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. e du/thir dc ir c uit_2002/167PRECEDENTIAL

Filed March 13, 2002

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 00-1898

PENNSYLVANIA PHARMACISTS ASSOCIATION; BELL EDGE PHARMACY; BROAD STREET APOTHECARY; BURNS PHARMACY; CAMBRIA PHARMACY #3;

CHRISTIAN STREET PHARMACY; ELWYN PHARMACY;
ESTERSON PHARMACY; FOSTERS PHARMACY; GETWELL PHARMACY; MCKEAN STREET PHARMACY; ROSICA PHARMACY; S&S COMMUNITY DRUG, INC.; SILVERMAN PHARMACY; TIOGA DRUG COMPANY; WELDON PHARMACY, and other Similarly Situated Pharmacies; TIRELLI, INC., dba BROAD STREET APOTHECARY; ROBERT SCHREIBER, dba BURNS' PHARMACY; CAMBRIA PHARMACIES, INC.; BARRY JACOBS, dba ELWYN PHARMACY; 2401 EAST YORK STREET, INC., dba ESTERSON'S PHARMACY; RIAZ U. RAHMAN, dba

GETWELL PHARMACY; FOSTER PHARMACY, INC.; HAUSSMANN'S PHARMACY; MCKEAN STREET PHARMACY, INC.; THOMAS BETTERIDGE, dba ROSICA

PHARMACY; WELDON PHARMACY, INC,

Appellants

v.

FEATHER O. HOUSTOUN

ON APPEAL FROM THE

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

(Dist. Court No. 99-cv-00491) District Court Judge: Ronald L. BuckwalterArgued April 20, 2001

Before: ALITO, McKEE, and ALARCON, Circuit Jud ges.

Argued En Banc November 28, 2001

Before: BECKER, Chief Judge, MANSMANN, SCIRICA,

NYGAARD, ALITO, ROTH, McKEE, RENDELL, BARRY, AMBRO, and FUENTES, Circuit Judges

(Opinion Filed: March 13, 2002)

Gregory L. Liacouras (Argued)

Leslie H. Smith Joseph W. Marshall, III Liacouras & Smith, LLP 1515 Market Street, 9th Floor Philadelphia, PA 19102

Attorneys for Appellants

Joseph McHale Kimberley A. Hendrix Stradley, Ronon, Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098

John A. Kane (Argued)

Commonwealth of PA Office of Legal Counsel Department of Public Welfare

P.O. Box 2675 Health & Welfare Building Harrisburg, PA 17120

Attorneys for Appellee

2OPINION OF THE COURT

ALITO, Circuit Judge, with whom Judges NYGAARD, ROT H, BARRY, AMBRO and FUENTES join:

The Pennsylvania Pharmacists' Association1 and 16 pharmacies operating in southeastern Pennsylvania brought this action under 42 U.S.C. S 1983 against Feather O. Houstoun, the Secretary of the Pennsylvania Depa rtment of Public Welfare (the "Department"), to challenge the reimbursement rates paid to pharmacies under Pennsylvania's Medicaid program. The plaintiffs cla imed that the Department, in administering its HealthCho ices Southeast program ("HealthChoices"), was violating provisions of Title XIX of the Social Security Act (the "Medicaid Act"), 42 U.S.C. SS 1396a(a)- 1396v. The plaintiffs' principal claim was based on 42 U.S.C. S 1396a(30)(A) ("Section 30(A)"). In accordance wit h its interpretation of prior circuit precedent, the Dist rict Court held that the plaintiffs could assert their Section 30(A) claim under S 1983, but the District Court neverthe less granted summary judgment against the plaintiffs. We now hold that the plaintiffs, as Medicaid providers, ma y not assert their claims under S 1983, and we therefore affirm

the order of the District Court on this alternative ground.

I.

Medicaid is a cooperative federal-state program und er which the federal government furnishes funding to s tates for the purpose of providing medical assistance to eligible low-income persons. See 42 U.S.C. S 1396; Rite Aid of Pennsylvania, Inc. v. Houstoun, 171 F.3d 842, 845 ( 3d Cir. 1999). If a state chooses to participate in the pro gram, it must comply with the Medicaid Act and implementing regulations promulgated by the Secretary of Health and Human Services ("HHS"). See Wilder v. Virginia Hosp

.

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1. The Pennsylvania Pharmacists' Association is a n on-profit corporation representing over 440 independent pharmacies and ov er 1,000 pharmacists employed at these pharmacies.

3Ass'n., 496 U.S. 498, 502 (1990). In order to parti cipate, a

state must submit a medical assistance plan to the Secretary of HHS and obtain approval of the plan. S ee 42 U.S.C. S 1396; 42 C.F.R. S 430.10 (2001). With furt her administrative approval, a state may amend a previo usly approved plan. See 42 C.F.R. S 430.12 (2001).

Under the Medicaid Act, a state is required to pay for certain enumerated services and may choose to pay f or certain additional services. 42 U.S.C. S 1396a(a)(1 0)(A); 42 C.F.R. S 440.210 (2001). Pennsylvania includes pres cription drugs among its optional services. See 42 U.S.C. S 1396d(a)(12); 42 C.F.R. S 440.120(a) (2001).

Until 1997, Pennsylvania compensated participating pharmacists directly under a "fee-for-service" prog ram. Payments to these pharmacies generally consisted of two components: (1) ingredient cost reimbursement and ( 2) a dispensing fee. Pharmacies were compensated for bra ndname drugs based on the "estimated acquisition cost " of the drugs2 plus a "reasonable" dispensing fee. See 42 U .S.C. S 1396(a)(30)(A); 42 C.F.R. S 447.300 et seq. Pharm acists were compensated for generic drugs using acquisitio n cost limits established by HHS plus a reasonable dispens ing fee.

In 1997, the Pennsylvania Department of Public Welf are began to implement its HealthChoices program, a mandatory managed care program operated in five cou nties in the southeastern part of the state pursuant to a n HFCA waiver from certain provisions of the Medicaid Act. 3 The Department contracted with four health management organizations ("HMOs") to administer HealthChoices. Three of the four HMOs administer pharmacy benefits throu gh contracts with pharmacy benefits managers. When an HMO contracts with a pharmacy benefits manager, the HMO and the pharmacy benefits manager set the rates at whic h

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2. The "estimated acquisition cost" is the"agency's best estimate of the price generally and currently paid by providers for a drug marketed or sold by a particular manufacturer or labeler in the package size of drug most frequently purchased by providers." 42 C.F.R. S 447.301 (2001).

3. The waiver applies to 42 U.S.C. S 1396a(a)(1)(st atewide scope), S 1396a(a)(10)(B)(comparability of services), and S 1396a(a)(23)(freedom

of choice).

4pharmacies are reimbursed. The pharmacy benefits

manager then contracts directly with the participat ing pharmacies to provide outpatient pharmacy services to eligible beneficiaries.

In order to participate in HealthChoices, the named pharmacy plaintiffs entered into standardized Medic al Assistance Provider Agreements with the Department. The Agreements cover the provision of brand-name and ge neric prescription drugs to eligible beneficiaries and ob ligate the Department to reimburse the contracting pharmacies in

accordance with state and federal law.

In January 1999, the plaintiffs commenced this acti on in

the United States District Court for the Eastern Di strict of Pennsylvania and requested declaratory and injuncti ve relief. The plaintiffs' principal claim was that th e new payment rates violate Section 30(A), which requires a state Medicaid plan to assure that payments "are consiste nt with efficiency, economy, and quality of care" and"are s ufficient to enlist enough providers so that care and service s are available under the plan at least to the extent tha t such care and services are available to the general popu lation in the geographic area." The plaintiffs alleged that t he pharmacy benefits managers, without oversight from the Department, had decreased the outpatient pharmacy benefit rates so much that they were below the cost of acquiring and dispensing the drugs.

The District Court certified a class of pharmacy pl aintiffs and denied the Department's motion to dismiss the complaint, holding that the plaintiffs had "a priva te right to enforce [Section 30(A)]." Pennsylvania Pharmacists Ass'n v. Houstoun, No. CIV.A. 99-491 (E.D. Pa. October 21, 1 999). As support for its holding on this point, the Court cited a footnote in a prior panel opinion of this Court. Se e Rite Aid of Pennsylvania, Inc. v. Houstoun, 171 F.3d 842, 85 0 n. 7 (3d Cir. 1999).

The District Court subsequently granted the defenda nt's motion for summary judgment. Pennsylvania Pharmacis ts Ass'n v. Houstoun, No. CIV.A. 99-491, 2000 WL 73034 4, at * 1 (E.D. Pa. June 7, 2000). The Court held that th e Department, in implementing its new program, had

5properly considered efficiency, economy, and access to

quality pharmacy services, that its procedures were neither arbitrary nor capricious, and that the resulting pa yment rates did not violate Section 30(A). Pennsylvania Pharmacists Ass'n, 2000 WL 730344, at * 3-5.

The Plaintiffs appealed, and their arguments were h eard before a regular panel. Under a longstanding practi ce of our Court, a panel may not overrule another panel decis ion. A footnote in the panel opinion in Rite Aid appeared to hold that a provider may assert a Section 30(A) claim un der S 1983, but the footnote provided no elaboration.4 By the time of the panel argument in this case, the other courts of appeals were divided on this issue. Prior to the is suance of a panel decision, we granted rehearing en banc prim arily for the purpose of considering the S 1983 issue.

II.

The threshold issue that we must consider is whethe r the plaintiffs, as Medicaid providers (as opposed to Me dicaid recipients), may assert a Section 30(A) claim under 28 U.S.C. S 1983. Section 1983 provides a private righ t of action against any person who, acting under the col or of state or territorial law, abridges "rights, privile ges, or immunities secured by the Constitution and laws" of the United States. See also Maine v. Thiboutot, 448 U.S . 1, 4 (1980). In order to seek redress under S 1983, a pl aintiff "must assert the violation of a federal right," and not merely

a violation of federal law. Golden State Transit Co rp. v. City of Los Angeles, 493 U.S. 103, 106 (1989). Thus, a p laintiff alleging a violation of a federal statute may not p roceed under S 1983 unless 1) the statute creates"enforcea ble

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4. The Rite Aid panel wrote as follows in footnote 7 of the opinion:

The Department argues at least in part that Rite Aid and the PPA [Pennsylvania Pharmacists Association] may n ot sue to enforce [certain] Medicaid regulations as section 30 (A) "does not support a private cause of action." Brief at 27. The d istrict court rejected

this argument and we agree with this result. Rite Aid , 998 F. Supp. at

525-26.

171 F.3d at 850.

6rights, privileges, or immunities within the meanin g of

S 1983" and 2) Congress has not "foreclosed such

enforcement of the statute in the enactment itself. " Wright v. Roanoke Redevelopment and Housing Auth., 479 U.S

. 418, 423 (1987).

In considering the first of these requirements -- t hat the statute must create an enforceable right, privilege , or immunity -- we must determine whether the three conditions identified by the Supreme Court in Wilde r and Blessing v. Freestone, 520 U.S. 329 (1997), are sat isfied. First, the provision in question must have been"int end[ed] to benefit the putative plaintiff." Wilder , 496 U. S. at 509 (quoting Golden State Transit Corp., 493 U.S. at 106)(brackets added in Wilder); see also Blessing, 520 U.S. at 340. Second, the right allegedly protected by th e statute must not be so "vague and amorphous" that its enforcement would strain judicial competence. Bless ing, 520 U.S. at 340-41; Wilder, 496 U.S. at 509. Finall y, the statute must unambiguously impose a binding obligat ion on the states, id., and thus the provision giving r ise to the asserted right must be couched in "mandatory, rathe r than precatory, terms." Blessing, 520 U.S. at 341.

Once these requirements are satisfied -- and the existence of a federal right is established -- a re buttable presumption arises that the right is enforceable un der S 1983. Blessing, 520 U.S. at 341. This presumption may be rebutted by showing that Congress expressly or impliedly foreclosed an action under S 1983. Id.; s ee also Livadas v. Bradshaw, 512 U.S. 107, 133 (1994).

