Filed Date: April 1, 2025
Closed Date: April 8, 2025
Clearinghouse coding complete
This is a case by a federally recognized tribe challenging Virginia's denial of medical reimbursements to a tribal health center.
As background to this case, the Nanesemond Indian Nation operates Fishing Point Healthcare, LLC, as a medical center. Fishing Point participates in Medicaid, a cooperative federal-state program that provides medical care to individuals in need. In order to qualify for federal funds, states must submit a state Medicaid plan to the Center for Medicare & Medicaid (CMS), a federal agency, which reviews the state's plan to determine whether it complies with the statutory requirements. If it does, the state is eligible for Medicaid funding. Once a state plan is in place, the state is entitled to reimbursement from the federal government. This reimbursement is called the Federal Medical Assistance Percentage (FMAP), which varies state by state. In Virginia, the Department of Medical Assistance Services (DMAS) is charged with distributing funds to providers who furnish services to Medicaid-eligible individuals.
Fishing Point is a free for service provider, which means that beneficiaries seek services directly from them and then they are paid directly by DMAS. As a Tribal Health Program, they are entitled to bill DMAS at the Federal All Inclusive Rate (Federal AIR), and under current guidelines, states are required to compensate Tribal Health Programs at the Federal AIR for each encounter, regardless of whether the beneficiary is Native American. To put simply, when a Tribal Health Program serves non-tribal beneficiaries, the state is reimbursed at the standard FMAP, which in Virginia is 50.99%. But, for tribal beneficiaries, the federal government reimburses at a special FMAP of 100% for services rendered. Thus, when the plaintiffs serve non tribal beneficiaries, the defendants bear half of the cost, instead of none of it.
According to the plaintiffs, this is the stage where the defendants ran afoul. The plaintiffs claim that the defendants "mistakenly assumed[ed] that all beneficiaries served by Fishing Point were Native American" and "improperly drew down a 100% FMAP even for non-Native American patients, thereby creating a substantial risk that the federal government would reclaim millions of dollars from defendants."
On February 4, 2025, the Senate of Virginia released a proposed budget amendment that would amend Virginia's Medicaid plan to condition the state's reimbursement rate on whether the beneficiary was tribal. Specifically, Governor Youngkin inserted language to reflect the idea that DMAS will seek approval to reimburse tribal clinics at the standard Medicaid rate for all services. In other words, non-tribal patients who seek services at Fishing Point would be paid based on the DMAS standard rate, rather than the Federal AIR.
On March 31, 2025, the defendants froze roughly $5.7 million worth of the plaintiff's claims without notice or explanation. The next day, the plaintiffs filed this lawsuit.
On April 1, 2025, the Nansemond Indian Nation and Fishing Point, LLC filed this lawsuit in the United States District Court for the Eastern District of Virginia. The plaintiffs sued the Commonwealth of Virginia, the Virginia Office of the Secretary of Health and Human Resources, and the Virginia Department of Medical Assistance Services under the Indian Health Care Improvement Act, the Indian Self-Determination and Education Assistance Act, the Medicaid Act, and U.S.C. 42 §1983. Represented by Cultural Heritage Partners, PLLC, the plaintiffs alleged that Virginia officials systematically undermined tribal sovereign rights by obstructing the operation of Tribal Health Programs established under federal law. Specifically, they alleged that the defendants unlawfully withheld Medicaid reimbursements, that “undermine[d] the sovereign rights of Tribal Nations and obstruct[ed] the operation of Tribal Health Programs established under federal law." In essence, the parties dispute whether the defendants may reimburse plaintiffs at different rates depending on whether the Medicaid beneficiary is tribal. The plaintiffs claim that Medicaid reimbursement rates for non-tribal patients should be the same rate as for the tribal patients they treat. The plaintiffs sought injunctive, declaratory, and monetary relief.
This case was assigned to Judge Rebecca Beach Smith.
On April 2, 2025, the plaintiffs filed a motion for a temporary restraining order, requesting that the court 1) order defendants to immediately process all Medicaid claims submitted by Plaintiffs on or before March 31, 2026, 2) enjoin the Defendants from halting future claims unless certain conditions are met, and 3) order the defendants to comply with all relevant legal requirements. The plaintiffs argued that an ex parte temporary restraining order is warranted because of the defendant's pattern of retaliatory behavior.
The following day, Judge Elizabeth Hanes recused herself from the case, and the case was reassigned to Chief Judge Mark Davis for further proceedings.
On April 8, 2025, the court denied the plaintiff's motion. The court reasoned that the considerations underlying an ex parte temporary restraining order were moot, due to a defining feature of this relief being that the opposing party is not served with the motion in advance, and the defendants in this case had already received notice of the injunctive relief sought in the complaint. Instead, the court directed the plaintiff to serve their motion for temporary restraining order on the defendants. On April 10, 2025, the plaintiffs filed a motion for preliminary injunction with the same contents.
