Burlington United Methodist Family Services, Inc. v. Atkins

227 F. Supp. 2d 593, 2002 U.S. Dist. LEXIS 20061, 2002 WL 31324122
District Court, S.D. West Virginia·Decided October 15, 2002·No. No. CIV.A. 2:02-0983·Published·Cited by 5 cases

Opinion

MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

Pending are Defendants’ motion to dismiss for failure to state a claim upon which relief may be granted and Plaintiffs’ motion for a preliminary injunction. The Court GRANTS Defendants’ motion in part and DISMISSES all counts of the Complaint except Counts IV and VI, alleging a violation of constitutional rights of equal protection and a violation of civil rights. Count VI is retained solely as it pertains to the equal protection count. Because Count I for injunctive relief is DISMISSED, Plaintiffs’ motion for a preliminary injunction is DENIED as moot.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs are four providers of residential and community-based mental health services for seriously troubled children in West Virginia. Reimbursement for the residential child care services is almost entirely through the Medicaid program, pursuant to Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. Defendants are the heads of two state agencies. The West Virginia Bureau for Medical Services (“BMS”) implements, oversees, and regulates the Medicaid Program in West Virginia. The West Virginia Department of Health and Human Services oversees BMS.

The West Virginia Medicaid State Plan provides a prospective cost-based reimbursement system for Behavioral Health Residential Child Care Facilities. As explained in the Complaint, under the Plan, providers’ reimbursement rates are adjusted by BMS and DHHR every six months based on cost reports filed by the providers. The agencies calculate the weighted average cost of all providers for the described level of residential service. Individual providers are then generally reimbursed at a rate that is the lesser of the rate based on their actual costs or the calculated weighted average costs for all providers within each described level of service. Plaintiffs complain Defendants’ method is not based on a determination of what the costs of an efficient or economically operated facility would be and that it results in wide rate variations from period to period. Plaintiffs allege they have complained in writing protesting the rates, but Defendants have responded that the administrative appeals process is available only to correct computational or reporting errors, not the rate-setting method.

Plaintiffs request an injunction reinstating the rates effective October 1, 2001 through March 31, 2002. They allege violations of 42 U.S.C. § 1396a(a)(30)(A) (“Section 30(A)”), the Provider Agreements, and Section 700 of the Rehabilitation Manual,1 as well as constitutional de[595] privations of procedural and substantive due process and equal protection rights.

II. DISCUSSION

A. Motion to Dismiss

Our Court of Appeals has often stated the settled standard governing the disposition of a motion to dismiss pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure:

In general, a motion to dismiss for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts which would support its claim and would entitle it to relief. In considering a motion to dismiss, the court should accept as true all well pleaded allegations and should view the complaint in a light most favorable to the plaintiff.

Mylan Laboratories, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993) (citations omitted); see also Brooks v. City of Winston-Salem, 85 F.3d 178, 181 (4th Cir.1996); Gardner v. E.I. Dupont De Nemours and Co., 939 F.Supp. 471, 475 (S.D.W.Va.1996). It is through this analytical prism the Court evaluates Defendants’ motion.

B. No Private Right of Action for Providers under Section 1396a(a)(30)(A)

The initial question is whether Plaintiffs as Medicaid providers, rather than Medicaid recipients, may enforce a Section 30(A) claim under § 1983, or otherwise.2 Although Plaintiffs do not invoke § 1983, all the major cases to examine a private right of action for providers under Section 30(A) do so in that context. See Arkansas Med. Soc’y, Inc. v. Reynolds, 6 F.3d 519, 526 (8th Cir.1993); Methodist Hospitals, Inc. v. Sullivan, 91 F.3d 1026, 1029 (7th Cir.1996); Visiting Nurse Ass’n of North Shore, Inc. v. Bullen, 93 F.3d 997, 1004 (1st Cir.1996); Evergreen Presbyterian Ministries, Inc. v. Hood, 235 F.3d 908, 928-29 (5th Cir.2000); Pennsylvania Pharmacists Ass’n. v. Houstoun, 283 F.3d 531, 541-42 (3rd Cir.), cert. denied, — U.S.-, 123 S.Ct. 100, 154 L.Ed.2d 30 (2002).

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Burlington United Methodist Family Services, Inc. v. Atkins, 227 F. Supp. 2d 593, 2002 U.S. Dist. LEXIS 20061, 2002 WL 31324122 (S.D.W. Va. 2002).

227 F. Supp. 2d 593 (Burlington United Methodist Family Services, Inc. v. Atkins) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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BURLINGTON UNITED METHODIST FAMILY v. Atkins
227 F. Supp. 2d 593 (S.D. West Virginia, 2002)