... MASSACHUSETTS SUPREME JUDICIAL COURT HOLDS.
In an eerie echo of the litigiousness of opponents of the Federal Affordable Care Act, seven Massachusetts hospitals and one managed healthcare organization joined their litigation forces in two cases in which they sued the Massachusetts Secretary of the Executive Office of Health and Human Services. They claimed that they were not paid enough money under the Massachusetts Healthcare Law known as MassHealth.
These Plaintiffs, which "disproportionately provide medical care to the poor" in Massachusetts, claimed that the Secretary "has violated her obligation to reimburse them for the reasonable costs incurred in providing medical services to MassHealth enrollees." Boston Medical Center Corp. v. Secretary of Executive Office of Health & Human Services, 463 Mass. 437, 2012 WL 4010338 *1 (Mass. September 14, 2012). MassHealth is "the Massachusetts Medicaid program that is jointly funded by State and Federal legislative appropriations and serves the needs of" the poor, in basis and simple terms. Boston Medical Center Corp. v. Secretary of Executive Office of Health & Human Services, 2012 WL 4010338 *1 (Mass. September 14, 2012).
The Supreme Judicial Court affirmed the Orders of the Trial Court which entered Judgment on the Pleadings for the Secretary in one case, and which dismissed the complaint against her in the other case.
The Plaintiffs pursued a dizzying array of legal theories, including alleged breach of the implied covenant of Good Faith and Fair Dealing. The Supreme Judicial Court rejected all of the Plaintiffs' legal theories. With respect to Good Faith, the Court ruled that the claim must fail because the claimants agreed in their written contract to accept payment at certain rates, and "the Secretary cannot be found to have acted in bad faith or to have dealt unfairly by failing to provide reimbursement at higher rates." Boston Medical Center Corp. v. Secretary of Executive Office of Health & Human Services, 2012 WL 4010338 *1 (Mass. September 14, 2012). [Emphasis added.]
Similarly, the Plaintiffs' collective claims failed in which they attempted to allege "a regulatory taking" without lawful compensation, implied rights of action under various statutes, quantum meruit, economic duress as a cause of action, certiorari, mandamus, and declaratory judgment. Boston Medical Center Corp. v. Secretary of Executive Office of Health & Human Services, 2012 WL 4010338 *8-*13 (Mass. September 14, 2012).
In sum, the Secretary could not be sued for carrying out her obligations under the Act. And the Plaintiffs could not recover over and above amounts that they voluntarily contracted to receive. The implications ought to be of interest to Medicare and Medicaid providers who may in the future become unhappy with the rates of payments that they receive under similar provisions of the Federal Affordable Care Act.
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