III.

A.

In the present case, the focus of our inquiry is th e requirement that the provision in question must hav e been intended to benefit the plaintiffs. Blessing, 520 U .S. at 340; Wilder, 496 U.S. at 509; Golden State Transit Corp. , 493 U.S. at 106; Wright, 479 U.S. at 430. It is importa nt to keep in mind that the question whether a statute is inte nded to benefit particular plaintiffs is quite different fr om the

7question whether the statute in fact benefits thos e plaintiffs5

or even whether Congress knew that the statute woul d benefit those plaintiffs. In the present case, it m ay well be that Section 30(A) in fact benefits pharmacies in s ome states and that Congress realized this in enacting that provision. For example, if Section 30(A) were not o n the books, a state plan might provide lesser access to pharmacy services than Section 30(A) requires. In a ny such state, Section 30(A) presumably has the effect of i ncreasing drug sales, and these increased drug sales presumab ly benefit pharmacies -- as well as drug wholesalers, drug manufacturers, many other businesses (e.g., lessors of pharmacy premises, cleaning service firms retained by pharmacies, trash collection companies retained by pharmacies, private security firms retained by phar macies), employees of all of these businesses, etc. Congress undoubtedly realizes that federal subsidies have su ch ripple effects, but it would be outlandish to argue that t he Wilder/Blessing intended-to-benefit requirement per mits all

of these businesses and individuals to assert Secti on 30(A) claims in federal court. Our inquiry, consequently, is quite narrow: did Congress, in enacting Section 30(A), in tend to benefit providers?

In attempting to answer this question, the Supreme Court has instructed us to pay careful attention to the way in which the statutory provision at issue is framed . In Cannon v. University of Chicago, 441 U.S. 677, 689 (1979), the Court wrote that the question whether a statute is enacted for the benefit of a particular class of pl aintiffs "is

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5. If the intended-to-benefit requirement could be satisfied simply by showing that a plaintiff in fact benefits from the law in question, the requirement would be superfluous. No plaintiff may assert a claim in federal court without establishing Article III stan ding, and this demands, among other things, that the plaintiff demonstrate" injury in fact." See, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). A plaintiff asserting a claim based on an alleged violation of a federal law cannot demonstrate injury in fact unless proper enforcemen t of the law would benefit the plaintiff. Therefore, if the intended-t o-benefit requirement could be met simply by showing that the plaintiff w ould benefit by proper enforcement, that requirement would add noth ing to the injuryin-fact test.

8answered by looking to the language of the statute itself."

The Court noted the importance of any "right- or du tycreating language" in the statute. Id. at 690 n.13. Moreover, in holding that the statute in that case was intend ed to benefit the plaintiffs, the Court observed that the statute was "phrased in terms of the persons benefited" and was "draft[ed] . . . with an unmistakable focus on the benefited class." Id. at 691, 692 n.13. More recently, in Ale xander v. Sandoval, 121 S.Ct. 1511, 1520 (2001), the Court ag ain commented on the importance of the particular phras ing of a statute in this regard.

While Cannon and Alexander concerned the implicatio n of a private right of action under a statute, rathe r than the assertion of a statutory claim under S 1983, the te sts applied in these contexts partially overlap,6 and b oth tests

ask whether the statute at issue was intended to be nefit the putative plaintiff or plaintiffs. See Wright, 479 U .S. at 432- 33 (O'Connor, J., dissenting). Thus, in cases apply ing the Wilder/Blessing test, the Court has also relied on the terms

in which the statute is drafted.

Wilder itself is illustrative. In Wilder , a hospit al filed a S 1983 action asserting a violation of the now-repe aled Boren Amendment to the Medicaid Act, 42 U.S.C. S 1396a(a)(13) (1994) (repealed 1997). The Boren Amendment required a state Medicaid plan to provide a class of providers7 with payments that were "reason able

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6. In determining whether a statute creates an impl ied right of action, the Supreme Court uses the four-part test of Cort v . Ash, 422 U.S. 66 (1975), to determine whether Congress intended to c reate a private remedy. Under this test, the Court considers (1) wh ether the plaintiff is within the class " `for whose especial benefit' the statute was enacted," (2) whether "there is any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one," (3) whether a private remedy would be "consistent with the underl ying purposes of the legislative scheme," and (4) whether "the cause of action [is] one traditionally relegated to state law, in an area ba sically the concern of the States." Id. at 78 (citations omitted). A S 198 3 plaintiff need not

prove that Congress specifically intended that a particul ar statutory right be enforceable under S 1983 but instead need only meet the three-part test outlined above. Wilder, 496 U.S. at 509 n. 9.

7. Namely, hospitals and nursing and intermediate c are facilities. See Wilder, 496 U.S. at 502 n.2.

9and adequate to meet the costs which must be incurr ed by

efficiently and economically operated facilities" t hat comply with applicable state and federal laws and standard s. Id. Holding that there was "little doubt" that the Bore n Amendment was intended to benefit these providers, theSupreme Court stressed the Boren Amendment's costreimbursement language, 496 U.S. at 503, and noted that the Amendment "establishe[d] a system for reimburse ment of providers and [was] phrased in terms benefitting health care providers." Wilder, 496 U.S. at 510 (emphasis added). Thus, the Court relied on language in the Boren Amendment that measured the adequacy of payments in relation to the economics of providers, i.e., their need to

cover their reasonable costs. As the Court later em phasized in Suter v. Artist M., 503 U.S. 347, 357 (1992), Wi lder "took pains to analyze the statutory provisions in detail ."

B.

With these standards in mind, we focus on the langu age of Section 30(A). Section 30(A) provides that a sta te plan for

medical assistance must:

[P]rovide such methods and procedures relati ng to the utilization of, and the payment for, care an d services available under the plan . . . as may be nec essary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and qua lity of care and are sufficient to enlist enough provider s so that care and services are available under the pl an at least

to the extent that such care and services ar e available to the general population in the geographic area.

Because this language is -- to put it mildly-- comp lex, it is helpful to break it down. Under Section 30(A), a state must provide "methods and procedures." These"method s and procedures" must assure that payments to provid ers produce four outcomes: (1) "efficiency," (2)"econom y," (3) "quality of care," and (4) adequate access to provi ders by

Medicaid beneficiaries.8

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8. We use the phrase "adequate access" simply as sh orthand for the statutory requirement that providers be "available under the plan at

10It seems clear to us that the first two required ou tcomes

-- "efficiency" and "economy" -- relate to the stat e program, not providers, i.e., Section 30(A) requires that a state program set payments at levels that make the progra m efficient and economical.9 What sort of payments wo uld make a program inefficient and uneconomical? Paymen ts that are too high. Accordingly, the directive to ac hieve "efficiency" and "economy" was obviously not intend ed to benefit providers.

That leaves the directives to provide "quality of c are" and adequate access. These directives are "draft[ed] . . . with an unmistakable focus on" Medicaid beneficiaries, not providers. Cannon, 441 U.S. at 691. They are"phrase d in terms benefiting" Medicaid recipients, Wilder , 496 U.S. at 510, and these are the persons that Congress intend ed to benefit. If Congress had wanted to look after pharm acies, it would hardly have framed Section 30(A) in the terms it

chose.

The language of Section 30(A) contrasts sharply wit h that of the Boren Amendment, which was interpreted in Wi lder as intended to benefit the relevant providers. As p reviously noted, the Boren Amendment required a state Medicai d plan to provide payments to providers that were "reasonable and adequate to meet the costs which mu st be incurred by efficiently and economically operated f acilities" that comply with applicable state and federal laws and standards. Pub. L. No. 96-499, S 962(a), 94 Stat. 2 650 (1980). It was thus "phrased in terms benefitting" providers

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least to the extent that such care and services are available to the general population in the geographic area." We do n ot suggest that "adequate access" in the lay sense of the term will or will not meet this statutory requirement.

9. Although the plaintiffs argue that these terms r efer to the operation

of pharmacies, this does not make sense. Suppose payme nts to pharmacies

were set far above cost. That would not make them i nefficient or uneconomical, i.e., "wasteful." Webster's Third New International Dictionary (1971). It would simply make them very p rofitable. Conversely, suppose payments to pharmacies were set well below costs.

That also would not make them inefficient or unecon omical. It would simply make participation in the Medicaid program u nprofitable and might lead them to withdraw.

11and measured the sufficiency of payments by referen ce to

the economics of providers. It plainly manifested c oncern for the economic well-being of providers. Section 3 0(A), unlike the Boren Amendment, does not demand that payments be set at levels that are sufficient to co ver provider costs. Unlike the Boren Amendment, it evin ces no direct concern for the economic situation of provid ers. Instead, it demands that payments be set at levels that are sufficient to meet recipients' needs. It is "phrase d in terms benefitting" recipients, and the adequacy of paymen ts is measured in relation to the health needs of recipie nts. It manifests concern solely for the well-being of reci pients. It is therefore apparent from the statutory language t hat the intended beneficiaries of Section 30(A) are recipie nts, not providers.

The principal dissent disagrees with this analysis and maintains that the Boren Amendment and Section 30(A ) "confer nearly identical rights on providers." Prin cipal Dissent at 23. The principal dissent makes two prin cipal points. First, it dismisses the significance of the presence in

the Boren Amendment and the absence from Section 30 (A) of language focusing on provider costs. Second, it argues that quality of care played essentially the same ro le in the Boren Amendment as it does in Section 30(A). Neithe r point

is well taken.

The language in the Boren Amendment focusing on provider costs is telling because it manifests a cl ear congressional concern for the economic plight of pr oviders

and an intent to benefit them. We are convinced tha t this statutory language was the basis for the Wilder Co urt's statement that the Boren Amendment was "phrased in terms benefitting" providers. 496 U.S. at 510. The principal dissent interprets this statement to mean simply th at the Boren Amendment "required states to establish a sch eme for provider reimbursement." See Principal Dissent at 24. But if this interpretation were correct, the Suprem e Court's full sentence ("The provision establishes a system for reimbursement of providers and is phrased in terms benefitting health care providers") would say exact ly the same thing twice ("The provision establishes a syst em for reimbursement of providers," 496 U.S. at 510, and

12"require[s] states to establish a scheme for provid er

reimbursement," Principal Dissent at 23). We theref ore disagree with the principal dissent and believe tha t the reference to phrasing pertains to the Boren Amendme nt's cost-reimbursement language.

This cost-reimbursement language is also of particu lar significance in, to use the principal dissent's phr ase, "the dynamic of the real world of healthcare."10 Princip al Dissent at 24. Cost reimbursement schemes11 are generally favorable to providers and greatly disliked by thos e required to do the reimbursing.12 The House Committee Report recommending repeal of the Boren Amendment cited a Congressional Budget Office estimate that its elimi nation would save $1.2 billion over four years,13 and the National Governors Association provided even higher estimate s.14 We

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10. In its description of the "real world""context" of this case, the principal dissent (at 24, 25-26) summarizes the pla intiffs' (but not the defendant's) evidence about the effect of the new r ates on access to pharmacies. But (1) the plaintiffs' position is dis puted, (2) the District Court, which reached the merits of the access issue , held that the plaintiffs had not adduced sufficient evidence to s how that the access requirement was not being met, Pennsylvania Pharmac ists Ass'n, 2000 WL 730344, at * 6-8, and (3) the principal dissent does not purport to

have examined or to reach the merits of this issue. We express no view whatsoever on the merits of this question.

11. Before the Boren Amendment, states, as a practi cal matter, tended to pay for "the actual costs incurred by hospitals in providing care to Medicaid recipients, regardless of disparities in c osts or efficiencies among hospitals." New Jersey Hosp. Ass'n v. Waldman , 73 F.3d 509, 511 (3d Cir. 1995). The Boren Amendment replaced th is actual-costreimbursement scheme with a reasonable-cost-reimbur sement scheme.

