Pee Dee Health Care, P.A. v. Sanford

509 F.3d 204, 2007 U.S. App. LEXIS 28027, 2007 WL 4247327
CourtCourt of Appeals for the Fourth Circuit
DecidedDecember 5, 2007
Docket06-2108
StatusPublished
Cited by47 cases

This text of 509 F.3d 204 (Pee Dee Health Care, P.A. v. Sanford) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pee Dee Health Care, P.A. v. Sanford, 509 F.3d 204, 2007 U.S. App. LEXIS 28027, 2007 WL 4247327 (4th Cir. 2007).

Opinion

Affirmed by published opinion. Judge DUNCAN wrote the opinion, in which Judge MICHAEL and Judge GREGORY joined.

OPINION

DUNCAN, Circuit Judge:

This case raises two issues of importance to healthcare providers who receive reimbursement from Medicaid. The first is whether healthcare providers serving Medicaid recipients have a right to sue state officials, under 42 U.S.C. § 1983, to enforce rights created under the Medicaid reimbursement program at 42 U.S.C. § 1396a(bb). The second is whether the appropriate venue for such an action can be limited by contract.

Pee Dee Health Care, P.A. (“Pee Dee”) is a healthcare provider qualified under the Medicaid program to serve low-income individuals in rural areas of South Carolina. As a Medicaid service provider, Pee Dee is entitled to reimbursement payments from the state. The Benefits Improvement and Protection Act of 2000 (“BIPA”) provides the methodology for computing those payments. To receive reimbursement payments, however, healthcare providers must first enter into a contract with the South Carolina Department of Health and Human Services (“SCDHHS”), the state agency responsible for the administration of the Medicaid program in South Carolina. Each contract contains a forum-selection clause which dictates that all reimbursement claims must be pursued through state administrative and judicial avenues.

Pee Dee claims that the SCDHHS payment methodologies do not comply with various provisions of BIPA. Pee Dee brought this action, pursuant to 42 U.S.C. § 1983, in the United States District Court for the District of South Carolina against the Governor of South Carolina, the Director of SCDHHS and SCDHHS itself, to enforce the reimbursement provisions of BIPA. The district court dismissed the BIPA claim, finding venue inappropriate based on the forum-selection clause in the provider contract between Pee Dee and SCDHHS. We affirm, holding that even though a healthcare provider has a private right of action under § 1983 to enforce 42 U.S.C. § 1396a(bb), Pee Dee agreed, in the forum-selection clause, to bring such an action in a state tribunal and is bound by that agreement.

I.

A. The Medicaid Scheme

Medicaid is a cooperative federal-state program designed to partially compensate *207 states for the costs of providing healthcare to needy individuals. 42 U.S.C. § 1396. States are not required to participate in the program, but if they choose to do so, “they must implement and operate Medicaid programs that comply with detailed federally mandated standards.” Antrican v. Odom, 290 F.3d 178, 183 n. 2 (4th Cir.2002). To qualify for federal assistance, a state must submit a comprehensive plan to the federal Secretary of Health and Human Services describing the nature and scope of the state’s Medicaid program. 42 C.F.R. § 430.10. Each state plan must include, among its details, a scheme for reimbursing rural health clinics (“RHCs”) for services provided to Medicaid patients. 1 42 U.S.C. § 1396a(bb).

The Medicaid Act, as amended by BIPA, Pub.L. No. 106-554, § 1(a)(6), 114 Stat. 2763, (codified as amended in scattered sections of 42 U.S.C.), regulates the way in which RHCs receive reimbursement payments for the services they provide to Medicaid patients. In general, BIPA allows for two methods of reimbursement. The first method is a “prospective payment system” based on historical-average costs plus a cost-of-living factor. 2 42 U.S.C. § 1396a(bb)(2). The second method, set forth in § 1396a(bb)(6), authorizes an “alternative payment methodology” that can take a number of forms, provided that the state and the clinic agree upon the system and it results in payment of an amount which is at least equal to the amount authorized under the prospective payment system.

SCDHHS is the state agency in South Carolina responsible for administration of the Medicaid program. Healthcare providers in South Carolina are not required to accept Medicaid patients. However, if a healthcare provider elects to treat Medicaid patients and to seek reimbursement from SCDHHS for its services, it does so by entering into a contract (“provider contract” or “contract”) with SCDHHS.

The contract provides for the method and amounts of payment, as well as for certain remedies if a healthcare provider believes it has not been reimbursed as required by law. 3 For example, the contract provides:

A. Reimbursement
The Rural Health Clinic (RHC) Medicaid rate for services rendered under this contract shall be determined based upon applicable Medicare/Medicaid laws, rules or regulations and SCDHHS policies and procedures in accordance with Attachment 4.19-B of the State Plan for Medical Assistance.

J.A. 117. 4

Should any dispute arise under the terms of the contract, a healthcare provid *208 er agrees, as part of its decision to accept Medicaid reimbursement payments, that its “sole and exclusive remedy” regarding such disputes would be to first file a Notice of Appeal of SCDHHS’s action to the SCDHHS Appeals Division. J.A. 124. Upon exhaustion of all administrative remedies, judicial review of final agency decisions is available in the state court system. S.C.Code Ann. § 1-23-380. Such appeals are governed by Article VIII of the contract, which provides:

If any dispute shall arise under the terms of this contract, the sole and exclusive remedy shall be the filing of a Notice of Appeal within .thirty (30) days of the receipt of written notice of SCDHHS’s action or decision which forms the basis of the appeal. Administrative appeals shall be in accordance with SCDHHS’s regulations R. 126-150 et seq. ... Judicial Review of any final SCDHHS administrative decision shall be in accordance with § 1-23-380, Code of Laws of South Carolina (1976), as amended.

J.A. 124 5 (emphasis added).

Such subsequent judicial review must proceed in the venue and location identified in Sections (R) and (S) of Article IX of the contract. 6

R.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
509 F.3d 204, 2007 U.S. App. LEXIS 28027, 2007 WL 4247327, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pee-dee-health-care-pa-v-sanford-ca4-2007.