KUHN, J.
1 gDefendants-appellants, State of Louisiana through the Department of Health and Hospitals and its secretary Alan Levine (DHH or the department), appeal the trial court’s judgment, granting summary judgment and declaring a reimbursement methodology promulgated by DHH (which appears as rules in various publications of the Louisiana Register) unconstitutional, as well as finding that all DHH’s actions taken pursuant to that reimbursement methodology discriminated in the Medicaid reimbursement payments made to plaintiff-appellee, Vicksburg Healthcare, LLC d/b/a River Region Healthcare System (River Region). Find
ing the record supports a violation of the Commerce Clause of the U.S. Constitution and, as such, a violation of La. R.S. 40:1300.144(A)(S)(b), we amend the judgment and, as amended, affirm.
BACKGROUND
River Region, who operates a hospital in Vicksburg, Mississippi, and is organized under the laws of the State of Mississippi, filed a petition seeking declaratory relief and damages against DHH, averring that the reimbursement rate DHH was paying to River Region for inpatient healthcare services it administered to Louisiana Medicaid patients was significantly less than the amount DHH reimburses to like instate providers. River Region filed a motion for partial summary judgment on the issue of the legality of the reimbursement methodology. After a hearing, the trial court granted River Region’s motion, declaring the I..¡reimbursement methodology unconstitutional and finding that DHH’s actions applying the methodology discriminated against River Region. DHH appealed the trial court’s judgment, signed in conformity with its ruling.
SUMMARY JUDGMENT
Summary judgments are reviewed on appeal
de novo,
with the appellate court using the same criteria that govern the trial court’s determination of whether summary judgment is appropriate.
Smith v. Our Lady of the Lake Hosp., Inc.,
932512, p. 26 (La.7/5/94), 639 So.2d 730, 750. The motion should be granted only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, show that there is no genuine issue as to material fact and that mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(B).
In light of the undisputed facts, on appeal, the questions presented for our determination are purely legal ones, rather than factual ones, and therefore particularly appropriate for determination by summary judgment “as a matter of law.”
See
La. C.C.P. art. 966(C)(1);
Hays v. Louisiana State Bd. of Elementary and Secondary Educ.,
2009-1386, p. 4 (La.App. 1st Cir.6/11/10), 39 So.3d 818, 820,
writ denied,
2010-1640 (La.10/8/10), 46 So.3d 1272.
DISCUSSION
Medicaid is a joint federal-state program, which furnishes medical assistance on behalf of families with dependent children and other qualifying | individuals,
see
42 U.S.C.A. § 1396, in which Louisiana participates.
According to La. R.S. 40:1300.144(A)(3)(a), which is part of the Louisiana Rural Hospital Preservation Act
(RHPA):
With respect to reimbursement for services furnished in another state, the department shall insure that reimbursement for such services shall be the lesser of the payment for such services by
the state wherein such hospital is located or the department’s payment made to like in-state providers.
The department shall provide coverage for such services to the same extent that it would pay for semces furnished within the boundaries of this state,
only
if
any of the following conditions is met:
(i) Medical services are needed because of a medical emergency.
(ii) Medical services are needed and the recipient’s health would be endangered if he were required to travel to his state or residence.
(iii) The state determines, on the basis of medical advice, that the needed medical services are necessary supplementary resources, and more readily available in the other state.
(iv)
It is general practice for recipients in a particular locality to use medical resources in another state.
(Emphasis added.)
Cf
42 C.F.R. § 431.52(b).
By La. Acts 1999, No. 1068, § 1, the Louisiana legislature, among other things, amended and reenacted La. R.S. 40:1300.144(A)(3)(b). These relevant provisions state:
The department shall adopt rules and regulations in accordance with the Administrative Procedure Act that provide the following ...
