MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Keystone Mercy Health Plan’s (“KMHP”) Motion to Dismiss and Strike Medevac MidAtlantic LLC’s (“Medevac”) Amended Complaint in Part [doc. no. 25]. KMHP seeks to dismiss Counts I and II of Medevac’s Amended Complaint under Federal Rule of Civil Procedure 12(b)(6), and seeks to strike, under Rule 12(f), portions of Plaintiffs Amended Complaint referencing “billed charges” and requesting attorneys’ fees and costs. 1 Also pending is Medevac’s Motion for Partial Summary Judgment, which the Court will address by separate opinion and order.
Medevac’s claims against KMHP, a managed care organization providing healthcare services to Medicaid beneficiaries under the Commonwealth of Pennsylvania’s HealthChoices Medicaid plan, arise from KMHP’s denial of partial or full payment to Medevac for the emergency air transport services it has provided to KMHP’s members.
1. Factual and Procedural Background
A. The Medicaid Program
Medicaid
2
is a cooperative federal-state program in which the federal government offers funding to states that provide healthcare services to low-income individuals and families in designated eligibility groups.
3
Though state participation in Medicaid is voluntary, participating states must comply with the requirements of the Medicaid Act and accompanying regulations, including submission of a compliant
In Pennsylvania, the Department of Public Works (“DPW’) administers the state’s Medicaid program 11 through both a traditional fee-for-service program and a managed care program — HealthChoices— which is mandatory for beneficiaries in some parts of Pennsylvania. 12 Under HealthChoices, contracting MCO’s receive payment on a capitated basis, 13 bearing the risk that the costs of service may exceed the capitation payments. 14 The MCOs negotiate contracts with the providers that form the provider network. Under such contracts, the MCOs direct their members to the network providers in exchange for receiving discounted rates for the medical services rendered to the members. 15 Non-contracting providers furnishing services to an MCO’s members are referred to as “out-of-network” or “non-plan” providers. 16 Providers are not required to enter into a contract with an MCO. 17
Any provider of emergency services that does not have in effect a contract with a Medicaid managed care entity ... must accept as payment in full no more than the amounts ... that it could collect if the beneficiary received medical assistance under this subchapter other than through enrollment in such an entity. 19
Thus, non-plan emergency service providers 20 serving Medicaid enrollees are entitled to payment at only the rate they would receive under the state’s fee-for-service Medicaid program.
B. The Dispute
KMHP administers a Medicaid managed care program under a subcontract with Keystone Health Plan East, which holds a license issued by, and a prime contract with, DPW to serve as a private Medicaid MCO under the Commonwealth’s Health-Choices program. 21 KMHP receives payment based on a fixed fee per member, per month. 22
Medevac provides emergency air transportation services from trauma scenes to medical facilities and between medical facilities 23 Though Medevac is not among KMHP’s network providers and has no contract with KMHP, 24 KMHP cannot, under state and federal law, restrict its members from using Medevac’s emergency services and is obligated under the contract with DPW to pay providers for medically necessary services, including emergency medical transportation services. 25 Additionally, under Pennsylvania law, Medevac is obligated to provide its emergency transport services without regard to a patient’s ability to pay. 26
Medevac’s claims arise from KMHP’s alleged failure to adequately pay Medevac for emergency air transport provided to KMHP’s members. Medevac began providing emergency services to KMHP’s members in April 2006, billing KMHP its usual and customary charges for emergency air transportation.
27
Between April 2006 and fall of 2007, KMHP paid Medevac for half of the billed amount per service.
28
Then, in fall 2007, KMHP began paying only
2%
of billed charges per service.
29
KMHP claimed that under Section 6085 of the 2005 Deficit Reduction Act, Medevac, as a non-network “emergency services” provider, was entitled to payment at only Pennsylvania’s fee-for-service rates— which equated to 2% of Medevac’s billed
C. Procedural History
Medevac filed a three-count complaint in the Philadelphia Court of Common Pleas, bringing two state contract claims and a claim under the Pennsylvania Declaratory Relief Act. KMHP removed that action to this Court, on grounds that the complaint contained an embedded federal question, conferring jurisdiction on this Court. 34 Medevac did not contest removal. 35 After the Court ordered additional briefing as to why subject-matter jurisdiction was appropriate under Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 36 the Parties stipulated that Medevac would be permitted to file an amended complaint, 37 and the Court entered the stipulation.
