2002 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

3-13-2002

PA Pharmacists Assoc v. Houstoun

Precedential or Non-Precedential:

Docket 0-1898

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PRECEDENTIAL 

 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. Buckwalter 
Argued 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 

 2 
OPINION OF THE COURT 

ALITO, Circuit Judge, with whom Judges NYGAARD, ROTH, 

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 Department 

of Public Welfare (the "Department"), to challenge the 

reimbursement rates paid to pharmacies under 

Pennsylvania's Medicaid program. The plaintiffs claimed 

that the Department, in administering its HealthChoices 

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 with its 

interpretation of prior circuit precedent, the District Court 

held that the plaintiffs could assert their Section 30(A) 

claim under S 1983, but the District Court nevertheless 

granted summary judgment against the plaintiffs. We now 

hold that the plaintiffs, as Medicaid providers, may 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 under 

which the federal government furnishes funding to states 

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 program, 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. 

_________________________________________________________________ 

1. The Pennsylvania Pharmacists' Association is a non-profit corporation 

representing over 440 independent pharmacies and over 1,000 

pharmacists employed at these pharmacies. 

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

state must submit a medical assistance plan to the 

Secretary of HHS and obtain approval of the plan. See 42 

U.S.C. S 1396; 42 C.F.R. S 430.10 (2001). With further 

administrative approval, a state may amend a previously 

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 for 

certain additional services. 42 U.S.C. S 1396a(a)(10)(A); 42 

C.F.R. S 440.210 (2001). Pennsylvania includes prescription 

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" program. 

Payments to these pharmacies generally consisted of two 

components: (1) ingredient cost reimbursement and (2) a 

dispensing fee. Pharmacies were compensated for brandname 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. Pharmacists 

were compensated for generic drugs using acquisition cost 

limits established by HHS plus a reasonable dispensing fee. 

In 1997, the Pennsylvania Department of Public Welfare 

began to implement its HealthChoices program, a 

mandatory managed care program operated in five counties 

in the southeastern part of the state pursuant to an 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 through 

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 which 

_________________________________________________________________ 

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)(statewide scope), 

S 1396a(a)(10)(B)(comparability of services), and S 1396a(a)(23)(freedom 

of 

choice). 

 4 
pharmacies are reimbursed. The pharmacy benefits 

manager then contracts directly with the participating 

pharmacies to provide outpatient pharmacy services to 

eligible beneficiaries. 

In order to participate in HealthChoices, the named

pharmacy plaintiffs entered into standardized Medical 

Assistance Provider Agreements with the Department. The 

Agreements cover the provision of brand-name and generic 

prescription drugs to eligible beneficiaries and obligate the 

Department to reimburse the contracting pharmacies in 

accordance with state and federal law. 

In January 1999, the plaintiffs commenced this action in 

the United States District Court for the Eastern District of 

Pennsylvania and requested declaratory and injunctive 

relief. The plaintiffs' principal claim was that the new 

payment rates violate Section 30(A), which requires a state 

Medicaid plan to assure that payments "are consistent with 

efficiency, economy, and quality of care" and"are sufficient 

to enlist enough providers so 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." The plaintiffs alleged that the 

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 plaintiffs 

and denied the Department's motion to dismiss the 

complaint, holding that the plaintiffs had "a private right to 

enforce [Section 30(A)]." Pennsylvania Pharmacists Ass'n v. 

Houstoun, No. CIV.A. 99-491 (E.D. Pa. October 21, 1999). 

As support for its holding on this point, the Court cited a 

footnote in a prior panel opinion of this Court. See Rite Aid 

of Pennsylvania, Inc. v. Houstoun, 171 F.3d 842, 850 n. 7 

(3d Cir. 1999). 

The District Court subsequently granted the defendant's 

motion for summary judgment. Pennsylvania Pharmacists 

Ass'n v. Houstoun, No. CIV.A. 99-491, 2000 WL 730344, at 

* 1 (E.D. Pa. June 7, 2000). The Court held that the 

Department, in implementing its new program, had 

 5 
properly considered efficiency, economy, and access to 

quality pharmacy services, that its procedures were neither 

arbitrary nor capricious, and that the resulting payment 

rates did not violate Section 30(A). Pennsylvania 

Pharmacists Ass'n, 2000 WL 730344, at * 3-5. 

The Plaintiffs appealed, and their arguments were heard 

before a regular panel. Under a longstanding practice of our 

Court, a panel may not overrule another panel decision. A 

footnote in the panel opinion in Rite Aid appeared to hold 

that a provider may assert a Section 30(A) claim under 

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 issuance of 

a panel decision, we granted rehearing en banc primarily 

for the purpose of considering the S 1983 issue. 

II. 

The threshold issue that we must consider is whether the 

plaintiffs, as Medicaid providers (as opposed to Medicaid 

recipients), may assert a Section 30(A) claim under 28 

U.S.C. S 1983. Section 1983 provides a private right of 

action against any person who, acting under the color of 

state or territorial law, abridges "rights, privileges, 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 plaintiff 

"must assert the violation of a federal right," and not merely 

a violation of federal law. Golden State Transit Corp. v. City 

of Los Angeles, 493 U.S. 103, 106 (1989). Thus, a plaintiff 

alleging a violation of a federal statute may not proceed 

under S 1983 unless 1) the statute creates"enforceable 

_________________________________________________________________ 

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 not sue to enforce 

 [certain] Medicaid regulations as section 30(A) "does not support a 

 private cause of action." Brief at 27. The district court rejected 

this 

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

 525-26. 

