Medevac MidAtlantic, LLC v. Keystone Mercy Health Plan
817 F. Supp. 2d 515
E.D. Pa.2011Background
- Medevac provides emergency air transport; KMHP is a Pennsylvania Medicaid managed care organization under HealthChoices and pays providers on a capitated basis.
- Medevac is non-network and had no contract with KMHP; KMHP cannot restrict Medevac from serving KMHP enrollees and DPW contract requires KMHP to pay providers for medically necessary services.
- Medevac billed KMHP for emergency transports; KMHP initially paid half, then in fall 2007 paid 2% of billed charges and began deducting against alleged overpayments.
- Medevac asserts KMHP's payments violated the Deficit Reduction Act and Medicaid Act timely payment requirements; Medevac filed a six-count Amended Complaint, including §1983 and contract-based claims.
- KMHP moved to dismiss Counts I–II and strike certain relief requests; Medevac sought partial summary judgment on whether emergency services fall under §6085.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1983 claim is cognizable for Medicaid timely payment rights | Medevac asserts rights to timely payment under §§1396n(b)(4) and 1396u-2(f). | KMHP contends these provisions do not create enforceable individual rights, nor action under color of state law. | No; §1983 claim dismissed; no enforceable individual rights conferred. |
| Whether Medevac can sue as a third-party beneficiary of the Operating Agreement | Medevac contends the contract creates third-party beneficiary rights to timely payment. | Operating Agreement expressly disclaims third-party beneficiaries; circumstantial provisions do not create such rights. | Dismissed; disclaimer upheld; Medevac not an intended or implied beneficiary. |
| Whether the court should strike Medevac's requests for billed charges as damages | Medevac seeks payment of billed charges under §2116 and related claims. | Billed charges are unclear; state law interpretation should limit to actual costs. | Denied; strike inappropriate at 12(f); complex statutory interpretation required. |
| Whether attorneys’ fees may be recovered | Fees may be recoverable under bad-faith theory or other exceptions. | American rule; fees not recoverable absent contract or statute; bad-faith exceptions do not apply here. | Granted; fees struck for Counts II, IV, V, VI; only §1988 potential but §1983 claim dismissed. |
Key Cases Cited
- Wilder v. Virginia Hospital Ass'n, 496 U.S. 498 (1990) (held that provider-focused timely payment provisions can confer enforceable rights)
- Sabree v. Richman, 367 F.3d 180 (3d Cir. 2004) (developmentally disabled beneficiaries have enforceable rights to prompt medical assistance)
- Gonzaga Univ. v. Doe, 536 U.S. 273 (2002) (rights-creating language is required for enforceable private rights)
- Blessing v. Freestone, 520 U.S. 329 (1997) (defines Blessing test for rights creation in statutes with aggregate focus)
- Suter v. Artist M., 503 U.S. 347 (1992) (illustrates generalized duties do not create individual rights)