Medevac’s Amended Complaint brings six counts: (1) a claim under 42 U.S.C. § 1983 for KMHP’s violation of the timely payment provisions of the Medicaid Act; (2) a claim that KMHP breached its contract with the state, to which Medevac is a third-party beneficiary, by failing to make prompt payment to Medevac; (3) a claim under the federal Declaratory Judgment Act, seeking judgment that Medevac is not a provider of emergency services under Section 6085 of the 2005 Deficit Reduction Act; (4) a claim for unjust enrichment, seeking payment for the reasonable value of Medevac’s services; (5) a claim, in the alternative to Count IV, for breach of an implied-in-fact contract for KMHP’s failure to continue remitting payment at the 50% rate agreed to by the Parties; and (6) a claim under Pennsylvania’s declaratory relief statute seeking, inter alia, judgment that KMHP has no right to recoup the purported “overpayments.”
KMHP now moves, under Rule 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the Section 1983 claim (Count I)
II. Standard of Review
In reviewing a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief may be granted, the Court must accept a plaintiffs factual allegations as true and draw all logical inferences in favor of the non-moving party. 39 Courts are not, however, bound to accept as true legal conclusions couched as factual allegations. 40 The Complaint must set forth “direct or inferential allegations [for] all the material elements necessary to sustain recovery under some viable legal theory.” 41 And the plaintiff must allege “enough facts to state a claim for relief that is plausible on its face.” 42
Rule 12(f) provides that a court may strike from a pleading “any redundant, immaterial, impertinent, or scandalous matter.” 43 The purpose of the provision is to clean-up the pleadings, streamline the litigation and avoid inquiry into irrelevant matters. 44 Motions to strike are to be decided o'n the pleadings alone. 45
Though this Court has considerable discretion to grant or deny a motion to strike a pleading or portions thereof, such motions are highly disfavored, and even where a statement in a pleading falls within the four corners of Rule 12(f), a court should grant the motion only when “the allegations have no possible relation to the controversy and may cause prejudice to one of the parties, or if the allegations confuse the issues.” 46 In such cases, granting a motion may save resources of the court and parties by preventing litigation of claims that will ultimately not affect the outcome. 47 Despite courts’ distaste for striking pleadings and portions thereof, doing so is appropriate when the type or amount of relief sought is unavailable under law. 48
III. Discussion
A. Motion to Dismiss Medevac’s Section 1983 Claim.
Under 42 U.S.C. § 1983, plaintiffs may seek relief against anyone who, under color of state law, deprives them of rights, privileges, of immunities secured by the Constitution and federal laws.
49
In Count I, Medevac brings claims under 42 U.S.C. § 1983, alleging KMHP, acting under color of state law, violated Medevac’s right to timely payment under 42 U.S.C.
Section 1983 provides a remedy for deprivation of rights secured by federal statute, not for violations of federal law. 50 Thus, the Court must determine not whether Medevac adequately alleges that KMHP violated Sections 1396n(b)(4) and 1396u-2(f), but whether those provisions confer on Medevac individual federal rights enforceable under Section 1983.
To evaluate that question, the Third Circuit directs that courts first determine whether the three requirements set forth by the Supreme Court in Blessing v. Free stone 51 are satisfied: (1) Congress must have intended that the statute benefit the plaintiff; (2) the benefit provided must not be “vague and amorphous;” and (3) the statute must impose an “unambiguous and binding obligation” on the state. 52 If the Blessing test is met, courts then determine, based on the statute’s text and structure, whether “Congress unambiguously conferred the rights asserted,” by using “rights-creating terms.” 53 Rights-creating terms are those that “clearly impart an individual entitlement and have an unmistakable focus on the benefited class.” 54
In a series of non-Medicaid cases, the Supreme Court has provided general principles guiding the determination of whether a statute uses rights-creating language and confers an individual, enforceable right. In
Gonzaga University v. Doe,
55
the Court identified as quintessential rights-conferring language that set forth in Titles VI of the Civil Rights Act and IX of the Education Act Amendments of 1972: “no person ... shall ... be subjected to discrimination.”
56
It then held that the educational records’ privacy provision of the Family Educational Rights and Privacy Act did not confer on students an individual right to privacy of their records because it addressed the obligation of the Secretary of Education to deny funding to schools releasing records without students’ consent.
57
Though the provision mentioned students and the need for consent, because it spoke “only in terms of institutional policy and practice, not
individual
instances of disclosure,” and had an “aggregate focus,” rather than a focus on of any particular individual, it did not confer individual rights.
