

To further expound upon the requirements of appropriate procedures for

review of Medicaid claims, we look to 42 C.F.R. § 455, which generally addresses the

program integrity of Medicaid. Section 455.23 deals with the suspension of Medicaid

payments to providers in cases of fraud. In section 455.23(a)(1), it is required that

[t]he State Medicaid agency must suspend all Medicaid
payments to a provider after the agency determines there is a
credible allegation of fraud for which an investigation is
pending under the Medicaid program against an individual or
entity unless the agency has good cause to not suspend
payments or to suspend payment only in part. (emphasis
added).

Good cause is addressed in section 455.23(e), which provides that

17
[a] State may find that good cause exists not to suspend
payments, or not to continue a payment suspension . . . against
which there is an investigation of a credible allegation of fraud
if any of the following are applicable:

(1) Law enforcement officials have specifically requested that
a payment suspension not be imposed because such a
payment suspension may compromise or jeopardize an
investigation.
(2) Other available remedies implemented by the State more
effectively or quickly protect Medicaid funds.
(3) The State determines, based upon the submission of written
evidence by the individual or entity that is the subject of the
payment suspension, that the suspension should be
removed.
(4) Beneficiary access to items or services would be
jeopardized by a payment suspension . . .
(5) Law enforcement declines to certify that a matter continues
to be under investigation . . . ; and
(6) The State determines that payment suspension is not in the
best interests of the Medicaid program. (emphasis added).

Generally, as to statutory construction, the SCAWV has held that “. . .

significance and effect must, if possible, be given to every section, clause, word or part of

the statute.” Syl. Pt. 3, in part, Meadows v. Wal-Mart Stores, Inc., 207 W. Va. 203, 530

S.E.2d 676 (1999). In Nicewarner v. City of Morgantown, 249 W. Va. 120, 894 S.E.2d 902

(2023), the SCAWV found that “[w]hen a statute is clear and unambiguous and the

legislative intent is plain, the statute should not be interpreted by the courts, and in such

case it is the duty of the courts not to construe but to apply the statute.” Id. at Syl. Pt. 3,

citing Syl. Pt. 5, State v. Gen. Daniel Morgan Post No. 548, Veterans of Foreign Wars, 144

W. Va. 137, 107 S.E.2d 353 (1959). Moreover, it has long been the precedent of West

Virginia that “[w]here the language of a statute is free from ambiguity, its plain meaning

18
is to be accepted and applied without resort to interpretation.” Syl. Pt. 2, Crockett v.

Andrews, 153 W. Va. 714, 172 S.E.2d 384 (1970).

Applying those principles to the instant case, we find that the language of 42

C.F.R. § 455.23(a)(1) requires, by use of the word “must,” that the suspension of Medicaid

payments is necessary upon a credible allegation of fraud, unless BMS finds “good cause”

to either postpone the suspension in whole or in part. Accord, VTCC, LLC v. Kimsey, 477

F.Supp.3d 457, 465 (E.D. Va. 2020) (§ 455.23 require[s] the suspension of Medicaid

payments, unless one of the regulatory good cause exceptions is found to exist. “A State

may find that good cause exists not to suspend payments . . . .”) See also Border Area

Mental Health Servs., Inc. v. Squier, 2013 WL 12140453, at *2 (D.N.M. 2013) (noting that

“good cause” is determined “at the discretion” of the state agency). Here, we find that

section 455.23(a) is unambiguous and must be applied without interpretation.

BMS identifies that the current language of section 42 C.F.R. § 455.23(a)

states that BMS has a mandatory legal obligation to suspend payments to Petitioners after

determining that there was a “credible allegation of fraud” against them. However, section

455.23(a) was amended in February of 2011 as part of the Affordable Care Act (“ACA”)

(passed in March of 2010). In its Final Rule related to this amendment, the Office of the

Inspector General for the Federal DHS (“OIG”) noted “[w]e proposed to implement

[§]6402(h)(2) of the ACA by modifying the existing §455.23(a) to make payment

suspensions mandatory where an investigation of a credible allegation of fraud under the

19
Medicaid program exists.” Medicare, Medicaid, and Children’s Health Insurance

Programs, Additional Screening Requirements, Application Fees, Temporary Enrollment

Moratoria, Payment Suspensions and Compliance Plans for Providers and Suppliers, 76

FR 5862-01, 5932 (February 2, 2011). The OIG further stated, again in discussing its Final

Rule and amendments to § 455.23, that “[c]onsistent with the new ACA provision, we also

proposed to create several ‘good cause’ exceptions by which States may determine good

cause exists not to suspend payments or to suspend payments only in part.” Id. at 5933

(emphasis added).