In the event federal requirements for the state plan for medical assistance permit the department to impose further restrictions on payment for and coverage of medical services to Louisiana Medicaid patients rendered by out-of-state providers, the department shall promulgate regulations restricting payment for and coverage of such | ¿services
to the fullest extent pemiitted by law. Such restrictions shall include lowering the rate of reimbursement provided for services rendered to out-of-state hospitals to the payment for such semces by the state wherein such hospital is located, the department’s payment made to like in-state providers, or the average rate paid to Louisiana rural hospitals located in the state, whichever is the least.
(Emphasis added.)
In an attempt to conform to the directive stated in La. R.S. 40:1300.144(A)(3)(b), DHH adopted a rule (the DHH Rule),
which created a classification of out-of-state, “border” hospitals.
As it appears in its final enactment, the DHH Rule states:
Out-of-state hospitals that provided at least 500 inpatient hospital days in State Fiscal Year 1999 and are located in border cities (cities located within a 50 mile trade area of the Louisiana state border) will continue to be reimbursed at the lesser of each hospital’s actual cost per
day (based on the 1998 filed cost report) or the Medicaid per diem rate of the state wherein the services are provided. This reimbursement methodology is applicable for all Louisiana Medicaid recipients who receive inpatient services in an out-of-state hospital located in a border city, including those recipients up to the age of 21.
The following facts are undisputed. River Region was enrolled in the Louisiana Medicaid program from March 8, 2000 until November 30, 2008, when it withdrew its participation in the voluntary administration of healthcare services to Louisiana Medicaid patients.
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KUHN, J.
1 gDefendants-appellants, State of Louisiana through the Department of Health and Hospitals and its secretary Alan Levine (DHH or the department), appeal the trial court’s judgment, granting summary judgment and declaring a reimbursement methodology promulgated by DHH (which appears as rules in various publications of the Louisiana Register) unconstitutional, as well as finding that all DHH’s actions taken pursuant to that reimbursement methodology discriminated in the Medicaid reimbursement payments made to plaintiff-appellee, Vicksburg Healthcare, LLC d/b/a River Region Healthcare System (River Region). Find
ing the record supports a violation of the Commerce Clause of the U.S. Constitution and, as such, a violation of La. R.S. 40:1300.144(A)(S)(b), we amend the judgment and, as amended, affirm.
BACKGROUND
River Region, who operates a hospital in Vicksburg, Mississippi, and is organized under the laws of the State of Mississippi, filed a petition seeking declaratory relief and damages against DHH, averring that the reimbursement rate DHH was paying to River Region for inpatient healthcare services it administered to Louisiana Medicaid patients was significantly less than the amount DHH reimburses to like instate providers. River Region filed a motion for partial summary judgment on the issue of the legality of the reimbursement methodology. After a hearing, the trial court granted River Region’s motion, declaring the I..¡reimbursement methodology unconstitutional and finding that DHH’s actions applying the methodology discriminated against River Region. DHH appealed the trial court’s judgment, signed in conformity with its ruling.
SUMMARY JUDGMENT
Summary judgments are reviewed on appeal
de novo,
with the appellate court using the same criteria that govern the trial court’s determination of whether summary judgment is appropriate.
Smith v. Our Lady of the Lake Hosp., Inc.,
932512, p. 26 (La.7/5/94), 639 So.2d 730, 750. The motion should be granted only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, show that there is no genuine issue as to material fact and that mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(B).
In light of the undisputed facts, on appeal, the questions presented for our determination are purely legal ones, rather than factual ones, and therefore particularly appropriate for determination by summary judgment “as a matter of law.”
See
La. C.C.P. art. 966(C)(1);
Hays v. Louisiana State Bd. of Elementary and Secondary Educ.,
2009-1386, p. 4 (La.App. 1st Cir.6/11/10), 39 So.3d 818, 820,
writ denied,
2010-1640 (La.10/8/10), 46 So.3d 1272.
DISCUSSION
Medicaid is a joint federal-state program, which furnishes medical assistance on behalf of families with dependent children and other qualifying | individuals,
see
42 U.S.C.A. § 1396, in which Louisiana participates.
According to La. R.S. 40:1300.144(A)(3)(a), which is part of the Louisiana Rural Hospital Preservation Act
(RHPA):
With respect to reimbursement for services furnished in another state, the department shall insure that reimbursement for such services shall be the lesser of the payment for such services by
the state wherein such hospital is located or the department’s payment made to like in-state providers.
