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GREENERY REHABILITATION GROUP v. SABOL

December 24, 1993

THE GREENERY REHABILITATION GROUP, INC., Plaintiff,
v.
BARBARA SABOL, as Commissioner of the New York City Human Resources Administration, the CITY OF NEW YORK, and GREG KALADJIAN, as Commissioner of the New York State Department of Social Services, Defendants. BARBARA SABOL, as Commissioner of the New York City Human Resources Administration, the CITY OF NEW YORK, and GREG KALADJIAN, as Commissioner of the New York State Department of Social Services, Third Party plaintiffs, v. DONNA E. SHALALA, as Secretary of the United States Department of Health and Human Services, Third Party Defendant.


McAvoy


The opinion of the court was delivered by: THOMAS J. MCAVOY

The third party defendant Donna E. Shalala moves to dismiss the third party complaint pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction. Two theories have been advanced in support of the said motion. First, it is alleged that the third-party complaint is not ripe for judicial review. Second, it is alleged that the State and City defendants failed to exhaust administrative remedies. Furthermore, the third party defendant has also moved to stay discovery pending the outcome of the instant motion to dismiss. Oral arguments were heard on November 8, 1993.

 I. BACKGROUND

 According to the underlying complaint, the Greenery Rehabilitation Group, Inc., (hereinafter "the Greenery") is a leader in the field of traumatic brain injury treatment, and it operates facilities in several states. The Greenery entered into an agreement with the New York City Human Resources Administration (hereinafter "HRA"), an agreement which provided that the Greenery, with the approval of the New York State Department of Social Services (hereinafter "DSS"), would admit into its specialized brain injury programs New York City residents who are in need of such services and who are eligible for Medicaid. The Greenery admitted three New York City residents into its specialized brain injury programs who met the financial eligibility criteria, but for whom HRA has refused to pay. These three patients are aliens.

 Because of the high level of specialized care provided by the Greenery, the complaint states that the three named aliens could not be admitted without the prior approval of the New York State Department of Health (hereinafter "DOH"). According to the complaint, DOH did in fact approve the admission of the three aliens into the Greenery's specialized brain injury programs. The Greenery has since provided care to the three aliens, the cost of which, at the rates approved by the State of New York, amounts to $ 152,612.28, $ 213,916.10 and $ 181,604.76 respectively, through November 30, 1992. Plaintiff Greenery now seeks a declaration which states that the care and services provided to the three aliens have been for the treatment of emergency medical conditions, and thus, it is entitled to Medicaid reimbursement for the care provided.

 The State and City defendants removed the instant case to this Court and filed a third party complaint against defendant Shalala as the Secretary of the United States Department of Health and Human Services (hereinafter "HHS"). The relief sought in the third party complaint is that if the Court determines that the cost of care for the three patients must be borne by the State Medicaid program, the Court should then determine that HHS, which is the Federal agency that administers the Medicaid program, should also bear part of that cost pursuant to Federal statutes which provide that Medicaid costs are to be divided among the Federal, State, and City governments. See 42 U.S.C. §§ 1396a, 1396b.

 II. STATUTORY BACKGROUND

 Title XIX of the Social Security Act (hereinafter "the Act") establishes a jointly funded, cooperative federal-state program known as Medicaid designed to enable each State to furnish medical assistance to eligible individuals. See Atkins v. Rivera, 477 U.S. 154, 156-57, 106 S. Ct. 2456, 2458, 91 L. Ed. 2d 131 (1986). The program, enacted in 1965, was established "for the purpose of providing federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons." Schweiker v. Hogan, 457 U.S. 569, 571, 102 S. Ct. 2597, 2600, 73 L. Ed. 2d 227 (1982) (quoting Harris v. McRae, 448 U.S. 297, 301, 100 S. Ct. 2671, 2680, 65 L. Ed. 2d 784 (1980)). If a state chooses to participate in the program, it must do so in accordance with the broad framework set by the federal government through the Act. If the state satisfies these requirements, it has wide discretion in administrating its program "including the responsibility for determining the eligibility of recipients, enlisting medical service providers, and paying those providers for services rendered." De Gregorio v. O'Bannon, 500 F. Supp. 541, 545 (E.D.Pa. 1980).

 New York State Regulations provide that, in general, aliens lawfully admitted for permanent residence or otherwise permanently residing in the United States under color of law who meet Medicaid requirements are eligible to receive the full range of Medicaid benefits. 18 N.Y.C.R.R. § 360-3.2(f). However, aliens who meet Medicaid program requirements but who are not lawfully admitted for permanent residence, or otherwise permanently residing in the United States under color of law, or who have not been granted lawful permanent resident status under the Federal Immigration Reform and Control Act of 1986, are not eligible to receive medical assistance unless the care and services are necessary for the treatment of an "emergency medical condition." 18 N.Y.C.R.R. § 360-3.2(f)(2). The New York statutory language is substantially the same as the language of the Act. See 42 U.S.C. § 1396b(v).

 An "emergency medical condition" is defined as

 
a medical condition (including emergency labor and delivery) manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in - (A) placing the patient's health in serious jeopardy, (B) serious impairment to bodily functions, or (C) serious dysfunction of any bodily organ or part.

 The third party plaintiffs allege that HHS' refusal to provide guidance to DSS resulted in the instant litigation. Prior to commencing this litigation, the Greenery's attorney contacted the State agency concerning the Greenery's claim that Medicaid should pay for the cost of the chronic care it was providing to the three patients in question. After receiving the inquiry, DSS referred the issue to HHS, and requested that the Federal agency evaluate the circumstances of the patients in question and give guidance concerning whether Medicaid should pay for this care. The third party plaintiffs allege that HHS refused to give such guidance.

 HHS now moves to dismiss the third party complaint against it on the ground that this court lacks subject matter jurisdiction either because the claim against it is not ripe, or because the State and City defendants have failed to exhaust administrative remedies. HHS also ...


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