Massachusetts General Hospital v. Sargent, Civ. A. No. 72-2839-M.

• Decision Date: 03 July 1975
• Docket Number: Civ. A. No. 72-2839-M.
• Citation: 397 F. Supp. 1056
• Parties: MASSACHUSETTS GENERAL HOSPITAL, Plaintiff, St. Elizabeth's Hospital of Boston, Intervening Plaintiff, Massachusetts Hospital Association, Intervening Plaintiff, v. Governor Francis W. SARGENT et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

397 F. Supp. 1056

MASSACHUSETTS GENERAL HOSPITAL, Plaintiff St. Elizabeth's Hospital of Boston, Intervening Plaintiff Massachusetts Hospital Association, Intervening Plaintiff, v. Governor Francis W. SARGENT et al., Defendants.

Civ. A. No. 72-2839-M.

United States District Court, D. Massachusetts.

May 20, 1975.

Memorandum July 3, 1975.

Colette Manoil, Tierney, Tierney, St. Onge & Manoil, Boston, Mass., for plaintiff.

William A. Waldron, Ely, Bartlett, Brown & Proctor, Boston, Mass., John F. Dunn, Jr., Boston, Mass., for intervening plaintiffs.

Mitchell J. Sikora, Asst. Atty. Gen., Boston, Mass., for State defendants.

William A. Brown, Asst. U. S. Atty., Boston, Mass., for Federal defendants.

JUDGMENT

FRANK J. MURRAY, District Judge.

Upon consideration of, and in accordance with the memorandum to be filed with the clerk, it is hereby Ordered, Adjudged and Declared:

(1) That as a participant in a plan for medical assistance to medically indigent persons under the provisions of Title XIX of the United States Social Security Act, 42 U.S.C. § 1396 et seq., the Commonwealth of Massachusetts must provide for prompt payment to providers, under 42 U.S.C. § 1396a(a)(13)(D), of the reasonable cost of inpatient hospital services furnished to eligible persons under the Social Security Act;

(2) That the existing practice and policy of the Commonwealth of Massachusetts of payment to providers of inpatient hospital services furnished to eligible persons under the Social Security Act, insofar as the Commonwealth fails to make full and prompt payment to such providers, are in conflict with the United States Social Security Act, 42 U.S.C. § 1396a(a)(13)(D), and the regulations thereunder, 45 C.F.R. § 250.30(b)(1), and therefore violate Article VI of the United States Constitution;

(3) That the continuing and inexcusable failure of the Commonwealth of Massachusetts to make full and prompt payment to Massachusetts General Hospital, St. Elizabeth's Hospital of Boston, and members of the Massachusetts Hospital Association providing inpatient hospital services to eligible persons under the Social Security Act, 42 U.S.C. § 1396 et seq., violates Article VI of the United States Constitution;

(4) That the court retains jurisdiction of this case to enable it to consider whatever further steps may be necessary to redress the rights of the parties and to effectuate the judgment of the court.

MEMORANDUM

FRANK J. MURRAY, District Judge.

This case came on to be heard on the merits. It is an action commenced by plaintiff Massachusetts General Hospital (MGH) for relief from an alleged failure of the Commonwealth of Massachusetts to pay fully and promptly for inpatient hospital care rendered by MGH under the state's Medicaid program. The Secretary of the Department of Health, Education, and Welfare (Secretary) is named as a federal defendant.

Plaintiff MGH's amended and supplemental complaint alleges, in substance, that the pattern of appropriation by the Commonwealth of funds to pay for the state Medicaid program, and the pattern of administration of these appropriations by state defendants for fiscal years 1973, 1974, and 1975, amount to a continuing state policy and practice of underappropriation for Medicaid expenses, which result in delayed and incomplete payments for services rendered by MGH to Medicaid recipients. Specifically, MGH alleges that the state is some $4.7 million in arrears in its payments for prior fiscal year services. Plaintiff MGH alleges that the state policy and practice violate the Social Security Act, Title XIX, 42 U.S.C. § 1396 et seq., and certain constitutional provisions (Equal Protection Clause, Due Process Clause, Impairment of Contracts Clause, and Just Compensation Clause). Plaintiff MGH seeks declaratory and injunctive relief and diversion of state funds until the $4.7 million in past amounts due is paid. Plaintiff also requests convening of a three-judge court under 28 U.S.C. § 2281.

On April 2, 1975, the court denied the state defendants' motion for summary judgment on the grounds that a genuine issue of fact existed at that time and that defendants were not entitled to summary judgment as a matter of law. On April 21, the court determined that plaintiff MGH's motion for summary judgment was not ripe for decision due to the procedural posture of the case. However, the court at that time made certain findings of fact pursuant to Rule 56(d) of Fed.R.Civ.P. and made an interlocutory determination that state defendants' conduct violated the Social Security Act. On May 7, 1975, a hearing was held on the merits to allow the parties to introduce any additional evidence and to argue the issue of the type of relief appropriate.

