13512247.16
UNITED STATES DISTRICT COURTFOR THE DISTRICT OF NEW HAMPSHIREDARTMOUTH-HITCHCOCK CLINIC ANDMARY HITCHCOCK MEMORIAL HOSPITAL,D/B/A DARTMOUTH-HITCHCOCK, et al.,
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Plaintiffs,
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CIVIL ACTION No.v.
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NICHOLAS A. TOUMPAS, in his officialcapacity as Commissioner of the New HampshireDepartment of Health and Human Services,
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Defendant.
:PLAINTIFFS’ MEMORANDUM OF LAW IN SUPPORTOF MOTION FOR PRELIMINARY INJUNCTION
The plaintiffs, through their attorneys, respectfully submit this memorandum of law insupport of their motion for preliminary injunction.
I. PRELIMINARY STATEMENT
Over the coming weeks, some of New Hampshire’s neediest citizens will no longer beable to access basic healthcare services. Those citizens are recipients under the State’s Medicaidprogram, the federal-state partnership designed to assure that the poor, elderly, and disabled haveadequate access to medical care and services. Since the onset of the economic recession in 2008,the State has made a series of purely budget-driven decisions – with manifest disregard forapplicable federal law – that have dramatically reduced the rates hospitals are paid for caring forthese patients. Those reductions were made to rates that were already the lowest in the country,and that reimbursed hospitals for less than half their actual costs incurred in caring for patients.The State’s recently enacted budget rendered an already tenuous situation completely
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unsustainable. Not only will the previously enacted reimbursement rate reductions remain inplace, but the State has eliminated the “hold-harmless” feature of a two-decades-old tax onhospitals that has been used to leverage $1.8 billion in federal Medicaid dollars for diversion tothe State’s general fund. The 5.5% tax on hospital services, one of the highest Medicaidprovider taxes in the country, will remain in place; half of the revenue will go to the generalfund, and the other half will be used to sustain the State’s Medicaid program. This “old” tax ascurrently administered is having new and financially devastating impacts on Provider Plaintiffsand ruinous effects on the Medicaid-related programs they provide.The Medicaid program was not intended to bring financial harm to institutions thatdeliver medical care and services to those in need. The net effect of these decisions is forcinghospitals to cut services and reduce staff. These decisions place patients at risk, and threatenaccess to medical care and services for New Hampshire’s poor, elderly and disabled. Ultimately,these decisions will irrevocably alter the landscape of New Hampshire’s entire health carecommunity.The Medicaid Act is, by design, flexible and Congress has given the states latitude inimplementing the program. That latitude, however, is not without limits. In general terms, theMedicaid Act requires that states adhere to basic procedural requirements – including notice andan opportunity to be heard – in setting reimbursement rates. The Act also requires that stateactions are consistent with Congress’s substantive objective: ensuring Medicaid beneficiarieshave access to healthcare.These standards are subject to judicial enforcement. The plaintiffs in this case – tenentities comprising New Hampshire’s largest providers of hospital-based and related Medicaid
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services and a Medicaid patient – seek injunctive relief to prevent the prospective enforcementby the Commission of the New Hampshire Department of Health and Human Services of enactments that violate the Medicaid Act’s procedural and substantive requirements. As arguedin detail below, because the record is irrefutable that the State failed to follow well-establishedprocedural norms and because the evidence is overwhelming that these actions will subvert theMedicaid Act’s substantive requirements, the plaintiffs are likely to succeed on the merits of their claim. The threat of irreparable harm to the plaintiffs and the public is real and immediate,and the balance of the equities cannot favor enforcement of unlawful rate decisions. Moreover,the public has a strong interest in a financially stable hospital system. Accordingly, and for thereasons set forth in detail below, the Court should grant the plaintiffs’ motion for preliminaryinjunction.
II. STATEMENT OF FACTS AND STATUTORY BACKGROUND
The plaintiff hospitals, healthcare systems, and components (“Provider Plaintiffs”)provide inpatient and outpatient care and related healthcare services to Medicaid-eligiblebeneficiaries.
See
Declaration of Kevin O’Leary (“O’Leary Declaration”) ¶¶ 6-9; Declaration of Robin F. Kilfeather-Mackey (“Kilfeather-Mackey Declaration”) ¶¶ 6-17; Declaration of MichaelRose (“Rose Declaration”) ¶¶ 7-16; Declaration of Peter E. Walcek (“Walcek Declaration”) ¶¶ 6-13; Declaration of Richard J. Plamondon (“Plamondon Declaration”) ¶¶ 7-13; Declaration of Edward L. Dudley (“Dudley Declaration”) ¶¶ 6-11; Declaration of John A. Marzinzik (“Marzinzik Declaration”) ¶¶ 7-14; Declaration of Richard A. Elwell (“Elwell Declaration”) ¶¶7-17; Declaration of Jill I. Batty (“Batty Declaration”) ¶¶ 6-12; Declaration of Henry Lipman
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Plaintiffs MOL in Support of PI
Motion Of Law in support of the plaintiffs request for a preliminary injunction in Dartmouth-Hitchcock v Toumpas.
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