58
Similarly, statutory provisions that provide benefits to individuals by imposing generalized duties on a participating state generally do not confer enforceable individual rights. For example, in
Suter v. Artist
M,
59
a statutory requirement that states receiving federal
In the Medicaid context, both the Third Circuit and the Supreme Court have held that certain provisions of the Medicaid Act create enforceable individual rights of providers or beneficiaries. In Wilder v. Virginia Hospital Association, 62 the Supreme Court held that Section 1896a(a)(13)(A), which required that a state Medicaid plan “must provide ... for payment ... of [medical services] though the use of rates ... [that] are reasonable and adequate to meet the costs that must be incurred by efficiently and economically operated facilities” 63 could be enforced by providers. 64 Critical to that finding was the statute’s emphasis on tying reimbursement rates to providers’ costs, creating an unmistakable focus on providers’ needs. 65 Similarly, the Third Circuit, in Sabree v. Richman, 66 found that Sections 1396a(a)(8), (a)(10), and (a)(15) of the Medicaid Act conferred on developmentally disabled Medicaid beneficiaries an enforceable right to reasonably prompt medical assistance in an intermediate care facility (“ICF”). 67 The statutory provisions required that a state “must provide ... medical assistance ... to ... all eligible individuals” with “reasonable promptness,” and included treatment at ICFs as a type of medical assistance. 68 Sabree found that the plaintiffs with developmental disabilities had an enforceable right because they were the intended beneficiaries of the provisions, the rights conferred were specific and enumerated, the obligation was unambiguous and binding, and the statutory terms (“must provide ... to all eligible individuals”) were both mandatory and had an unmistakable individual focus, rather than a focus on the regulated entity. 69
The statutory language the Court must evaluate here falls somewhere between the boundaries outlined by these cases. Although the language of Sections 1396n(b)(4) and 1396u-2(f) appears to be similar to that found to create an enforce
Section 1396n(b)(4) allows the Secretary to waive the freedom-of-choice requirement to permit states to implement a plan that restricts providers if certain other conditions, including timely payment to providers, are satisfied. The provision states:
The Secretary ... may waive such requirements of section 1396a of this title ... as may be necessary for a State ... to restrict the provider from (or through) whom an individual ... can obtain services (other than in emergency circumstances) to providers or practitioners who undertake to provide such services and who meet, accept, and comply with the reimbursement, quality, and utilization standards under the State plan ... if such restriction does not discriminate among classes of providers on grounds unrelated to their demonstrated effectiveness and efficiency in providing those services and if providers under such restriction are paid on a timely basis in the same manner as health care practitioners must be paid under section 1396a(a)(37)(A) of this title. 70
Section 1396u-2 imposes certain requirements on states that opt to provide Medicaid services through contracts with MCOs and require beneficiaries to enroll with those MCOs. 71 Section 1396u-2(f), entitled “Timeliness of payment,” provides:
A contract ... with a medicaid managed care organization shall provide that the organization shall make payment to health care providers for items and services which are subject to the contract and that are furnished to individuals eligible for medical assistance under the State plan ... who are enrolled with the organization on a timely basis consistent with the claims payment procedures described in section 1396a(a)(37)(A) of this title, unless the health care provider and the organization agree to an alternate payment schedule. 72
Medevac argues, with some force, that the language in these subsections (“shall provide,” “shall make payment to health care providers ... on a timely basis,” and “may waive ... if providers under such restriction are paid on a timely basis”) mimics the language that Sabree found conferred an enforceable right. First, the provisions providing for timely payment to providers appear intended to benefit providers. Such a provision would not benefit eligible Medicaid recipients because Medicaid recipients, in most cases, are not obligated to pay the provider directly; failure to timely pay providers would not impose payment liability on them. Moreover, timely payment by MCOs would not necessarily benefit the state or MCOs against whom the requirement is imposed. And though, arguably, such a provision benefits the Medicaid program as a whole by ensuring providers are not discouraged
But that does not end the inquiry. The requirement that payment to providers be “timely” is qualified: payment must be timely made “consistent with” or “in the same manner” as provided under section 1396a(a)(37)(A). That section provides that a state Medicaid plan must provide for “claims payment procedures” that:
[Ejnsure that 90 per centum of claims for payment (for which no further written information or substantiation is required in order to make payment) made for services covered under the plan and furnished by health care practitioners through individual or group practices or through shared health facilities are paid within 30 days of the date of receipt of such claims and that 99 per centum of such claims are paid within 90 days of the date of receipt of such claims .... 74
The language of this provision stands in stark contrast with the facially provider-focused language of Sections 1396n(b)(4) and 1396u-2(f). First, it does not focus on payment to individual providers, but rather on a state’s institutional payment
procedures to
ensure timely payment of claims in the
aggregate,
along the lines of the statutory language in
Gonzaga, Suter,
and
Blessing.
The requirement that a certain percentage of claims be paid within 30 or 90 days appears to serve as a benchmark for the performance of the claims procedures;
75
it does not require that all pro
Having concluded that Sections 1396n(b)(4) and 1396u-2(f), at least facially, use rights-creating language, and that Section 1396a(a)(37)(A) does not, the Court must determine the impact of the prior two sections’ reliance on the latter. Because the purported rights to timely payment in 1396n(b)(4) and 1396u-2(f) are
Medevac does not dispute that Section 1396a(a)(37)(A) lacks rights-conferring language; instead it insists that Section is irrelevant to this Court’s inquiry because sections 1396n(b)(4) and 1396u-2(f) create stand-alone timely payment rights. But the right to payment in these sections is only a right to payment in the same manner or consistent with the timely payment provisions applicable to health care practitioners — the only providers referenced in 1396a(a)(37)(A). The limited legislative history available suggests that Congress was attempting to extend the reach of Section 1396a(a)(37)(A) to all types of providers, not to create additional rights for providers offering services under a managed care system.
