White v. Moses Taylor Hosp.

• Decision Date: 09 April 1991
• Docket Number: Civ. No. 89-1588.
• Citation: 763 F. Supp. 776
• Parties: Karen WHITE, Individually and as Personal Representative of the Estate of Kenneth V. White, Deceased, Plaintiff, v. MOSES TAYLOR HOSPITAL, Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

763 F. Supp. 776

Karen WHITE, Individually and as Personal Representative of the Estate of Kenneth V. White, Deceased, Plaintiff, v. MOSES TAYLOR HOSPITAL, Defendant.

Civ. No. 89-1588.

United States District Court, M.D. Pennsylvania.

April 9, 1991.

COPYRIGHT MATERIAL OMITTED

Todd J. O'Malley, Frank Anthony Mazzeo, Ronald J. Worobey, Scranton, Pa., for plaintiff.

Brian M. Peters, Jonathan B. Sprague, Post & Schell, James B. Jordan, Shrager, McDaid, Loftus, Flum & Spivey, Philadelphia, Pa., for defendant.

MEMORANDUM

NEALON, District Judge.

The Hill-Burton Act, 42 U.S.C. § 291 et seq., (hereinafter Hill-Burton or the Act), requires medical facilities that are recipients of its funds to assure a reasonable amount of uncompensated services, determined by a formula based on a percentage of operating costs or of federal assistance provided, to patients who are deemed unable to pay according to prescribed income guidelines.¹ In this action, plaintiff seeks generally to enforce the "assurances" of uncompensated services made by Moses Taylor Hospital (hereinafter Hospital) under the Act and, in particular, to obtain personal relief from medical costs incurred by her husband. Presently before the court is defendant's motion to dismiss all counts in the complaint of the above-captioned case for failure to state a claim upon which relief may be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons that follow, the court will grant defendant's motion to dismiss plaintiff's Second, Third, Fourth, Fifth and Sixth Causes of action, and deny defendant's motion to dismiss plaintiff's First Cause of Action.

I. BACKGROUND

A. Facts

In September of 1984, Kenneth V. White, the deceased husband of plaintiff, was hospitalized at the defendant Hospital and incurred medical bills totaling $217,321.00 before his death.² Plaintiff avers that the Hospital, contrary to the regulations promulgated by the Secretary of Health and Human Services (hereinafter Secretary), notified neither her husband nor herself, and failed to post notices of the availability of uncompensated services to those patients who were eligible and sought such services.³

Because plaintiff did not pay the medical bills, the Hospital instituted a collection action against her, as administratrix of her husband's estate, in the Court of Common Pleas of Lackawanna County. Due to plaintiff's failure to respond to the action in County Court, a judgment was entered against her for $217,321.00. Plaintiff complains, throughout this process, that she possessed inadequate resources to pay expenses owed to the Hospital, that she was unaware of any potential free or reduced cost medical services, and that the Hospital failed to provide notices detailing the availability of Hill-Burton funds or to provide written notice to her of those same funds in violation of 42 C.F.R. § 124.504.⁴

After the default judgment was entered, plaintiff learned of the availability of the free or reduced cost health care and applied to the Hospital for relief. The Hospital allegedly denied those funds to her and additionally failed to provide a written determination of her eligibility as required by 42 C.F.R. § 124.507.⁵

B. Procedural History

In April of 1989, plaintiff filed a complaint with the Secretary against the Hospital for failing to comply with its Hill-Burton obligations. See document 1 of record, Exhibit A. On July 19, 1989, the Assistant Surgeon General for the United States Department of Health and Human Services informed plaintiff that her complaint was dismissed, but that "under section 1627 of the Public Health Service Act (42 U.S.C. 300s-6) after a complaint has been dismissed, the person who filed the complaint may bring a private right of action in court to effectuate compliance by the facility with the regulations." Document 10 of record, Exhibit A; see also document 1 of record at ¶ 23.⁶

