Opinion ID: 1024421
Heading Depth: 3
Heading Rank: 1

Heading: The Medicaid Scheme

Text: Medicaid is a cooperative federal-state program designed to partially compensate states for the costs of providing healthcare to needy individuals. 42 U.S.C. § 1396. States are not required to participate in the program, but if they choose to do so, they must implement and operate Medicaid programs that comply with detailed federally mandated standards. Antrican v. Odom, 290 F.3d 178, 183 n. 2 (4th Cir. 2002). To qualify for federal assistance, a state must submit a comprehensive plan to the federal Secretary of Health and Human Services describing the nature and scope of the state's Medicaid program. 42 C.F.R. § 430.10. Each state plan must include, among its details, a scheme for reimbursing rural health clinics (RHCs) for services provided to Medicaid patients. [1] 42 U.S.C. § 1396a(bb). The Medicaid Act, as amended by BIPA, Pub.L. No. 106-554, § 1(a)(6), 114 Stat. 2763, (codified as amended in scattered sections of 42 U.S.C.), regulates the way in which RHCs receive reimbursement payments for the services they provide to Medicaid patients. In general, BIPA allows for two methods of reimbursement. The first method is a prospective payment system based on historical-average costs plus a cost-of-living factor. [2] 42 U.S.C. § 1396a(bb)(2). The second method, set forth in § 1396a(bb)(6), authorizes an alternative payment methodology that can take a number of forms, provided that the state and the clinic agree upon the system and it results in payment of an amount which is at least equal to the amount authorized under the prospective payment system. SCDHHS is the state agency in South Carolina responsible for administration of the Medicaid program. Healthcare providers in South Carolina are not required to accept Medicaid patients. However, if a healthcare provider elects to treat Medicaid patients and to seek reimbursement from SCDHHS for its services, it does so by entering into a contract (provider contract or contract) with SCDHHS. The contract provides for the method and amounts of payment, as well as for certain remedies if a healthcare provider believes it has not been reimbursed as required by law. [3] For example, the contract provides: A. Reimbursement The Rural Health Clinic (RHC) Medicaid rate for services rendered under this contract shall be determined based upon applicable Medicare/Medicaid laws, rules or regulations and SCDHHS policies and procedures in accordance with Attachment 4.19-B of the State Plan for Medical Assistance. J.A. 117. [4] Should any dispute arise under the terms of the contract, a healthcare provider agrees, as part of its decision to accept Medicaid reimbursement payments, that its sole and exclusive remedy regarding such disputes would be to first file a Notice of Appeal of SCDHHS's action to the SCDHHS Appeals Division. J.A. 124. Upon exhaustion of all administrative remedies, judicial review of final agency decisions is available in the state court system. S.C.Code Ann. § 1-23-380. Such appeals are governed by Article VIII of the contract, which provides: 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 the receipt of written notice of SCDHHS's action or decision which forms the basis of the appeal. Administrative appeals shall be in accordance with SCDHHS's regulations R. 126-150 et seq. . . . Judicial Review of any final SCDHHS administrative decision shall be in accordance with § 1-23-380, Code of Laws of South Carolina (1976), as amended. J.A. 124 [5] (emphasis added). Such subsequent judicial review must proceed in the venue and location identified in Sections (R) and (S) of Article IX of the contract. [6] R. Venue of Actions. Any and all suits or actions for the enforcement of the obligations of this contract and for any and every breach thereof, or for the review of a SCDHHS final agency decision with respect to this contract or audit disallowances, and any judicial review sought thereon and brought pursuant to the S.C.Code Ann. § 1-23-380 (1976, as amended) shall be instituted and maintained in any court of competent jurisdiction in the County of Richland, State of South Carolina. S. Place of Suit Any action at law, suit in equity, or judicial proceeding for the enforcement of this contract or any provision thereof shall be instituted only in the courts of the State of South Carolina. J.A. 128. Pee Dee, through three Medicaid-certified RHCs, provides healthcare services to low-income individuals in rural areas of South Carolina. Its services are subject to reimbursement from Medicaid funds. Pee Dee has entered into two consecutive three-year contracts with SCDHHS since the enactment of BIPA. Each contract contains a forum-selection clause  Sections (R) and (S)  requiring that any claims that arise under the terms of the contract be pursued first through an administrative appeals process and then in state court. [7]