See id. at 514-15.

12. The National Governors Association unanimously recommended repeal of the Boren Amendment. See 1997 WL 8219815 (March 11, 1997) (Testimony of Govs. Miller and Leavitt before Sen. Fin. Comm.); 1996 WL 7135617 (Feb. 21, 1996)(Statement of Govs. Thompson, Miller, Chiles, Engler, Leavitt, and Romer before House Com merce Comm.)("The Boren amendment and other Boren-like statutory prov isions must be repealed. `One hundred percent reasonable cost reim bursement' must be phased out . . . ."). 13. H.R. Rep. 149, 105th Cong., 1st Sess. 547 (1997 ).

14. See 1997 WL 8219815 (March 11, 1997) (Testimony of Govs. Miller and Leavitt before Sen. Fin. Comm.).

13take no side in the policy debate about cost reimbu rsement,

but we think that it is highly unrealistic to minim ize the significance of the presence in the Boren Amendment of cost-reimbursement language. This language was plai nly a boon for providers, Congress surely understood its implications, and its inclusion in the Boren Amendm ent was an unmistakable sign of a congressional desire to benefit providers.

The principal dissent also misinterprets the Boren Amendment as containing a quality-of-care requireme nt similar to that in Section 30(A). See Principal Dis sent at 24 (Boren Amendment "mandates minimum reimbursement rates defined by reference to quality of care . . . .") id. at 33 (rates must be "sufficient to ensure quality of car e"); id. at 33 (same). In fact, however, quality of care played a decidedly secondary role in the Boren Amendment. Whereas quality of care is a primary benchmark for setting payments in Section 30(A), the Boren Amendment simp ly provided that reimbursements were to be calculated by reference to the reasonable costs of providers that were operating in compliance with other applicable legal requirements -- in the precise language of the Amen dment, "with applicable State and Federal laws, regulation s, and quality and safety standards . . . ." 42 U.S.C. Sec tion 1396a(a)(13)(A) (repealed 1997). Thus, for example, in determining the reasonable costs of a nursing home, the Boren Amendment looked to nursing homes that were complying with state fire safety laws rather than t hose that cut costs by doing without fire escapes, smoke dete ctors, etc. (The principal dissent obscures this point by repeatedly eliding the reference to "State and Federal laws[an d] regulations" and referring only to "quality and saf ety standards." See Principal Dissent at 31, 33, 35.)15

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15. We also disagree with Judge Rendell's view that Section 30(A) manifests an intent to benefit providers simply bec ause it says that a state plan must provide methods and procedures "rel ating to the utilization of, and payment for, care and services available under the plan."

First, Judge Rendell's analysis looks at only part of Section 30(A), but we do not think that it is possible to determine wh ether Section 30(A)

14In attempting to point out what we view as the crit ical

differences between the Boren Amendment and Section 30(A), we do not dispute the obvious point that the se provisions have other features in common, as the pr incipal dissent points out. For instance, the principal dis sent is correct in noting that "[b]oth the Boren Amendment and Section 30(A) require states to reimburse providers for

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was intended to benefit providers or just recipient s without looking at the entire provision. Moreover, although Judge Rend ell would look at only one part of Section 30(A) in determining wheth er that provision was intended to benefit providers, we assume that she w ould look at the rest of the provision in determining whether Section 30( A) meets the next requirement set out in Wilder and Blessing, viz., t hat the right allegedly protected by the statute must not be so "vague and amorphous" that its enforcement would strain judicial competence. Bless ing, 520 U.S. at 340-41; Wilder, 496 U.S. at 509. If she did not do so -- if she confined her analysis of this question to the portion of the statute that she

examines in relation to the intent-to-benefit issue -- she would have to conclude that this second requirement cannot be met . If Section 30(A) simply said that a state plan must "provide . . . m ethods and procedures relating to the utilization of, and the payment for , care and services available under the plan," it would not set out a s tandard that a court could enforce. The substance of what a state plan m ust meet is set out in the portion of Section 30(A) that follows, and t his part of the provision cannot be ignored. We see no justification for exam ining only one part of a statute in considering the intent-to-benefit issu e and then considering other parts of the statute in considering other pro ngs of the Wilder/Blessing inquiry.

Second, if the mere reference to "payment" in the p art of Section 30(A) that Judge Rendell examines were enough to show an intent to benefit providers, it would be virtually impossible to draf t a provision requiring a state plan to provide services without creating a n entitlement to sue on behalf of the providers who furnish those services. Providers, after all, must be paid, and according to Judge Rendell's posi tion, if a statute makes any mention of "payment," it evidences an int ent to benefit providers. It is interesting to apply Judge Rendell 's analysis to the current version of 42 U.S.C. S 1396a(a)(13), which replaced the Boren Amendment. One of Congress's main objectives -- per haps its dominant objective -- in repealing the Boren Amendment was t o take away the right to sue under S 1983, but the provision that r eplaced the Boren Amendment, refers to the "determination of rates of payment under the [state] plan" and goes on to refer repeatedly to "r ates."

15services rendered." Principal Dissent at 32. But as we

began by cautioning, the inquiry mandated by Wilder and Blessing - whether Congress intended for Section 30 (A) to benefit providers as opposed to simply knowing tha t providers would be benefitted -- calls for us to dr aw a fine line and to take into account the precise statutory language adopted by Congress. After considering the language of the Boren Amendment and Section 30(A), we remain convin ced

that there are critical differences and that Sectio n 30(A), unlike the Boren Amendment, was not intended to ben efit providers.

C.

We have examined the legislative history of Section 30(A) and have found nothing inconsistent with our readin g of the statutory language. The plaintiffs note that wh en Section 30(A) was originally enacted in 1967, see S ocial Security Amendments of 1967, Pub. L. 90-248, S 237, 81 Stat. 821, 911 (1968), it differed in two respects from the current version: it required a state plan to assure that payments were "not in excess of reasonable charges, " and it lacked the adequate access requirement that the current version contains.16 In 1981, Congress changed these

features.

Nothing in the 1981 amendments suggests that the

current version of the statute is intended to benef it providers. On the contrary, the effect of the 1981

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16. As enacted in 1967, it required a state to:

provide such methods and procedures relating to the utilization of, and the payment for, care and services avail able under the plan as may be necessary to safeguard against unnece ssary utilization of such care and services and to assure that pa yments .. . are not in excess of reasonable charges consistent with efficiency, economy, and quality of care.

This provision originated as a Senate Amendment to the House bill, and the brief discussion of this provision in the Confe rence Committee report says nothing that has a bearing on the issue before us. See Conf. Rep. No. 1030, 90th Cong., 1st Sess. (1967), reprinted i n 1967 U.S.C.C.A.N. 3179, 3213 (1967).

16amendments was to sharpen the focus on Medicaid

beneficiaries. Language referring to providers' cha rges was removed, and language providing a further protectio n for

beneficiaries was added.

The plaintiffs note, however, that the House Commit tee Report on the 1981 amendments observed that "in instances where the States or the Secretary fail to observe these statutory requirements, the courts would be e xpected to take appropriate remedial action." H.R. Rep. No. 158, 97th Cong., 312-13 (1981). This statement certainly suggests that the Committee anticipated that some c lass of plaintiffs would be able to sue to enforce Section 30(A), but it does not show that the Committee anticipated tha t Medicaid providers, as opposed to recipients, would be able to do so. It is thus of little value for present pu rposes.

The plaintiffs rely, finally, on certain HHS regula tions that the plaintiffs view as showing that HHS has interpreted Section 30(A) as intended to benefit pr oviders. We have examined these regulations, and we do not b elieve that they evidence any such interpretation. The mos t pertinent of the current regulations cited by the p laintiffs establish upper limits on what a state program may pay for drugs. See 42 C.F.R. SS 447.301, 447.331- .334 (200 1). Section 447.331(b), which applies to brand name dru gs duly certified by a physician to be medically neces sary for a particular recipient, is illustrative. This provi sion states that a state agency's payments for such drugs

must not exceed in the aggregate, payment le vels that the agency has determined by applying the lo wer of the

--

(1)Estimate acquisition costs plus reasonabl e dispensing fees established by the agency; o r

(2)Providers' usual and customary charges to the general public

These regulations do not assist the plaintiffs here for the obvious reason that they merely set a ceiling, but no floor, on what providers must be paid. Any payments below the ceiling, no matter how low, would satisfy the regul ation. Accordingly, the regulations do not show that the S ecretary

17has interpreted Section 30(A) as intended to benefi t

providers; nor can they be viewed as themselves int ended to benefit providers.17

In sum, we are convinced that Section 30(A) is not intended to benefit providers and that therefore pr oviders may not assert a Section 30(A) claim under S 1983.

D.

Of the other courts of appeals that have considered the question whether providers may assert a Section 30( A) claim under S 1983, the Fifth Circuit's opinion con tains the most thorough analysis of the intended-to-benefit requirement. See Evergreen Presbyterian Ministries, Inc. v. Hood, 235 F.3d 908, 928-29 (5th Cir. 2000); see als o Walgreen Co. v. Hood, 275 F.3d 475 (5th Cir. 2001). In Evergreen Presbyterian Ministries, the Fifth Circui t wrote:

Section 30(A) . . . focuses on recipients in that it is directly keyed to the recipients' access to medical care, and as a result, the recipients are the dire ct intended beneficiaries of the section. . . . [I]n con trast to the Boren Amendment, section 30(A) does not crea te an individual entitlement in favor of any provi der. The section benefits recipients by ensuring ther e is an adequate number of providers in the marketpl ace. Therefore, it may be true that health care p roviders as a group are indirectly benefitted by section 30(A) because the section requires that the paymen ts to providers be sufficient to ensure that Medic aid recipients have equal access to medical care . But it cannot be said that section 30(A) necessaril y confers upon each provider an individual right to a particular payment because the section does not focus d irectly on providers.

235 F.3d at 928-29 (emphasis in the original). We a gree with the Fifth Circuit's analysis and holding.

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17. In South Camden Citizens in Action v. New Jerse y Dep't of Envtl. Prot., 274 F.3d 771 (3d Cir. 2001), we held that a regulation may invoke a private right of action that Congress created thr ough statutory text but may not create a new right.

18Prior to the decision in Evergreen Presbyterian Min istries,

the First, Seventh, and Eighth Circuits had held th at providers may pursue a Section 30(A) action underS 1983,

but we decline to follow these decisions. See Visit ing Nurse Ass'n of North Shore, Inc. v. Bullen, 93 F.3d 997, 1004 (1st Cir. 1996); Methodist Hosp., Inc. v. Sullivan , 91 F.3d 1026, 1029 (7th Cir. 1996); Arkansas Med. Soc'y, Inc. v. Reynolds, 6 F.3d 519, 526 (8th Cir. 1993).18

In Arkansas Medical Society, the Eighth Circuit rea soned

as follows:

The question of whether the Medicaid provide rs are intended beneficiaries is . . . easily resol ved. Wilder concluded that institutional providers were intended

beneficiaries of the Boren Amendment because the

Amendment concerned their reimbursement. Wil der, 496 U.S. at 510, 110 S.Ct. at 2517. Similarly, t he equal access provision [of Section 30(A)] addresse s payment for "care and services" provided by noninsti tutional providers. The providers here are beneficiar ies for the same reason that the providers in Wilder wer e beneficiaries.

6 F.3d at 526 (emphasis added).

This analysis pays little attention to the differin g terms of the Boren Amendment and Section 30(A) and is thus

inconsistent with the reminder in Suter to examine each particular statutory provision "in detail." 503 U.S . at 357. Arkansas Medical Society fails to note that the Bor en Amendment was keyed to providers' costs, whereas Se ction 30(A) focuses on the care and services available to recipients. Moreover, while Arkansas Medical Societ y read

Wilder to mean that the Boren Amendment was intende d to benefit providers simply because it "concerned thei r reimbursement," 6 F.3d at 526, Wilder actually reli ed on the fact that the Boren Amendment "establishe[d] a system

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18. In Orthopaedic Hosp. v. Belshe, 103 F.3d 1491 ( 9th Cir. 1997), the Court held in favor of a hospital that appealed an adverse decision regarding a Section 30(A) claim brought under S 198 3. However, the Court's opinion provides no indication that the hos pital's right to proceed under S 1983 was challenged, and the Court did not address the issue.

