Victory for National Nursing Home Chain in Medicaid Dispute

On October 2, 2000, Florida's Agency for Health Care Administration took the unprecedented action of terminating Medicaid provider agreements with six Florida nursing homes, effective November 1. The terminations, announced by Florida Governor Jeb Bush, would force more than 628 elderly Medicaid residents at these facilities to move to new homes within 30 days. State officials publicly announced that the terminations were based on the allegedly insufficient care delivered at these facilities.

Three of the six nursing facilities were operated by subsidiaries of Vencor, Inc., a long-time client of Zuckerman Spaeder. Morris “Sandy” Weinberg Jr. and Marcos E. Hasbun of Zuckerman Spaeder's Tampa office immediately moved to enjoin the terminations, arguing that the state's actions were unconstitutional and violated the federal Medicaid statute and regulations. In a brief period of time, the attorneys also collected and filed dozens of affidavits in support of the motion; many attested to the residents' and their families' high degree of satisfaction with the care delivered at the Vencor nursing homes.

The court convened an emergency hearing on October 10, 2000, at which it agreed with Vencor's arguments and ordered Florida to temporarily cease efforts to terminate its provider agreements. In just over a week, Zuckerman Spaeder had halted the state's efforts to terminate its client's Medicaid contracts.

To protect the residents at the affected homes from the stress and uncertainty of protracted litigation and to normalize Vencor's relationship with Florida regulators, the Zuckerman team, working closely with Vencor in-house attorneys, began negotiating with the state at the highest levels to resolve the dispute. After two days of meetings with Florida officials in Tallahassee, the parties struck a settlement on the eve of the next hearing date. The state agreed to withdraw the termination of its provider agreements with the Vencor facilities in exchange for Vencor stepping up internal compliance monitoring activities at the facilities.

This case exemplifies the ability of the Tampa office of Zuckerman Spaeder to achieve extraordinary results in the context of emergency litigation involving complex legal issues. It also demonstrates the firm's aptitude for creatively settling disputes that are best resolved outside of court and once again, in adroitly handling high-profile, high-stakes litigation.