Umeze v. New York State Department of Health
Ben Umeze, MD v. New York State Department of Health, Dr. James V. Macdonald, Commissioner of New York State Department of Health, Amir Bassiri, New York State Medicaid Director, The New York State Office of Medicaid Management, The State of New York, Healthfirst PHSP Inc., Healthfirst, and Pat Wang, CEO Healthfirst
- Vyskocil
- 1:24-cv-07425
- U.S. District Court · Southern District of New York
- 19
Umeze v. New York State Department of Health: Judge Vyskocil granted dismissal motions, ending the case while leaving some claims eligible for refiling.
Dr. Ben Umeze’s claims were dismissed: the claims against the State without prejudice, the federal claims against Healthfirst with prejudice, and the state-law claims against Healthfirst without prejudice. The case was closed.
What happened
In Ben Umeze, MD v. New York State Department of Health, Dr. Ben Umeze alleged that Healthfirst failed to pay him for Medicaid services, refused to raise his payment rates, and ended his provider contract. He also sued New York State officials and agencies.
The State argued that Umeze could not show that it caused his injuries or could remedy them. Healthfirst argued that it was not acting as a government entity, as required for Umeze’s constitutional claims. Umeze represented himself.
Judge Mary Kay Vyskocil granted both motions to dismiss. She dismissed the claims against the State without prejudice for lack of standing, dismissed Umeze’s federal claims against Healthfirst with prejudice, and dismissed his state-law claims against Healthfirst without prejudice.
The detailed version
- Umeze v. New York State Department of Health · No. 1:24-cv-07425
- Vyskocil
- Sept. 25, 2025
Background
Dr. Ben Umeze, proceeding without a lawyer, alleged that Healthfirst, a Medicaid managed-care organization with which he previously had a provider contract, failed to pay him for services provided to Medicaid patients for about ten years. He also alleged that Healthfirst failed to increase his capitation rates, meaning upfront payments per patient, and did not renew his contract.
Umeze sued Healthfirst and its CEO, as well as New York State, the New York State Department of Health, the State Medicaid Director, the Department of Health Commissioner, and the New York State Office of Medicaid Management. His amended complaint asserted four claims: constitutional due-process and equal-protection claims under 42 U.S.C. § 1983, a breach-of-contract claim, and a claim that defendants failed to enforce New York Medicaid policies requiring increased capitation rates.
Umeze previously sought emergency relief to stop the contract termination. The Court denied that relief, later issued a temporary restraining order preserving the existing situation for a time, and then vacated the order and denied Umeze’s renewed emergency motion. The State and Healthfirst then moved to dismiss the amended complaint.
Claims Against the State
The Court dismissed the amended complaint against the State defendants for lack of standing. Standing is the requirement that a plaintiff show a concrete injury, that the defendant caused or likely caused it, and that the requested relief would likely fix it.
The Court found that Umeze attributed his alleged financial losses to Healthfirst’s failure to pay him, refusal to increase his rates, and non-renewal of his contract. His allegation that Healthfirst was regulated and overseen by the State did not show that the State caused those injuries. The Court also found that Umeze did not allege unlawful conduct by the State. His assertion that the State had a duty to enforce Medicaid reimbursement policies was treated as a legal conclusion unsupported by sufficient facts.
The Court further found that Umeze’s contract was between him and Healthfirst entities, not the State. It therefore did not establish that the State was responsible for Healthfirst’s alleged conduct. Because Umeze lacked standing to sue the State defendants, the Court did not decide the merits of his claims against them or reach the State’s sovereign-immunity defense. The claims against the State were dismissed without prejudice.
Federal Claims Against Healthfirst
Umeze asserted due-process and equal-protection claims against Healthfirst under Section 1983. To state such a claim, he had to plausibly allege both a violation of a federal right and action taken under color of state law—that is, conduct fairly attributable to the government.
The Court held that Umeze did not plausibly allege that Healthfirst acted under color of state law when it allegedly failed to pay him, declined to increase his capitation rates, or declined to renew his contract. The fact that Healthfirst was regulated by the State, received public funding, administered Medicaid services, or operated under government-related contracts was not enough. Umeze did not allege that the State initiated, encouraged, or was responsible for the specific conduct he challenged. The Court therefore dismissed the Section 1983 claims against Healthfirst, Counts I and III, with prejudice.
State-Law Claims and Disposition
The remaining claims against Healthfirst were the breach-of-contract claim and the claim concerning capitation rates. After dismissing all federal claims, the Court declined to exercise supplemental jurisdiction—the court’s discretionary authority to hear related state-law claims—in light of the early stage of the case and the preference for state courts to decide state-law issues. Those claims, Counts II and IV, were dismissed without prejudice.
The Court granted both pending motions to dismiss. The amended complaint was dismissed in its entirety without prejudice as to the State for lack of standing; the federal claims against Healthfirst were dismissed with prejudice; and the state-law claims against Healthfirst were dismissed without prejudice. The Clerk was directed to close the case.
Read the full 19-page opinion on CourtListener, the free public archive maintained by the Free Law Project.