On the morning of November 8, while many Americans were still casting their votes and getting ready for Election Night parties, the Supreme Court heard oral arguments for Health & Hospital Corporation of Marion County v. Talevski. At issue in Talevski is whether a Medicaid beneficiary can file a "Section 1983" civil rights suit in federal court to seek relief for violation of the 1987 Federal Nursing Home Reform Act (FNHRA). The FNHRA is codified as part of the Medicaid program, and we have discussed many times in our blog the fascinating legal questions presented when an aggrieved Medicaid beneficiary or provider attempts to enforce a requirement of the Medicaid program (such as the FNHRA) against a state official in the federal court system. The Talevski case is just such a case...in fact, it is one of many such cases.
To quote our colleague Tom Barker, there is an "ongoing saga" surrounding the ability of a Medicaid beneficiary or provider to challenge a state's alleged violation of the Medicaid program in federal court; the $64,000 question remains: can an individual sue to enforce his or her rights under Medicaid? In 2015, we discussed how the Supreme Court's decision in Armstrong v. Exceptional Child Center seemed to foreclose federal judiciary enforcement of the Medicaid law governing payments to providers against states, meaning that aggrieved patients and providers ostensibly can only seek enforcement through the Centers for Medicare & Medicaid Services ("CMS"). We also discussed how the Eighth Circuit's opinion in Doe v. Gillespie (2017) suggests that Medicaid provisions governing free choice of providers could not be enforced in federal courts. More recently, Tom published a blog analyzing how this never-ending saga created splits within the United States Circuit Courts of Appeal.
Although stakeholders were deeply concerned that the Court would take up Talevski to completely do away with the private right of action, questions and comments from the Justices during oral arguments indicate that the Court might actually refrain from doing so. This said, we caution against any firm prediction(s) based solely on Justices' questions during oral arguments. We anticipate the Supreme Court will issue its opinion on Talevski in the coming months. While we wait for the opinion, we have provided a summary and analysis of the oral arguments.
Background: Recap of the Facts, Relevant Statutes, and Legal Issues in Talevski
FNHRA establishes minimum standards of care to which nursing facilities must adhere in order to participate in the Medicaid program. Standards include limitations on the use of physical or chemical restraints, and on patient transfer or discharge.
As Tom explained in a blog this summer, Mr. Gorgi Talevski was a resident of Valparaiso Care and Rehabilitation (VCR), a public nursing facility managed by the Health and Hospital Corporation of Marion County, Indiana (HHC). This nursing facility accepted Medicaid funding; therefore, it was subject to the FNHRA. Talevski involves two alleged FNHRA violations: (1) VCR using psychotropic drugs to chemically restrain Mr. Talevski, who suffered from dementia before his death; and (2) VCR transferring Mr. Talevski to another nursing home, against his and his family's wishes. The Talevski family sued HHC under 42 U.S.C § 1983, the federal Civil Rights Statute, also known colloquially as "Section 1983." Section 1983 itself does not provide rights, but rather provides a means to enforce existing civil rights. This statute has been invoked over the past century and a half to protect all individuals when a state deprives them of rights guaranteed by federal law.
These Arguments are Wild[er]
In 1990, the Supreme Court held, in an important case (Wilder v. Virginia Hospital Association), that Section 1983 could be used to enforce requirements of the Medicaid program. As we will soon see, the impact of Wilder has since been limited, but the case has never been overruled. In Blessing v. Freestone (1997) and Gonzaga University v. Doe (2002), which followed Wilder, the Supreme Court established a three-prong test to determine whether a statutory provision creates a privately enforceable right under Section 1983: (1) the plaintiff is the intended beneficiary of the statute; (2) the provision is specific enough to allow for enforcement; and (3) the statute imposes a binding obligation on the state.
HHC, in its cert petition to the Supreme Court, argues that statutes enacted under the Spending Clause (i.e., FNHRA) function as contracts between the United States government and those receiving the funds (i.e., state-run facilities such as HHC). In exchange for government dollars, the recipient facility provides services to private individuals (i.e., Medicaid beneficiaries, like Mr. Talevski), and those individuals are third-party beneficiaries to the contract. Thus, HHC argues that the Court should discard the three-prong test and instead read Section 1983 in the context of 1871 common law, which did not allow third-party beneficiaries to enforce contracts, particularly government contracts.
The Talevski family's response to HHC's petition relies on the Wilder line of cases. The Talevski family asserts that FNHRA allows for a private right of action that may be redressed under Section 1983: "Consistent with its plain text, for decades all three branches of the government have understood that rights in Spending Clause statutes are enforceable under § 1983." In their response, the Talevski family stresses that if the Supreme Court issues an "adverse ruling," such an opinion "would be disastrous for federal safety-net programs" because "more than a quarter of the [US] population (more than 87 million people)" are Medicaid enrollees; therefore, disallowing individuals to use Section 1983 to enforce their rights "would leave tens of millions of people that Congress provided with rights under these Spending Clause programs without any effective means of enforcement."