On May 5, 2025, the defendants filed a motion to dismiss under FRCP 12(b)(1) for lack of subject matter jurisdiction and FRCP 12(b)(6) for failure to state a claim for which relief can be granted, and on August 8, 2025, the court granted the defendant's motion to dismiss.
The court first addressed arguments made regarding whether legislative and sovereign immunity shielded the defendants from liability. The defendants argued that Governor Youngkin should be protected by legislative immunity, which grants individuals "absolute immunity from liability under §1983 for their legislative activities." But the court reasoned that this was not the case because enforcement of the law is not "legislative activity." As for sovereign immunity, which "bars federal courts from exercising jurisdiction over suits against nonconsenting states or state entities." Since lawsuits against officials in their state capacity are "treated as suits against the state," they are barred by sovereign immunity to the extent that they seek monetary relief. The plaintiffs argued that their lawsuit fell under the "well-established" Ex Parte Young exception, which "allows suits for declaratory or injunctive relief against state officers in their official capacities." Ex Parte Young, 209 U.S. 123 (1908).To qualify for this exception, the plaintiff must "allege an ongoing violation of federal law and seek relief that is properly characterized as prospective." Id. at 157. The lawsuit must also be "against officers with 'some connection with the enforcement of this act.'" Id. Specifically, there must be a "special relation" between the state officer sued and the challenged government action. Id. The plaintiffs argued that Governor Youngkin and Secretary Kelly are amenable to this lawsuit because they "exercise authority over the agencies responsible for administering Virginia's Medicaid program" and "endorsed a state budget amendment he understood to be unlawful." The court did not find this compelling and instead found that the Governor's conduct did not lead him to possess sufficient enforcement authority to be sued under this standard and dismissed the claims against him without prejudice.
The plaintiffs also argued that they were bringing this lawsuit in its parens patriae, which states may do when the interests of a group of citizens are at stake, so long as the state is also pursuing a quasi-sovereign interest. The court found that the plaintiffs did not meet the "substantiality" requirement by failing to allege how many of their members are affected by the defendant's actions.
As for the remainder of the claims, the court analyzed whether the plaintiffs had a claim under Ex Parte Young. The court concluded that the claims that the defendants' actions are contrary to Virginia's state Medicaid plan are barred by sovereign immunity and that the federal claims rely on overly broad language in the prefatory section, instead of the more specific provisions necessary, in addition to failing to state a valid claim of field or conflict preemption. Thus, the federal claims were dismissed.
The court concluded by noting that the defendant's motion to dismiss was granted and the only remaining claims could be taken up through the DMA's administrative appeals process. Since the plaintiffs' claims were dismissed, their motion for preliminary injunction was also dismissed as moot.
As of March 2026, the window for appeal has passed, and this case is closed.
Summary Authors
Haleigh Knowles (3/3/2026)
For PACER's information on parties and their attorneys, see: https://www.courtlistener.com/docket/69837120/parties/nansemond-indian-nation-v-commonwealth-of-virginia/
Barrington, Jessie (Virginia)
Dexter, Lydia (Virginia)
Barber, Kathryn Margaret (Virginia)
Hatch, Benjamin Lucas (Virginia)
Pumphrey, Brian Emory (Virginia)
See docket on RECAP: https://www.courtlistener.com/docket/69837120/nansemond-indian-nation-v-commonwealth-of-virginia/
Last updated March 31, 2026, 8:56 a.m.
State / Territory:
Case Type(s):
Healthcare Access and Reproductive Issues
Public Benefits/Government Services
Key Dates
Filing Date: April 1, 2025
Closing Date: April 8, 2025
Case Ongoing: No
Plaintiffs
Plaintiff Description:
Nansemond Indian Nation, a federally recognized tribe.
Plaintiff Type(s):
Public Interest Lawyer: Yes
Filed Pro Se: No
Class Action Sought: No
Class Action Outcome: Not sought
Defendants
State
Commonwealth of Virginia
Virginia Department of Health and Human Resources
Virginia Department of Medical Assistance Services
Defendant Type(s):
Case Details
Causes of Action:
Medicaid, 42 U.S.C §1396 (Title XIX of the Social Security Act)
Constitutional Clause(s):
Other Dockets:
Eastern District of Virginia 2:25-cv-00195
Available Documents:
Outcome
Prevailing Party: Defendant
Relief Sought:
Relief Granted:
Source of Relief:
Issues
Benefits (Source):
Affected Race(s):
American Indian/Alaskan Native
Case Summary of Nansemond Indian Nation v. Commonwealth of Virginia, Civil Rights Litig. Clearinghouse, https://clearinghouse.net/case/46991/ (last updated 3/3/2026).