Here, in its May 16, 2022, letters to Petitioners, BMS noted that it had

received a credible allegation of fraud concerning Petitioners in that they knowingly billed

for services never rendered. Further, the May 16, 2022, letter advised Petitioners that BMS

“reviewed all good cause exceptions to payment suspension allowed by statute and

determined none are applicable in this instance.” Even though justification of a decision

for no good cause is not required under 42 C.F.R. § 455.23, Andrew Pack, the Director of

OPI (part of BMS) provided an Affidavit to Petitioners on August 25, 2022, detailing BMS’

decision that no good cause existed.18

18
In his Affidavit, Mr. Pack examined each of the six good cause exceptions set
forth in § 455.23(e). As to the first exception, Mr. Pack noted that it was not applicable as
MFCU lifted the request not to proceed with payment suspension. Likewise, the second
and third exceptions are not applicable as, given the credible allegation of fraud against
Petitioners, BMS determined that there are no other remedies (aside from payment
suspension) to “effectively protect Medicaid funds” and because Petitioners had the
opportunity to contest the suspension via a DDR and administrative hearing (both of which
20
In its brief, Holistic acknowledges, and the Individual Petitioners concur, that

while the decision not to suspend “might be discretionary[,]” the actual performance of the

evaluation of whether good cause exists is mandatory. We agree and find that 42 C.F.R. §

455.23 requires that BMS must suspend payments on a credible allegation of fraud unless

the agency has good cause to not suspend payments. However, no matter how it is

characterized by Petitioners, the record clearly establishes that BMS completed a good

cause analysis and noted the same in its May 16, 2022, letters to Petitioners. Simply

because Petitioners disagree with BMS’ discretionary determination does not itself provide

grounds for a finding that BMS’ decision was arbitrary or capricious. Here, Petitioners

simply do not meet their burden of establishing that BMS’ determination of no good cause

was an abuse of discretion.

Petitioners are critical of BMS for failing to include in its May 2, 2022, letter

to Petitioners a statement that BMS found no good cause not to grant a suspension of

Petitioners’ Medicaid payments. However, such oversight was corrected in advance of the

actual suspension of Petitioners’ Medicaid payments. The record reflects that prior to

upheld the suspension). As to the fourth exception, it also is not applicable as BMS’
Behavioral Health and Long-Term Care Services Program Director, Cynthia Parson,
determined member access to care would not be jeopardized by suspending payments to
Petitioners. The fifth exception is not applicable because law enforcement has certified that
the investigation is “open and ongoing.” Lastly, the sixth exception is also not applicable
as BMS has determined that payment suspension is in the best interest of the Medicaid
program given that credible allegations of fraud exist as to Petitioners.
21
suspension of Petitioners’ Medicaid payments, BMS sent a second letter, dated May 16,

2022, to Petitioners. In the May 16, 2022, letter, Petitioners were specifically advised that

BMS “reviewed all good cause exceptions to payment suspension allowed by statute and

determined none are applicable in this instance.”

Petitioners, citing Alexandre v. Illinois Dep’t of Healthcare & Fam. Servs.,

No. 20 C 6745, 2021 WL 4206792, at *9 (N.D.Ill. Sept. 15, 2021) (memorandum opinion

and order), argue that Holistic’s uninterrupted payment of earned funds under, and its

continued participation in, the state’s Medicaid program constitute property interests

protected by the Due Process clause of the West Virginia Constitution. The Due Process

clause of the Fourteenth Amendment provides that “[n]o state shall . . . deprive any person

of life, liberty or property without due process of law.” However, to establish a due process

violation, a plaintiff must actually have been deprived of a liberty or property interest

entitled to constitutional protections. See generally Paul v. Davis, 424 U.S. 693, 710-11

(1976).

In Alexandre, the United States District Court for the Northern District of

Illinois found that a doctor had a due process right for prospective injunctive relief to

challenge the suspension of her Medicaid payments for alleged fraud. In their briefs before

this Court, Petitioners contend that the instant case is analogous to Alexandre. Like Dr.

Alexandre, Petitioners suggest that they lacked detail of the allegations against them to

22
preclude a proper defense, which affected their due process. We disagree and find that the

instant case is distinguishable from Alexandre for several reasons.

