The North Carolina Court of Appeals has upheld the decision to terminate Ave Maria Family Practice, PLLC, from the state's Medicaid Program. This ruling affects the medical practice and its ability to provide services to Medicaid recipients. The court's decision emphasizes the importance of compliance with Medicaid regulations and the authority of the North Carolina Department of Health and Human Services in overseeing these programs.
Ave Maria Family Practice, a medical provider that has participated in the North Carolina Medicaid Program since 2009, appealed the termination of its participation, which was initiated by the North Carolina Department of Health and Human Services (NCDHHS). The case, identified by docket number 26-146, was heard by the Court of Appeals on September 17, 2026, after the trial court affirmed the NCDHHS's decision in September 2025.
The dispute arose when the NCDHHS began a prepayment claims review in May 2022 to ensure that claims submitted by Ave Maria Family Practice complied with federal and state laws. The review process involved sending notices to the practice regarding the claims that needed documentation. After a hearing, an Administrative Law Judge (ALJ) concluded that the termination was justified, leading to the appeal by Ave Maria Family Practice.
The Court of Appeals, led by Judge Tom Murry, ruled against Ave Maria Family Practice on both jurisdictional and substantive grounds. The court stated, "We hold that the trial court had the subject-matter jurisdiction to hear this appeal," affirming that the notices sent by the NCDHHS were sufficient to meet the statutory requirements. The court emphasized that the initial notice regarding the claims was adequate, even after the NCDHHS later reduced the number of claims requiring documentation.
The court's ruling clarified that the NCDHHS acted within its authority when it initiated the review and that the notices provided to Ave Maria Family Practice were compliant with the relevant statutes. The court noted, "Respondent determined that 'data analysis' sufficed as 'grounds' on which to 'place [Petitioner] on prepayment-claims review.'" This indicates that the court found the reasons for the review to be valid and within the scope of the department's regulatory framework.
Going forward, this ruling reinforces the authority of the NCDHHS to regulate Medicaid providers and conduct audits to ensure compliance with program requirements. It highlights the significance of adhering to procedural requirements in the Medicaid program, which is essential for maintaining program integrity. The decision may also serve as a precedent for future cases involving Medicaid provider terminations and the standards for notices and reviews.
The ruling also raises questions about the procedural aspects of Medicaid audits and reviews. It underscores the need for providers to understand the implications of their participation in the Medicaid Program and the importance of complying with all regulatory requirements. This case may influence how other Medicaid providers approach their compliance efforts and the potential consequences of failing to meet the standards set by the NCDHHS.
As for what’s next, Ave Maria Family Practice may consider appealing the ruling to a higher court, although details were not available in the court filing regarding any plans for further appeal. The outcome of this case will likely have implications for other medical practices involved in Medicaid and their interactions with state health departments.