For example, in 1990, Congress amended the Medicaid Act to add Section 1396n(b)(4)
82
when it recognized that although the statute provided for timely payment to healthcare practitioners, it had no such provision for hospitals and other providers.
83
Section 1396n(b)(4) thus “extend[ed] the prompt payment requirements to any type of provider participating under a selective contracting waiver.”
84
Similarly, Congress later extended those provisions to providers of services subject to a state’s contract with an MCO.
85
Nothing in the legislative history suggests that Congress intended to create
new
or
greater
rights to payment than were afforded under Section 1396a(a)(37)(A) to health
Accordingly, the Court finds that Medevac has not stated a § 1983 claim because neither of the statutory provisions it seeks to enforce confers on providers individual enforceable rights to timely payment. Having so concluded, the Court does not reach the question of whether KMHP acts under color of state law.
B. Motion to Dismiss Medevac’s Third-Party Beneficiary Claim.
The Operating Agreement between Keystone Health Plan East and DPW requires KMHP, as a subcontractor, to make timely payment to non-plan emergency providers. 86 Based on this provision, Medevac brings a breach-of-contract claim on a third-party beneficiary theory. KMHP moves to dismiss because the Operating Agreement explicitly disclaims intent to create third-party beneficiaries.
Under Pennsylvania law, a contract creates a third-party beneficiary when its language affirmatively indicates mutual intent to benefit that third-party. 87 Pennsylvania has also adopted, as an exception to that general rule, Section 302 of the Restatement (Second) of Contracts, under which a contract can create a third-party beneficiary even in the absence of language demonstrating mutual intent. 88 Section 302 provides:
(1) Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either
(a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or
(b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.
(2) An incidental beneficiary is a beneficiary who is not an intended beneficiary. 89
In analyzing Section 302(1) at step one, 90 Pennsylvania courts require that the circumstances surrounding the contract be “compelling” before finding that recognizing a third-party beneficiary is appropriate to effectuate the intention of the parties. 91 At step two, there must be a showing that the alleged beneficiary falls within one of two categories under Section 302(l)(a) and (b) — creditor and donee beneficiaries. 92 “If the two steps of the test are met, the beneficiary is an intended beneficiary unless otherwise agreed between the [contracting parties].” 93
Here, the Operating Agreement expressly disclaims any intent to create
The Court does not agree that these contract provisions demonstrate mutual intent to benefit Medevac and other providers in its situation. A fair reading of the relevant contractual provisions in the context in which they appear lead this Court to conclude that they evince intent to impose on KMHP an obligation to comply with applicable law, not an intent to specifically benefit emergency services providers. State- contracts with Medicaid MCOs must provide for timely payment to providers, 102 and Pennsylvania law requires HMOs to pay for medically necessary emergency services provided by non-plan providers. 103 Contractual provisions ensuring compliance with existing statutory or regulatory provisions do not indicate mutual intent to benefit a non-party; they evince intent to comply with applicable law. 104 Indeed, the Operating Agreement requires the MCO to comply with all regulations promulgated under the Medicaid Act, as well as with a number of federal and state laws. 105 Under Medevac’s construction, every beneficiary of the many applicable federal and state statutes referenced in the contract would have the right to sue the MCO for non-compliance, creating expansive liability under the contract, despite the disclaimer.
Medevac also argues that, under Pennsylvania law, express disclaimers are not
Medevac also argues that a provision in the Agreement specifying that the Bureau of Hearings and Appeals is not the appropriate forum to resolve provider disputes with MCOs indicates the parties’ intent that providers may “directly enforcfe] their payment rights arising under the Operating Agreement.”
108
The Court does not find this provision is inconsistent with the disclaimer or that it presents circumstances so compelling that recognition of Medevac’s beneficiary status is appropriate. That the Bureau of Hearings and Appeals will not entertain disputes does not demonstrate intent to permit direct enforcement by third parties because the parties could have anticipated means other than direct enforcement of the contract to resolve such disputes: network providers can enforce their rights directly against KMHP pursuant to their own contracts and non-network providers may
Finally, Medevac has not pleaded facts sufficient to enforce a government contract as a third-party beneficiary, particularly in light of the disclaimer. Pennsylvania courts have adopted Section 313 of the Restatement (Second) of Contracts, applicable to government contracts, 111 which establishes significant hurdles for non-parties seeking to enforce them:
[A] promisor who contracts with a government or governmental agency to do an act for or render a service to the public is not subject to contractual liabil-
ity to a member of the public for consequential damages resulting from performance or failure to perform unless
(a) the terms of the promise provide for such liability; or
(b) the promisee is subject to liability to the member of the public for the damages and a direct action against the promisor is consistent with the terms of the contract and with the policy of the law authorizing the contract and prescribing remedies for its breach. 112
Under Section 313, something more than an intent to benefit the non-party must be demonstrated: the contract must express intent that the promisor will be liable to members of the general public in the event of non-performance.