171 F.3d at 850. 

 6 
rights, privileges, or immunities within the meaning 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 -- that the 

statute must create an enforceable right, privilege, or 

immunity -- we must determine whether the three 

conditions identified by the Supreme Court in Wilder and 

Blessing v. Freestone, 520 U.S. 329 (1997), are satisfied. 

First, the provision in question must have been"intend[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 the statute 

must not be so "vague and amorphous" that its 

enforcement would strain judicial competence. Blessing, 

520 U.S. at 340-41; Wilder, 496 U.S. at 509. Finally, the 

statute must unambiguously impose a binding obligation 

on the states, id., and thus the provision giving rise to the 

asserted right must be couched in "mandatory, rather than 

precatory, terms." Blessing, 520 U.S. at 341. 

Once these requirements are satisfied -- and the 

existence of a federal right is established -- a rebuttable 

presumption arises that the right is enforceable under 

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.; see also 

Livadas v. Bradshaw, 512 U.S. 107, 133 (1994). 

III. 

A. 

In the present case, the focus of our inquiry is the 

requirement that the provision in question must have 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 important to keep 

in mind that the question whether a statute is intended to 

benefit particular plaintiffs is quite different from the 

 7 
question whether the statute in fact benefits those plaintiffs5 

or even whether Congress knew that the statute would 

benefit those plaintiffs. In the present case, it may well be 

that Section 30(A) in fact benefits pharmacies in some 

states and that Congress realized this in enacting that 

provision. For example, if Section 30(A) were not on the 

books, a state plan might provide lesser access to 

pharmacy services than Section 30(A) requires. In any such 

state, Section 30(A) presumably has the effect of increasing 

drug sales, and these increased drug sales presumably 

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 pharmacies), 

employees of all of these businesses, etc. Congress

undoubtedly realizes that federal subsidies have such ripple 

effects, but it would be outlandish to argue that the 

Wilder/Blessing intended-to-benefit requirement permits all 

of these businesses and individuals to assert Section 30(A) 

claims in federal court. Our inquiry, consequently, is quite 

narrow: did Congress, in enacting Section 30(A), intend 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 plaintiffs "is 

_________________________________________________________________ 

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 standing, 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 enforcement of the law would 

benefit the plaintiff. Therefore, if the intended-to-benefit requirement 

could be met simply by showing that the plaintiff would benefit by 

proper enforcement, that requirement would add nothing to the injuryin-fact test. 

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

The Court noted the importance of any "right- or dutycreating language" in the statute. Id. at 690 n.13. Moreover, 

in holding that the statute in that case was intended 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 Alexander v. 

Sandoval, 121 S.Ct. 1511, 1520 (2001), the Court again 

commented on the importance of the particular phrasing of 

a statute in this regard. 

While Cannon and Alexander concerned the implication 

of a private right of action under a statute, rather than the 

assertion of a statutory claim under S 1983, the tests 

applied in these contexts partially overlap,6 and both tests 

ask whether the statute at issue was intended to benefit the 

putative plaintiff or plaintiffs. See Wright, 479 U.S. at 432- 

33 (O'Connor, J., dissenting). Thus, in cases applying 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 hospital filed a 

S 1983 action asserting a violation of the now-repealed 

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 "reasonable 

_________________________________________________________________ 

6. In determining whether a statute creates an implied 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 create a private 

remedy. Under this test, the Court considers (1) whether 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 underlying purposes of the 

legislative scheme," and (4) whether "the cause of action [is] one 

traditionally relegated to state law, in an area basically the concern of 

the States." Id. at 78 (citations omitted). A S 1983 plaintiff need not 

prove 

that Congress specifically intended that a particular 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 care facilities. See 

Wilder, 496 U.S. at 502 n.2. 

 9 
and adequate to meet the costs which must be incurred by 

efficiently and economically operated facilities" that comply 

with applicable state and federal laws and standards. Id. 

Holding that there was "little doubt" that the Boren 

Amendment was intended to benefit these providers, the 

Supreme Court stressed the Boren Amendment's costreimbursement language, 496 U.S. at 503, and noted that 

the Amendment "establishe[d] a system for reimbursement 

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 emphasized 

in Suter v. Artist M., 503 U.S. 347, 357 (1992), Wilder "took 

pains to analyze the statutory provisions in detail." 

B. 

With these standards in mind, we focus on the language 

of Section 30(A). Section 30(A) provides that a state plan for 

medical assistance must: 

 [P]rovide such methods and procedures relating to the 

 utilization of, and the payment for, care and services 

 available under the plan . . . as may be necessary to 

 safeguard against unnecessary utilization of such care 

 and services and to assure that payments are

 consistent with efficiency, economy, and quality of care 

 and are sufficient to enlist enough providers so 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. 