The department shall provide coverage for such services to the same extent that it would pay for semces furnished within the boundaries of this state,
only
if
any of the following conditions is met:
(i) Medical services are needed because of a medical emergency.
(ii) Medical services are needed and the recipient’s health would be endangered if he were required to travel to his state or residence.
(iii) The state determines, on the basis of medical advice, that the needed medical services are necessary supplementary resources, and more readily available in the other state.
(iv)
It is general practice for recipients in a particular locality to use medical resources in another state.
(Emphasis added.)
Cf
42 C.F.R. § 431.52(b).
By La. Acts 1999, No. 1068, § 1, the Louisiana legislature, among other things, amended and reenacted La. R.S. 40:1300.144(A)(3)(b). These relevant provisions state:
The department shall adopt rules and regulations in accordance with the Administrative Procedure Act that provide the following ...
In the event federal requirements for the state plan for medical assistance permit the department to impose further restrictions on payment for and coverage of medical services to Louisiana Medicaid patients rendered by out-of-state providers, the department shall promulgate regulations restricting payment for and coverage of such | ¿services
to the fullest extent pemiitted by law. Such restrictions shall include lowering the rate of reimbursement provided for services rendered to out-of-state hospitals to the payment for such semces by the state wherein such hospital is located, the department’s payment made to like in-state providers, or the average rate paid to Louisiana rural hospitals located in the state, whichever is the least.
(Emphasis added.)
In an attempt to conform to the directive stated in La. R.S. 40:1300.144(A)(3)(b), DHH adopted a rule (the DHH Rule),
which created a classification of out-of-state, “border” hospitals.
As it appears in its final enactment, the DHH Rule states:
Out-of-state hospitals that provided at least 500 inpatient hospital days in State Fiscal Year 1999 and are located in border cities (cities located within a 50 mile trade area of the Louisiana state border) will continue to be reimbursed at the lesser of each hospital’s actual cost per
day (based on the 1998 filed cost report) or the Medicaid per diem rate of the state wherein the services are provided. This reimbursement methodology is applicable for all Louisiana Medicaid recipients who receive inpatient services in an out-of-state hospital located in a border city, including those recipients up to the age of 21.
The following facts are undisputed. River Region was enrolled in the Louisiana Medicaid program from March 8, 2000 until November 30, 2008, when it withdrew its participation in the voluntary administration of healthcare services to Louisiana Medicaid patients. From March 8, 2000 through September 1, 2008, River Region provided a total of 13,284 inpatient hospital healthcare services to | (Louisiana Medicaid patients. Under the DHH Rule, border hospitals are reimbursed differently than Louisiana hospitals that provide inpatient hospital services to Louisiana Medicaid patients.
River Region is classified as a border hospital. Under its tiered system, DHH’s classification of “Peer Group 5” refers to a category of hospitals, which have more than 138 beds and are neither rural hospitals nor teaching hospitals. River Region is an out-of-state hospital where Louisiana Medicaid patients customarily obtain medical services.
It has more than 138 beds and is neither a rural hospital nor a teaching hospital.
At all times since March 8, 2000, DHH has reimbursed River Region a lower per diem rate for inpatient hospital healthcare services it administered to Louisiana Medicaid Lpatients than the amount in-state Peer Group 5 hospitals have been reimbursed for their administration of inpatient hospital healthcare services.
River Region asserts, among other things, that DHH’s reimbursement methodology for inpatient hospital healthcare services administered to Louisiana Medicaid patients by border hospitals violates the Commerce Clause of the U.S. Constitution. Specifically, it asserts that the DHH Rule directly discriminates against and places excessive burdens on interstate commerce without serving any valid state interest other than protectionism toward its in-state hospitals, particularly rural hospitals. As such, River Region maintains, the DHH rule is not in conformity with La. R.S. 40:1300.144(A)(8)(b) in that it does not restrict payment for and coverage of such services to the fullest extent permitted by law.