Key Points in Oral Arguments
Counsel for HHC, counsel for the Talevski family, Indiana's Solicitor General, and the Assistant Solicitor General (ASG) of the United States were given argument time. Indiana's Solicitor General argued in favor of HHC, and the US ASG did not argue in favor of either party.
During HHC's arguments, Chief Justice Roberts and Justices Kavanagh and Kagan noted how FNHRA repeatedly uses the word "rights" and requires recipients of government money (i.e., nursing facilities) to "protect" beneficiaries' rights (the Justices were referring to a specific FNHRA subpart, which is codified in the Medicaid program at 42 U.S.C. § 1396r(c), ("Requirements Relating to Residents' Rights")). When HHC argued that the "individual patient is not the unambiguous focus" of FNHRA, Justice Kavanagh replied, "it says 'rights' ... it's a very uncomfortable fact for you [that] ... the statute says 'rights' over and over again."
Justice Kagan suggested that Section 1983 presumably allows for private enforcement unless there is "incompatibility" or tension between administrative remedies and private suits (later, counsel for the Talevski family agreed with this).
Justice Sotomayor pointed to an amicus brief filed in support of the Talevski family, in which contract law and legal history professors asserted, "[the] right of a third-party beneficiary to bring suit was well-established at common law as early as the seventeenth century." HHC challenged the accuracy of the assertions in the brief. It is worth noting that another amicus brief submitted by healthcare policy scholars in support of the Talevski family states, "...the historical record confirms that Congress has protected and enhanced beneficiaries' ability to bring such suits and that private enforcement under 42 U.S.C. § 1983 has become an integral part of Medicaid's structure."
Counsel for HHC argued that Mr. Talevski's ability to file an individual suit requires the "marriage" of Section 1983 and FNHRA, and that Section 1983 "carries old soil with it" because it was enacted at a time when third-party beneficiaries could not enforce contracts. Justice Barrett told HHC that she did not "see the connecting of the dots" in HHC's argument. Justice Jackson seemed similarly skeptical when stating, "...[I]t seems to me odd to suggest that we as a Court can reinterpret the word 'law' in Section 1983 to carve anything out." Justice Jackson explained that Congress passed Section 1983 as part of the Ku Klux Klan Act because states were "not giving forum, not giving a cause of action to people who were being terrorized," and instead of incorporating the common law that excluded people from filing suit, Congress "created the right...to allow people to go to court."
During arguments from counsel for the Talevski family, Justice Kavanagh asked about available administrative processes. Talevski pointed to minimal state-level administrative remedies, which was also noted in the amicus brief provided by former senior HHS officials, and explained how the family exhausted all options before going to court:
"Your Honor, there may be a process for getting to the Health and Human Services Secretary to actually get enforcement for rights violations by nursing homes. If there was, I promise you this family would have...pursued it. But, as far as I know...there was no process available ... this family was crying out for help and using every possible lever at their disposal. Section 1983 was the last resort."
Impressions and Potential Implications
Generally, the Justices seemed receptive to Talevski's characterization of the case, and their questions suggested a degree of skepticism toward HHC's arguments. The Justices appeared narrowly interested in the more limited question of whether FNHRA can provide for a private right of action against a state-run facility, instead of the broader question regarding the private right of action under Section 1983.
Chief Justice Roberts' questions may have raised some eyebrows, given that they seem to reflect a potential departure from his dissent in Douglas v. Independent Living Center of Southern California. There, his opinion unequivocally stated, "Nothing in the Medicaid Act allows providers or beneficiaries (or anyone else, for that matter) to sue to enforce" and "...private parties have no statutory right to sue to enforce those requirements in court." However, Chief Justice Roberts' position in Douglas seems at odds with his line of questioning in Talevski. Notably, during oral arguments, after HHC stated "...the Court should finish what it started in Gonzaga and hold that federal spending conditions are not privately enforceable unless Congress expressly so provides," Chief Justice Roberts replied, "I wouldn't say [Gonzaga] went that far because it didn't, but it imposed a pretty high bar" for evidence required to establish Congressional intent for a private right of action. Some may interpret his and other Justices' lines of questioning to imply that FNHRA could meet the Court's "pretty high bar," which would by implication maintain the private right of action.
It is possible the Court could issue a narrow ruling that allows Talevski's family to sue but does not address the larger question of whether other Medicaid provisions can be enforced via private right of action under Section 1983. Should the Court ultimately avoid Section 1983 (and avoid overruling Wilder), and instead focus solely on FNHRA, regardless of the outcome, the opinion likely would not have the feared ripple effect on individuals entitled to legislatively conferred rights established via the Spending Clause (e.g., Medicaid and SNAP recipients). For example, an opinion that focuses only on FNHRA would not impact Medicaid beneficiaries who attempt to sue under Section 1983 to seek access to health services. Such a ruling would also avoid any administrative logjams resulting from only allowing HHS to enforce rights, as noted in some amicus briefs.
As always, we will continue to monitor this case and provide an update when the Court issues its opinion, likely in early 2023.
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