State Attempts to Close Clinic

On May 18, 1976, George Miller made his first attempt to close down Operation Life's clinic. He stated that the contract enclosed in the April 7th letter from Kelso (the letter was not sent until the end of April) was not signed and returned and therefore, no new contract would be signed by the Welfare Division starting June 15, 1976, because the Welfare Division was canceling its agreement, effective June 19, 1976, and would no longer reimburse the clinic for EPSDT services after the above date. This was to be Just 5 days after the existing contract expired. For a while, it appeared that Mr. Miller would have his way. In just 30 days from the May 18 letter, 60% of Nevada's EPSDT program would be abolished with no federal penalty whatsoever. However, because the entire process of non?negotiation for a new contract was a sham, higher-ups in the Department of Human Resources, (NSWD is a part of the Department of Human Resources) advised Miller and company that the cancellation of the clinic's contract, would not do. Rodger Trounday, Director of Human Resources, reassured clinic officials that yet another contract would be sent to them soon, so that there would be no interruption of services provided by the health center. Finally, a new contract was entered into by the health center and NSWD, whereby the state agreed to pay the health center 30 dollars for M.D. screenings and 20 dollars for R.N. screenings. It was the April 7th scheme. According to this new contract, it was to be effective from April 1, 1976 through March 31, 1977. This was the case, even though the contract, by its terms signed September 30, 1975, would not be effective until the 14th of June. This contract was signed about the 10th of June by Operation Life. While this contract was exactly like the one proposed in Kelso's April letter, OLCHC had little choice in whether they should sign it or not. It should also be noted that this contract signed in mid June 1976 by OLCHC, was to take effect on April 1, 1976. The reason the NSWD put this retroactive clause into the contract is obvious. They were trying to strengthen their legal argument on fraud charges on 32 dollar invoices submitted by the clinic from April 1, 1976 to June 15, 1976. While in retrospect, it does not make sense for the clinic to have signed such a contract, it is important to understand the circumstances and climate surrounding the period when the contract was signed. The clinic was threatened once before, when it didn't sign the state's contract, that the clinic would be closed. Operation Life didn't want to take a second chance. The NSWD refused to negotiate a contract with the clinic. The clinic was given an ultimatum; sign our contract or else! By June 10th, there was still no signed contract and only four days remaining on the old contract. The clinic did not understand the full legal implications of signing a contract that retro-actively took effect 211 months before, at 12 dollars less per screening than they had been reimbursed for. There was so much confusion resulting from Welfare Division actions and so little time that clinic officials were willing to sign anything. Nobody at the clinic really read the contract carefully and nobody could see the trap that the Welfare Division was setting up. Finally, it should be stated that OLCHC never received a copy from NSWD for their files, as was promised. For over two months, clinic staff, administrators, the M.D. and the R.N. had no way to check to see if their practices were in line with the regulations of the new contract. However, since all previously signed contracts had resembled past practices, nobody worried about it. Also, the clinic people knew that if they were doing something wrong, the Welfare Division would be the first to let them know. With a new contract under their belt (even though the new contract reduced their ability to seek out needy children through outreach) clinic members felt good about the prospect of doing EPSDT screenings for another 9 months.