113
Otherwise, third-party beneficiaries of a Government contract are assumed to be merely incidental
Arguably, Section 313 precludes only claims by members of the “general public,” rather than discrete and identifiable groups of plaintiffs. 116 Nevertheless, Pennsylvania state courts appear to apply the Restatement to all beneficiaries of government contracts even where the third-party is a member of a small and specific sub-population that, like Medevac here, benefits from the government contract more than the general public. 117 So, too, has the Third Circuit when applying Section 313 under federal common law. 118 “The fact that third parties will benefit more directly from performance of the contract than members of the public at large does not alter their status as incidental beneficiaries.” 119
Accordingly, because the Operating Agreement expressly disclaims third-party beneficiaries and Medevac has neither pleaded nor presented sufficiently contradictory contract language or compelling circumstances that might warrant disregarding that disclaimer, and because Medevac has not pleaded facts sufficient for recognition as a third-party beneficiary of a government contract, the Court will dismiss this Count II without prejudice.
C. Motion to Strike.
1. Medevac’s Request for Damages in the Amount of its Usual and Customary “billed charges” for pre-January 1, 2007 Charges.
KMHP moves to strike Medevac’s requests for relief in the amounts actually billed to KMHP 120 because it asserts that Section 2116 of Pennsylvania’s Health Care Accountability and Protection Act 121 entitles Medevac to reimbursement of only its actual costs, not its billed charges.
The Court will exercise its substantial discretion in considering motions under Rule 12(f) and deny the motion to strike references to billed charges because the determination whether Medevac may recover its billed charges in full (if indeed that is what it is seeking 123 ) requires this Court to resolve a disputed and substantial question of law. This is not an appropriate use of a Rule 12(f) motion. 124 And KMHP has neither suggested nor demonstrated that it will suffer any prejudice from references in the Amended Complaint to “billed charges.” Upon proper motion and briefing, the Court will consider, if necessary, whether the state statutory provision limits Medevae’s recovery to actual costs and the implications, if any, of that limitation. 125
2. Medevac’s Request for Attorneys’ Fees.
KMHP moves to strike Medevac’s request for attorneys fees because, under Pennsylvania law, attorneys’ fees are unavailable for the state contract claims (Counts II, IV and V), for claims seeking relief under the federal Declaratory Judgment Act 126 (Count III), and under the state declaratory judgment act (Count VI) except for claims brought against insurers acting in bad faith. The Court agrees.
Pennsylvania courts follow the “American rule” that attorneys’ fees and costs are not recoverable from an adverse party unless a statute expressly authorizes the fees, there was a clear agreement among the parties to permit such recovery, or some other exception applies.
127
Conse
Medevac asserts that because it has alleged conduct by KMHP that demonstrates bad faith, it may seek attorneys’ fees. Setting aside the question whether Medevac has alleged bad faith, fee awards for bad faith can be awarded in two situations: (1) bad faith during the pendency of litigation, available under the Court’s equitable powers and Pennsylvania statute; 129 and (2) bad faith underlying the conduct that forms the basis for the claim. 130 Medevac does not seek fees for bad faith conduct during litigation, but rather for pre-litigation conduct. But fees awarded for conduct underlying the substantive claim are punitive in nature and thus cannot be awarded when punitive damages are not permitted. 131 And under Pennsylvania law, punitive damages are not permitted in breach of contract actions. 132
Medevac’s claims for declaratory relief likewise do not permit recovery of attorneys’ fees. Neither the federal nor state declaratory judgment statutes expressly provide for an award of attorneys’ fees and costs to the prevailing party. 133 And Medevac points to no exception to the American rule for declaratory judgments, beyond bad faith. To date, Pennsylvania has recognized only one exception permitting attorneys’ fees in actions under the state declaratory judgment statute: where fees are “implemented as supplemental relief to effectuate the declaratory judgment.” 134 Medevac points to no other exception, and this Court’s own research has revealed none.
Thus, an award of attorneys’ fees would be permissible for only Medevac’s Section 1988 claim 135 and, as discussed above, that claim is dismissed. Accordingly, the Court will grant KMHP’s motion to strike Medevac’s request for attorneys’ fees and costs as such are not recoverable under the causes of action Plaintiff pleads.
