University of Maryland Medical System Corporation v. Maryland Care, Inc.

CourtDistrict Court, D. Maryland
DecidedMarch 18, 2026
Docket1:25-cv-02319
StatusUnknown

This text of University of Maryland Medical System Corporation v. Maryland Care, Inc. (University of Maryland Medical System Corporation v. Maryland Care, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
University of Maryland Medical System Corporation v. Maryland Care, Inc., (D. Md. 2026).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

UNIVERSITY OF MARYLAND MEDICAL SYSTEM CORPORATION, + Plaintiff, *

Civil No. 25-23 19-BAH MARYLAND CARE, INC., * Defendant. — ,

* * * * * * * * * * * * * MEMORANDUM OPINION Plaintiff University of Maryland Medical System Corporation (“UMMS”) brought suit ‘against Maryland Care, Inc. d/b/a Maryland Physicians Care (“MPC”) alleging a breach of contract and other claims related to UMMS’s provision of healthcare to members of MPC. ECF 1. Pending before the Court are two motions. □ First, MPC filed a motion to dismiss, ECF 2, which UMMS Opposes, ECF 9. MPC has filed a reply. ECF 11. Second, UMMS has filed a motion to remand. □ ECF 10. MPC filed an opposition, ECF 12, and UMMS filed a reply, ECF 13. All filings include memoranda of law.! The Court has reviewed all relevant filings and finds that no hearing is necessary. See Loc. R. 105.6 (D. Md. 2025). Accordingly, for the reasons stated below, UMMS’s motion to remand is GRANTED, except with respect to its request for attorney’s fees. MPC’s motion to dismiss is DENIED as moot.

’ The Court references all filings by their respective ECF numbers and page numbers by the ECF- generated page numbers at the top of the page.

I. BACKGROUND □

Maryland “Medicaid is a joint federal and state program that provides free or low-cost health care coverage” to vulnerable Marylanders, ECF 4, at 2 95. “HealthChoice [is] a mandatory Medicaid managed care program that provides Maryland Medicaid participants with the ability to: enroll in one of nine Medicaid” managed care organizations (“MCOs”), one of which is MPC. Jd. at 3 9] 6, 8. MPC is obligated by its contract (the “Plan Contract”) with the Maryland Department of Health (“MDH”) “to manage the care of its members, which includes paying the health care. professionals and facilities who provide them with covered health services.” Id. at3-4 48. Pursuant to its obligation to manage the care of its members, “effective January 1, 2018,” “MPC entered into a Participating Health Provider Agreement (the ‘PHP Agreement’)” with. UMMS, under “which UMMS agreed to provide services to MPC Members.” Jd. at 4-5 □ 11. UMMS alleges that “MPC agreed to pay for those services at specified rates” which are either “set by the Maryland Health Services Cost Review Commission” or “negotiated and agreed to by UMMS and MPC.” Jd According to UMMS, “Taljt all times relevanit to this Complaint, UMMS has provided medical care, including emergency services, to MPC members consistent with its obligations under the PHP Agreement.” /d at 5 7 13. In return, UMMS claims that “MPC is obligated under the PHP Agreement to pay UMMS at the rates set forth in the fee schedule incorporated into the PHP Agreement.” fd. at 8 J 28. UMMS alleges that MPC has engaged in a “longstanding, ongoing, deliberate, and systemic practice[] of denying timely and complete payment for covered medical services provided to MPC members by UMMS,” causing “UMMS to lose over $15 million.” Jd. at 5-6 14-15. Specifically, UMMS alleges that MPC denies UMMS’s claims for emergency services that UMMS is required to provide under the federal Emergency Medical Treatment and Labor Act (“EMTALA”), /d at 9 431. UMMS asserts that the Plan Contract between MPC and MDH

“obligates MPC to cover all Medicaid benefits that are required to be covered under federal and/or Maryland law and regulations,” including emergency services under EMTALA. id. at 11 36, at ‘12 { 43; see also id. at 13 § 44 (“Referencing and incorporating both federal and state law, the Plan Contract unquestionably requires MPC to provide coverage for emergency services to its members, and to pay UMMS for such services.”). UMMS alleges that it is similarly “required to provide ‘Emergency Medical Services’ to MPC Members” under the PHP Agreement. Jd at 13 § 47. UMMS claims that {whether a service must be covered as an ‘emergency’ service is determined by a coverage standard known