Dr. Alexandre’s case involved suspension of her Medicaid payments for up

to three years (capped by an Illinois statute providing a maximum of three years suspension

of Medicaid payments while investigation continues) and she was provided no

administrative hearing and was not provided with details of the particular billing

irregularities supporting the suspension. Conversely, in the instant case, BMS suspended

Petitioners’ Medicaid payments on May 23, 2022, and, by November of 2023, BMS had

filed a civil complaint against Petitioners specifically detailing their particular billing

irregularities and had provided detailed information related to the investigation to

Petitioners.

Here, again unlike Alexandre, Petitioners exercised their opportunity to

appeal the BMS’ suspension and were involved in an administrative appellate hearing

related to their suspension in August of 2022, just four months following their suspension.

Further, unlike Illinois in the Alexandre case, West Virginia does not have any statutes

establishing a maximum time for suspension of Medicaid payments. With these

distinctions we find Alexandre unpersuasive.

As to property rights, we find, with respect to payments for services already

rendered, there is no property right implicated when the payments are the subject of a fraud

23
investigation. See Pers. Care Prods. Inc. v. Hawkins, 635 F.3d 155, 159 (5th Cir. 2011).

Here, as Petitioners’ payments were subject to a fraud investigation, we find no property

right implicated. Similarly, even if we were to assume that continued participation in the

Medicaid program constitutes a property interest for providers, the parties herein cannot

establish that they were not afforded due process.19 Below, the parties were provided with

significant information related to the “credible allegation of fraud” against them.

Petitioners herein were able to pursue a DDR review and an administrative hearing, in

which Petitioners were provided the opportunity to state their case for BMS’ alleged

arbitrary and capricious suspension of their Medicaid payments, to no avail.

Before moving on to Petitioners’ second assignment of error, we want to

address the Individual Petitioners’ statement, at page seven of their brief, that “four of the

five [Individual Petitioners] were not even employed by Holistic during the time of the

billing noted in the” SIU Report of Investigation Case Summary. While this statement may

be true (the record is unclear), the same is not “literally impossible” (as alleged by the

19
The Fourth Circuit recognizes a property interest in a provider’s expectation of
continued participation in the federal healthcare programs such as Medicare and Medicaid.
See Ram v. Heckler, 792 F.2d 444 (4th Cir. 1986). However, the majority of jurisdictions
(the First, Second, Fifth, Sixth, Ninth and Tenth Federal Circuit Courts) do not recognize
such a property right, as providers are not the intended beneficiaries of the medical
programs. As to the determination of Petitioners’ property right for continued participation
in the Medicaid program, we decline to address the same in this appeal as determination of
this issue is not necessary to disposition of this appeal. Under the limited facts and
circumstances of this case, even if we were to find that Petitioners had a property right in
continued participation in the Medicaid program, we find that they were afforded sufficient
and meaningful due process.
24
Individual Petitioners) and such fact is not dispositive of this matter. Here, both MFCU

and BMS found and referenced fraudulent billing charges made by four out of the five

Petitioners (excluding Sunshine Holstein) in its civil complaint filed in November of 2023.

The SUI Report of Investigation Case Summary is but one of many sources relied upon by

MFCU and BMS.20

Further, we must address Petitioners’ inference in their arguments that the

suspension of their Medicaid payments was permanent in nature. Such an assertion is

simply not true. In the May 16, 2022, letter sent to Petitioners, BMS expressly notes that

the suspension is temporary in nature and “will end upon the determination that there is

insufficient evidence of fraud, or on the completion of legal proceeding(s) related to the

alleged fraud by” Petitioners (the civil complaint filed by BMS against Petitioners in

November of 2023). Moreover, we note that in 42 C.F.R. § 455.23(d)(3)(ii), it is required

that “[o]n a quarterly basis, the State must request a certification from the [MFCU] or other

law enforcement agency that any matter accepted on the basis of referral continues to be

under investigation thus warranting continued suspension.” BMS is not permitted to

permanently suspend a provider’s Medicaid payments, without the check of certification

of a continued investigation. Here, under the facts and circumstances of this case, we find

20
In the civil complaint against Petitioners, BMS alleges as follows: Samantha
Burgess’ fraud occurred in late October of 2020; George Grover’s fraud occurred on early
November of 2020 and December of 2021; Alyssa Skeens fraud occurred between March
13, 2020, and November 5, 2020; and Jessica Halstead’s fraud occurred between of August
29, 2018, and October 6, 2020.
25
the same sufficient to protect the interests of Petitioners from unlimited permanent

suspension of payments.