The Commerce Clause provides that “Congress shall have Power ... To regulate Commerce with foreign Nations, and among the several States....” U.S. Const, art. 1, § 8. On its face, the Commerce Clause simply empowers Congress to regulate interstate commerce. This clause, however, historically has been construed as not only empowering Congress, but also limiting the states.
Crescent Towing & Salvage Co., Inc. v. Ormet Corp.,
1997-1531, p. 5 (La.9/9/98) 720 So.2d 628, 631,
cert. denied, 525
U.S. 1142, 119 S.Ct. 1035, 143 L.Ed.2d 43 (1999) (citing
Cooley v. Bd. of Wardens,
53 U.S. 299, 12 How. 299, 13 L.Ed. 996 (1852);
see generally
Laurence H. Tribe, American Constitutional Law §§ 6.3-6.4 (2d Red.1988)). The latter limiting aspect is referred to as the dormant Commerce Clause.
Crescent Towing & Salvage Co., Inc.,
1997-1531 at p. 5, 720 So.2d at 631.
Under the dormant Commerce Clause, there is a “virtually per se rule of invalidity” applicable to state regulations that directly discriminate against interstate commerce — i.e., favor in-state over out-of-state economic interests.
Id.,
1997-1531 at pp. 5-6, 720 So.2d at 631 (citing
City of Philadelphia v. New Jersey,
437 U.S. 617, 624, 98 S.Ct. 2531, 57 L.Ed.2d 475 (1978), and noting a New Jersey law that barred local landfills from importing out-of-state wastes was struck down by the court). The dormant Commerce Clause also invalidates state regulations that indirectly discriminate if the regulation imposes an undue burden on interstate commerce.
Crescent Towing & Salvage Co., Inc.,
1997-1531 at p. 6, 720 So.2d at 631 (citing
Hughes v. Oklahoma,
441 U.S. 322, 99 S.Ct. 1727, 60 L.Ed.2d 250 (1979)).
DHH initially urges that it is a market participant and, as such, the dormant Commerce Clause is inapplicable to its promulgation of the DHH Rule. In support of this contention, DHH suggests that when a state participating in the federal Medicaid program decides the amount it is willing to reimburse a healthcare provider for administering healthcare services to the state’s Medicaid patients, and then makes payments accordingly, that state is entering into the healthcare services market and participating in it as a purchaser.
Our Louisiana Supreme Court, examining the jurisprudence of the U.S. Supreme Court and other scholarly sources, stated in
Crescent Towing & Salvage Co., Inc.,
1997-1531 at pp. 6-7, 720 So.2d at 631-32:
^Historically, the Commerce Clause has been utilized principally in cases in
volving state taxes and regulatory measures “impeding free private trade in the national market place.”
Reeves, Inc. v. Stake,
447 U.S. 429, 437, 100 S.Ct. 2271, 65 L.Ed.2d 244 (1980); Tribe,
supra,
[§§ ] 6-11, p. 431. The Court, in focusing on cases of Commerce Clause violations by state or municipal action in enacting statutes or ordinances, developed an exception when the action by the government is as a market participant, akin to a private party, as opposed to a market regulator.
See Hughes v. Alexandria Scrap Corp.,
426 U.S. 794, 822 n. 4, 96 S.Ct. 2488, 49 L.Ed.2d 220 (1976)(Brennan, J., dissenting). Explaining this exception, the Court has stated:
There is no indication [in the Commerce Clause] of a constitutional plan to limit the ability of the States themselves to operate freely in the free market.... Restraint in this area is also counseled by considerations of state sovereignty ... and “the long recognized right of trader or manufacturer, engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal.” Moreover, state proprietary activities may be, and often are, burdened with the same restrictions imposed on private market participants. Evenhandedness suggests that, when acting as proprietors, States should similarly share existing freedoms from federal constraints, including the inherent limits of the Commerce Clause.