IV. Conclusion
For the foregoing reasons, the Court will grant KMHP’s motion to dismiss Counts I and II, deny KMHP’s Motion to Strike references to Medevac’s billed charges, and grant KMHP’s Motion to
An appropriate Order follows.
Notes
.The Court has subject matter jurisdiction over Counts I and III pursuant to 28 U.S.C. § 1331. Medevac brings Count I pursuant to 42 U.S.C. § 1983 for KMHP’s alleged violation of two provisions of the Medicaid Act: 42 U.S.C. §§ 1396n(b)(4) and 1396u-2(f). In Count III, Medevac seeks a declaratory judgment that a provision of the Deficit Reduction Act of 2005, 42 U.S.C. § 1396u-2(b)(2)(D), does not apply to Medevac. Because the Parties are not diverse, see Am. Compl. ¶¶ 8 & 9, the Court has only supplemental jurisdiction over the remaining state law claims (Counts II, IV, V & VI), pursuant to 28 U.S.C. § 1367(a).
. Title XIX of the Social Security Act, 42 U.S.C. §§ 1396-1396v, is known as the Medicaid Act.
Sabree v. Richman,
.
Id.
(citing
Pa. Pharmacists Ass'n v. Houstoun,
. Id. (citing 42 U.S.C. §§ 1396, 1396c and 42 C.F.R. § 430.10).
. 42 U.S.C. § 1396a(a)(23).
. See 42 U.S.C. § 1396a(a)(30)(A) (payments to providers must be "consistent with efficiency, economy, and quality of care and ... sufficient to enlist enough providers so that care and services are available under the plan ...."); see also 55 Pa.Code §§ 1101.61, 1150.61.
. See id. § 1396n(b).
. Id. & § 1396u-2(b)(2).
. Am. Compl. ¶ 53 (citing, inter alia, 42 U.S.C. § 1396b(m)(2)(A)(iii)); see also 42 C.F.R. §§ 438.806(b), 438.6.
. See Am. Compl. ¶ 54; 42 U.S.C. § 1396b(m).
. Pennsylvania’s medical assistance program is authorized under Article IV of Pennsylvania’s Public Welfare Code, 62 P.S. §§ 401-488. See 55 Pa.Code § 1101.11; see also 62 P.S. § 201(1).
.
See Hosp. & Healthsys. Ass’n of Pa. v. Dep't of Pub. Welfare,
. "A ‘capitated basis' ... means that such services are provided for a flat rate based upon the number of participating individuals.”
Hosp. & Healthsys. Ass’n of Pa.,
. Am. Compl. ¶ 19.
. Am. Compl. ¶¶ 3, 22.
.
Hosp. & Healthsys. Ass’n of Pa.,
. Am. Compl. ¶¶ 3, 20.
. Pub.L. 109-171, 120 Stat. 4.
. Id. § 6085, 120 Stat. 121 (codified as amended at 42 U.S.C. § 1396u-2(b)(2)(D)).
. Whether "emergency services” includes air transport is the subject of Medevac’s pending Motion for Partial Summary Judgment.
. Am. Compl. ¶¶ 9, 22. KMHP is a joint venture between Keystone Health Plan East and Mercy Health Plan, each of which have 50 percent ownership of KMHP. Am. Compl. ¶ 9.
. Am. Compl. ¶ 2.
. Am. Compl. 1125.
. Am. Compl. ¶ 30. Medevac avers that ambulance services rarely participate in providers' networks because they receive most of their patient referrals from 911 call centers, and thus would benefit little from deeply discounting rates charged to HMOs in exchange for patient referrals. Am. Compl. ¶¶ 28, 35.
. Am. Compl. ¶¶ 23, 24, 29, 32.
. Am. Compl. II 26.
. Am. Compl. II 30, 33.
. Am. Compl. ¶ 36.
. Am. Comp. ¶¶ 37, 38.
. Am. Compl. ¶ 38. DPW’s fee-for-service rates for emergency transport service are based on ground ambulance rates, not rates for emergency air transport. Am. Compl. ¶ 14.
. Am. Compl. ¶ 38-39 & Ex. A at 1. This is so despite the Deficit Reduction Act's effective date of January 1, 2007. Am. Compl., Ex. A. at 2.
. Am. Compl. ¶ 39.
. Am. Compl. ¶ 39.
. Notice of Removal [doc. no. 1].
. PI. Medevac’s Resp. to Def. KMHP’s Notice of Removal [doc. no. 4].
.
. Doc. no. 21. This Court has subject-matter jurisdiction over this matter because, even if the original complaint was improperly removed due to lack of subject matter jurisdiction (a question this Court did not decide), Medevac's Amended Complaint, which states well-pleaded federal questions, confers subject-matter jurisdiction on this Court.
See In re Cmty. Bank of N. Va.,
. See Mem. of Law in Supp. of Def.’s Mot. to Dismiss & Strike PL’s Am. Compl. in Part (“KMHP Mem.”) [doc. no. 25],
.