19for reimbursement of providers and [was] phrased in terms

benefitting health care providers." Wilder, 496 U.S . at 510 (emphasis added). As we have noted, the same cannot be said of Section 30(A).

In Methodist Hosp., Inc. v. Sullivan, supra, the Se venth Circuit held that Medicaid providers may assert Sec tion 30(A) claims under S 1983, but the opinion provides no indication that the Seventh Circuit was presented w ith the question whether Section 30(A) was intended to bene fit providers. Instead, the opinion merely addresses-- and rejects -- the district court's holding that provid ers could not sue under Section 30(A) because the term "geogr aphic area"19 is so "vague and amorphous" that its enforc ement would strain judicial competence. Methodist Hosp. v

. Indiana Family and Social Services Admin., 860 F. S upp. 1309, 1331- 33 (N.D. In. 1994).

In Visiting Nurse Ass'n of North Shore, Inc. v. Bul len, supra, the argument presented to the First Circuit regarding the intended-to-benefit requirement was n otably different from the argument presented to us. In Vis iting Nurse Ass'n, it was argued that Section 30(A), unli ke the Boren Amendment, is not intended to benefit provide rs because Section 30(A) "does not list specific categ ories of health care providers (e.g., hospitals, nursing fac ilities, and

intermediate care facilities." 93 F.3d at 1004. The First Circuit rejected this attempted distinction and wro te:

The Wilder Court first observed that the sta tute "is phrased in terms benefitting health care pro viders," and leaves "little doubt that health care pr oviders are the intended beneficiaries," then proceeded to illustrate how the plain language of the Boren Amendmen t "establishes a system for reimbursement of p roviders" through its listing of specific types of hea lth care providers. Nowhere did the Court indicate th at the more general term "providers" would not suff ice, however, or that a listing of specific types of providers

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19. As previously noted, Section 30(A) requires tha t a plan assure that "care and services are available under the plan at least to the extent

that such care and services are available to the general population in the geographic area." 42 U.S.C. S 1396a (30)(A)(emphasi s added).

20is a sine qua non without which a congressio nal intent

to benefit health care providers could not b e inferred. As long as the two statutory provisions evin ce a congressional concern for preserving financi al incentives to providers--by ensuring adequat e reimbursement payment levels--providers are appropriately considered intended beneficiar ies. See Arkansas Med. Soc'y, Inc., 6 F.3d at 526.

93 F.3d at 1004 (italics in quotations from Wilder added by First Circuit). To the extent that the First Circui t rejected the particular argument advanced to it, its decisio n has no bearing on the issue we address here. And to the ex tent that the First Circuit simply adopted the reasoning of Arkansas Medical Society, we find that reasoning unpersuasive for the reasons already explained.

After considering all of the decisions of other cou rts of appeals on the question before us, we agree with th e Fifth Circuit's analysis in Evergreen Presbyterian Minist ries, and we respectfully decline to follow the contrary cour ts of appeals decisions.

E.

Our conclusion that providers may not assert Sectio n 30(A) claims under S 1983 does not mean that Sectio n 30(A)'s important "quality of care" and access requ irements will go unenforced. Not only is HHS responsible for ensuring that state plans are administered in accor dance with these requirements, see 42 U.S.C. S 1396c, but Medicaid recipients plainly satisfy the intended-to -benefit requirement and are thus potential private plaintif fs. In other parts of the country, recipients have sued to enforce Section 30(A), and the other courts of appeals have uniformly held that recipients may assert such clai ms under S 1983. See Evergreen Presbyterian Ministries , 235 F.3d at 927; Visiting Nurses Ass'n, 93 F.3d at 1004 n.7; Arkansas Medical Society, 6 F.3d at 526. If, as the plaintiffs in this case allege, the rates set under the Health Choices program are so low that compliance with the "qualit y of care" and access requirements is threatened, we see no reason to believe that recipients in the affected a rea of the

21Commonwealth will not seek legal redress to ensure that

these critical mandates are met.

IV.

For the reasons explained above, the order of the D istrict

Court is affirmed.

22BECKER, Chief Judge, dissenting, with whom Judges

Mansmann,* Scirica, McKee and Rendell join.

The focus of the majority opinion, quite properly, is on whether Section 30(A) is intended to benefit the pr ovider plaintiffs. To reach the result that it was not, th e majority must distinguish the case central to the outcome, W ilder v. Virginia Hospital Association, 496 U.S. 498 (1990), which held that the Boren Amendment, a statute that by it s express terms required states to establish a scheme for reimbursement of Medicaid healthcare providers, is intended to benefit providers. The majority attempt s to do so by reasoning that the Boren Amendment and Sectio n 30(A) "contrast[ ] sharply." Maj. Op. at 11. I disa gree, for as I will explain, the two statutes confer nearly iden tical rights on providers. Hence this case is squarely controlle d by Wilder, which compels the conclusion that healthcar e providers may sue under S 1983 to enforce their rig hts under Section 30(A). The clear majority of Circuits to address the question whether healthcare providers m ay sue under S 1983 to enforce their rights under Section 30(A) have resolved that question in the affirmative, and my views

are in accord.

As the majority observes, the Boren Amendment and Section 30(A) differ textually insofar as the Boren Amendment's reference to provider costs in its defi nition of reimbursement rates is absent from Section 30(A). T he rationale of Wilder, however, renders this differen ce immaterial, since Wilder nowhere relied on the Bore n Amendment's reference to provider costs in concludi ng that providers were intended beneficiaries of that statu te. Rather, Wilder clearly explained that the reason pr oviders

were intended beneficiaries of the Boren Amendment is that the provision by its express terms required states to establish a scheme for provider reimbursement. See Wilder, 496 U.S. at 510. Similarly, Section 30(A) expressly requires states to establish a system for reimbursing provid ers for

services rendered.

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* The Honorable Carol Los Mansmann participated in the oral argument and joined in this opinion, but died before the opi nion could be filed.

23Much of the majority opinion is devoted to explaini ng

why Medicaid recipients are among the intended beneficiaries of Section 30(A). I agree, but a stat ute can

have more than one class of intended beneficiaries and hence the mere fact that Congress intended Section 30(A) to benefit Medicaid recipients has no bearing on wheth er Congress also intended Section 30(A) to benefit Med icaid providers. By its own terms, Section 30(A) is addre ssed to both healthcare providers and Medicaid recipients, for, like the Boren Amendment, it expressly requires states t o establish a scheme for provider reimbursement and mandates minimum reimbursement rates defined by reference to quality of care and recipients' access to care and services. Hence, Wilder controls.

While this brief introduction sets up the analytica l core of this opinion, it is deficient to the extent that it lacks context -- the dynamic of the real world of healthcare. Unfortunately, so does the majority opinion, which, while commendably terse, is short on "realpolitik." I wil l therefore supply that broader context, which implicates the relationship between provider costs and the availab ility of services to Medicaid recipients. The background of this case is the recent change in the Medicaid system in the fivecounty Philadelphia metropolitan area from fee-for- service to managed care. The plaintiffs have adduced eviden ce designed to demonstrate that the HMOs, in administe ring Medicaid, have squeezed the pharmacies and reduced provider reimbursement rates to levels that, accord ing to the plaintiffs, are below any reasonable measure of the cost of providing care and services. As a practical matt er, if the HMOs set provider reimbursement rates too low, prov iders will simply refuse to render services to Medicaid r ecipients, and recipients will go without adequate access. In fact, 50% of the pharmacies that participated in Medicaid in the five county area have dropped out since 1997. The plaint iffs also produced evidence that no pharmacy within fift een contiguous zip codes in Bucks and Montgomery counti es participates in Medicaid, and that among those phar macies in the five-county area that continue to participat e in Medicaid, quality of care has suffered as a result of inadequate reimbursement rates.

24While the plaintiffs' submissions in this area are

contested, and failure to establish that the challe nged reimbursement rates violate Section 30(A)'s quality of care and adequate access mandates would be fatal to thei r case, they demonstrate a nexus between the interests of providers and the interests of recipients, which is recognized by the express terms of Section 30(A). M oreover, given the financial straits of Medicaid recipients and providers' access to information on the relationshi p between reimbursement rates and provider participation in Medicaid, healthcare providers may be better able t o enforce recipients' and providers' shared interest in assuring that provider reimbursement rates comply w ith the mandates of Section 30(A).

I thus respectfully dissent from the conclusion tha t S 1983 does not grant providers a cause of action t o sue for violations of Section 30(A). Since the Court has no t gone beyond the threshold issue of whether S 1983 grants providers a right of action to enforce Section 30(A ), I would reconstitute the original panel so that it may reso lve the merits of the Department's summary judgment motion, which requires determining whether plaintiffs have produced sufficient evidence for a reasonable jury to find that the challenged reimbursement rates violate Sec tion 30(A)'s quality of care and adequate access mandate s, an issue on which I express no opinion.

I.

The managed care program at issue is HealthChoices, under which the Pennsylvania Department of Public

Welfare has contracted with four HMOs to administer the Medicaid program in the five-county area. The Depar tment agrees to pay the HMOs on a per-person basis, and p ermits the HMOs to set pharmacy reimbursement rates. The plaintiffs allege that the pharmacy reimbursement r ates set by the HMOs are below any reasonable estimate of pharmacies' costs, and that unless rates are at lea st adequate to cover providers' costs, they cannot be consistent with quality of care or sufficient to in duce enough pharmacies to participate in Medicaid so tha t Medicaid recipients have the same access to pharmac ies as

25members of the general population, as is required b y

Section 30(A).

In support of their claim that current rates are inconsistent with quality of care, the plaintiff ph armacists produced evidence that: (1) low reimbursement rates prevent them from dispensing or stocking certain dr ugs; (2) low reimbursement rates require them to cut back on services provided to customers, such as counseling customers about how to use their medication; (3) administrative problems with the HealthChoices HMOs prevent their customers from obtaining medication; (4) HealthChoices HMOs force their customers to change repeatedly their medication, causing delays and lea ding to health problems when the new medication is ineffect ive; (5)

HealthChoices HMOs restrict the formularies that ma y be used to fill customer prescriptions, causing delays in customers' prescriptions being filled, often to the detriment of customers' health; and (6) HealthChoices HMOs ma ke medical judgments on a daily basis over the phone a nd deny medications that they know nothing about.

In support of their allegation that the reimburseme nt rates fall below the minimum rates mandated by Sect ion 30(A)'s access requirement, plaintiffs produced evi dence showing a precipitous drop in the number of pharmac ies in the five-county area who participate in Medicaid si nce the inception of HealthChoices. In particular, 50% of t he pharmacies that participated in Medicaid have dropp ed out since 1997. Plaintiffs also produced evidence that the

HealthChoices reimbursement rates are the lowest ra tes in the five-county area, and that whereas the Blue Cro ss network has 963 participating pharmacies in the fiv ecounty area, the four HealthChoices HMOs have only 600, 635, 794, and 864 pharmacies each participating in their networks. Moreover, there are no pharmacies that participate in Medicaid in fifteen contiguous zip c odes in Bucks and Montgomery counties. Consequently, accord ing to the plaintiffs, Medicaid recipients lack access to pharmacies to the same extent as the general popula tion.

Whether this evidence is sufficient to create a tri able

issue of fact as to whether the current rates viola te Section 30(A)'s quality of care and adequate access mandate is, of

26course, disputed by the Department. My purpose in

summarizing this evidence is not to express a view as to whether this evidence is sufficient for plaintiffs' claims to survive summary judgment, but rather to provide con crete evidence of the common interest shared by providers and recipients in enforcing the provider reimbursement rates mandated by Section 30(A).

