Equal Access for El Paso, Inc. v. Hawkins

Citation509 F.3d 697
Decision Date10 December 2007
Docket NumberNo. 06-50599.,06-50599.
PartiesEQUAL ACCESS FOR EL PASO, INC.; Monica Rivero, as next friend of Kevin Rivero; Patricia Duarte Melendez, in her individual capacity and as next friend of Orandie Jahssar Melendez-Duarte; Jessilyn Nagel, as next friend of Heidi Armstrong and McKenna Armstrong; Ruth Gallegos, in her individual capacity and as next friend of Amber Villegas, Plaintiffs-Appellees, v. Albert HAWKINS, Commissioner of the Texas Health and Human Services Commission, individually and in his official capacity, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Thomas Hart Watkins (argued), Brown McCarroll, Austin, TX, for Plaintiffs-Appellees.

Miguel A. Torres, El Paso, TX, for Rivero.

Rance Lamar Craft, Austin, TX, for Hawkins.

Appeal from the United States District Court for the Western District of Texas.

Before DENNIS, CLEMENT and PRADO, Circuit Judges.

DENNIS, Circuit Judge:

This case requires us to determine whether, in light of the Supreme Court's decision in Gonzaga University v. Doe, 536 U.S. 273, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002), Medicaid recipients in El Paso County, Texas, may bring an action under 42 U.S.C. § 19831 to challenge whether the methods and procedures of the Texas State Medicaid Plan ("Plan") assure that the payments for care and services available under the Plan are sufficient to provide them with access to medical assistance "at least to the extent that such care and services are available to the general population in the geographic area" as required by 42 U.S.C. § 1396a(a)(30)(A). More specifically, the question presented is whether the so-called "Equal Access" requirement of § 1396a(a)(30)(A) is enforceable in an action pursuant to § 1983 so as to afford declaratory and injunctive relief because the Medicaid payment rates for the El Paso area are deficiently priced to enlist enough providers to make medical assistance under the Plan available to the Medicaid recipients in the El Paso area at least to the extent that such care and services are available to the general (non-Medicaid) population in that area.

I. FACTUAL AND PROCEDURAL BACKGROUND
A.

Medicaid is a cooperative federal-state program through which the federal government provides financial assistance to states so that they may furnish medical care to needy individuals. See 42 U.S.C. § 1396 et seq. Although participation in the program is voluntary, participating states must comply with certain requirements imposed by the Medicaid Act, id., and regulations promulgated by the Secretary of Health and Human Services ("Secretary"). To qualify for federal assistance, a state must submit to the Secretary and have approved a "plan for medical assistance," § 1396a(a), that contains a comprehensive statement describing the nature and scope of the state's Medicaid program. 42 C.F.R. § 430.10 (2007). The state plan is required to provide, among other things, methods and procedures for the payment of care and services under the plan necessary to assure their availability to the Medicaid population to the same extent as they are available to the general population in that geographic area. 42 U.S.C. § 1396a(a)(30)(A).

Section 1396a(a)(30)(A)of the Medicaid Act sets out the requirement that Medicaid recipients must be assured of "equal access" to medical assistance with the general populace in respect to plan-specified care and services, in pertinent part, as follows:

A State plan for medical assistance must ... provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan ... as may be necessary ... to assure that payments ... are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area....

42 U.S.C. § 1396a(a)(30)(A).

The state of Texas has elected to participate in the Medicaid program and has designated the Health and Human Services Commission ("HHSC"), of which defendant Hawkins is the commissioner, to administer its Plan. The Texas Medicaid program is financed through a joint federal-state arrangement, in which every $1 of state funds disbursed for Medicaid is matched by approximately $2 of federal funds. The HHSC compensates Medicaid providers through two programs: (1) the traditional fee-for-service program; and (2) the managed care program. Under the fee-for-service program, health care professionals are reimbursed based on fee schedules established by HHSC. These fee schedules, which assign discrete codes, and in turn monetary values, to hundreds of different medical procedures, are in effect and consistent statewide. Under the managed care program, HHSC administers payments to participating managed care providers, such as health maintenance organizations, using capitation or per-head rates, which are fixed amounts paid to the participating providers on a per-member, per-month basis. The capitation rates vary according to market medical service prices in each geographic area.