Because this language is -- to put it mildly-- complex, it 

is helpful to break it down. Under Section 30(A), a state 

must provide "methods and procedures." These"methods 

and procedures" must assure that payments to providers 

produce four outcomes: (1) "efficiency," (2)"economy," (3) 

"quality of care," and (4) adequate access to providers by 

Medicaid beneficiaries.8 

_________________________________________________________________ 

8. We use the phrase "adequate access" simply as shorthand for the 

statutory requirement that providers be "available under the plan at 

 10 
It seems clear to us that the first two required outcomes 

-- "efficiency" and "economy" -- relate to the state program, 

not providers, i.e., Section 30(A) requires that a state 

program set payments at levels that make the program 

efficient and economical.9 What sort of payments would 

make a program inefficient and uneconomical? Payments 

that are too high. Accordingly, the directive to achieve 

"efficiency" and "economy" was obviously not intended to 

benefit providers. 

That leaves the directives to provide "quality of care" 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"phrased in 

terms benefiting" Medicaid recipients, Wilder , 496 U.S. at 

510, and these are the persons that Congress intended to 

benefit. If Congress had wanted to look after pharmacies, it 

would hardly have framed Section 30(A) in the terms it 

chose. 

The language of Section 30(A) contrasts sharply with that 

of the Boren Amendment, which was interpreted in Wilder 

as intended to benefit the relevant providers. As previously 

noted, the Boren Amendment required a state Medicaid 

plan to provide payments to providers that were 

"reasonable and adequate to meet the costs which must be 

incurred by efficiently and economically operated facilities" 

that comply with applicable state and federal laws and 

standards. Pub. L. No. 96-499, S 962(a), 94 Stat. 2650 

(1980). It was thus "phrased in terms benefitting" providers 

_________________________________________________________________ 

least to the extent that such care and services are available to the 

general population in the geographic area." We do not 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 refer to the operation 

of 

pharmacies, this does not make sense. Suppose payments to pharmacies 

were set far above cost. That would not make them inefficient or 

uneconomical, i.e., "wasteful." Webster's Third New International 

Dictionary (1971). It would simply make them very profitable. 

Conversely, suppose payments to pharmacies were set well below costs. 

That also would not make them inefficient or uneconomical. It would 

simply make participation in the Medicaid program unprofitable and 

might lead them to withdraw. 

 11 
and measured the sufficiency of payments by reference to 

the economics of providers. It plainly manifested concern 

for the economic well-being of providers. Section 30(A), 

unlike the Boren Amendment, does not demand that 

payments be set at levels that are sufficient to cover 

provider costs. Unlike the Boren Amendment, it evinces no 

direct concern for the economic situation of providers. 

Instead, it demands that payments be set at levels that are 

sufficient to meet recipients' needs. It is "phrased in terms 

benefitting" recipients, and the adequacy of payments is 

measured in relation to the health needs of recipients. It 

manifests concern solely for the well-being of recipients. It 

is therefore apparent from the statutory language that the 

intended beneficiaries of Section 30(A) are recipients, 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." Principal 

Dissent at 23. The principal dissent makes two principal 

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 role in the 

Boren Amendment as it does in Section 30(A). Neither point 

is well taken. 

The language in the Boren Amendment focusing on 

provider costs is telling because it manifests a clear 

congressional concern for the economic plight of providers 

and an intent to benefit them. We are convinced that this 

statutory language was the basis for the Wilder Court'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 that the 

Boren Amendment "required states to establish a scheme 

for provider reimbursement." See Principal Dissent at 24. 

But if this interpretation were correct, the Supreme Court's 

full 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 ("The provision establishes a system for 

reimbursement of providers," 496 U.S. at 510, and 

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

reimbursement," Principal Dissent at 23). We therefore 

disagree with the principal dissent and believe that the 

reference to phrasing pertains to the Boren Amendment's 

cost-reimbursement language. 

This cost-reimbursement language is also of particular 

significance in, to use the principal dissent's phrase, "the 

dynamic of the real world of healthcare."10 Principal Dissent 

at 24. Cost reimbursement schemes11 are generally 

favorable to providers and greatly disliked by those required 

to do the reimbursing.12 The House Committee Report

recommending repeal of the Boren Amendment cited a 

Congressional Budget Office estimate that its elimination 

would save $1.2 billion over four years,13 and the National 

Governors Association provided even higher estimates.14 We 

_________________________________________________________________ 

10. In its description of the "real world""context" of this case, the 

principal dissent (at 24, 25-26) summarizes the plaintiffs' (but not the 

defendant's) evidence about the effect of the new rates on access to 

pharmacies. But (1) the plaintiffs' position is disputed, (2) the District 

Court, which reached the merits of the access issue, held that the 

plaintiffs had not adduced sufficient evidence to show that the access 

requirement was not being met, Pennsylvania Pharmacists 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 practical matter, tended to 

pay for "the actual costs incurred by hospitals in providing care to 

Medicaid recipients, regardless of disparities in costs or efficiencies 

among hospitals." New Jersey Hosp. Ass'n v. Waldman, 73 F.3d 509, 

511 (3d Cir. 1995). The Boren Amendment replaced this actual-costreimbursement scheme with a reasonable-cost-reimbursement 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 Commerce Comm.)("The 

Boren amendment and other Boren-like statutory provisions must be 

repealed. `One hundred percent reasonable cost reimbursement' 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.). 