On its face Section 30(A) is addressed to both heal thcare providers and Medicaid recipients, as it expressly requires states to establish a scheme for provider reimburse ment and mandates minimum reimbursement rates defined by reference to recipients' quality of care and access to care and services. In particular, Section 30(A) requires states to "provide . . . methods and procedures relating to. . . the payment for[ ] care and services available under th e plan" and to reimburse providers at rates that are "consi stent with efficiency, economy, and quality of care and a re sufficient to enlist enough providers so that care and services are available under the plan at least to t he extent that such care and services are available to the ge neral population in the geographic area."

The House Report on the 1989 amendment to Section 30(A) confirms Congress's recognition that because healthcare providers' participation in Medicaid is voluntary, Medicaid recipients' access to healthcare will suff er if provider reimbursement rates are too low to induce a sufficient number of providers to participate in Me dicaid:

There is no doubt that Medicaid reimbursemen t rates have not kept pace with average community ra tes. . .. The Committee believes that, without adequat e payment levels, it is simply unrealistic to expect physicians to participate in the program. . . .[T]he Committee bill would require that Medicaid p ayments for all practitioners be sufficient to enlis t enough providers so that care and service are avail able under the plan at least to the extent that such ca re and services are available to the general popula tion in the geographic area.

H.R. Rep. No. 101-247, at 390 (1989), reprinted in 1989 U.S.C.C.A.N. 2060, 2116. As the majority notes, Sec tion

2730(A)'s legislative history also indicates that Con gress

intended Section 30(A) to be enforced through priva te actions. See H.R. Rep. No. 158, at 312-13 (1981) (" [I]n instances where the States or the Secretary fail to observe these statutory requirements, the courts would be e xpected to take appropriate remedial action.").

The evidence we have described illustrates the mann er in which the interests of healthcare providers and Med icaid recipients are inextricably intertwined. As we note d in West Virginia University Hospitals, Inc. v. Casey, 885 F .2d 11 (3d Cir. 1989), aff 'd on other grounds, 499 U.S. 83 (1 991):

We recognize, of course, that the primary pu rpose of medicaid is to achieve the praiseworthy soci al objective of granting health care coverage to those wh o cannot afford it. It does not necessarily follow, h owever, that Title XIX grants substantive rights only to medicaid patients. Although the broad purpose of the Medicaid Act as a whole is to help the poor attain me dical care, the specific purpose of section 1396a(a)(13) (A) is to assure state compliance with some federal st andard of hospital reimbursement. The section sets up a plan for the adequate and reasonable reimbursement of hospitals which serve medicaid patients, and thus hospitals are the section's "beneficiaries." Their interests and the interests of medicaid pati ents are bonded by a common goal, the delivery of ade quate health care by the hospitals to state medica id patients and the enjoyment of such care by the patien ts. The interests of both are intertwined and hospit als have a

concrete stake in reimbursement in accordanc e with the federal statute and regulations.

Id. at 20. Against this backdrop, I now turn to the doctrinal question whether S 1983 grants healthcare providers a cause of action to enforce Section 30(A).

II.

Until now, nearly every Circuit to consider the iss ue has held that whether providers may bring actions under S 1983 to enforce the mandates of Section 30(A) is squarely controlled by the Supreme Court's decision in Wilde r, which

28of course remains binding on this Court unless the

Supreme Court overrules it. See State Oil Co. v. Kh an, 522 U.S. 3, 20 (1997) ("[I]t is this Court's prerogativ e alone to overrule one of its precedents."). The first Court of Appeals to consider the issue was the Eighth Circuit in Ark ansas Medical Society, Inc. v. Reynolds, 6 F.3d 519 (8th Cir. 1993), which concluded that Section 30(A) is indistinguishable from the Boren Amendment, which t he Supreme Court in Wilder held was enforceable by pro viders

under S 1983:

Our analysis in this case is greatly simplif ied by the Wilder opinion. Although focusing on a diffe rent subsection, Wilder addressed the same statut e facing us in this case. Suter urges a careful scrut iny of the exact legislation at issue and Wilder has al ready done that. . . . [T]he equal access provision is very analogous to the Boren Amendment examined in Wilder; t hey are similar not only in function but also in the specific language employed.

Id. at 525. With regard to the particular question whether providers are among the intended beneficiaries of S ection 30(A), the Court determined that:

The question of whether the Medicaid provide rs are intended beneficiaries is also easily resolv ed. Wilder concluded that institutional providers were intended

beneficiaries of the Boren Amendment because the

Amendment concerned their reimbursement. Sim ilarly, the equal access provision [of Section 30(A) ] addresses payment for "care and services" provided by noninstitutional providers. The providers he re are beneficiaries for the same reason that the p roviders in

Wilder were beneficiaries.

Id. at 526 (internal citations omitted).

The First Circuit and the Seventh Circuit have also easily resolved the issue whether providers may bring S 19 83 actions to enforce Section 30(A) by noting that the question is squarely controlled by Wilder. In Visiting Nurse Association of North Shore, Inc. v. Bullen, 93 F.3d 997 (1st Cir. 1996), the First Circuit concluded that provid ers are among the intended beneficiaries of Section 30(A) f or the

29same reason that the Supreme Court held that they w ere

among the intended beneficiaries of the Boren Amend ment:

The Wilder Court first observed that the[Bor en Amendment] "is phrased in terms benefitting health care providers," and leaves "little doubt th at health care providers are the intended beneficiarie s," then proceeded to illustrate how the plain langua ge of the Boren Amendment "establishes a system for reimbursement of providers" . . . . As long as the two statutory provisions evince a congressional concern for preserving financial incentives to providers -- by ensuring adequate reimbursement payment leve ls -- providers are appropriately considered inten ded

beneficiaries.

Id. at 1004 (emphasis and internal citations omitte d). Similarly, the Seventh Circuit observed that becaus e Wilder had not been overruled, "Wilder's holding binds us, " and consequently held that providers have a private rig ht of action under S 1983 to enforce Section 30(A). See M ethodist Hosps., Inc. v. Sullivan, 91 F.3d 1026, 1029 (7th C ir. 1996) ("We therefore . . . hold that providers of medical care have a private right of action, derived through S 1983, to enforce S 1396a(a)(30)."). Thus, most courts have found tha t whether S 1983 grants providers a cause of action t o enforce Section 30(A) is an issue that is easily di sposed of by Wilder. Until now, the only Circuit to hold othe rwise is the Fifth Circuit in Evergreen Presbyterian Ministr ies, Inc. v. Hood, 235 F.3d 908 (5th Cir. 2000), which I discuss in Section IV, infra.

III.

A.

The majority holds that providers may not sue under S 1983 to enforce Section 30(A) because they are no t among the provision's intended beneficiaries.1 Like most Courts of

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1. I disagree with the majority's replacement of th e requirement under S 1983 that "Congress must have intended that the p rovision in question

30Appeals to consider the issue, I believe that the i nquiry into

whether providers are among the intended beneficiar ies of Section 30(A) begins and ends with Wilder.

The Boren Amendment, which was the statute that providers sought to enforce in Wilder, provided, in relevant part:

A State plan for medical assistance must . . . provide . . . for payment . . . of hospital services , nursing facilities, and services in an intermediate care facility for the mentally retarded provided under the plan through the use of rates . . . which the Sta te finds. . . are reasonable and adequate to meet the cost s which must be incurred by efficiently and economic ally operated facilities in order to provide care and services in conformity with applicable State and Fede ral laws, regulations, and quality and safety standard s and to assure that individuals eligible for medical assistance

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benefit the plaintiff," Blessing v. Freestone , 520 U.S. 329, 340 (1997), with the stricter requirement, drawn from an implie d right of action case, that the statute must be "draft[ed] . . . with an u nmistakable focus on the benefitted class." Cannon v. Univ. of Chi., 441 U.S. 677, 691 (1979). See Maj. Op. at 9, 11. The Supreme Court has made c lear that:

[Whether a cause of action exists under S 19 83] is a different inquiry than that involved in determining whether a private right of action can be implied from a particular statute. In implied right of

action cases, we employ the four-factor Cort test t o determine whether Congress intended to create the private reme dy asserted for the violation of statutory rights. The test refl ects a concern, grounded in separation of powers, that Congress rather t han the courts controls the availability of remedies for violations of statutes. Because S

1983 provides an alternative source of express co ngressional authorization of private suits, these separa tion-of-powers concerns are not present in a S 1983 case.

Wilder, 496 U.S. at 508 n.9 (internal quotations an d citations omitted). The Supreme Court has never held that to be enforce able under S 1983, a provision must also be "draft[ed] . . . with an u nmistakable focus on the benefitted class," Cannon, 441 U.S. at 692, as the majority asserts. Rather, in the S 1983 context, a plaintiff must sim ply show that the provision in question was "intended to benefit" the plaintiff. Golden

State Transit Corp. v. City of L.A., 493 U.S. 103, 106 (1 989).31have reasonable access (taking into account geographic

location and reasonable travel time) to inpa tient hospital services of adequate quality . . .

.

42 U.S.C. S 1396a(a)(13)(A) (repealed).

The text of Section 30(A) is strikingly similar. It provides, in relevant part:

A State plan for medical assistance must . . . provide such methods and procedures relating to the utilization of, and the payment for, care and services a vailable under the plan . . . as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are con sistent with efficiency, economy, and quality of car e and are sufficient to enlist enough providers so tha t care and services are available under the plan at lea st to the

extent that such care and services are avail able to the general population in the geographic area .

. . .

42 U.S.C. S 1396a(a)(30)(A). Comparing the two stat utes, I can find no principled basis for holding that provi ders are intended beneficiaries of the Boren Amendment, as t he Supreme Court held in Wilder, but are not intended beneficiaries of Section 30(A), as the majority hol ds today. In particular, I cannot accept the majority's conte ntion that "[t]he language of Section 30(A) contrasts sharply with that of the Boren Amendment." Maj. Op. at 11.

Both the Boren Amendment and Section 30(A) require states to reimburse providers for services rendered . See Boren Amendment ("A State plan for medical assistan ce must . . . provide . . . for payment . . . of . . . services . . . provided under the plan . . . ."); Section 30(A) (" A State plan for medical assistance must . . . provide . . . met hods and procedures relating to . . . payment for, care and services available under the plan . . . ."). And both the Bo ren Amendment and Section 30(A) define reimbursement ra tes by reference to efficiency and economy. See Boren Amendment (defining rates by reference to "efficien tly and economically operated facilities"); Section 30(A) ( requiring states "to assure that payments are consistent with efficiency [and] economy").

32Both the Boren Amendment and Section 30(A) require

states to reimburse providers at rates that are suf ficient to ensure quality of care. See Boren Amendment (requir ing that reimbursement rates be "reasonable and adequat e to

meet the costs which must be incurred . . . in orde r to provide care and services in conformity with . . . quality and safety standards"); Section 30(A) (requiring st ates "to assure that payments are consistent with . . . qual ity of care"). And both the Boren Amendment and Section 30 (A) require states to reimburse providers at rates that are sufficient to guarantee Medicaid recipients adequat e access to healthcare. See Boren Amendment (requiring "rate s . . . which . . . are reasonable and adequate . . . to as sure that individuals eligible for medical assistance have re asonable access . . . to inpatient hospital services"); Sect ion 30(A) (requiring states "to assure that payments are . . . sufficient to enlist enough providers so that care and service s are available under the plan at least to the extent tha t such care and services are available to the general popu lation in the geographic area").