Phillips v. Cnty. of Allegheny,
.
Bell Atl. Corp. v. Twombly,
.
See id.
at 562,
.
Id.
at 570,
. Fed.R.Civ.P. 12(f).
.
Zaloga v. Provident Life and Acc. Ins. Co. o
f
Am.,
. Id.
.
N. Penn Transfer, Inc. v. Victaulic Co. of Am.,
. Id.
.
Siko v. Kassab, Archbold & O’Brien, L.L.P.,
No. 98-402,
.
Sabree v. Richman,
.
Id.
at 181 n. 2 & 188;
Grammer v. John J. Kane Reg. Ctrs.-Glen Hazel,
.
.
Sabree,
.
Id.
at 190 (citing
Gonzaga Univ. v. Doe,
.
Sabree,
.
.
Id.
at 284 & n. 3, 287,
.
Id.
at 287,
.
Id.
at 288,
.
.
Id.
at 358, 363,
.
Gonzaga,
.
. This provision has since been repealed.
See Pa. Pharmacists Ass'n v. Houstoun,
.
Wilder,
.
See Pa. Pharmacists Ass'n,
.
. Id. at 192.
. Id. at 189.
. Id. at 189-90.
.42 U.S.C. § 1396n(b)(4). The Court questions whether § 1396n(b)(4) is applicable to Medevac's emergency services because such services by the terms of this section, cannot be restricted. The "timely basis” provision applies only to "restricted providers.” But because assuming that this provision applies to emergency services providers does not affect the outcome, the Court does so here.
. 42 U.S.C. § 1396u-2(a)( 1 )(A).
. 42 U.S.C. § 1396u-2(f).
. At least one court has concluded that Section 1396n(b)(4) is focused not on providers, but instead on the Secretary because it provides guidance to the Secretary about when waivers
may
be granted and does not mention providers in "imperative terms.”
See Molina Healthcare of Ind., Inc. v. Henderson,
No. 06-1483,
. 42 U.S.C. § 1396a(a)(37)(A).
.
See Blessing,
. Contrary to Plaintiff's suggestion, this case thus stands in contrast to
Grider v. Keystone Health Plan Central, Inc.,
No. 01-5641,
. In
Wilder,
the Supreme Court found that providers had individual enforceable rights because of the emphasis of the statutory text on individual facilities’ costs for providing care; thus the provision "measured the adequacy of payments in relation to the economics of providers.”
Pa. Pharmacists,
.
See Bio-Medical Applications of N.C., Inc. v. Elec. Data Sys. Corp.,
.
See Gonzaga,
. The Court recognizes that the district court in
National Medical Care, Inc. v. Rullán,
No. 04-1812,
.
See Wilder,
. See Omnibus Budget Reconciliation Act of 1990, Pub.L. 101-508, § 4742 ("Timely Payment Under Waivers of Freedom of Choice of Hospital Services”), 104 Stat. 1388-197 (1990) (codified at 42 U.S.C. § 1396n(b)(4)).
. See H.R.Rep. No. 101-964 at 882 (1990) (Conf. Rep.) ("Medicaid Law includes requirements that states pay health care practitioners, such as physicians, on a timely basis, but includes no such provision for other types of providers, such as hospitals.”).
. See icL at 888.
. See Balanced Budget Act of 1997, Pub.L. 105-33, § 4708(c) 111 Stat. 506 (1997) (codified at 42 U.S.C. 1396u-2(f)). Notably, Section 4708 of the Act was entitled "Improved Administration,” supporting a finding that the intent of timely payment provisions is to ensure the efficient administration of state Medicaid programs, rather than to confer an individual right on providers.
. See Am. Compl. ¶¶ 18, 71, 72.
.
See Spires v. Hanover Fire Ins. Co.,
.
Scarpitti v. Weborg,
. Restatement (Second) of Contracts § 302 (1981) (emphasis added).
. Whether recognizing the right is appropriate to effectuate the intent of the parties is a question of standing for courts to decide.
See Guy,
.
Scarpitti,
. Id.
.
Guy,
. KMHP Mem. at 17 & Ex. 1 at 160.
The court may consider the Operating Agreement because, though it was not attached to the Amended Complaint, Medevac's Amended Complaint, at paragraph 70, relies on the Agreement.
Lum v. Bank of Am.,
.
See R.M. Shoemaker v. Se. Pa. Econ. Devel. Corp.,
.
Guy,
.
See Ira G. Steffy & Son, Inc. v. Citizens Bank of Pa., 1
A.3d 278, 287-88 (2010) (enforcing express disclaimer stating neither subcontractors nor any other party was a third party beneficiary of the loan agreement though bank retained right to make payment directly to subcontractors);
Mar-Paul Co. v. Jim Thorpe Area Sch. Dist.,
7 Pa. D. & C. 5th 387 (Pa.Com.Pl. July 31, 2008) (exculpatory provision eschewing any other contractual beneficiaries was dispositive to third-party beneficiary claim);
Tredennick v. Bone,
. Medevac Resp. at 17.