Reeves,
447 U.S. at 436-38, 100 S.Ct. 2271, 65 L.Ed.2d 244. Stated otherwise, “[w]hen a state government regulates or taxes, it turns over nothing that belongs to it; rather, it compels private action through the exercise of raw governmental power. In contrast, when a state government buys or sells, it is controlling and distributing its own resources.” Dan T. Coenen,
Untangling the Market-Participant Exemption to the Dormant Commerce Clause,
88 Mich. L.Rev. 395, 422 (1989).
DHH’s role in its participation in the federal Medicaid program can only be described as a hybrid one.
See Smith v. Dep’t of Agric. of the State of Georgia,
630 F.2d 1081, 1083 (5th Cir.1980),
cert. denied,
452 U.S. 910, 101 S.Ct. 3040, 69 L.Ed.2d 412 (1981). The market is a result of the decision of the State of Louisiana to participate in the federal Medicaid program. It is operated and Impartially financed by the State of Louisiana.
But it is significant that DHH neither operates the small rural hospitals it seeks to protect and that provide the healthcare services to Louisiana Medicaid patients nor engages in the actual buying and selling of those healthcare services. The record clearly establishes that the Louisiana Medicaid patient is permitted to request healthcare at any facility that is a qualified Medicare provider of his choosing. Regardless of the facility the Louisiana Medicaid patient chooses, the patient pays nothing. Therefore, the calculation of the flat fee rate that River Region is reimbursed by DHH is not dependent on any contribution from the patient, the actual recipient of the healthcare services administered by River Region. In essence, the State of Louisiana has simply provided a suitable marketplace for the administration of healthcare services to Louisiana Medicare patients. Thus, the State of Louisiana cannot be deemed an actual market participant by its
participation in the federal Medicaid program.
Id.
The State of Louisiana’s essential role is that of market regulator, and the DHH Rule as applied to River Region is subject to scrutiny under the Commerce Clause.
Id.
Having determined that this case involves the kind of activity to which the Commerce Clause applies, it is necessary to determine whether the regulation at issue imposes an impermissible burden on interstate commerce.
Id.,
630 F.2d at 1084. Therefore, we must inquire (1) whether the challenged statute regulates evenhandedly with only “incidental” effects on interstate commerce, or discriminates against interstate commerce either on its face or in practical effect; (2) whether the statute serves a legitimate local purpose; and, if so, (3) whether | n alternative means could promote this local purpose as well without discriminating against interstate commerce.
Id.; Crescent Towing & Salvage Co., Inc.,
1997-1531 at p. 6, 720 So.2d at 631 (citing
Hughes,
441 U.S. at 336, 99 S.Ct. 1727, 60 L.Ed.2d 250).
It is undisputed that River Region’s reimbursement rate for its administration of inpatient healthcare services to Louisiana Medicaid recipients is lower than the reimbursement rate than in-state hospitals DHH classifies as “Peer Group 5” hospitals. The evidence also established that aside from its administration of healthcare in the State of Mississippi, River Region possessed the same characteristics as a “Peer Group 5” hospital, i.e., it has more than 138 beds and is neither a rural hospital nor a teaching hospital. As such, River Region has established that the DHH reimbursement methodology as applied to River Region favors in-state over out-of-state economic interests. Thus, DHH must demonstrate the DHH Rule serves a legitimate purpose and that this purpose could not be served as well by available nondiscriminatory means.
DHH contends that the purpose of the DHH Rule setting forth the reimbursement methodology as directed by the legislature in its enactment of La. R.S. 40:1300.144(A)(3)(b) is that expressed in § 1300.142(B) of the RHPA:
The legislature hereby declares that, absent the enactment of the following provisions, the very existence of Louisiana’s small rural hospital [system] is imperiled. The legislature hereby declares that the purpose of this Part is to assure the continued viability of rural hospitals.