At the May 7 hearing, St. Elizabeth's Hospital of Boston (St. Elizabeth's) and the Massachusetts Hospital Association (MHA), in behalf of its member hospitals, moved to intervene as parties plaintiff in the instant case, pursuant to Fed.R.Civ.P. Rule 24.¹ These parties are plaintiffs in two other actions before this court which present claims against the instant defendants substantially identical to those raised by plaintiff MGH in the case at bar.² Neither state defendants nor federal defendants objected to the intervention; and, after hearing, the motions to intervene of St. Elizabeth's and of MHA were allowed.

I. The Procedural Issues

At the threshold there are certain preliminary procedural issues which should be referred to and considered before reaching the merits.

A.

Jurisdiction lies in this court under 28 U.S.C. § 1331(a) (federal question), there being questions raised under the laws and Constitution of the United States and the $10,000 jurisdictional amount being satisfied. Plaintiffs also allege jurisdiction under 28 U.S.C. § 1343(3) (deprivation of constitutional rights). Since jurisdiction lies under section 1331(a), the court need not reach a consideration of the issues presented in determining whether section 1343(3) jurisdiction is properly invoked. Catholic Medical Center of Brooklyn and Queens, Inc. v. Rockefeller, 305 F.Supp. 1256 and 1268, 1260 (E.D. N.Y.1969), vacated, 397 U.S. 820, 90 S. Ct. 1517, 25 L.Ed.2d 806, aff'd, 430 F.2d 1297 (2d Cir.), appeal dismissed, 400 U. S. 931, 91 S.Ct. 246, 27 L.Ed.2d 262 (1970); cf. Hagans v. Lavine, 415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974) (discussing the threshold issues presented in determining section 1343(3) jurisdiction).

B.

Plaintiffs have standing to prosecute this action. Although the Social Security Act does not by its text provide remedies to private parties, it is clear that welfare recipients have standing to challenge violations of their rights under the Act. Rosado v. Wyman, 397 U.S. 397, 420, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970); National Welfare Rights Organization v. Finch, 139 U.S. App.D.C. 46, 429 F.2d 725 (1970); Smith v. Vowell, 379 F.Supp. 139 (W.D. Tex.1974). No significant distinction can be drawn between welfare recipients and welfare providers, such as plaintiffs. MGH and the other plaintiffs can show "injury in fact", an "interest . . . arguably within the zone of interest . . . protected", and that "Congress has not in express or implied terms precluded judicial review". Data Processing Service Organizations v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970); Barlow v. Collins, 397 U.S. 159, 90 S.Ct. 832, 25 L.Ed.2d 192 (1970); National Welfare Rights Organization v. Finch, supra. Thus, plaintiffs, as provider hospitals, have standing. Cf. Catholic Medical Center of Brooklyn and Queens, Inc. v. Rockefeller, supra 305 F.Supp. at 1263.

C.

The plaintiffs' claim that state defendants' policy and practice violate the Social Security Act is properly before a single federal district judge. Where a claim is made of conflict between state law and a federal statute, that claim is properly characterized as statutory in nature and hence does not require consideration and decision by a three-judge court convened under 28 U. S.C. § 2281. Swift and Co. v. Wickham, 382 U.S. 111, 86 S.Ct. 258, 15 L.Ed.2d 194 (1965). The case here presents issues of both statutory and constitutional nature; and, in such a situation, the statutory claim should be disposed of first by a single district judge. A three-judge court need only be convened to deal with the constitutional issues, if the statutory claim is not dispositive. Hagans v. Lavine, supra 415 U.S. at 543-45, 94 S.Ct. 1372; Rosado v. Wyman, supra 397 U.S. at 402-03, 90 S.Ct. 1207.

D.

Eleventh Amendment state sovereign immunity is no impediment to this court's jurisdiction to hear plaintiffs' claims for declaratory and prospective injunctive relief against defendant state officers. Ex parte Young, 209 U. S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908); cf. Edelman v. Jordan, 415 U.S. 651, 664-65, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974). No opinion need be expressed as to the effect of the Eleventh Amendment on plaintiff MGH's demand for diversion of state funds to satisfy past debts owed plaintiff. See Part IV, infra.

II. The Facts

Since prior to 1972, the Commonwealth of Massachusetts has participated in the federal Title XIX Medicaid program of medical assistance to certain categories of the needy. This participation is effected by Mass.Gen.Laws ch. 118E, the state Medicaid law, and by the state Department of Public Welfare's "Plan for Medical Assistance" thereunder. By both ch. 118E and the state plan, the Commonwealth has undertaken the establishment of a Medicaid program in conformity with federal law. The Secretary has made payments during each year to the Commonwealth for purposes of its approved Title XIX plan pursuant to 42 U.S.C. § 1396b(d).

The MGH is a private hospital in Boston. Since prior to 1972, MGH has been a "provider" of services to eligible recipients under the Title XIX Medicaid program. In its role as provider, MGH has given necessary inpatient medical care to a substantial number of eligible Medicaid recipients....