The Fishing Point Healthcare lawsuit was a federal case filed on April 1, 2025, in which the Nansemond Indian Nation and its tribally owned clinic system sued Governor Glenn Youngkin, Virginia’s Department of Medical Assistance Services (DMAS), and other state officials over withheld Medicaid reimbursements. A federal judge dismissed the case on August 8, 2025. Virginia’s fraud investigation of the provider is still open, and the clinics stopped seeing Medicaid patients on April 15, 2026.1FindLaw. Nansemond Indian Nation v. Commonwealth of Virginia2Virginia Mercury. Medicaid Payment Halt Leaves Thousands Without Care as Fishing Point, State Clash Over Fraud Probe
Who Fishing Point Is
Fishing Point Healthcare is a tribally owned health system launched in 2023 by the Nansemond Indian Nation, a Virginia tribe that received federal recognition in January 2018. Its first clinic opened in Portsmouth in February 2024, followed by a primary care office in Newport News in early 2025, with services spanning primary care, pharmacy, home health, behavioral health, a 20-bed substance abuse facility in Chesapeake, and dental and radiology care.3VPM. Nansemond Indian Nation Fishing Point Healthcare Newport News Although the Nansemond Nation has roughly 550 enrolled members, Fishing Point served more than 1,100 Medicaid beneficiaries a month and over 4,000 patients total before operations were suspended.2Virginia Mercury. Medicaid Payment Halt Leaves Thousands Without Care as Fishing Point, State Clash Over Fraud Probe
What the Dispute Was About
Under federal law, tribal health programs can bill state Medicaid at a federally set All-Inclusive Rate (AIR) of roughly $801 per outpatient encounter. When the patient is American Indian or Alaska Native, the federal government reimburses the state at 100 percent. When the patient is not AI/AN, the state pays its usual share.4MACPAC. Medicaid’s Role in Health Care for American Indians and Alaska Natives
DMAS took the position that the higher AIR should not apply to services for non-AI/AN patients and that many services Fishing Point billed at that rate fell outside what the rate was designed to cover. The Nansemond Nation argued that federal rules entitled the clinic to bill the AIR for all outpatient encounters regardless of the patient’s tribal status, and that Virginia was shifting money away from tribal providers to protect managed care organizations.1FindLaw. Nansemond Indian Nation v. Commonwealth of Virginia
Fishing Point’s billings grew fast. Personal care service billings went from about $2.7 million in 2023 to over $96 million in 2024, roughly a 3,600 percent increase, which drew attention from the Centers for Medicare and Medicaid Services (CMS) and DMAS.5Turtle Talk. Opposition to Motion for Injunction On October 10, 2024, DMAS began pending all future personal care claims. Roughly $228.5 million in claims accumulated in pended status. Governor Youngkin endorsed a budget amendment on March 24, 2025, that would condition AIR reimbursement on a patient’s AI/AN status, and on March 31, 2025, the state froze about $1.7 million in additional Medicaid claims across more than 7,650 submissions.6Virginia Mercury. Nansemond Indian Nation Says Virginia Is Withholding Medicaid Funding in New Lawsuit
What the Lawsuit Claimed
The tribe and Fishing Point filed suit the next day, April 1, 2025, in the U.S. District Court for the Eastern District of Virginia (case no. 2:25-cv-195). Defendants included the Commonwealth, DMAS, the Office of the Secretary of Health and Human Resources, Governor Youngkin, Secretary Janet Vestal Kelly, DMAS Director Cheryl Roberts, and Chief Deputy Director Jeffrey Lunardi.1FindLaw. Nansemond Indian Nation v. Commonwealth of Virginia
The complaint alleged that Virginia’s attempt to condition reimbursement on patient tribal status violated the Supremacy Clause and federal Medicaid law; that the state was interfering with Fishing Point’s federal contract under the Indian Self-Determination and Education Assistance Act by withholding funds, freezing claims, and stalling a dental clinic approval; and that DMAS violated federal timely-payment rules and Virginia’s approved state Medicaid plan. Nansemond Chief Keith Anderson said, “Virginia is undermining our sovereignty and our patients’ care to benefit healthcare giants. We will not stand by.”7Tribal Business News. Nansemond Indian Nation Sues Virginia Over Medicaid Reimbursement Discrimination CEO Lance Johnson said Fishing Point had offered a “cost-neutral plan” to cover the state’s share for non-tribal patients, which Virginia rejected.8Native News Online. Nansemond Indian Nation Sues Virginia Over Medicaid Reimbursement Discrimination
Virginia’s Fraud Allegations
On April 29, 2025, DMAS suspended all payments to Fishing Point, citing a “credible allegation of fraud” that under federal regulations required a payment hold during investigation.9News From the States. New Details Emerge in Fishing Point Healthcare Fraud Allegation