B.

Plaintiff Equal Access for El Paso is a nonprofit corporation located in El Paso County, Texas, composed of individuals interested in the provision of health care in the El Paso geographic area. Its purpose is to develop health care resources and access to health care in that area. On October 24, 2003, Equal Access for El Paso, on behalf of its members, many of whom it alleges are Medicaid recipients and health care professionals and other providers directly and adversely impacted by HHSC's actions, and on behalf of the patients of its member health care professionals and providers, brought suit in the United States District Court for the Western District of Texas against HHSC.2 Also joining in this suit were several individual Medicaid recipients residing in El Paso, who sued as individuals on their own behalf and on behalf of their respective children, as well as three health care providers (a doctor, a hospital, and a health maintenance organization) suing on their own behalf and on behalf of their Medicaid recipient patients/enrollees.3 Together, these plaintiffs allege that HHSC set deficient Medicaid reimbursement and capitation rates, resulting in inadequate access to medical services for Medicaid recipients who live in the El Paso area as compared to the rest of the State and as compared to individuals covered by private insurance in the El Paso area. This follows, plaintiffs contend, because the inadequate reimbursement and capitation rates, when combined with the relatively high percentage of Medicaid recipients in the El Paso area, has created a financial incentive for physicians to relocate and practice in other communities in the State and for physicians practicing in the El Paso area to seek out patients covered by employer-sponsored insurance.

In the district court, plaintiffs originally brought suit under § 1983, alleging violations of six provisions of the Medicaid Act, the Supremacy Clause, and the Equal Protection Clause of the Fourteenth Amendment. HHSC then filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction and, in the alternative, Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. The district court denied HHSC's 12(b)(1) motion, finding that the plaintiffs had standing, but granted its 12(b)(6) motion, dismissing all of the plaintiffs' claims with the exception of the recipients' claim under § 1396a(a)(30)(A)'s "Equal Access" provision. The district court denied the defendant's motion with respect to the Equal Access claim because the court determined that this particular statutory provision confers on Medicaid recipients an individual federal right enforceable through § 1983.4 On interlocutory appeal, HHSC contends that, in light of the Supreme Court's decision in Gonzaga, the Equal Access provision does not create a federal right of action enforceable through § 1983.5

II. STANDARD OF REVIEW

This court reviews de novo the district court's disposition of a motion to dismiss under either Rule 12(b)(1) or Rule 12(b)(6). See Bombardier Aerospace Employee Welfare Benefits Plan v. Ferrer, Poirot & Wansbrough, 354 F.3d 348, 351 (5th Cir.2003).

III. DISCUSSION

"`Section 1983 imposes liability on anyone who, under color of state law, deprives a person "of any rights, privileges, or immunities secured by the Constitution and laws."'" Blessing v. Freestone, 520 U.S. 329, 340, 117 S.Ct. 1353, 137 L.Ed.2d 569 (1997) (internal quotations omitted). The § 1983 remedy encompasses violations of rights secured by federal statutory as well as constitutional law. Maine v. Thiboutot, 448 U.S. 1, 4, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980). In order to seek redress through § 1983, therefore, "a plaintiff must assert the violation of a federal right, not merely a violation of federal law." Blessing, 520 U.S. at 340, 117 S.Ct. 1353 (emphasis in original) (citing Golden State Transit Corp. v. Los Angeles, 493 U.S. 103, 106, 110 S.Ct. 444, 107 L.Ed.2d 420 (1989)).

In Gonzaga, the Supreme Court noted that some language in its prior opinions had suggested that something less than an unambiguously conferred right is enforceable by § 1983. 536 U.S. at 282, 122 S.Ct. 2268. As an example, the Court quoted from Blessing: "`Congress must have intended that the provision in question benefit the plaintiff,' `the plaintiff must demonstrate that the right assertedly protected by the statute is not so "vague and amorphous" that its enforcement would strain judicial competence,' and `the provision giving rise to the asserted right must be couched in mandatory, rather than precatory, terms.'" Id. (quoting Blessing, 520 U.S. at 340-41, 117 S.Ct. 1353). On the other hand, the Court pointed out that Blessing, in the same paragraph, emphasized that "it is only violations of rights, not laws, which give rise to §...

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