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Published by Grant Bosse

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Published by: Grant Bosse on Sep 26, 2011
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UNITED STATES DISTRICT COURTDISTRICT OF NEW HAMPSHIRE****************************************Dartmouth-Hitchcock Clinic and Mary *Hitchcock Memorial Hospital *d/b/a Dartmouth-Hitchcock, et al., *Plaintiff **v. * 11-cv-358-SMNicholas A. Toumpas, in his official capacity *as Commissioner of the New Hampshire *Department of Health and Human Services, *Defendant *******************************************
The Defendant, Nicholas A. Toumpas, in his official capacity as Commissioner of theNew Hampshire Department of Health and Human Services, by and through counsel, the NewHampshire Office of the Attorney General, submits the following Memorandum of Law insupport of his Motion to Dismiss Counts I, II, III, and IV.
Plaintiffs, ten of the state’s thirteen non-critical access hospitals and one “John Doe”individual Medicaid recipient, filed this lawsuit against the Commissioner of the Department of Health and Human Services regarding a number of legislative and departmental actions since2005 that have reduced the reimbursement rates for Medicaid in-patient and outpatient servicesand that eliminated disproportionate share payments to non-critical access hospitals in the FY2012/2013 budget. Counts I, II, III and IV of Plaintiffs’ Complaint for Declaratory Judgment arebrought under the Supremacy Clause of the United States constitution, claiming that the state
Case 1:11-cv-00358-SM Document 48-1 Filed 09/23/11 Page 1 of 12
-2-laws which reduced the rates are preempted by the Medicaid statute, 42 U.S.C. §1396a(a)(30)(A) and 42 U.S.C. § 1396a(b). Defendant moves to dismiss Plaintiffs’ SupremacyClause claims on the grounds that they fail to state a claim upon which relief may be granted.
In reviewing a motion to dismiss under Fed. R. Civ. P. 12(b)(6) for failure to state a claimupon which relief can be granted, the court will “accept as true all well-pleaded facts set forth inthe complaint and draw all reasonable inferences therefrom in the pleader’s favor.”
 Artuso v.Vertex Pharm., Inc.
, 637 F.3d 1, 5 (1
Cir. 2011). A complaint need contain only “a short andplain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.8(a)(2). Although “detailed factual allegations” are not necessary,
 Bell Atl. Corp. v. Twombly
,550 U.S. 544, 555 (2007), the complaint must “contain sufficient factual matter . . . to ‘state aclaim to relief that is plausible on its face.’”
 Ashcroft v. Iqbal
, __ U.S. __, __, 129 S. Ct. 1937,1949 (2009) (quoting
, 550 U.S. at 570).
In Counts I, II, III and IV of their Complaint, Plaintiffs seek to challenge their Medicaidrates under the Supremacy Clause of the United States Constitution. Specifically, Plaintiffsclaim in Counts I, II and III that RSA 126-A:3, VII(a), RSA 167:64, and New Hampshire Lawsof 2011, Chapters 223 and 224 are preempted by the Medicaid Act, 42 U.S.C. § 1396a(a)(30)(A)(hereinafter “Section 30(A)”), because they allegedly permit the State to reduce Medicaid ratessolely for budgetary reasons. In Count IV, Plaintiffs claim that the challenged state laws arepreempted by 42 U.S.C. § 1396a(b) and 42 C.F.R. § 430.12. These claims should be dismissed.Because neither Section 30(A) nor 42 U.S.C. § 1396a(b) create privately enforceable rightseither under 42 U.S.C. § 1983 or directly under the Medicaid Act, the Supremacy Clause cannot
Case 1:11-cv-00358-SM Document 48-1 Filed 09/23/11 Page 2 of 12
-3-supply an implied cause of action to enforce those statutes. Plaintiffs therefore fail to state aclaim, and their Supremacy Clause claims should be dismissed.
A. Plaintiffs Have No Rights To Any Protections Under Section 30(A)
Section 30(A) provides that a State plan for medical assistance must,provide such methods and procedures relating to the utilization of, and thepayment for, care and services available under the plan (including but not limitedto utilization review plans as provided for in section 1396b(i)(4) of this title) asmay be necessary to safeguard against unnecessary utilization of such care andservices and to assure that payments are consistent with efficiency, economy, andquality of care and are sufficient to enlist enough providers so that care andservices are available under the plan at least to the extent that such care andservices are available to the general population in the geographic area.42 U.S.C. § 1396a(a)(30)(A). Plaintiffs argue that the State violated the procedural requirementsof Section 30(A) by not considering efficiency, economy, and quality of care, and equal access tocare and services before reducing rates, and that the current Medicaid rates fail to comply withthe substantive requirements of Section 30(A) because Plaintiffs are considering eliminatingcertain services in the future due to the reduced rates.
Plaintiffs’ Memorandum of Law at31-44.Section 30(A) does not create an individual entitlement to a certain level of payments thatwould be enforceable by providers. Instead, it provides broad criteria to guide CMS’sdeterminations regarding the adequacy of the methods and procedures set out in a State’sMedicaid plan. While Section 30(A) includes “substance goals” for the “methods andprocedures” set forth in the State plan, the First Circuit has observed that “nothing in subsection(30)(A) expressly provides that those who furnish Medicaid services have any enforcementrights or, indeed, have
specific rights to procedural (
, notice and comment) or substantive(
, just and reasonable rates) protections.”
 Long Term Care Pharmacy Alliance v. Ferguson
,362 F.3d 50, 56-57 (1
Cir. 2004) (emphasis added). As such, the First Circuit has
Case 1:11-cv-00358-SM Document 48-1 Filed 09/23/11 Page 3 of 12

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