United States District Court, D. South Carolina, Columbia Division
OPINION AND ORDER ON MOTIONS TO DISMISS AND AMEND
(ECF NOS. 9, 24)
CAMERON MCGOWAN CURRIE Senior United States District Judge
this action, Plaintiff Genesis Health Care, Inc.
(“Genesis”) seeks declaratory and injunctive
relief against Defendant, Christian Soura
(“Soura”), who serves as Director of the South
Carolina Department of Health and Human Services
(“DHHS”). Complaint ¶ 1 (ECF No. 1)
Specifically, Genesis seeks “an order requiring [Soura]
to reimburse [Genesis] for required Medicaid [Federally
Qualified Health Center (“FQHC”)] services to
Medicaid patients in a manne consistent with federal
matter is before the court on two motions: Soura's motion
to dismiss for lack of venue or, alternatively, for failure
to state a claim on which relief can be granted, ECF No. 9
(seeking dismissal without prejudice under Fed.R.Civ.P.
12(b)(3) & (6)), and Genesis's motion to amend the
Complaint, ECF No. 24 (seeking to delete express reliance on
contractual venue provisions) Both aspects of the motion to
dismiss depend on provisions found in the contract(s) under
which Genesis provides services to Medicaid patients,
specifically, Articles IX (“Appeals Procedures”)
and Article X (“Venue of Actions”). For reasons
addressed below, the court denies the motion to amend the
complaint as futile, grants Soura's motion dismiss for
lack of venue, and dismisses the action without prejudice.
The court does not reach Soura's alternative argument for
dismissal fo failure to state a claim (failure to exhaust
asserts six causes of action against Soura. All six rest on
allegations DHHS' payment practices, for which Soura is
responsible, violate various subparts of 42 U.S.C. 1396a(bb).
One cause of action also alleges violation of
various interrelated statutes, 42 U.S.C §§ 256b,
1396, 1396a, 1396r-8(j), and DHHS's plan for providing
Medicaid Services in Sout Carolina (“State
Plan”). This cause of action challenges DHHS's
method of paying specialty dru claims, which Genesis alleges
results in denial of benefits Genesis is entitled to receive
under th 340B Drug Discount Program, codified as 42 U.S.C.
causes of action are pursued under 42 U.S.C. § 1983.
Genesis also seeks attorneys fees under 42 U.S.C. §
1988. No cause of action is expressly founded on a contract
theory, thoug several causes of action refer directly or
implicitly to the existence of a contract between th parties.
See Complaint ¶ 3.c. (referring to
“contracts between the parties”); id.
¶ 16 (allegin DHHS “refus[ed] to offer Genesis a
provider contract containing” required terms);
id. ¶ 1 (alleging DHHS is using reimbursement
methods “Genesis has never agreed to”).
Proposed Amended Complaint is identical to the original
Complaint with one exception: it deletes a subparagraph
referring to the venue provision in the “contracts
between the parties.” No other allegations and no legal
theories are modified.
Arguments for Dismissal. Soura argues that two
provisions found in identical contracts between the parties,
the 2010 and 2013 Provider Agreements (collectively
“Provider Agreements”), require dismissal for
lack of venue or, alternatively, for failure to exhaust
administrative remedies. The relevant provisions of the
Provider Agreements read as follows:
IX APPEALS PROCEDURES
If any dispute shall arise under the terms of this contract,
the sole and exclusive remedy shall be the filing of
a Notice of Appeal within thirty (30) days of receipt of
written notice of SCDHHS' action or decision which forms
the basis of the appeal. Administrative appeals shall be in
accordance with SCDHHS' regulations 27 S.C. Code Ann.
Regs. §126-150 et seq. (1976, as amended), and
in accordance with the Administrative Procedures Act, SC Code
Ann. §1-23-310 et seq., (1976, as amended).
Judicial review of any final SCDHHS administrative decisions
shall be in accordance with S.C. Code Ann. §1-23-380
(1976, as amended).
Agreements, Article IX (emphasis added).