 13 
take no side in the policy debate about cost reimbursement, 

but we think that it is highly unrealistic to minimize the 

significance of the presence in the Boren Amendment of 

cost-reimbursement language. This language was plainly a 

boon for providers, Congress surely understood its 

implications, and its inclusion in the Boren Amendment 

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 requirement 

similar to that in Section 30(A). See Principal Dissent 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 care"); 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 simply 

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 Amendment, 

"with applicable State and Federal laws, regulations, and 

quality and safety standards . . . ." 42 U.S.C. Section 

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 those that 

cut costs by doing without fire escapes, smoke detectors, 

etc. (The principal dissent obscures this point by repeatedly 

eliding the reference to "State and Federal laws[and] 

regulations" and referring only to "quality and safety 

standards." See Principal Dissent at 31, 33, 35.)15

_________________________________________________________________ 

15. We also disagree with Judge Rendell's view that Section 30(A) 

manifests an intent to benefit providers simply because it says that a 

state plan must provide methods and procedures "relating 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 whether Section 30(A) 

 14 
In attempting to point out what we view as the critical 

differences between the Boren Amendment and Section

30(A), we do not dispute the obvious point that these 

provisions have other features in common, as the principal 

dissent points out. For instance, the principal dissent is 

correct in noting that "[b]oth the Boren Amendment and 

Section 30(A) require states to reimburse providers for 

_________________________________________________________________ 

was intended to benefit providers or just recipients without looking at 

the entire provision. Moreover, although Judge Rendell would look at 

only one part of Section 30(A) in determining whether that provision was 

intended to benefit providers, we assume that she would look at the rest 

of the provision in determining whether Section 30(A) meets the next 

requirement set out in Wilder and Blessing, viz., that the right allegedly 

protected by the statute must not be so "vague and amorphous" that its 

enforcement would strain judicial competence. Blessing, 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 . . . methods and procedures 

relating to the utilization of, and the payment for, care and services 

available under the plan," it would not set out a standard that a court 

could enforce. The substance of what a state plan must meet is set out 

in the portion of Section 30(A) that follows, and this part of the 

provision 

cannot be ignored. We see no justification for examining only one part of 

a statute in considering the intent-to-benefit issue and then considering 

other parts of the statute in considering other prongs of the 

Wilder/Blessing inquiry. 

Second, if the mere reference to "payment" in the part of Section 30(A) 

that Judge Rendell examines were enough to show an intent to benefit 

providers, it would be virtually impossible to draft a provision requiring 

a state plan to provide services without creating an entitlement to sue on 

behalf of the providers who furnish those services. Providers, after all, 

must be paid, and according to Judge Rendell's position, if a statute 

makes any mention of "payment," it evidences an intent 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 -- perhaps its dominant 

objective -- in repealing the Boren Amendment was to take away the 

right to sue under S 1983, but the provision that replaced the Boren 

Amendment, refers to the "determination of rates of payment under the 

[state] plan" and goes on to refer repeatedly to "rates." 

 15 
services 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 that 

providers would be benefitted -- calls for us to draw 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 convinced 

that there are critical differences and that Section 30(A), 

unlike the Boren Amendment, was not intended to benefit 

providers. 

C. 

We have examined the legislative history of Section 30(A) 

and have found nothing inconsistent with our reading of 

the statutory language. The plaintiffs note that when 

Section 30(A) was originally enacted in 1967, see Social 

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 benefit 

providers. On the contrary, the effect of the 1981 

_________________________________________________________________ 

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 available under the plan as 

 may be necessary to safeguard against unnecessary utilization of 

 such care and services and to assure that payments .. . 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 Conference Committee report 

says nothing that has a bearing on the issue before us. See Conf. Rep. 

No. 1030, 90th Cong., 1st Sess. (1967), reprinted in 1967 U.S.C.C.A.N. 

3179, 3213 (1967). 

 16 
amendments was to sharpen the focus on Medicaid 

beneficiaries. Language referring to providers' charges was 

removed, and language providing a further protection for 

beneficiaries was added. 

The plaintiffs note, however, that the House Committee 

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 expected 

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 class of 

plaintiffs would be able to sue to enforce Section 30(A), but 

it does not show that the Committee anticipated that 

Medicaid providers, as opposed to recipients, would be able 

to do so. It is thus of little value for present purposes. 

The plaintiffs rely, finally, on certain HHS regulations 

that the plaintiffs view as showing that HHS has 

interpreted Section 30(A) as intended to benefit providers. 

We have examined these regulations, and we do not believe 

that they evidence any such interpretation. The most 

pertinent of the current regulations cited by the plaintiffs 

establish upper limits on what a state program may pay for 

drugs. See 42 C.F.R. SS 447.301, 447.331- .334 (2001). 

Section 447.331(b), which applies to brand name drugs 

duly certified by a physician to be medically necessary for 

a particular recipient, is illustrative. This provision states 

that a state agency's payments for such drugs 

 must not exceed in the aggregate, payment levels that 

 the agency has determined by applying the lower of the 

 -- 

 (1)Estimate acquisition costs plus reasonable 

 dispensing fees established by the agency; or 

 (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 regulation. 