DHH maintains this purpose is legitimate because it optimizes the allocation of Louisiana’s limited Medicaid budget in such a way as to enhance the viability of the State’s small rural hospitals and, thus, enhance the health of the residents | i2they serve. As such, DHH asserts, Louisiana has a legitimate interest in ensuring the adequate funding of the network of healthcare providers that serves its residents. The deposition testimony seemingly supports this assertion. DHH representative, Jerry Phillips, who is the Director of the Bureau of Health Services Financing, indicated that reimbursing River Region at a higher rate did not mean that the reimbursement rate for rural hospitals would be less, but pointed out that the volume of business could be affected. DHH representative, Sandra Victor, also indicated that the promulgation of the DHH Rule, in accordance with the legislative directive of La. R.S. 40:1300.144(A)(3)(b), was to make sure that rural hospitals were not adversely impacted by border hospitals. Thus, DHH suggests that “only the most important hospitals — that is, the hospitals located in Louisiana, and particularly the endangered small rural hospitals which the RHPA seeks to help and protect — can be
prioritized for funding purposes.” But the record is devoid of any measures taken by DHH to determine that “the most important” hospitals for all Louisiana Medicaid patients are those located in Louisiana and particularly the small rural hospitals. Likewise, DHH has offered nothing to show that its objective of preserving small rural hospitals cannot be accomplished by nondiseriminatory alternatives.
Despite the suggestion that the application of the DHH Rule to River Region’s reimbursement rate for inpatient healthcare services it administered to Louisiana Medicaid patients is for the purpose of assuring continued viability of rural hospitals, it is basically a protectionist measure.
See City of Philadelphia,
437 U.S. at 623-24, 98 S.Ct. 2531, 2535, 57 L.Ed.2d 475. Indeed, there is obviously no reason to differentiate between in-state Peer Group 5 hospitals and River Region on any | i.gbasis other than the physical location of the hospitals. This is particularly egregious when the Louisiana Medicaid patient has chosen to avail himself of River Region’s services, which may be more extensive, or more convenient, than anything locally available to him.
See Smith,
630 F.2d at 1084-85.
We note, however, that the trial court’s declaration was that the DHH Rule was unconstitutional, without any restrictions, i.e., ostensibly unconstitutional on its face. But this record is insufficient to establish that the other border hospitals subject to the reimbursement methodology set forth in the DHH Rule (i.e., Natchez Regional Medical Center and Natchez Community Hospital) are also discriminated against in DHH’s application to their respective reimbursement rates. Documentation shows that each of these hospitals receives significantly more than River Region.
As such, the trial court’s judgment declaring the DHH Rule unconstitutional is too broad and is amended to limit the declaration of unconstitutionality to the application of the reimbursement methodology to River Region. And because the DHH rule is unconstitutional, it is not in conformity with La. R.S. 40:1300.144(A)(3)(b) in that it is not a regulation restricting payment for and coverage of such services “to the fullest extent permitted by law.”
luDECREE
For these reasons, the trial court’s judgment is amended to state:
IT IS ORDERED, ADJUDGED, AND DECREED that plaintiffs motion for partial summary judgment is GRANTED and declare that the Louisiana Department of Health and Hospitals’ reimbursement rules, which appear at 26 La. Reg. 217 (February 20, 2000); 26 La. Reg. 1234 (June 20, 2000); 26 La. Reg.1954-1955 (September 20, 2000); 26 La. Reg. 2795 (December 20, 2000); and the second paragraph of 29 La. Reg. 2801-2802 (December 20, 2003) are held to be unconstitutional as applied by Louisiana Department of Health and Hospitals to plaintiff, Vicksburg Healthcare, LLC d/b/a River Region Healthcare System and, as such, is in violation of La. R.S. 40:1300.144(A)(3)(b) insofar as applied by Louisiana Department of
Health and Hospitals to plaintiff, Vicksburg Healthcare, LLC d/b/a River Region Healthcare System.
In all other respects, the judgment is affirmed.
Appeal costs in the amount of $2,245.50 are assessed against defendants-appellants, State of Louisiana through the Department of Health and Hospitals and its secretary, Alan Levine.
AMENDED AND, AS AMENDED, AFFIRMED.