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Renal Care Group Indiana, LLC v. City of Fort Wayne

United States District Court, N.D. Indiana, Fort Wayne Division

November 2, 2017

RENAL CARE GROUP INDIANA, LLC, Plaintiff,
v.
CITY OF FORT WAYNE, Defendant.

          OPINION AND ORDER

          THERESA L. SPRINGMANN CHIEF JUDGE

         This matter comes before the Court on a Motion for Judgment on the Pleadings as to Count I [ECF No. 24], filed by Plaintiff Renal Care Group Indiana LLC. The Plaintiff filed its Complaint [ECF No. 1] on February 23, 2017. Defendant City of Fort Wayne filed its Answer [ECF No. 6] on April 3, 2017. In its Complaint, the Plaintiff brings four causes of action against the Defendant: Declaratory relief under the federal Declaratory Act (Count I) or, in the alternative, under the Indiana Uniform Declaratory Judgment Act (Count II); breach of contract (Count III); and a private cause of action under the Medicare Secondary Payer Act (Count IV). The instant matter involves only declaratory relief as requested in Count I, and has been fully briefed and is ripe for review.

         FACTUAL BACKGROUND

         The following background is taken from the pleadings. The Plaintiff, a domestic corporation organized under the laws of Delaware with its principal place of business in Waltham, Massachusetts, operates a dialysis facility in Fort Wayne, Indiana. (Compl. ¶ 1, ECF No. 1.) The Defendant operates a municipal retiree health benefits plan, the City of Fort Wayne Employee Benefit Plan (Plan), which provides health care medical benefits to municipal retirees. (Answer ¶ 2, ECF No. 6.) One participant in the Defendant's Plan, the Patient, [1] received treatment at the Plaintiff's dialysis facility in Fort Wayne. (Compl. ¶ 1.) The Plan provided health care coverage for the Patient from March 11, 2014, through May 31, 2014. (Answer ¶ 9.) During that time period, the Defendant paid the Plaintiff directly for the dialysis services that the Patient received from the Plaintiff at an agreed upon rate set by an insurance network, the Parkview Signature Network. (Id. ¶ 24.) On June 1, 2014, the Patient became entitled to Medicare coverage based on the Patient's end-stage renal disease (ESRD) diagnosis. (Id. ¶ 25.) Because the Patient was newly eligible for Medicare, the City terminated the Patient's coverage under the Plan beginning on June 1, 2014. (Id. ¶ 26.) The City admits that it “took into account the Patient's eligibility for and entitlement to Medicare and terminated coverage for the Patient so that he would no longer be covered by the Plan beginning June 1, 2014.” (Id. ¶ 27.)

         STANDARD OF REVIEW

         Under Federal Rule of Civil Procedure 12(c), a party may move for judgment after the plaintiff has filed a complaint and the defendant has filed an answer. See Fed. R. Civ. P. 12(c). The reviewing court must consider only the pleadings, which “include the complaint, the answer, and any written instruments attached as exhibits.” N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 452 (7th Cir. 1998) (citations omitted). “Where the plaintiff moves for judgment on the pleadings, the motion should not be granted unless it appears beyond doubt that the non-moving party cannot prove facts sufficient to support [its] position.” Hous. Auth. Risk Retention Grp. v. Chi. Hous. Auth., 378 F.3d 596, 600 (7th Cir. 2004) (citing All Am. Ins. Co. v. Broeren Russo Const., Inc., 112 F.Supp.2d 723, 728 (C.D. Ill. 2000)) (internal quotations omitted). Judgment may be granted on the pleadings only if “all material allegations of fact are admitted or not controverted in the pleadings and only questions of law remain to be decided by the district court.” 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1367 (3d. 2017).

         ANALYSIS

         The Plaintiff has moved for Judgment on the Pleadings on Count I only. Count I seeks a declaratory judgment under 28 U.S.C. § 2201(a), stating that the Defendant violated the Medicare Secondary Payer Act, 42 U.S.C. § 1395y (MSP Act) when it terminated coverage for the Patient, and that the Defendant was required to remain the primary payer responsible for the Patient's dialysis treatments through the end of the Patient's 30-month coordination of benefits period. The Defendant attacks both the procedure and the merits of the Plaintiff's Rule 12(c) motion.

         A. Standing to Pursue Declaratory Relief

         The Plaintiff contends that it has standing to pursue declaratory relief. A federal court may issue a declaratory judgment to a party so long as the parties present a justiciable case or controversy. See Vickers v. Henry Cty. Sav. & Loan Ass'n, 827 F.2d 228, 230 (7th Cir. 1987). A cause of action for a declaratory judgment is justiciable when “there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Id. at 231 (quoting Alcan Aluminum Ltd. v. Dep't of Revenue of Or., 724 F.2d 1294, 1298 (7th Cir.1984)).

         The Plaintiff has met its standing requirements. The Plaintiff asserts that, under the MSP Act, the Defendant has had to pay for the Patient's dialysis treatment since June 1, 2014. The Defendant has not paid the Patient because the Defendant denies that has an obligation to pay. Medicare, meanwhile, has reimbursed the Plaintiff at a lower rate than the Defendant was required to pay. The Plaintiff thus argues that it has incurred an economic injury caused by this dispute over whether a legal requirement applies to the Defendant. Declaratory relief would redress such an injury.

         The Plaintiff has, therefore, brought a justiciable cause of action for declaratory relief as to Count I, and the Court may proceed to the merits of the Plaintiff's Rule 12(c) motion.

         B. The Medicare Secondary Payer Act

         The Plaintiff argues that the Defendant violated the MSP Act when the Defendant terminated the Patient's coverage under the Plan on June 1, 2014. Before 1980, Medicare generally paid for health care services regardless of whether a Medicare beneficiary was covered by another health plan. United Seniors Ass'n v. Philip Morris USA, 500 F.3d 19, 21 (1st Cir. 2007). In an effort to reduce health care costs, Congress passed the MSP Act in 1980. Id. Under certain circumstances, the MSP Act makes Medicare a secondary payer ...


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