Accordingly, the regulations do not show that the Secretary 

 17 
has interpreted Section 30(A) as intended to benefit 

providers; nor can they be viewed as themselves intended to 

benefit providers.17 

In sum, we are convinced that Section 30(A) is not 

intended to benefit providers and that therefore providers 

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 contains 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 also 

Walgreen Co. v. Hood, 275 F.3d 475 (5th Cir. 2001). In 

Evergreen Presbyterian Ministries, the Fifth Circuit 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 direct intended 

 beneficiaries of the section. . . . [I]n contrast to the 

 Boren Amendment, 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 marketplace. 

 Therefore, it may be true that health care providers as 

 a group are indirectly benefitted by section 30(A) 

 because the section requires that the payments to 

 providers be sufficient to ensure that Medicaid 

 recipients have equal access to medical care. But it 

 cannot be said that section 30(A) necessarily confers 

 upon each provider an individual right to a particular 

 payment because the section does not focus directly on 

 providers. 

235 F.3d at 928-29 (emphasis in the original). We agree 

with the Fifth Circuit's analysis and holding. 

_________________________________________________________________ 

17. In South Camden Citizens in Action v. New Jersey 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 through statutory text but 

may not create a new right. 

 18 
Prior to the decision in Evergreen Presbyterian Ministries, 

the First, Seventh, and Eighth Circuits had held that 

providers may pursue a Section 30(A) action underS 1983, 

but we decline to follow these decisions. See Visiting 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 reasoned 

as follows: 

 The question of whether the Medicaid providers are 

 intended beneficiaries is . . . easily resolved. Wilder 

 concluded that institutional providers were intended 

 beneficiaries of the Boren Amendment because the 

 Amendment concerned their reimbursement. Wilder, 496 

 U.S. at 510, 110 S.Ct. at 2517. Similarly, the equal 

 access provision [of Section 30(A)] addresses payment 

 for "care and services" provided by noninstitutional 

 providers. The providers here are beneficiaries for the 

 same reason that the providers in Wilder were 

 beneficiaries. 

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

This analysis pays little attention to the differing 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 Boren 

Amendment was keyed to providers' costs, whereas Section 

30(A) focuses on the care and services available to

recipients. Moreover, while Arkansas Medical Society read 

Wilder to mean that the Boren Amendment was intended to 

benefit providers simply because it "concerned their 

reimbursement," 6 F.3d at 526, Wilder actually relied on 

the fact that the Boren Amendment "establishe[d] a system 

_________________________________________________________________ 

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 1983. However, the 

Court's opinion provides no indication that the hospital's right to 

proceed 

under S 1983 was challenged, and the Court did not address the issue. 

 19 
for 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 Seventh 

Circuit held that Medicaid providers may assert Section 

30(A) claims under S 1983, but the opinion provides no 

indication that the Seventh Circuit was presented with the 

question whether Section 30(A) was intended to benefit 

providers. Instead, the opinion merely addresses-- and 

rejects -- the district court's holding that providers could 

not sue under Section 30(A) because the term "geographic 

area"19 is so "vague and amorphous" that its enforcement 

would strain judicial competence. Methodist Hosp. v. 

Indiana Family and Social Services Admin., 860 F. Supp. 

1309, 1331- 33 (N.D. In. 1994). 

In Visiting Nurse Ass'n of North Shore, Inc. v. Bullen, 

supra, the argument presented to the First Circuit 

regarding the intended-to-benefit requirement was notably 

different from the argument presented to us. In Visiting 

Nurse Ass'n, it was argued that Section 30(A), unlike the 

Boren Amendment, is not intended to benefit providers 

because Section 30(A) "does not list specific categories of 

health care providers (e.g., hospitals, nursing facilities, and 

intermediate care facilities." 93 F.3d at 1004. The First 

Circuit rejected this attempted distinction and wrote: 

 The Wilder Court first observed that the statute "is 

 phrased in terms benefitting health care providers," 

 and leaves "little doubt that health care providers are 

 the intended beneficiaries," then proceeded to illustrate 

 how the plain language of the Boren Amendment 

 "establishes a system for reimbursement of providers" 

 through its listing of specific types of health care 

 providers. Nowhere did the Court indicate that the 

 more general term "providers" would not suffice, 

 however, or that a listing of specific types of providers 

_________________________________________________________________ 

19. As previously noted, Section 30(A) requires that 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)(emphasis added). 

 20 
 is a sine qua non without which a congressional intent 

 to benefit health care providers could not be inferred. 

 As long 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. 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 Circuit rejected 

the particular argument advanced to it, its decision has no 

bearing on the issue we address here. And to the extent 

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 courts of 

appeals on the question before us, we agree with the Fifth 

Circuit's analysis in Evergreen Presbyterian Ministries, and 

we respectfully decline to follow the contrary courts of 

appeals decisions. 

E. 

Our conclusion that providers may not assert Section 

30(A) claims under S 1983 does not mean that Section 

30(A)'s important "quality of care" and access requirements 

will go unenforced. Not only is HHS responsible for

ensuring that state plans are administered in accordance 

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 plaintiffs. 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 claims 

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 HealthChoices 

program are so low that compliance with the "quality of 

care" and access requirements is threatened, we see no 

reason to believe that recipients in the affected area of the 

 21 
Commonwealth will not seek legal redress to ensure that 

these critical mandates are met. 