. Medevac Resp. at 16 & Ex. D at 27, 34, Ex. K.
. 40 P.S. § 991.2116.
. Medevac Resp., Ex. D at 127. This same provision requires the MCO to "assume financial responsibility, in accordance with applicable law, for emergency services and urgently needed services” that are obtained outside the provider-network, regardless of prior authorization. Id. (emphasis added).
. 42 U.S.C. § 1396u-2(f).
. 40 P.S. § 991.2116.
.
See Evans Suppliers,
. Medevac Resp., Ex. D at 27 ("The PH-MCO agrees to comply with all applicable rules, regulations, and Bulletins promulgated under ... 42 U.S.C. § 1396 et seq____”). In addition to complying with all the provisions of Pennsylvania's Health Care and Accountability Act of 1998, the PH-MCO must also comply with provisions of the Civil Rights Act, Title IX of the Education Amendments, portions of the Rehabilitation Act, the Americans with Disabilities Act; and the Pennsylvania Human Relations Act. See Medevac Resp., Ex. D at 27.
. See Ario v. Reliance Ins. Co.,
.
See Scarpitti,
. Medevac Resp. at 18 & Ex. D at 68.
.
See Guy,
. While arguably other factual circumstances might exist that demonstrate compelling circumstances, Medevac has not suggested discovery is necessary to evaluate the circumstances surrounding the contract.
.
See Clifton v. Suburban Cable TV Co.,
Though the Pennsylvania Supreme Court has not yet adopted Section 313, the Court predicts that, if presented with the question, the Supreme Court would adopt this Section of the Restatement for the following reasons: the Supreme Court has generally adopted a narrow approach to third-party beneficiaries by applying Section 302 only as an exception to the requirement for contractual language evincing intent to create third party beneficiaries; it has applied Section 313’s predecessor Restatement provision when addressing beneficiaries of a contract with the federal government,
Townsend v. City of Pittsburgh,
. Restatement (Second) of Contracts § 313(2).
. George v.
Boise Cascade Corp.,
No. 082113,
.
Allstate Transp. Co.,
. Medevac asserts, without support, that it satisfies any "heightened standard” that applies to government contracts, but it does not explain how its Amended Complaint does so. Medevac Resp. at 19.
. See Patience A. Crowder, More than Merely Incidental: Third-party Beneficiary Rights in Urban Redevelopment Contracts, 17 Geo. J. on Poverty L. & Pol’y 287, 317-19 (2010).
.
See Clifton,
.
See Nguyen,
.
See Allstate Transp. Co.,
. Am. Compl. at 11, 14, 16, 19 (requests for relief in Counts I, III, IV & VI).
. 40 P.S. § 991.2116.
. Id.
. The Amended Complaint, while referencing "billed charges,” does not on its face seek damages for the full amount billed. Instead, Medevac asks that KMHP pay "in full its claims for payment of billed charges.” See, e.g., Am. Compl. at II, 14, 19 & ¶ 108. Medevac asserts that up until the point at which KMHP began paying only 2% of its billed charges, KMHP had for more than a year consistently paid. 50% percent of the billed charges, without complaint from Medevac. Am. Compl. ¶¶ 36, 99-101. And, indeed, Medevac’s claim for breach of an implied-in-fact contract (in the alternative to its unjust enrichment claim), alleges that Medevac and KMHP agreed to reimbursement at the 50% rate. Am. Compl. ¶¶ 101, 103. Thus, it is not clear what measure of damages Medevac specifically seeks.
.
Eisai Co., Ltd. v. Teva Pharm. USA, Inc.,
. Medevac avers that its billed charges approximate its actual costs. Resp. at 21; Am. Compl. ¶ 27. This question of fact is likewise inappropriate for resolution on a motion to strike.
Eisai,
. 28 U.S.C. § 2201 et seq.
.
Yellow Transp., Inc. v. DM Transp. Mgmt. Servs., Inc.
No. 06-1517,
. Id.
. 42 Pa. Con. Stat. Ann. § 2503(6) & (7).
.
See Straub v. Vaisman & Co.,
.
See id.
(attorneys fees imposed for prelitigation conduct are punitive in nature and thus not permissible in securities fraud action where statute prohibits punitive damages) (citing
Hall v. Cole,
.
Yellow Transport.,
. See 28 U.S.C. § 2202; 42 Pa. Con. Stat. Ann. § 7538.
.
Mosaica Academy Charter Sch. v. Commonwealth Dep't of Educ.,
. 42 U.S.C. § 1988.