On May 8, 1989, plaintiff obtained a stay of the collection proceedings in the Court of Common Pleas. On November 3, 1989, plaintiff initiated this instant suit, on her own behalf and as personal representative of the Estate of Kenneth V. White, to compel Moses Taylor to abide by their obligation to provide free or low cost medical care to eligible individuals. In her complaint, plaintiff, in addition to seeking punitive damages, posits six causes of action: (1) violation of the Hill-Burton Act; (2) denial of due process under the Fifth and Fourteenth Amendments of the United States Constitution; (3) breach of contract; (4) denial of equal protection under the Fifth and Fourteenth Amendments; (5) violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law 73 Pa.Stat.Ann. § 201, et seq.; and (6) violation of the Civil Rights Act, 42 U.S.C. § 1983 (Section 1983).⁷ See document 1 of record. On February 28, 1990, defendant filed its motion to dismiss together with a supporting brief. See documents 6 & 7 of record. After plaintiff and defendant filed their respective briefs in support of and opposition to the pending motion, the court held several hearings and conferences. During the last hearing in late December, 1990, the court extended defendant additional time to conduct further research and to submit any additional briefs. The court has been informed that no further submissions will be forthcoming which would affect this motion. All documents necessary for consideration of the present motion are before the court. Accordingly, the motion is now ripe for disposition.

II. DISCUSSION

On a motion to dismiss for failure to state a claim upon which relief can be granted, the burden of proof lies with the moving parties. Johnsrud v. Carter, 620 F.2d 29, 33 (3d Cir.1980). The court, in ruling upon a Rule 12(b)(6) motion, must accept all well-pleaded allegations of the complaint as true and construe them in a light most favorable to the non-moving parties. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); Truhe v. Rupell, 641 F.Supp. 57, 58 (M.D. Pa.1985) (Rambo, J.). The motion should be granted only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Hosp. Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 746, 96 S.Ct. 1848, 1853, 48 L.Ed.2d 338 (1976) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957)).

A. Federal Claims

1) Hill-Burton Claim

A brief background outlining the origin of the Hill-Burton Act and the ensuing adoption of regulations implementing the Act may be instructive.⁸ Congress, in 1946, enacted Title VI of the Public Health Service Act, commonly known as the Hill-Burton Act. Generally, the Act was intended to address problems with the adequacy and distribution of health service facilities by means of a program of grants-in-aid to the States. See Statement of Senator Hill, in Hearings on S. 191 before the Senate Comm. on Education and Labor, 79th Cong., 1st Sess. 6-9 (1945). The expressed purpose of the Act, aside from stimulating the development of new or improved medical facilities and promoting research, was:

to assist the several States in the carrying out of their programs for the construction and modernization of such public or other nonprofit community hospitals and other medical facilities as may be necessary, in conjunction with existing facilities, to furnish adequate hospital, clinic, or similar services to all their people....

42 U.S.C. § 291(a). A State wishing to participate in this program and receive federal assistance was required to submit a plan to the Surgeon General⁹ (now the Secretary of Health and Human Services), for his approval. 42 U.S.C. § 291d.

Most importantly to the issues presented in this litigation, the Hill-Burton act required that:

The Surgeon General ... shall by general regulations prescribe —

(e) that the State plan shall provide for adequate hospitals, and other facilities for which aid under this part is available, for all persons residing in the State, and adequate hospitals (and such other facilities) to furnish needed services for persons unable to pay therefor. Such regulations may also require that before approval of an application for a project is recommended by a State agency to the Surgeon General for approval under this part, assurance shall be received by the state from the applicant that (1) the facility or portion thereof to be constructed or modernized will be made available to all persons residing in the territorial area of the applicant; and (2) there will be made available in the facility or portion thereof to be constructed or modernized a reasonable volume of services to persons unable to pay therefor, but an exception shall be made if such a requirement is not feasible from a financial viewpoint.

42 U.S.C. § 291c(e). The second of the two "assurances" — requiring a state plan to furnish necessary services to persons unable to pay — is the one implicated in this case. Under Section 291c(e), the Surgeon General could require as a condition of approval that the State give an "assurance" that there be made available a reasonable volume of services to persons unable to pay.

The regulations issued pursuant to enforcing these "assurances" essentially mirrored the language of the statute for nearly thirty years. See American Hosp. Ass'n v. Schweiker, 721 F.2d 170, 173 (7th Cir.1983), cert. denied, 466 U.S. 958, 104 S.Ct. 2169, 80 L.Ed.2d 553 (1984) (citing 42 C.F.R. §§ 52.61-53.63 (Supp.1947)). Despite the "uncompensated care assurance" requirement, hospitals receiving the federal aid routinely ignored their responsibility to provide charitable care. Id. In response to this reluctance by hospitals, the Secretary in 1972 issued regulations which contained more definite standards to determine compliance with the "assurance" obligations. See 42 C.F.R. §§ 53.111, 53.113 (1974). Moreover, in 1975, Congress passed ...