Two moms and one of Arizona’s largest autism therapy providers are suing the state’s Medicaid system over a decision to cancel the provider’s contract.
Earlier this year, Mercy Care, an insurer that provides coverage through Arizona’s Medicaid program, notified Centria Autism that it was cancelling the provider’s contract after initially attempting to cut the rate the provider was paid for services by 25%.
The contract was scheduled to terminate in January, but that deadline has been pushed to March 1.
In a lawsuit filed in Maricopa County Superior Court on Dec. 15, two mothers whose children receive services from Centria and the provider itself allege the insurer and the state’s Medicaid agency didn’t follow the proper steps to cancel the contract and ensure affected families still had access to care, in violation of state and federal regulations.
It cites federal rules, requiring states to ensure their Medicaid systems maintain “network adequacy," which includes making sure there are enough providers available to meet patient demand.
They also claim that cancelling Centria’s contract will further exacerbate a shortage of applied behavior analysis, or ABA, providers in the state, where "estimates indicate that at least 22,000 children in Arizona are unable to receive behavior analytic services due to this provider shortage,” according to the suit.
Tiana Brandon, one of the plaintiffs, told KJZZ in November that she’s worried about how a disruption in care will affect her 6-year-old son Micah. She says he was diagnosed when he was 2 years old. He is non-verbal and has shown good progress since he started receiving care from Centria in 2023.
“So starting something completely all over again could definitely wreck his entire routine and throw him completely off-kilter,” Brandon said.
Brandon also said she received little help from Mercy Care or the state to find a new provider.
“I've not been contacted by AHCCCS or Mercy Care this entire time via e-mail, via phone call, via mail correspondence,” Brandon said in November.
The lawsuit acknowledges that Mercy Care and the state agencies it works with are now trying to switch Centria’s Medicaid clients to new providers “but this may be nearly impossible given the ongoing shortage of ABA providers in Arizona.”
And the plaintiffs also allege the process to switch those people to new care has been chaotic.
“Mercy Care and AHCCCS have not provided any written transition plan to the individual Plaintiffs to help them identify other providers via a different network or to provide an option to continue with current Centria practitioners via a different MCO,” according to the lawsuit.
The backstory
According to the lawsuit, the notification about the 25% rate cut came months after Mercy Care cut Centria’s rate by 15% in July.
“Centria immediately evaluated the effect of the additional 25% rate reduction and determined that such a drastic cut in funding would require Centria to completely change its care model and prevent it from providing high-quality services,” according to the lawsuit.
Attorneys for Centria claim the company attempted to engage in “good faith” negotiations with Mercy Care but instead received notification that its contract would be terminated in November.
In a statement in November, Mercy Care said it canceled the contract due to a breakdown in negotiations and that is still has other providers available in its network.
“As an Arizona-based nonprofit organization, Mercy Care is committed to providing access to high quality care, while being good stewards of Arizona taxpayer funds,” according to the statement. “We negotiated in good faith but have not been able to reach an agreement. We're dedicated to the health and wellbeing of our members and ensuring that they have access to a broad network of ABA providers.”
AHCCCS representatives told the Arizona Capitol Times that the agency is aware of the lawsuit.
“ABA is an AHCCCS covered service, and the agency and its contracted health plans continue to cover ABA services when the services are determined to be medically necessary,” according to a statement.
The lawsuit is asking a judge to issue an order blocking Mercy Care from cancelling the contract. After an initial hearing in the case on Dec. 19, the judge overseeing the case declined to immediately issue that order.