Thus, far from "contrast[ing] sharply," as the majo rity contends, see Maj. Op. at 11, the Boren Amendment a nd Section 30(A) confer on providers nearly identical rights to be reimbursed for services provided and to be reimb ursed at a minimum rate that is defined by reference to q uality of care and adequate access. See Ark. Med. Soc'y, Inc. v. Reynolds, 6 F.3d 519, 525 (8th Cir. 1993) ("[T]he e qual access provision [of Section 30(A)] is very analogo us to the Boren Amendment examined in Wilder; they are simila r not only in function but also in the specific language employed."). This case is therefore squarely contro lled by Wilder, and I would hold that healthcare providers may bring S 1983 actions to enforce the rights conferre d on them by Section 30(A).2

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2. I fully concur in the majority's distinction bet ween "the question whether a statute is intended to benefit particular plaintiffs" and "the question whether the statute in fact benefits thos e plaintiffs." Maj. Op.

at 8. Similarly, I agree with the majority's observati on that "lessors of pharmacy premises, cleaning service firms retained by pharmacies, trash collection companies retained by pharmacies, [and] private security firms retained by pharmacies" may all benefit from Sectio n 30(A). Maj. Op. at

33B.

The majority's rationale relies heavily on the fact that Section 30(A) is addressed in part to recipients, s ince it defines provider reimbursement rates by reference t o quality of care and adequate access. See Maj. Op. a t 11 ("[Section 30(A)'s] directives to provide`quality o f care' and adequate access . . . . are drafted with an unmista kable focus on Medicaid beneficiaries, not providers."); id. at 12 ("[Section 30(A)] demands that payments be set at l evels that are sufficient to meet recipients' needs."); i d. ("[T]he adequacy of payments [under Section 30(A)] is measu red in relation to the health needs of recipients."); id. at 19 ("Section 30(A) focuses on the care and services av ailable to recipients."); id. at 12 ("It is therefore apparent from the statutory language that the intended beneficiaries of Section 30(A) are recipients, not providers.").

To rely on the quality of care and adequate access guarantees as a basis for holding that Section 30(A ) was not intended to benefit providers, however, would r equire overruling Wilder, which squarely held that a statu te that defines provider reimbursement rates by reference t o Medicaid recipients' quality of care and Medicaid r ecipients' access to care and services may nonetheless be inte nded to benefit providers. Nowhere in Wilder did either the majority

or the dissent even hint that the Boren Amendment's reference to quality of care and adequate access sh ould give the Court pause before concluding that the Boren Amendment was intended to benefit providers. As suc h, for purposes of determining whether providers are inten ded beneficiaries of Section 30(A), Wilder renders irre levant the fact that Section 30(A) includes quality of care an d adequate access guarantees.

Inexplicably, then, the majority makes the adequate access and quality of care guarantees that are foun d in

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8. But I have little difficulty in concluding that these third parties are not among the intended beneficiaries of Section 30( A), for the simple reason that Section 30(A) expressly requires states to establish a scheme for reimbursing those who provide healthcare servic es, not garbage collection services or security services.

34both the Boren Amendment and Section 30(A) the

cornerstone of its analysis in holding that provide rs are not intended beneficiaries of Section 30(A). To be cons istent with Wilder, which held that providers are intended beneficiaries of the Boren Amendment, however, a ra tionale leading to the conclusion that providers are not i ntended beneficiaries of Section 30(A) must rest not on sim ilarities between the Boren Amendment and Section 30(A), as d oes the vast bulk of the majority opinion, but rather o n differences.

C.

The only difference between the Boren Amendment and Section 30(A) that the majority relies on is the Bo ren Amendment's reference to providers' costs, which is absent from Section 30(A). For the reasons discussed below

, however, the reference to providers' costs in the B oren Amendment and the absence of such a reference in Se ction 30(A) are immaterial for purposes of determining wh ether providers are among the intended beneficiaries of S ection 30(A).

First, the language of the Boren Amendment did not create any independent right on the part of provide rs to be reimbursed for their costs without reference to qua lity of care, as the majority maintains. The majority repea tedly quotes the language in the Boren Amendment requirin g payments to be "reasonable and adequate to meet the costs which must be incurred by efficiently and economica lly operated facilities," Maj. Op. at 10, 11, but negle cts to quote the remainder of the clause, which goes on to expressly define costs in terms of quality of care. In fact, the Boren Amendment required payment for "the costs which must be incurred by efficiently and economica lly operated facilities in order to provide care and se rvices in conformity with applicable State and Federal laws, regulations, and quality and safety standards ." (e mphases added). The plain language of the Boren Amendment t hus explicitly defined "costs" by reference to quality of care, and created no independent right of providers to be rei mbursed for their costs beyond that conferred by the qualit y of care requirement, such as exists in Section 30(A).

35I acknowledge that quality of care guarantees in th e two

statutes are not completely identical -- the Boren Amendment requires rates that "meet the costs which must be incurred . . . to provide care and services in c onformity with . . . quality and safety standards," while Sec tion 30(A) requires rates that "are consistent with . . . qual ity of care." I cannot agree with the majority's conclusion, howe ver, that this difference is so significant that quality of c are "played a decidedly secondary role in the Boren Amendment," but "is a primary benchmark" in Section 30(A). Maj. Op. at 14. Indeed, the majority never explains how a reimburse ment

rate could be so low that it violates the Boren Ame ndment's requirement that rates meet "the costs which must b e incurred by efficiently and economically operated f acilities in order to provide care and services in conformity with applicable State and Federal laws, regulations, and quality and safety standards," yet nonetheless be "consiste nt with . . . quality of care," as mandated by Section 30(A ).

Even assuming, arguendo, that the majority is corre ct that the Boren Amendment created an independent rig ht on the part of providers to be reimbursed for their co sts without reference to quality of care, the plaintiff s in Wilder were suing to enforce both their right to be reimbu rsed at rates that covered their costs, as well as their in dependent right under the Boren Amendment to be reimbursed at rates that are sufficient to ensure adequate access . See Wilder, 496 U.S. at 503 ("Respondent contends that Virginia's Plan for reimbursement violates the Act because the rates are not reasonable and adequate to meet t he economically and efficiently incurred cost of provi ding care to Medicaid patients in hospitals and do not assure access to inpatient care.") (emphasis added and internal q uotation marks omitted). Had Wilder's holding rested on the Boren Amendment's reference to provider costs, as the maj ority contends, then the Court would have permitted the providers to sue under S 1983 to enforce only their right to be reimbursed for their costs, and not their additi onal right

under the Boren Amendment to be reimbursed at rates sufficient to ensure recipients adequate access to care and

services.

The plain language of S 1983 creates a cause of act ion

not for a violation of a statute as an undifferenti ated whole,

36but rather for a violation of a "right[ ] . . . sec ured by the

Constitution or laws" of the United States. See Ble ssing v. Freestone, 520 U.S. 329, 340 (1997) ("In order to s eek redress through S 1983, . . . a plaintiff must asse rt the violation of a federal right, not merely a violatio n of federal law."); id. at 342 ("It was incumbent upon the resp ondents to identify with particularity the rights they clai med, since it is impossible to determine whether Title IV-D, a s an undifferentiated whole, gives rise to undefined`rig hts.' "). By permitting the providers' suit to proceed, the Supr eme Court necessarily held that providers are among the intended beneficiaries of not only the Boren Amendm ent's requirement that reimbursement rates be sufficient to cover provider costs, but also the Boren Amendment's requirement that reimbursement rates be sufficient to ensure recipients' adequate access to care and serv ices.

Finally, and most importantly, the Supreme Court's rationale in Wilder made clear that in concluding t hat providers were intended beneficiaries of Section 30 (A), it was relying not on the Boren Amendment's reference to providers' costs, as the majority asserts, but rath er on the Boren Amendment's express requirement that states establish a scheme to reimburse providers for servi ces rendered. In attempting to distinguish Section 30(A ) from the Boren Amendment, the majority repeatedly quotes

Wilder's conclusion that the Boren Amendment"was phrased in terms benefitting health care providers, " see Maj. Op. at 10, 12, 20, but conspicuously omits the rest of the sentence, in which the Wilder Court explained w hy it concluded that the Boren Amendment "was phrased in terms benefitting health care providers." The remai nder of the sentence, which the majority never fully quotes , makes clear what particular statutory language in the Bor en Amendment the Court in Wilder was in fact relying o n in concluding that the Boren Amendment was "phrased in terms benefitting providers":

There can be little doubt that health care p roviders are

the intended beneficiaries of the Boren Amen dment. The provision establishes a system for reimb ursement of providers and is phrased in terms benefit ting health care providers: It requires a state plan to provide for

37"payment of the hospital services, nursing f acility

services, and services in an intermediate ca re facility for the mentally retarded provided under the pla n." 42 U.S.C. S 1396a(a)(13)(A) (1982 ed., Supp. V)

Wilder, 496 U.S. at 510 (internal alterations omitt ed) (emphasis added).

The majority is "convinced," Maj. Op. at 12, that w hen

the Wilder Court stated that the Boren Amendment "i s phrased in terms benefitting health care providers: It requires a state plan to provide for `payment of th e hospital services, nursing facility services, and services i n an intermediate care facility for the mentally retarde d provided under the plan,' " the Court was relying on languag e in the Boren Amendment other than the language it directly quoted. It is difficult to imagine how a judicial o pinion could be more clear about what particular statutory language it is relying on to establish a given prop osition than by expressly quoting that language immediately following the proposition, as the Supreme Court did in Wilder. The majority's conclusion that the Court qu oted only a portion of the statutory language that it re lied on in concluding that the Boren Amendment was "phrased in terms benefitting health care providers" is particu larly puzzling given that, according to the majority, tha t portion of the Boren Amendment that the Court actually quo ted in the passage above was insufficient to establish the proposition for which it was cited, while that port ion of the Boren Amendment that the Court neglected to quote ( the Boren Amendment's reference to provider costs) was, according to the majority, "plainly a boon for prov iders," and "an unmistakable sign of a congressional desire to benefit providers." Maj. Op. at 14.

Indeed, by the majority's reasoning, it is hard to see why the Wilder majority, in concluding the Boren Amendm ent was "phrased in terms benefitting health care provi ders," would even bother to quote the particular language in the Boren Amendment requiring "payment of the hospital services, nursing facility services, and services i n an intermediate care facility for the mentally retarde d provided under the plan," given that, according to the major ity, the nearly identical language in Section 30(A) requirin g

38"payment for[ ] care and services available under t he plan,"

"manifests concern solely for the well-being of rec ipients." Maj. Op. at 12 (emphasis added).3

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3. The majority attempts to overcome the obvious di fficulty posed by the Wilder Court's quotation of the particular language in the Boren Amendment that it was relying on by invoking the ca non of construction

that a statute should be construed to avoid renderi ng any part of it superfluous. According to the majority, if the reas on that Wilder concluded that the Boren Amendment was "phrased in terms benefitting health care providers" was that it required a state plan to provide for "payment of the hospital services, nursing facility services, and services in an intermediate care facility for the mentally r etarded provided under the plan" (the language in the Boren Amendment that the Wilder majority relied on), then the Supreme Court's "full [sic] sentence (`The provision establishes a system for reimbursement of providers and is phrased in terms benefitting health care providers' ) would say exactly the same thing twice . . . ." Maj. Op. at 12.