In its opposition to the tribe’s injunction motion, the state laid out its billing concerns. Between July 2023 and June 2024, Fishing Point billed $105 million for 1,267 Medicaid members, with $96 million in personal care services alone. DMAS said more than 41 percent of Fishing Point’s Medicaid members received personal care services, compared to about 2.3 percent statewide, and more than 75 percent received home health services versus under 5 percent statewide. The state alleged the clinic billed the $801 AIR multiple times per visit (sometimes exceeding a five-encounters-per-day limit), billed $801 per unit for over-the-counter items like ibuprofen and Vaseline (totaling roughly $3.1 million over 11 months), showed almost no physician oversight (only 90 of more than 2,000 members billed for non-clinic services had ever been billed for a physician evaluation at the clinic), and in some cases billed personal care services on dates when patients were recorded as hospital inpatients.10Virginia Mercury. New Details Emerge in Fishing Point Healthcare Fraud Allegation
DMAS identified five distinct credible allegations of fraud and referred the matter to the Medicaid Fraud Control Unit under the Virginia Attorney General’s office. Johnson disputed the framing, saying the disputed billings amounted to “less than 1%” of the clinic’s total and were tied to home health services, likely attributable to an individual employee or contractor rather than institutional wrongdoing.2Virginia Mercury. Medicaid Payment Halt Leaves Thousands Without Care as Fishing Point, State Clash Over Fraud Probe
How the Court Ruled
U.S. District Judge Rebecca Beach Smith dismissed all claims on August 8, 2025. The court had already denied a temporary restraining order on April 8, 2025, and the preliminary injunction request was mooted by the dismissal.11PACER Monitor. Nansemond Indian Nation et al v. Commonwealth of Virginia et al
The court held that the Commonwealth and its agencies were protected by sovereign immunity, and that Youngkin and Kelly lacked the enforcement connection required to be sued under the Ex parte Young exception. Youngkin’s endorsement of the budget amendment was treated as legislative activity, giving him legislative immunity in his personal capacity. The tribe’s attempt to sue on behalf of its members under a parens patriae theory failed for lack of named members and a “sufficiently substantial segment” of the population shown to be harmed. The court also found that federal Medicaid law does not displace state participation in the program, that the tribal sovereignty claims did not apply outside on-reservation conduct, and that the tribe had not alleged a violation of a federal right cognizable under Section 1983. All claims were dismissed without prejudice, and the court directed the plaintiffs to pursue remaining state plan compliance disputes through DMAS’s administrative appeals process.1FindLaw. Nansemond Indian Nation v. Commonwealth of Virginia12Virginia Lawyers Weekly. Indian Nation’s Lawsuit Over Medicaid Reimbursements Is Dismissed
What Has Happened Since
While the case was pending, Virginia moved to lock in the reimbursement restrictions at the heart of the dispute. DMAS filed State Plan Amendment 25-007, effective April 1, 2025, excluding pharmacy, dental, transportation, and personal care waiver services from AIR billing and requiring tribal facilities with retail pharmacies to enroll separately at standard pharmacy rates.13Virginia DMAS. SPA 25-007 Tribal Provider Reimbursement SPA 25-012, effective July 1, 2025, limited AIR reimbursement to services provided to patients eligible for the 100 percent federal match, meaning non-AI/AN patients would be reimbursed at standard Medicaid rates.14Virginia DMAS. SPA 25-012 Applicability of the OMB Outpatient All-Inclusive Rate SPA 25-007 alone was projected to reduce fee-for-service expenditures by about $37.3 million in federal fiscal 2025 and $53 million in 2026. As of the most recent available filings, both SPAs had been submitted to CMS with no formal approval or rejection recorded.15Virginia DMAS. SPAs Filed With CMS
With no Medicaid payments arriving since April 2025, Fishing Point announced it would suspend Medicaid services on April 15, 2026. Johnson said the organization had kept billing while hoping for a resolution but could no longer self-finance operations. The shutdown left more than 4,400 non-Native Medicaid patients in Portsmouth alone looking for new providers.16WTKR. Thousands of Medicaid Patients Lose Access as Portsmouth Clinic Pauses Care DMAS said it was not notified in advance and directed affected fee-for-service members to the state’s Cardinal Care managed care program to find new providers.17Virginia DMAS. Fishing Point
The Medicaid Fraud Control Unit’s investigation remains active, and no criminal charges have been reported. Fishing Point has filed an administrative appeal of the payment suspension with DMAS, and Johnson said the organization “has laid out its position in detail in the formal administrative proceeding.”18WTKR. Medicaid Fraud Investigation Targets Fishing Point Healthcare as Patients Lose Access to Care The outcome of that appeal has not been publicly reported. The clinics remain closed.