AL-KHOURI v. OKLAHOMA HEALTH CARE AUTHORITY
419 P.3d 366
Okla. Civ. App.2017Background
- Dr. Haisam Al‑Khouri, an Oklahoma psychiatrist and long‑time SoonerCare (Medicaid) provider, had his Provider Agreement immediately terminated by the Oklahoma Health Care Authority (OHCA) for alleged quality-of-care and documentation violations.
- OHCA's termination letter cited member health/safety and notified Dr. Al‑Khouri of a right to a post‑termination "panel committee desk review" under OAC 317:2‑1‑12 (a non‑evidentiary, document‑based review by OHCA employees).
- Dr. Al‑Khouri filed suit seeking declaratory and injunctive relief, arguing the desk‑review procedure violated due process and the Administrative Procedures Act (APA), and obtained a temporary injunction reinstating him.
- OHCA appealed, arguing Dr. Al‑Khouri lacks a protected property or liberty interest in continued Medicaid participation and that Article II of the APA does not apply to the Authority.
- The trial court had not made explicit findings about whether a protected property or liberty interest existed; the Court of Civil Appeals reviewed the injunction for abuse of discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dr. Al‑Khouri has a constitutionally protected property interest in continued participation as a Medicaid provider | Provider Agreement terms and long participation create a reasonable, mutually explicit expectation of continued participation | No statute, rule, or clear promise creates an entitlement; Agreement reserves OHCA discretion and disavows any property right | No property interest; Agreement and regulatory scheme do not create entitlement; due process not implicated |
| Whether the desk‑review post‑termination procedure satisfies procedural due process | Desk review is inadequate; due process requires a full post‑termination evidentiary hearing | OHCA's desk review is the process provided by rule; provider must comply with or seek to change rules | Court need not reach adequacy because threshold property/liberty interest missing; injunction improper |
| Whether OHCA (the agency) is subject to Article II of the Oklahoma APA for these proceedings | Authority and §5007(H) require Authority to follow Article II; §250.4(B)(19) exemption does not cover the Authority | §250.4(B)(19) exempts the Authority via exemption of Board and Administrator; Authority acts only through Board/Administrator | Authority is exempt from Article II of APA under §250.4(B)(19); trial court erred in applying Article II |
| Whether the temporary injunction was appropriately granted | Injunction needed to prevent irreparable harm and because procedure violated due process | No likelihood of success on due process claim; injunction abused discretion | Temporary injunction vacated; trial court abused discretion |
Key Cases Cited
- Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) (property interests for due process are created by state law or mutually explicit understandings)
- Ross v. Peters, 846 P.2d 1107 (Okla. 1993) (procedural due process requires protected property or liberty interest)
- Koerpel v. Heckler, 797 F.2d 858 (10th Cir. 1986) (Medicare provider not entitled to property interest absent statutes/rules creating entitlement)
- Geriatrics, Inc. v. Harris, 640 F.2d 262 (10th Cir. 1981) (nursing home lacked property interest in renewal of Medicaid/Medicare agreements)
- Plaza Health Laboratories, Inc. v. Perales, 878 F.2d 577 (2d Cir. 1989) (state reservation of termination authority undermines provider property‑interest claim)
- Senape v. Constantino, 936 F.2d 687 (2d Cir. 1991) (Medicaid providers have no property right to continued enrollment)
- Cervoni v. Secretary of Health, Education & Welfare, 581 F.2d 1010 (1st Cir. 1978) (receipt of Medicare payments alone does not create a valid expectation of continuing reimbursement)
- Choices Institute, Inc. v. Oklahoma Health Care Authority, 308 P.3d 177 (Okla. Civ. App. 2013) (provider challenges to OHCA procedures must be addressed through rulemaking or other authorized processes)
- Daffin v. State ex rel. Oklahoma Dep’t of Mines, 251 P.3d 741 (Okla. 2011) (standards for issuing a temporary injunction)