‘as the ‘prudent layperson’ standard (‘PLP Standard’),” which is adopted and incorporated in the Plan Contract, /d. at 9 9 33, at 11 | 36. MPC, UMMS alleges, applies a “flawed and unlawful coverage standard .. . instead of the PLP standard” to deny claims in “violation of federal and state Jaw, the Plan Contract, and the PHP Agreement.” /d at 15-16 7] 54, 57. Based on these allegations, UMMS brings four causes of action in the complaint: breach of contract (Count I); in the alternative to a breach of contract, unjust enrichment (Count II); -declaratory relief (Count ITI); and injunctive relief (Count IV). Jd. at 28-31. In connection with Counts I and II, UMMS requests compensatory damages in excess of $15 million and “specific performance of MPC’s obligations under the Agreement,” Id, at 32. UMMS also seeks a

declaration that: “MPC has breached the Agreement by failing to pay UMMS for the services: referenced” in the complaint; “MPC’s use of internally developed code lists .. . to automatically deny or downcode claims ... violates the Agreement and applicable law”; “MPC’s denial of Claims for behavioral health-related emergency care . . . is in violation of its obligations under the Agreement and governing Medicaid standards”; and “MPC’s systemic failure to apply the prudent layperson standard in evaluating emergency claims constitutes an ongoing breach of its contractual

and legal obligations.” {d. at 32-33. UMMS also requests that the Court enjoin MPC from “using . its internally developed code lists . . . to automatically deny or downcode.claims”; “denying claims for behavioral health-related emergency care”; and “setting aside the prudent layperson standard when evaluating emergency claims.” Jd. at 33. UMMS initially filed this action in the Circuit Court for Baltimore City, Maryland. ECF 1, at 1. MPC removed the action to federal court on the basis of federal question jurisdiction pursuant to 28 US.C. § 1331. Id. Specifically, MPC asserted that removal is proper because “Counts II, II, and IV allege violations of federal law” including that “MPC’s legal obligations to make certain payments are established by: (4) the federal Medicaid statutes; (i) EMTALA; and (iii) the federal EMTALA regulations.” Jd at 5. MPC also argued that “this Court has’ supplemental jurisdiction over Plaintiff's state law claims (Count I-Breach of Contract).” Jd. at 6. MPC simultaneously filed a motion to dismiss, ECF 2, which is fully briefed, see ECF 9 (UMMS’s opposition); ECF 11 (MPC’s reply). UMMS has also filed a motion to remand, ECF 10, which: MPC opposes, ECF 12 (MPC’s “Opposition”), and to which UMMS has filed a reply, ECF 13. □

The Court begins, and ends, by addressing the motion to remand. See Comm’r of Lab. & Indus. to Use & Benefit of Valerie Steele v. Washington Metro. Area Transit Auth., Civ. No. RDB-25-. 1746, 2025 WL 2917382, at *1 (D. Md. Oct. 14, 2025) (“It is generally improper to resolve a motion dismiss before deciding a motion to remand.”). . os Il. LEGAL STANDARD Federal courts are courts of limited jurisdiction and “may not exercise jurisdiction absent a statutory basis)” Exxon Mobil Corp. y, ‘Allapattah Servs., Inc., 545 U.S. 546, 552 (2005). Federal law grants defendants “Tt]he right to remove a case from state to federal court” if a United States district court would have original jurisdiction over the case. See Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994), Where, as here, “there is no diversity of

citizenship alleged, the propriety of removal depends on whether this case falls within the original jurisdiction of the district court under 28 US.C. § 1331 as a civil action ‘arising under’ the laws ‘of the United States.” State of Ma v. Philip Morris Inc., 934 F. Supp. 173, 175 (D. Md.

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University of Maryland Medical System Corporation v. Maryland Care, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/university-of-maryland-medical-system-corporation-v-maryland-care-inc-mdd-2026.