IV. 

For the reasons explained above, the order of the District 

Court is affirmed. 

 22 
BECKER, 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 provider 

plaintiffs. To reach the result that it was not, the majority 

must distinguish the case central to the outcome, Wilder v. 

Virginia Hospital Association, 496 U.S. 498 (1990), which 

held that the Boren Amendment, a statute that by its 

express terms required states to establish a scheme for 

reimbursement of Medicaid healthcare providers, is 

intended to benefit providers. The majority attempts to do 

so by reasoning that the Boren Amendment and Section 

30(A) "contrast[ ] sharply." Maj. Op. at 11. I disagree, for as 

I will explain, the two statutes confer nearly identical rights 

on providers. Hence this case is squarely controlled by 

Wilder, which compels the conclusion that healthcare 

providers may sue under S 1983 to enforce their rights 

under Section 30(A). The clear majority of Circuits to 

address the question whether healthcare providers may 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 definition of 

reimbursement rates is absent from Section 30(A). The 

rationale of Wilder, however, renders this difference 

immaterial, since Wilder nowhere relied on the Boren 

Amendment's reference to provider costs in concluding that 

providers were intended beneficiaries of that statute. 

Rather, Wilder clearly explained that the reason providers 

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 providers for 

services rendered. 

_________________________________________________________________ 

* The Honorable Carol Los Mansmann participated in the oral argument 

and joined in this opinion, but died before the opinion could be filed. 

 23 
Much of the majority opinion is devoted to explaining 

why Medicaid recipients are among the intended 

beneficiaries of Section 30(A). I agree, but a statute 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 whether 

Congress also intended Section 30(A) to benefit Medicaid 

providers. By its own terms, Section 30(A) is addressed to 

both healthcare providers and Medicaid recipients, for, like 

the Boren Amendment, it expressly requires states to 

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 analytical 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 will therefore 

supply that broader context, which implicates the 

relationship between provider costs and the availability 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 evidence 

designed to demonstrate that the HMOs, in administering 

Medicaid, have squeezed the pharmacies and reduced 

provider reimbursement rates to levels that, according to 

the plaintiffs, are below any reasonable measure of the cost 

of providing care and services. As a practical matter, if the 

HMOs set provider reimbursement rates too low, providers 

will simply refuse to render services to Medicaid recipients, 

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 plaintiffs 

also produced evidence that no pharmacy within fifteen 

contiguous zip codes in Bucks and Montgomery counties 

participates in Medicaid, and that among those pharmacies 

in the five-county area that continue to participate in 

Medicaid, quality of care has suffered as a result of 

inadequate reimbursement rates. 

 24 
While the plaintiffs' submissions in this area are 

contested, and failure to establish that the challenged 

reimbursement rates violate Section 30(A)'s quality of care 

and adequate access mandates would be fatal to their 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). Moreover, 

given the financial straits of Medicaid recipients and 

providers' access to information on the relationship between 

reimbursement rates and provider participation in 

Medicaid, healthcare providers may be better able to 

enforce recipients' and providers' shared interest in 

assuring that provider reimbursement rates comply with 

the mandates of Section 30(A). 

I thus respectfully dissent from the conclusion that 

S 1983 does not grant providers a cause of action to sue for 

violations of Section 30(A). Since the Court has not 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 resolve 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 Section 

30(A)'s quality of care and adequate access mandates, 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 Department 

agrees to pay the HMOs on a per-person basis, and permits 

the HMOs to set pharmacy reimbursement rates. The 

plaintiffs allege that the pharmacy reimbursement rates set 

by the HMOs are below any reasonable estimate of 

pharmacies' costs, and that unless rates are at least 

adequate to cover providers' costs, they cannot be 

consistent with quality of care or sufficient to induce 

enough pharmacies to participate in Medicaid so that 

Medicaid recipients have the same access to pharmacies as 

 25 
members of the general population, as is required by 

Section 30(A). 

In support of their claim that current rates are 

inconsistent with quality of care, the plaintiff pharmacists 

produced evidence that: (1) low reimbursement rates

prevent them from dispensing or stocking certain drugs; (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 leading to 

health problems when the new medication is ineffective; (5) 

HealthChoices HMOs restrict the formularies that may be 

used to fill customer prescriptions, causing delays in 

customers' prescriptions being filled, often to the detriment 

of customers' health; and (6) HealthChoices HMOs make 

medical judgments on a daily basis over the phone and 

deny medications that they know nothing about. 

In support of their allegation that the reimbursement 

rates fall below the minimum rates mandated by Section 

30(A)'s access requirement, plaintiffs produced evidence 

showing a precipitous drop in the number of pharmacies in 

the five-county area who participate in Medicaid since the 

inception of HealthChoices. In particular, 50% of the 

pharmacies that participated in Medicaid have dropped out 

since 1997. Plaintiffs also produced evidence that the 

HealthChoices reimbursement rates are the lowest rates in 

the five-county area, and that whereas the Blue Cross 

network has 963 participating pharmacies in the fivecounty 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 codes in 

Bucks and Montgomery counties. Consequently, according 

to the plaintiffs, Medicaid recipients lack access to 

pharmacies to the same extent as the general population. 

