Mallo v. Public Health Trust of Dade County

Citation88 F.Supp.2d 1376
Decision Date31 March 2000
Docket NumberNo. 99-0064-CIV.,99-0064-CIV.
CourtUnited States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
PartiesRodrigo MALLO, individually and on behalf of all others similarly situated, Plaintiff, v. THE PUBLIC HEALTH TRUST OF DADE COUNTY, FLORIDA, Defendant.

Steven K. Hunter, Angones, Hunter & McClure, Angel Gimenez, Carillio, Gimenez & Carillo, Miami, FL, for Plaintiff.

Jack P. Hartog, Asst. County Atty., Jackson Memorial Hospital, Miami, FL, for Defendant.

ORDER DENYING MOTION TO DISMISS

LENARD, District Judge.

THIS CAUSE is before the Court on the Motion to Dismiss, filed by Defendant Public Health Trust of Dade County, Florida April 12, 1999. Plaintiff Rodrigo Mallo filed a Response April 26, 1999. Based on a review of the Motion, the Response, and the record, the Court finds as follows.

I. Statement of Facts
A. The Medicaid System

The instant dispute arises out of the statutorily created relationship among a Medicaid patient, the health care provider that treated him, the State agency that disbursed Medicaid funds to the health care provider, and the federal government. At the center of this dispute is the balance billing provision of the Medicaid Statute,1 codified at 42 U.S.C. § 1396a(a)(25)(C) (West 1992). As a predicate to discussing the factual background of this case, the Court first describes the Medicaid system and the balance billing provision.

Under the Medicaid Statute, Congress agreed to appropriate Medicaid funds to the States, in exchange for which the States provide affordable medical care to the poor. State governments depend on public and private hospitals to provide the necessary medical care. After the health care provider informs the State that the provider has treated an indigent patient, the State agency authorized to disburse Medicaid funds determines whether such a patient qualifies for Medicaid assistance. The patient must meet two conditions in order to obtain Medicaid assistance. First, the patient's income and resources must be "insufficient to meet the costs of necessary medical services." 42 U.S.C.A. § 1396. Second, the patient must seek medically necessary services. See id. If the patient qualifies, the State agency determines the cost of care and then disburses Medicaid funds to the health care provider for the treatment of the Medicaid patient.

By statutory mandate, the State and federal government work together to ensure that the designated State agency reasonably assesses the cost of Medicaid care for each patient. See 42 U.S.C.A. §§ 1396a(a)(30) & 1396b(g)(1)(C). The Medicaid Statute provides that Congress will reduce federal funds for Medicaid assistance, unless the State demonstrates to the federal government that the State-assessed costs of care for Medicaid patients do not exceed what is "necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care." 42 U.S.C.A. § 1396a(a)(30). See 42 U.S.C.A. § 1396b(g)(1)(C); see also Blum v. Yaretsky, 457 U.S. 991, 994 n. 3, 102 S.Ct. 2777, 73 L.Ed.2d 534 (1982) (explaining that Medicaid Statute requires State to provide periodic review of patient care in nursing homes).

Aimed to protect indigent patients, the Medicaid Statute's balance billing provision precludes health care providers from billing Medicaid patients more than the amount of State-disbursed Medicaid funds. See 42 U.S.C.A. § 1396a(a)(25)(C).2 Therefore, for example, even if a hospital initially bills a Medicaid patient $25,000, once the patient qualifies for Medicaid, and the State agency disburses a lesser amount, the patient need only pay the lesser amount as his or her full share. Upon receipt of the patient's payment, the health care provider then reimburses the State. These reimbursements to the State maintain a healthy surplus of Medicaid monies.

B. Summary of Events

Plaintiff, a Medicaid patient, has sued Defendant, the Public Health Trust of Dade County, for breaching its obligation under the balance billing provision of the Medicaid Statute, arising out of the following events, as alleged in the Amended Class Action Complaint.

On April 13, 1996, Plaintiff was filling his automobile tire when it exploded. The explosion seriously injured Plaintiff, and he was admitted to and treated at Jackson Memorial Hospital ("JMH"). Defendant operates JMH, which is an agency and instrumentality of Miami-Dade County, Florida. At the conclusion of Plaintiff's stay at JMH, the hospital billed Plaintiff $16,000.00 for the medical care he received at JMH. In addition to the $16,000.00 medical bill, JMH also notified Plaintiff that it was asserting a lien in the amount of $12,466.00 upon any recovery Plaintiff obtained from third parties. Recognizing Plaintiff's indigent status, JMH then sought Medicaid benefits from the Florida agency authorized to disburse Medicaid funds, the Agency for Health Care Administration. The State agency determined Plaintiff to be eligible for Medicaid assistance, assessed Plaintiff's medical expenses, and paid $3,774.48 in Medicaid benefits to JMH. JMH accepted the Medicaid payment and re-billed Plaintiff $3,774.48.

On or about September 18, 1996, Plaintiff settled a personal injury lawsuit against Garden Tires, the manufacturer of the exploded tire, and its insurance carrier, Aries Insurance Company, for the policy limit of $50,000.00. From the proceeds of this settlement, Plaintiff paid JMH $3,774.48 for the Medicaid benefits paid on his behalf. JMH maintained its hospital lien on Plaintiff's settlement award, and Plaintiff ultimately paid Defendant an additional $10,000 in satisfaction of this lien.