I believe that this reasoning errs by "minutely par sing phrases, and seeking shades of meaning in the interstices of sen tences and words, as though a discursive judicial opinion were a statute ." Schlup v. Delo, 513 U.S. 298, 343 (1995) (Scalia, J., dissenting). Even if the majority were correct that my reading of Wilder renders a portion of a sentence in the opinion redundant, it would be neither the first no r the last time that a judicial opinion sought clarity at risk of redundan cy. Whatever redundancy might exist in the sentence at issue in Wilder, I nonetheless believe that the Court was relying on the statutory language that it quoted when it stated that the Boren Amendment "is phrased in terms benefitting health care providers: It requires a st ate plan to provide for `payment of the hospital services, nursing facility services, and services in an intermediate care facility for the mentally r etarded provided under the plan.' "

At all events, the Supreme Court's statement that t he Boren Amendment "establishes a system for reimbursement o f providers" and the Supreme Court's conclusion that the Boren Amend ment "is phrased in terms benefitting health care providers" because it "requires a state plan to provide for `payment of the hospital servic es, nursing facility services, and services in an intermediate care faci lity for the mentally retarded provided under the plan' " do not amount t o "say[ing] exactly the same thing twice." Maj. Op. at 12. The first st atement is addressed
to the substance of the Boren Amendment (the Boren Amendment "establishes a system for reimbursement of provider s," 496 U.S. at 510);

the second statement is addressed to the Boren Amen dment's text (the Boren Amendment "is phrased in terms benefitting he alth care providers:

39Given that the excerpt quoted above contains the Wi lder

Court's entire discussion of whether providers were intended beneficiaries of the Boren Amendment, the majority is plainly incorrect when it asserts that" the Supreme Court [in Wilder] stressed the Boren Amendm ent's cost-reimbursement language," and that "the Court r elied on language in the Boren Amendment that measured th e adequacy of payments in relation to the economics o f providers, i.e., their need to cover their reasonab le costs." Maj. Op. at 10 (emphases added). Nowhere in its ana lysis did the Court rely on the Boren Amendment's referen ce to provider costs, much less "stress" such language, a s the majority contends. And whatever this Court may thin k about the breadth of the Supreme Court's rationale, it is not our function to rewrite a Supreme Court opinion to narrow its holding by imputing to the Court relianc e on a fact that played no role in the Court's rationale. Rather, the scope of the Wilder Court's holding must be determi ned by

reference to the Wilder Court's ratio decidendi as articulated by the Wilder Court.

As is readily apparent from the analysis quoted abo ve, the Wilder Court made perfectly clear that in concl uding that "there can be little doubt that healthcare pro viders are the intended beneficiaries of the Boren Amendment," it was relying on the language in the Boren Amendment requ iring a state plan to provide for "payment of the hospita l services, nursing facility services, and services in an inter mediate care facility for the mentally retarded provided un der the plan." See Ark. Med. Soc'y, Inc. v. Reynolds , 6 F. 3d 519, 526 (8th Cir. 1993) ("Wilder concluded that institu tional providers were intended beneficiaries of the Boren

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It requires a state plan to provide for `payment of the hospital services, nursing facility services, and services in an inter mediate care facility

for the mentally retarded provided under the plan.' " 4 96 U.S. at 510). See Maj. Op. at 9 (commenting on "the importance of the particular phrasing of a statute in this regard"); Maj. Op. at 16 ("[T] he inquiry mandated by Wilder and Blessing -- whether Congress intended fo r Section 30(A) to benefit providers as opposed to simply knowing tha t providers would be

benefitted -- calls for us . . . to take into accou nt the precise

statutory language adopted by Congress.").

40Amendment because the Amendment concerned their

reimbursement."); see also Evergreen Presbyterian Ministries, Inc. v. Hood, 235 F.3d 908, 925 (5th Ci r. 2000) ("[T]he [Wilder] Court concluded that there was lit tle doubt that the providers were the intended beneficiaries of the Boren Amendment because it established a system for reimbursement of providers and was phrased in terms benefitting health care providers, in that it requi red a state plan to provide for their payment.") (internal quot ations and alterations omitted); Visiting Nurse Ass'n of N. Sh ore, Inc. v. Bullen, 93 F.3d 997, 1004 (1st Cir. 1996) ("The Wil der Court . . . observed that the statute `is phrased i n terms benefitting health care providers,' and . . . then proceeded to illustrate how the plain language of the Boren Amendment `establishes a system for reimbursement o f providers.' ") (emphasis omitted).

Thus, for the same reason that the Wilder Court concluded that the Boren Amendment was "phrased in terms benefitting health care providers: It require s a state plan to provide for `payment of the hospital servic es, nursing facility services, and services in an inter mediate care facility for the mentally retarded provided un der the plan,' " 496 U.S. at 510 (quoting the Boren Amendme nt), I would conclude that Section 30(A) is phrased in ter ms benefitting health care providers: It requires a st ate plan to provide for "payment for[ ] care and services avail able under the plan." See Ark. Med. Soc'y, 6 F.3d at 526 ("[T] he equal access provision [of Section 30(A)] addresses payme nt for `care and services' provided by noninstitutional pr oviders. The providers here are beneficiaries for the same r eason that the providers in Wilder were beneficiaries."); Visiting Nurse Ass'n, 93 F.3d at 1004 (1st Cir. 1996) ("As l ong as the two statutory provisions evince a congressional concern for preserving financial incentives to providers-- by ensuring adequate reimbursement payment levels -- providers are appropriately considered intended beneficiaries.").4

(Text continued on page 43)

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4. One further point needs to be made -- that the m ajority's departure from Wilder creates serious line-drawing problems. Whereas Wilder held that any statute that expressly requires states to pay providers is

41intended to benefit providers, the majority holds t hat whether such a

statute is intended to benefit providers depends on how the statute defines the minimum payment rate. But the majority never offers an analytically sound explanation of how we are to dis tinguish those payment floors that are intended to benefit provide rs from those payment floors that are not.

At times, the majority appears to rely on the fact that the payment floor mandated by Section 30(A) is not expressly de fined by reference to provider costs or provider economics. See Maj. Op. 12 (distinguishing Wilder on the ground that the Boren Amendment"measu red the sufficiency of payments by reference to the economi cs of providers"); Id. at 12 ("Unlike the Boren Amendment, [Section 30(A)] evinces no direct concern for the economic situation of providers."). But if the majority's test of whether providers are intended beneficiarie s of a statute requiring states to pay providers some minimum amount turns o n whether the language of the statute expressly defines the minim um reimbursement rate by reference to provider costs or provider eco nomics, then providers would not be among the intended beneficiaries of a statute that required states to pay pharmacies $2,500 each time they disp ense a given dosage of a particular prescription drug, but would be amo ng the intended beneficiaries of a statute that required states to pay providers 1% of

their costs each time they dispensed a drug. In my view, this taxonomy is

unreasonable.

Elsewhere, the majority appears to rely on the fact that the text of Section 30(A) defines the minimum reimbursement rat es solely by reference to the health needs of recipients. See M aj. Op. at 12 (observing that under Section 30(A), "the adequacy of payments is measured in relation to the health needs of recipients"). But i f the majority's test

of whether providers are intended beneficiaries of a s tatute requiring states to pay providers is whether the statute's language expressly defines reimbursement rates solely by reference to the heal th needs of recipients, then that test too, produces unreasonab le results. Under such a test, providers would not be among the inten ded beneficiaries of a statute whose language expressly required states to pay providers ten times the rate needed to ensure Medicaid recipients quality of care and adequate access, but providers would be intended be neficiaries of a statute whose language expressly required states to pay providers a dollar every time they filled a Medicaid prescripti on.

Finally, it may be that the minimum reimbursement r ates actually mandated by the Boren Amendment were lower than the actual minimum rates mandated by Section 30(A). For exampl e, the Boren

42In sum, although there are differences between the

specific language of the Boren Amendment and the sp ecific language of Section 30(A), as there inevitably will be between any two statutes, these differences are imm aterial in light of Wilder's rationale, and the Supreme Cou rt in Wilder gave no indication that its rationale was"go od for this day and train only." County of Washington v. G unther, 452 U.S. 161, 183 (1981) (Rehnquist, J., dissenting ).

IV.

Until now, the only Court of Appeals to hold that providers may not bring S 1983 actions to enforce t heir rights under Section 30(A) was the Fifth Circuit in Evergreen Presbyterian Ministries, Inc. v. Hood, 23 5 F.3d 908 (5th Cir. 2000), which I would decline to follo w. In holding that providers are not among the intended beneficiaries of Section 30(A), the Fifth Circuit i n Evergreen relied heavily on the Supreme Court's decision in B lessing v. Freestone, 520 U.S. 329, 340 (1997), which held that a plaintiff may sue under S 1983 for a violation of a federal statute only if the statute creates an individual e ntitlement, and not simply a systemwide guarantee. Id. at 343. In Blessing, the plaintiffs were mothers whose childre n were eligible to receive child support services from the state pursuant to Title IV-D of the Social Security Act. Id. at 332. Plaintiffs brought a S 1983 action seeking to enfor ce 42

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Amendment's access requirement mandated that rates be sufficient to ensure only that "individuals eligible for medical assistance have reasonable access," whereas Section 30(A) requires equal access -- rates must be "sufficient to enlist enough providers so t hat care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area." Fortunately, Wilder avoided the problem of distingu ishing those mandatory payment floors that are intended to benef it the payee from those that are not. While how high the statute sets the payment floor will determine the magnitude of the intended benefit (a low minimum reimbursement rate obviously does not benefit provi ders as much as a high minimum reimbursement rate), under Wilder as long as the statute expressly requires states to pay providers, provide rs are intended

beneficiaries.

43U.S.C. S 609, which authorizes the Secretary of the

Department of Health and Human Services to penalize a state if it is not in "substantial compliance" with Title IV-D.

Id. at 335.

The Blessing Court held that S 609(a)(8) does not c reate an individual right, enforceable under S 1983, to h ave states achieve substantial compliance with Title IV -D. First, the Court noted that the plaintiffs had failed to i dentify a particular provision of Title IV-D that grants them an individual entitlement, and may not simply sue to e nforce substantial compliance with Title IV-D as a whole. See Blessing, 520 U.S. at 342 ("It was incumbent upon respondents to identify with particularity the righ ts they claimed, since it is impossible to determine whethe r Title IV-D, as an undifferentiated whole, gives rise to u ndefined `rights.' "). Second, the Court reasoned that becau se S 609(a)(8)'s "substantial compliance" requirement would be satisfied if the state provided the mandated servic es in only 75% of the cases reviewed during the federal audit period, "even when a State is in `substantial compliance' w ith Title IV-D, any individual plaintiff might still be among the 10 or 25 percent of persons whose needs ultimately go unm et." Id. at 344. Thus, "[f]ar from creating an individua l entitlement to services, the standard [which plaint iffs seek to enforce under S 1983] is simply a yardstick for the Secretary to measure the systemwide performance of a State's Title IV-D program." Id. at 343.

In view of the Supreme Court's rationale in Blessin g, plaintiffs' claims in this case are easily distingu ishable from plaintiffs' claims in Blessing. First, unlike the p laintiffs in Blessing, the plaintiffs in this case have identifi ed with particularity the right claimed, since they allege that the reimbursement rates violate Section 30(A)'s quality of care and adequate access mandates. Cf. Blessing, 520 U.S . at 342 (distinguishing Wilder on the ground that "in W ilder, we held that health care providers had an enforceab le right to reimbursement . . . as required by a particular provision in the Medicaid statute") (emphasis added). This ca se is therefore distinguishable from Blessing for the sam e reason that the Blessing Court concluded that Wilder was distinguishable from Blessing.

44Blessing is further distinguishable on the ground t hat in

that case, the plaintiffs would not necessarily hav e obtained any benefit had they succeeded on the merits of the ir claim, since the provision that they sought to enforce und er S 1983 required only "substantial compliance" with Title IVD. See Blessing, 520 U.S. at 344 ("[E]ven when a St ate is in `substantial compliance' with Title IV-D, any indiv idual plaintiff might still be among the 10 or 25 percent of persons whose needs ultimately go unmet."). By cont rast, in this case each individual plaintiff will necessa rily benefit if they succeed on the merits, since they would eac h be individually entitled to reimbursement at higher ra tes.

I therefore disagree with Evergreen's reliance on B lessing in concluding that Section 30(A) creates only a sys tem-wide guarantee, not an individual entitlement on the par t of providers. The Fifth Circuit in Evergreen illustrat ed its reasoning with the following example:

Assume we have a nursing home in Baton Rouge with 150 residents, which, following the [rate re duction at issue], is forced into bankruptcy and then l iquidation.