Whether this evidence is sufficient to create a triable 

issue of fact as to whether the current rates violate Section 

30(A)'s quality of care and adequate access mandate is, of 

 26 
course, 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 concrete 

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 healthcare 

providers and Medicaid recipients, as it expressly requires 

states to establish a scheme for provider reimbursement 

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 the plan" 

and to reimburse providers at rates that are "consistent 

with efficiency, economy, and quality of care and are 

sufficient to enlist enough providers so 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." 

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 suffer if 

provider reimbursement rates are too low to induce a 

sufficient number of providers to participate in Medicaid: 

 There is no doubt that Medicaid reimbursement rates 

 have not kept pace with average community rates. . .. 

 The Committee believes that, without adequate 

 payment levels, it is simply unrealistic to expect 

 physicians to participate in the program. . . .[T]he 

 Committee bill would require that Medicaid payments 

 for all practitioners be sufficient to enlist enough 

 providers so that care and service 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. 

H.R. Rep. No. 101-247, at 390 (1989), reprinted in 1989 

U.S.C.C.A.N. 2060, 2116. As the majority notes, Section 

 27 
30(A)'s legislative history also indicates that Congress 

intended Section 30(A) to be enforced through private 

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 expected 

to take appropriate remedial action."). 

The evidence we have described illustrates the manner in 

which the interests of healthcare providers and Medicaid 

recipients are inextricably intertwined. As we noted in West 

Virginia University Hospitals, Inc. v. Casey, 885 F.2d 11 (3d 

Cir. 1989), aff 'd on other grounds, 499 U.S. 83 (1991): 

 We recognize, of course, that the primary purpose of 

 medicaid is to achieve the praiseworthy social objective 

 of granting health care coverage to those who cannot 

 afford it. It does not necessarily follow, however, 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 medical care, 

 the specific purpose of section 1396a(a)(13)(A) is to 

 assure state compliance with some federal standard 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 patients are 

 bonded by a common goal, the delivery of adequate 

 health care by the hospitals to state medicaid patients 

 and the enjoyment of such care by the patients. The 

 interests of both are intertwined and hospitals have a 

 concrete stake in reimbursement in accordance 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 issue 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 Wilder, which 

 28 
of course remains binding on this Court unless the 

Supreme Court overrules it. See State Oil Co. v. Khan, 522 

U.S. 3, 20 (1997) ("[I]t is this Court's prerogative alone to 

overrule one of its precedents."). The first Court of Appeals 

to consider the issue was the Eighth Circuit in Arkansas 

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 the 

Supreme Court in Wilder held was enforceable by providers 

under S 1983: 

 Our analysis in this case is greatly simplified by the 

 Wilder opinion. Although focusing on a different 

 subsection, Wilder addressed the same statute facing 

 us in this case. Suter urges a careful scrutiny of the 

 exact legislation at issue and Wilder has already done 

 that. . . . [T]he equal access provision is very analogous 

 to the Boren Amendment examined in Wilder; they 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 Section 

30(A), the Court determined that: 

 The question of whether the Medicaid providers are 

 intended beneficiaries is also easily resolved. Wilder 

 concluded that institutional providers were intended 

 beneficiaries of the Boren Amendment because the 

 Amendment concerned their reimbursement. Similarly, 

 the equal access provision [of Section 30(A)] addresses 

 payment for "care and services" provided by 

 noninstitutional providers. The providers here are 

 beneficiaries for the same reason that the providers 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 1983 

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 providers are 

among the intended beneficiaries of Section 30(A) for the 

 29 
same reason that the Supreme Court held that they were 

among the intended beneficiaries of the Boren Amendment: 

 The Wilder Court first observed that the[Boren 

 Amendment] "is phrased in terms benefitting health 

 care providers," and leaves "little doubt that health 

 care providers are the intended beneficiaries," then 

 proceeded to illustrate how the plain language 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 levels -- 

 providers are appropriately considered intended 

 beneficiaries. 

Id. at 1004 (emphasis and internal citations omitted). 

Similarly, the Seventh Circuit observed that because Wilder 

had not been overruled, "Wilder's holding binds us," and 

consequently held that providers have a private right of 

action under S 1983 to enforce Section 30(A). See Methodist 

Hosps., Inc. v. Sullivan, 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)."). Thus, most courts have found that 

whether S 1983 grants providers a cause of action to 

enforce Section 30(A) is an issue that is easily disposed of 

by Wilder. Until now, the only Circuit to hold otherwise is 

the Fifth Circuit in Evergreen Presbyterian Ministries, 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 not among 

the provision's intended beneficiaries.1 Like most Courts of 

_________________________________________________________________ 

1. I disagree with the majority's replacement of the requirement under 

S 1983 that "Congress must have intended that the provision in question 

 30 
Appeals to consider the issue, I believe that the inquiry into 

whether providers are among the intended beneficiaries 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 State finds. . . 

 are reasonable and adequate to meet the costs which 

 must be incurred by efficiently and economically 

 operated facilities in order to provide care and services 

 in conformity with applicable State and Federal laws, 

 regulations, and quality and safety standards and to 

 assure that individuals eligible for medical assistance 

_________________________________________________________________ 

benefit the plaintiff," Blessing v. Freestone , 520 U.S. 329, 340 (1997), 

with the stricter requirement, drawn from an implied right of action case, 

that the statute must be "draft[ed] . . . with an unmistakable 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 clear that: 

 [Whether a cause of action exists under S 1983] 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 to determine whether 

 Congress intended to create the private remedy asserted for the 

 violation of statutory rights. The test reflects a concern, 

grounded in 

 separation of powers, that Congress rather than the courts controls 

 the availability of remedies for violations of statutes. Because S 

1983 

 provides an alternative source of express congressional 

 authorization of private suits, these separation-of-powers concerns 

 are not present in a S 1983 case. 