C. Procedural History

Plaintiff filed its amended class action complaint on March 26, 1999.3 Plaintiff seeks a declaratory decree that Defendant shall "reimburse the representative parties and class members for all sums recovered by [Defendant] in excess of Medicaid benefits paid to [Defendant] for expenses incurred by the representative party and class members." (Am. Class Action Compl. at 5.) Plaintiff seeks this relief because Defendant's lien on the settlement award and the subsequent payment is allegedly in violation of the Medicaid Statute's balance billing provision. Plaintiff claims that the balance billing provision set forth in 42 U.S.C.A. § 1396a(a)(25)(C) precludes public providers, such as Defendant, from billing patients for the balance remaining on a medical bill above the amount provided by the State agency distributing federal Medicaid funds. The Medicaid Statute does not explicitly create a private right of action for Medicaid patients to sue providers acting in violation of § 1396a(a)(25)(C). However, Plaintiff bases his cause of action on 42 U.S.C.A. § 1983 (West 1992) to sue Defendant for violating his federal rights under the balance billing provision of the Medicaid Statute.

On April 13, 1999, Defendant filed a Motion to Dismiss the Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6). Defendant argues that Plaintiff cannot use § 1983 to sue Defendant under the Medicaid Statute's balance billing provision. In the absence of an explicitly created right of action within a statute Defendant maintains that a § 1983 claimant must satisfy the Supreme Court's requirements in Wright v. City of Roanoke Redevelopment & Housing Auth., 479 U.S. 418, 423, 107 S.Ct. 766, 93 L.Ed.2d 781 (1987), and Wilder v. Virginia Hosp. Assoc., 496 U.S. 498, 508-09, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1990), in order to bring a § 1983 claim. Defendant further contends that Plaintiff cannot meet these requirements.

Plaintiff responded to Defendant's Motion to Dismiss April 26, 1999. Plaintiff concedes that the § 1396a(a)(25)(C) does not explicitly create a right of action. However, Plaintiff, who also asks the Court to apply the Wright and Wilder tests, maintains that Medicaid patients in Plaintiff's position possess a federal right under the balance billing provision of the Medicaid statute.

II. Standard of Review

The Eleventh Circuit has clearly set out the standard of review for a Rule 12(b)(6) motion to dismiss for failure to state a cause of action upon which relief can be granted. Harper v. Blockbuster Entertainment Corp., 139 F.3d 1385, 1387 (11th Cir.), cert. denied, 525 U.S. 1000, 119 S.Ct. 509, 142 L.Ed.2d 422 (1998):

"The standard of review for a motion to dismiss is the same for the appellate court as it was for the trial court." Stephens v. Department of Health and Human Servs., 901 F.2d 1571, 1573 (11th Cir.1990). A motion to dismiss is only granted when the movant demonstrates "beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

"On a motion to dismiss, the facts stated in appellant's complaint and all reasonable inferences therefrom are taken as true." Stephens, 901 F.2d at 1573 (citing Delong Equipment Co. v. Washington Mills Abrasive Co., 840 F.2d 843, 845 (11th Cir.1988)).

III. Analysis

The broad issue before the Court is whether § 1983 provides Medicaid recipients with a right to sue a health care provider that has allegedly violated § 1396a(a)(25)(C) of the Medicaid Statute, which is apparently a question of first impression for the Eleventh Circuit. As discussed below, courts have employed a two-step test to determine whether a cause of action exists under § 1983. In this case, the Court's attention focuses on the second step of this test: whether a violation of the Medicaid Statute's balance billing provision is a violation of a Medicaid patient's federal right.

A. Section 1983's Two-Step Test

Section 1983 creates a right of action for injured parties against

[e]very person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected,...

To continue reading

Request your trial
19 cases
  • Spectrum Health Cont. Care v. Anna Marie Bowling
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • 14 Junio 2005
    ... ... ANNA MARIE BOWLING IRREVOCABLE TRUST DATED JUNE 27, 2002, Defendant-Appellant/Cross-Appellee ... That same day, the Probate Court of Kent County, Michigan, entered a protective order approving the ... at 544; see also Mallo v. Pub. Health Trust, 88 F.Supp.2d 1376, 1387 ... Health Trust v. Dade County Sch. Bd., 693 So.2d 562, 566 (Fla ... Indeed, the lack of public availability alone raises doubts ... Page 319 ... about ... ...
  • Ansley v. Banner Health Network
    • United States
    • Arizona Court of Appeals
    • 12 Marzo 2019
  • Ansley v. Banner Health Network
    • United States
    • Arizona Court of Appeals
    • 3 Abril 2018
  • Rose v. Via Christi Health System, Inc., 88,434.
    • United States
    • Kansas Supreme Court
    • 31 Octubre 2003
    ... ... Trust Co. of Kansas v. Abbott Labs., 259 F.3d 1226, 1233 [10th ...         In Holle v. Moline Public Hosp., 598 F. Supp. 1017, 1021 (C.D. Ill. 1984), the ... App. 2d at 706 (quoting Gordon v. Forsyth County Hospital Authority, Inc., 409 F. Supp. 708, 719 [M.D ... Hartley, 792 F.2d 260, 261-62 (1st Cir. 1986) ; Mallo v. Public Health Trust of Dade County, 88 F. Supp. 2d ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT