Dartmouth-Hitchcock Clinic v. Toumpas

856 F. Supp. 2d 315, 2012 DNH 032, 2012 U.S. Dist. LEXIS 27667, 2012 WL 683502
CourtDistrict Court, D. New Hampshire
DecidedMarch 2, 2012
DocketCase No. 11-cv-358-SM
StatusPublished
Cited by3 cases

This text of 856 F. Supp. 2d 315 (Dartmouth-Hitchcock Clinic v. Toumpas) is published on Counsel Stack Legal Research, covering District Court, D. New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dartmouth-Hitchcock Clinic v. Toumpas, 856 F. Supp. 2d 315, 2012 DNH 032, 2012 U.S. Dist. LEXIS 27667, 2012 WL 683502 (D.N.H. 2012).

Opinion

ORDER

STEVEN J. McAULIFFE, District Judge.

A number of New Hampshire hospitals and two individuals seek an order prospectively enjoining the State’s Commissioner of Health and Human Services from enforcing significantly reduced reimbursement rates for medical care provided under the State’s Medicaid Program. The hospital and health care system plaintiffs are “providers” of medical care, and the individual plaintiffs are “beneficiaries” under the program.

Plaintiffs complain that, in several respects, the Commissioner ignored his clear obligations under federal law, both procedurally and substantively. First, they say, he failed to provide them with notice and an opportunity to comment before the reduced rates became final. Second, they claim he failed to provide notice and an opportunity to comment before the Department of Health and Human Services (“DHHS”) employed rate-setting methods and standards that were materially different from those established in the State’s federally-approved Medicaid plan. Finally, plaintiffs assert that the reduced rates cannot and do not satisfy substantive (and preemptive) federal requirements (i.e., that Medicaid reimbursement rates be set at a level sufficient to both assure quality of care and enlist enough providers to deliver medical services to Medicaid beneficiaries to the same extent such care is available to the general population). See 42 U.S.C. § 1396a(a)(30)(A) (“Section (30)(A)”).

At the risk of oversimplifying the complaint, it generally alleges that New Hampshire’s Legislature and Governor effectively dictated substantial reductions in Medicaid reimbursement rates (as well as other Medicaid funding) solely to accommodate state budgetary preferences — that is, to save the State money. And, say plaintiffs, they acted in a manner completely divorced from the federally required rate-setting process that the State agreed to follow when it voluntarily enlisted in the Medicaid program. The Commissioner’s failure to comply with mandatory notice requirements, and his failure to set reimbursement rates in a lawful manner, plaintiffs argue, render those reduced rates invalid and unenforceable. Accordingly, say plaintiffs, they are entitled to equitable injunctive relief as necessary to [317]*317obtain the Commissioner’s compliance with federal law.

The Commissioner opposes the motion for injunctive relief on a number of grounds. He also moves to dismiss plaintiffs’ substantive claims (Counts I-IV) on grounds that the Medicaid Act does not include a private right of action entitling either medical service providers or beneficiaries to enforce the Act’s substantive provisions. Enforcement of the Medicaid Act’s substantive provisions, says the Commissioner, is a matter that Congress has committed to the sound discretion of the federal Secretary of Health and Human Services, not private litigants. Moreover, the Commissioner argues, plaintiffs’ assertion of a direct claim under the Supremacy Clause of the United States Constitution is little more than a transparent effort to end-run Congressional intent, by putting a different label on what is really an effort to enforce private rights under the Medicaid Act.

With respect to plaintiffs’ procedural claims, the Commissioner denies that DHHS employed rate-setting methods or standards different from those described in the State’s Medicaid plan (and so denies that any public notice was required), and he denies that he was obligated to obtain federal approval of a change in rate-setting methodology before reducing the reimbursement rates. Moreover, he contends that, to the extent any notice and opportunity for public comment were required, the legislative and executive processes associated with the rate reductions were sufficient, in themselves, to satisfy his obligations under federal law.

The parties have extensively briefed the pertinent legal and factual issues, and hearings have been held on plaintiffs’ request for preliminary injunctive relief, as well as the Commissioner’s motion to dismiss Counts I-IV.

Background

Medicaid is a cooperative federal-state program designed to provide medical services to those members of society who, because they lack the necessary financial resources, cannot otherwise obtain medical care. That is, the program provides medical care to a population generally consisting of the poor, including dependent children, the disabled, and the elderly. 42 C.F.R. § 430.0. Legislation creating the program, the Medicaid Act, 42 U.S.C. § 1396 et seq., “provides financial support to states that establish and administer state Medicaid programs in accordance with federal law through a state plan approved by the U.S. Department of Health and Human Services (“HHS”).” Long Term Care Pharm. Alliance v. Ferguson, 362 F.3d 50, 51 (1st Cir.2004). “Although participation in the Medicaid program is entirely optional, once a State elects to participate, it must comply with the requirements of [the Act].” Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct. 2671, 65 L.Ed.2d 784 (1980). One such requirement is that the state must have (and adhere to) a federally-approved plan for reimbursing health care providers. 42 U.S.C. §§ 1396a(a), 1396d(a).

New Hampshire participates in the program and has a federally-approved state plan. Under New Hampshire’s plan, DHHS is the single state agency charged with responsibility to administer the Medicaid program. 42 U.S.C. § 1396a(a)(5). DHHS is headed by the defendant, Commissioner Nicholas A. Toumpas. As the State agency charged with administering the Medicaid program, DHHS is required to set payment rates for various medical services according to approved methods and standards.

All agree that the present dispute arises from state budget management decisions [318]*318made by the Governor and Legislature, in 2008, in response to an anticipated decline in general revenues and concomitant looming deficits. Given difficult economic circumstances and the relatively large expenditures associated with the Medicaid program, DHHS’s budget naturally came under increasing scrutiny. Earlier, in 2005, the legislature had enacted a provision of state law apparently designed to create a specific mechanism for adjusting reimbursement rates for Medicaid outpatient services, should DHHS think that claims might exceed appropriations available to pay those claims:

If [Medicaid outpatient reimbursement] expenditures are projected to exceed the annual appropriation, the department may recommend rate reduction for providers to offset the amount of any such deficit. The department of health and human services shall submit to the legislative fiscal committee and to the finance committees of the house and the senate, the rates that it proposes to pay for hospital outpatient services. The rates shall be subject to the prior approval of the legislative fiscal committee.

N.H. Rev. Stat. Ann.

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Related

NH Hospital Assoc., et al. v Burwell, et al.
2017 DNH 040 (D. New Hampshire, 2017)
Dartmouth-Hitchcock v. NHDHHS
2012 DNH 032 (D. New Hampshire, 2012)

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Bluebook (online)
856 F. Supp. 2d 315, 2012 DNH 032, 2012 U.S. Dist. LEXIS 27667, 2012 WL 683502, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dartmouth-hitchcock-clinic-v-toumpas-nhd-2012.