Also, in reviewing the claims at issue, we do not agree that Holistic had little

or no information regarding the allegations of fraud against it. The record reflects that

Shawn Blankenship, the president of Holistic, was aware of SIU’s investigation into

Holistic and its individual providers’ billing practices in at least September of 2018. Mr.

Blankenship participated in an interview with an SIU investigator and was asked pointed

questions about the allegations of fraud at issue herein.

In addressing this assignment of error, it is the duty of this Court to consider

the total implications of BMS’ decisions, including implication on those who are served by

the Medicaid program. We must temper the rights of those suspended with Medicaid’s

stated intent to decrease fraud rampant within the program. See West Virginia Code § 9-7-

1 (Legislature notation of substantial sums of money having been lost due to overpayment

of moneys to medical providers through abuse and fraud of reimbursement process). As

Petitioners did not substantiate their argument that BMS was arbitrary and capricious in

suspending Petitioners’ Medicaid payments upon a credible allegation of fraud, we find no

error.

In its second assignment of error, Petitioners argue that BMS acted arbitrarily

and capriciously in failing to provide “adequate specific detail of the allegations in its pre-

26
suspension notices” to Petitioners. We again turn to 42 C.F.R. § 455.23(b)(2) for a

description of what notices of suspension of Medicaid payments must include. Per this

provision, the notice must include or address all of the following:

(i) State that payments are being suspended in accordance
with this provision.
(ii) Set forth the general allegations as to the nature of the
suspension action, but need not disclose any specific
information concerning an ongoing investigation.
(iii) State that the suspension is for a temporary period . . .
and cite the circumstances under which the suspension
will be terminated.
(iv) Specify, when applicable, to which type or types of
Medicaid claims or business units of a provider
suspension is effective.
(v) Inform the provider of the right to submit written
evidence for consideration by State Medicaid Agency.
(vi) Set forth the appliable State administrative appeals
process and corresponding citations to State law.

Here, based on our review, we find that the May 16, 2022, suspension letter

to Petitioners meets each of the six requirements of a notice of suspension of Medicaid

payments. The May 16, 2022, letter identifies that payments are being suspended in

conjunction by 42 C.F.R. § 455.23(c)(1) providing a general description of the allegations

as an investigation of a credible allegation of fraud and concerning allegations of

knowingly billing for services never rendered. Further, the May 16, 2022, letter advises

that the suspension is temporary and will end upon determination of insufficient evidence

of fraud or the completion of a legal proceeding(s) related to alleged fraud. Lastly, the May

16, 2022, letter contains information regarding which type of Medicaid payments are being

suspended (Medicaid payments in whole) and provides information regarding the

27
administrative appeals process and the ability to submit written evidence to the State

Medicaid Agency.

With adherence to the explicit requirements of 42 C.F.R. § 455.23(c)(1)

completed by BMS in its May 16, 2022, letter, we find allegations set forth in this letter

sufficient to put Holistic on notice. Further, we note that since this May 16, 2022, letter,

Petitioners have received additional information from BMS including the SIU Report of

Investigation Case Summary (identifying particular CPT codes and identifying improper

billing procedures), a FBI search warrant application which specifically identifies the

instances of Medicaid fraud perpetrated by Petitioners, and a civil Complaint that has been

filed against Petitioners (excluding Sunshine Holstein) that details each allegation of fraud

against each of the Petitioners (again, excluding Sunshine Holstein). Accordingly, we find

no error.

We further note the decision of the Court of Appeals of Mississippi in NSCH

Rural Health Clinic v. Snyder, 321 So.3d 565 (2020), in which that court found that a notice

of suspension of medical payments including only general allegations and no specific

allegations concerning the ongoing investigation was sufficient under 42 C.F.R. §

455.23(b). The Snyder court recognized, as this Court does, that to find otherwise would

potentially undermine the ongoing criminal investigation against the provider.

28
IV. CONCLUSION

For the foregoing reasons, we affirm BMS’ December 7, 2022, decision, and

remand this matter for further proceedings only as it pertains to the lifting of the suspension

of Medicaid payments of Sunshine Holstein.

Affirmed, in part, and remanded, in part, with instructions.

29