Rio Grande Community Health Center, Inc. v. Rullan

397 F.3d 56, 2005 U.S. App. LEXIS 2390, 2005 WL 338327
CourtCourt of Appeals for the First Circuit
DecidedFebruary 14, 2005
Docket04-1526
StatusPublished
Cited by199 cases

This text of 397 F.3d 56 (Rio Grande Community Health Center, Inc. v. Rullan) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rio Grande Community Health Center, Inc. v. Rullan, 397 F.3d 56, 2005 U.S. App. LEXIS 2390, 2005 WL 338327 (1st Cir. 2005).

Opinion

*60 LYNCH, Circuit Judge.

This case raises two issues of importance to the administration of Medicaid funds for medically underserved populations. The first is whether the health centers serving those populations have enforceable rights to sue, under 42 U.S.C. § 1983, to obtain an injunction requiring that monies (called wraparound payments) be paid as they become due. The second is how a federal court hearing such a prospective claim should proceed when parallel litigation is proceeding in a state court, seeking damages for past overdue payments and other relief. Of course, due to the Eleventh Amendment to the United States Constitution, suits for such past damages may often only be brought in state court. And so, in the world of Medicaid payments, such parallel suits are not uncommon.

Here, the Secretary of Health for the Commonwealth of Puerto Rico, Johnny Rullan, appeals from the grant of a preliminary injunction that forced him to make a prospective interim Medicaid reimbursement payment to the plaintiff health center, Concilio de Salud Integral de Loiza, Inc. (“Loiza”), for the first quarter of 2005. 1 It is undisputed that the Secretary has not, to date, been in compliance with the special Medicaid reimbursement requirements applicable to federally-qualified health centers (FQHCs) like Loiza, which provide care to medically under-served populations. 42 U.S.C. §§ 1396a(bb). As a result of the Secretary’s noncompliance with these requirements, the plaintiff Puerto Rico FQHCs alleged they were experiencing financial problems and Loiza, in particular, alleged that it was facing imminent foreclosure and bankruptcy. The Secretary did not seriously deny this.

Nonetheless, the Secretary argues that the preliminary injunctive relief given here was inappropriate. He argues that (1) the district court should have abstained, under Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), from granting relief, because of a pending local court action on similar issues; (2) there is no action to enforce the relevant provisions of the Medicaid law under 42 U.S.C. § 1983; and (3) the district court otherwise abused its discretion in granting the injunction because relief was moot and for other reasons.

We affirm. Younger does not apply to the sort of ongoing local court action at issue here. The exceptional circumstances necessary for abstention due to the mere presence of a parallel state court action, under Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), are absent. There is an implied action under section 1983 to enforce the special provisions of the Medicaid law dealing with FQHC reimbursement, 42 U.S.C. § 1396a(bb), as these provisions vest the FQHCs with a federal right to proper reimbursement.

I.

The Medicaid scheme

Loiza operates a community “health center” under the Public Health Service [PHS] Act, 42 U.S.C. § 254b. Such centers must meet various requirements: most importantly, they must be located in a medically underserved area or serve a medically underserved population. 42 U.S.C. § 254b(a)(l). They must also provide services to Medicaid recipients. See 42 U.S.C. § 254b(k)(3)(E). As a “health *61 center,” Loiza is eligible to receive, and has received, federal grant funds under section 330 of the Public Health Service Act. 42 U.S.C. § 254b.

Loiza alleges that the Commonwealth has failed to properly compensate the plaintiff health centers for their treatment of Medicaid patients. Some elaboration'of the Medicaid scheme is needed to understand the dispute. The Medicaid program, which was begun in 1965, is jointly supported with federal and state funds and directly administered by state governments: the purpose is to provide medical assistance to indigent families with dependent children, as well as indigent disabled, blind, and aged individuals. 42 U.S.C. § 1396 et seq.; see Rabin v. Wilsan-Coker, 362 F.3d 190, 192 (2d Cir.2004). The Commonwealth of Puerto Rico is such a state for Medicaid purposes, 42 U.S.C. § 1301(a)(1), and for these purposes we refer to it as a state. A state need not participate in Medicaid, but once a state decides to participate, it must comply with all federal requirements.

One such federal requirement is that a state must provide, as a part of its Medicaid plan, certain types of health services. 42 U.S.C. § 1396a(a)(10). For example, a state must provide “Federally-qualifíéd health center services.” 42 U.S.C. § 1396a(a)(10)(A);: 42 U.S.C. § 1396d(a)(2)(C). Such services can, by statutory definition, only be provided by “Federally-qualified health centers” (FQHCs). Loiza is a FQHC because it is eligible to receive grants under section 330 of the Public Health Service Act (most importantly, it serves a medically under-served area). 42 U.S.C. § 254b.

Federal law regulates in great detail the ways in which FQHCs receive payment for the services that they provide to Medicaid patients. The special provisions on FQHC reimbursement reflect the important public health role that these centers play. The FQHC reimbursement scheme has changed several times, most recently on January 1, 2001. The system in place between 1989 and 2000 required that FQHCs be reimbursed for “100 percent ... of [each FQHC’s] costs which are reasonable.” 42 U.S.C. § 1396a(a)(13)(C) (repealed 2000).

A new system, which relieved centers of having to supply new cost data every year, was put in place after fiscal year 2000. The new system, which is the focus of this action, is referred to as the prospective payment system (PPS). The first step is to calculate each center’s total cost of providing Medicaid services for two years, 1999 and 2000.

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Bluebook (online)
397 F.3d 56, 2005 U.S. App. LEXIS 2390, 2005 WL 338327, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rio-grande-community-health-center-inc-v-rullan-ca1-2005.