Assume further that the district court decid es that the relevant geographic market to measure the ac cess of recipients is the Baton Rouge market for nur sing home

care and also that the district court conclu des that the recipients are entitled to the same access t o nursing home care in Baton Rouge as that of non-Medi caid recipients. Finally, assume that, once the n ursing home closes, all 150 residents are able to f ill vacant beds in other facilities in Baton Rouge. Und er this scenario, there is no violation of the recip ients' equal access rights, despite the fact that the ban krupt nursing home was put out of business.

From this example, it is apparent that whil e recipients have an individual entitlement to equal access to medical care, any benefit to healt hcare providers is indirect at best. The statute d oes not confer any direct right upon the individual provider because, as the above example illustrates, e ven if an individual provider is forced to liquidate, the recipients' right to access is not necessarily violated.

45235 F.3d at 929. I find this reasoning unpersuasive

.

First, the Fifth Circuit put the rabbit in the hat when it reasoned from a hypothetical example in which Secti on 30(A) is not violated. See Evergreen, 235 F.3d at 9 29 ("Under this scenario, there is no violation of the recipients' equal access rights . . . ."). Of course providers will have no individual entitlement under Section 30(A) to incre ased

reimbursement rates under a factual scenario in whi ch Section 30(A) is not violated. But in a factual sce nario

where reimbursement rates are so low that Section 3 0(A)'s adequate access guarantee is violated, every provid er who participates in Medicaid would be individually enti tled to reimbursement at the higher rate mandated by Sectio n 30(A).

Second, Evergreen incorrectly assumed that unless a statute requiring providers to be reimbursed at a g iven rate ensures that no providers will ever be put out of b usiness, the statute does not create any direct right on the part of providers. See Evergreen, 235 F.3d at 929 ("The sta tute does not confer any direct right upon the individua l provider because, as the above example illustrates, even if an individual provider is forced to liquidate, the recipients' right to access is not necessarily violated."). Und er any statute addressed to provider reimbursement, howeve r, it will almost always be the case that some providers may go out of business notwithstanding the statute. But th is possibility does not mean that the statute creates no individual entitlement on the part of providers.

Consider, for example, a statute that expressly req uires states to reimburse pharmacies at least $25 each ti me they dispense a given dosage of a particular prescriptio n drug to a Medicaid recipient. A $25 reimbursement rate migh t force certain providers out of business, but it is hard t o imagine a statute that more directly confers an individual entitlement on providers. Similarly, there was no g uarantee in the Boren Amendment that no provider would ever be put out of business, but the Court in Wilder noneth eless held that the Boren Amendment conferred on provider s rights that are enforceable under S 1983.

Finally, the Evergreen Court mistakenly reasoned th at because the minimum reimbursement rate mandated by

46Section 30(A) is defined by reference to the market -wide

criterion of Medicaid recipients' access to healthc are, it does not confer an individual entitlement on provid ers. See Evergreen, 235 F.3d at 928 ("Section 30(A) does not create an individual entitlement in favor of any provider. The section benefits recipients by ensuring there is an adequate number of providers in the market place."). That Se ction 30(A) defines the mandatory minimum provider reimbursement rate by reference to the number of pr oviders in the market place, however, does not make the rat e any less mandatory or any less of a minimum. As long as a statute expressly requires providers to be reimburs ed at rates that are at least equal to a defined minimum, then

the statute creates an individual entitlement on th e part of every provider to be reimbursed at that minimum, regardless whether the minimum is defined by refere nce to providers' costs, recipients' access, quality of ca re, market rates, or a fixed sum.

Thus, contrary to the Fifth Circuit's conclusion th at "it cannot be said that section 30(A) necessarily confe rs upon each provider an individual right to a particular p ayment," Section 30(A) clearly does confer upon each provide r an individual right to be paid at rates that are at le ast equal to the statutory minimum. See Wilder, 496 U.S. at 510 ("There can be little doubt that health care provid ers are the intended beneficiaries of the Boren Amendment. The provision establishes a system for reimbursement of providers and is phrased in terms benefitting healt h care providers: It requires a state plan to provide for `payment of the hospital services, nursing facility services, a nd services in an intermediate care facility for the mentally r etarded provided under the plan.' ") (internal alterations omitted). Cf. W. Va. Univ. Hosps., Inc. v. Casey, 885 F.2d 11 , 21 (3d Cir. 1989), aff 'd on other grounds, 499 U.S. 83 (1 991) ("Who else is more aggrieved by the absence of an a dequate or reasonable hospital reimbursement rate than a disadvantaged hospital and who has a more compellin g interest to press for a correction?").

47V.

Finally, although one can find isolated instances o f Medicaid recipients suing to enforce Section 30(A), see, e.g., Evergreen Presbyterian Ministries, Inc. v. Hood, 23 5 F.3d 908, 931-32 (5th Cir. 2000); Ark. Med. Soc'y, Inc. v. Reynolds, 6 F.3d 519, 522 (8th Cir. 1993), I do not share the majority's optimism that lawsuits brought by Me dicaid recipients will provide sufficient private enforcem ent. See Maj. Op. at 21-22 ("If, as the plaintiffs in this c ase allege, the rates set under the HealthChoices program are s o low that compliance with the `quality of care' and acce ss requirements is threatened, we see no reason to bel ieve that recipients in the affected area of the Commonw ealth will not seek legal redress to ensure that these cr itical mandates are met."). Medicaid recipients are, by de finition, people facing severe financial hardship, and theref ore are unlikely to have the same access to legal services as healthcare providers.5

Moreover, Section 30(A), by its express terms, uses provider reimbursement rates as the means of ensuri ng recipients' quality of care and adequate access, an d healthcare providers are more likely than Medicaid recipients to possess information about the relatio nship between current provider reimbursement rates and recipients' quality of care and access to care and services. Indeed, few if any Medicaid recipients will even be aware of current provider reimbursement rates, much less hav e an idea of how a particular rate compares with provide r costs

___________________________________________________ ______________

5. To be sure, attorney's fees are available to a s uccessful S 1983 plaintiff. See 42 U.S.C. S 1988 ("In any action or proceeding to enforce a provision of section[ ] . . . 1983 . . . of this ti tle, . . . the court,

in its discretion, may allow the prevailing party . . . a reasonable attorney's

fee as part of the costs . . . ."). Awards of attorney' s fees may be inadequate to induce attorneys to represent Medicaid recipient s in Section 30(A) cases, however, since such attorneys would assume t he risk of earning no fees if the lawsuit is unsuccessful. See City of Burlington v. Dague, 505 U.S. 557 (1992) (holding that in determining th e reasonableness of attorney's fees under federal fee shifting statutes , courts may not

enhance the fee award above the "lodestar" amount t o compensate attorneys for assuming the risk of receiving no pay ment for their services if the lawsuit failed).

48and the reimbursement rates offered by non-Medicaid

healthcare plans. Nor are Medicaid recipients likel y to have ready access to statistical information on the exte nt to which healthcare is available to the general public , for purposes of determining whether current reimburseme nt rates comply with Section 30(A)'s adequate access m andate. By contrast, professional associations such as the pharmacists association plaintiff in this case are more likely to possess the market data necessary to dete rmine whether a colorable claim under Section 30(A) exist s.

In sum, because Section 30(A) is expressly addresse d to the financial incentives of healthcare providers to participate in Medicaid, healthcare providers are w ellsituated to vindicate recipients' and providers' sh ared interest in ensuring that provider reimbursement ra tes are consistent with quality of care and sufficient to g uarantee Medicaid recipients access to care and services to the same extent as the general public. These practical consi derations further support the result compelled by Wilder .

VI.

Because I believe that the question whether provide rs may bring S 1983 actions to enforce Section 30(A) i s squarely controlled by Wilder, I would decline to f ollow Evergreen Presbyterian Ministries, Inc. v. Hood, 23 5 F.3d 908 (5th Cir. 2000), and would join those Circuits that, relying on Wilder, have permitted providers to brin g such claims. See Visiting Nurse Ass'n of N. Shore, Inc. v. Bullen, 93 F.3d 997, 1005 (1st Cir. 1996) ("[W]e conclude t hat plaintiffs possess standing . . . to enforce sectio n 1396a(a)(30) . . . ."); Methodist Hosps., Inc. v. S ullivan, 91 F.3d 1026, 1029 (7th Cir. 1996) ("We therefore . . . hold that providers of medical care have a private right of action, derived through S 1983, to enforce S 1396a(a)(30)." ); Ark. Med. Soc'y, Inc. v. Reynolds, 6 F.3d 519, 528 (8th Cir. 1993) ("[T]he equal access provision [of Section 30 (A)] may be enforced by Medicaid recipients and providers us ing 42 U.S.C. S 1983."). I thus respectfully dissent.

To hold as have these other Courts would not of cou rse be the end of the case, for the plaintiffs would st ill have

49significant hurdles in the next phase. In particula r,

plaintiffs would have to demonstrate that they have produced sufficient evidence for a reasonable jury to find

that the current reimbursement rates are so low tha t they violate either the quality of care or adequate acce ss mandate contained in Section 30(A), a question on w hich I express no opinion here. Since the Court has not go ne beyond the threshold issue of whether S 1983 grants providers a right of action to enforce Section 30(A ), I would reconstitute the original panel so that it may reso lve the merits of the Department's summary judgment motion, which requires determining whether plaintiffs have produced sufficient evidence for a reasonable jury to find that the challenged reimbursement rates violate Sec tion 30(A)'s quality of care and adequate access mandate s.

50RENDELL, Circuit Judge, dissenting, with whom Chief

Judge BECKER joins:

I join in Chief Judge Becker's thoughtful dissentin g opinion and write separately only to offer a permis sible reading of the statutory language different from th at urged by the majority. The majority terms the language"co mplex" and "breaks it down." However, I see it as fairly s traightforward -- at least regarding what we need to decid e -- when properly parsed. If we were to "parse" the sta tute at issue in grammarian fashion, we would note that the "state plan" is the noun, "must provide," the verb, and "m ethods and procedures," the object. Then comes the descrip tive phrase "relating to the utilization of, and payment for, care and services available under the plan." The methods and procedures must relate to the use of care and servi ces -- by individual recipients -- and the payment-- to provi ders --

for care and services.

What then follows in the statute -- preceded by"as may be necessary . . ." -- is no more than a further de scriptive phrase setting forth the barometer or standard agai nst which the utilization and payment methods and proce dures are to be measured. Why should only the users be a ble to challenge a plan that must pass muster not only in terms of the methods and procedures for "utilization," bu t also the methods and procedures for "payment?"

I think it eminently reasonable to conclude that bo th aspects -- use and payment -- are foci, and that bo th constituencies can speak to whether the statutory requirement ("as may be necessary to . . .") has be en fulfilled, and both should have the right to compla in that in

fact it has not.

Also, in response to the majority's footnote 15, I submit that I am not ignoring the second part of the provi sion, and I do not view the provision as hopelessly vague. Ra ther, I

see no need to mention it because it sets forth a s tandard that is quite susceptible to proof. I have little d ifficulty imagining the gist of the testimony of recipients, providers, and state administrators as to how the procedures i n place impact the sufficiency of payment and quality of se rvice, so that judicial decision making can be exercised. I d o,

51however, continue to have difficulty in understandi ng why

there cannot be two intended beneficiaries, especia lly if the statute is designed to benefit one (the providers) in order to provide the desired level of services to the other (the recipients).

Further, I suggest that the fact that the language postrepeal of Boren continues to reference "rates" is a ctually quite insignificant. In repealing Boren, Congress r eplaced the standard for the rates ("reasonable and adequat e") with the requirement that the state provide for a public process for determination of rates. What is significant, ho wever, is the fact that the Boren Amendment language that had been held to afford a cause of action required that rate s be "reasonable and adequate," and the language we are quibbling over similarly describes a standard for p ayments to providers. I see no meaningful distinction betwe en the two and therefore respectfully dissent.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

52