Wilder, 496 U.S. at 508 n.9 (internal quotations and citations omitted). 

The Supreme Court has never held that to be enforceable under S 1983, 

a provision must also be "draft[ed] . . . with an unmistakable focus on 

the benefitted class," Cannon, 441 U.S. at 692, as the majority asserts. 

Rather, in the S 1983 context, a plaintiff must simply 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 (1989). 
 31 
 have reasonable access (taking into account geographic 

 location and reasonable travel time) to inpatient 

 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 available 

 under the plan . . . as may be necessary to safeguard 

 against unnecessary utilization of such care and 

 services and to assure that payments are consistent 

 with efficiency, economy, and quality of care and are 

 sufficient to enlist enough providers so 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(a)(30)(A). Comparing the two statutes, I 

can find no principled basis for holding that providers are 

intended beneficiaries of the Boren Amendment, as the 

Supreme Court held in Wilder, but are not intended 

beneficiaries of Section 30(A), as the majority holds today. 

In particular, I cannot accept the majority's contention 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 assistance 

must . . . provide . . . for payment . . . of . . . services . . . 

provided under the plan . . . ."); Section 30(A) ("A State plan 

for medical assistance must . . . provide . . . methods and 

procedures relating to . . . payment for, care and services 

available under the plan . . . ."). And both the Boren 

Amendment and Section 30(A) define reimbursement rates 

by reference to efficiency and economy. See Boren 

Amendment (defining rates by reference to "efficiently and 

economically operated facilities"); Section 30(A) (requiring 

states "to assure that payments are consistent with

efficiency [and] economy"). 

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

states to reimburse providers at rates that are sufficient to 

ensure quality of care. See Boren Amendment (requiring 

that reimbursement rates be "reasonable and adequate to 

meet the costs which must be incurred . . . in order to 

provide care and services in conformity with . . . quality 

and safety standards"); Section 30(A) (requiring states "to 

assure that payments are consistent with . . . quality 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 adequate access 

to healthcare. See Boren Amendment (requiring "rates . . . 

which . . . are reasonable and adequate . . . to assure that 

individuals eligible for medical assistance have reasonable 

access . . . to inpatient hospital services"); Section 30(A) 

(requiring states "to assure that payments are . . . sufficient 

to enlist enough providers so 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"). 

Thus, far from "contrast[ing] sharply," as the majority 

contends, see Maj. Op. at 11, the Boren Amendment and 

Section 30(A) confer on providers nearly identical rights to 

be reimbursed for services provided and to be reimbursed 

at a minimum rate that is defined by reference to quality of 

care and adequate access. See Ark. Med. Soc'y, Inc. v. 

Reynolds, 6 F.3d 519, 525 (8th Cir. 1993) ("[T]he equal 

access provision [of Section 30(A)] is very analogous to the 

Boren Amendment examined in Wilder; they are similar not 

only in function but also in the specific language 

employed."). This case is therefore squarely controlled by 

Wilder, and I would hold that healthcare providers may 

bring S 1983 actions to enforce the rights conferred on 

them by Section 30(A).2 

_________________________________________________________________ 

2. I fully concur in the majority's distinction between "the question 

whether a statute is intended to benefit particular plaintiffs" and "the 

question whether the statute in fact benefits those plaintiffs." Maj. Op. 

at 

8. Similarly, I agree with the majority's observation 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 Section 30(A). Maj. Op. at 

 33 
B. 

The majority's rationale relies heavily on the fact that 

Section 30(A) is addressed in part to recipients, since it 

defines provider reimbursement rates by reference to 

quality of care and adequate access. See Maj. Op. at 11 

("[Section 30(A)'s] directives to provide`quality of care' and 

adequate access . . . . are drafted with an unmistakable 

focus on Medicaid beneficiaries, not providers."); id. at 12 

("[Section 30(A)] demands that payments be set at levels 

that are sufficient to meet recipients' needs."); id. ("[T]he 

adequacy of payments [under Section 30(A)] is measured in 

relation to the health needs of recipients."); id. at 19 

("Section 30(A) focuses on the care and services available 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 require 

overruling Wilder, which squarely held that a statute that 

defines provider reimbursement rates by reference to 

Medicaid recipients' quality of care and Medicaid recipients' 

access to care and services may nonetheless be intended 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 should give 

the Court pause before concluding that the Boren 

Amendment was intended to benefit providers. As such, for 

purposes of determining whether providers are intended 

beneficiaries of Section 30(A), Wilder renders irrelevant the 

fact that Section 30(A) includes quality of care and 

adequate access guarantees. 

Inexplicably, then, the majority makes the adequate

access and quality of care guarantees that are found in 

_________________________________________________________________ 

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 services, not garbage 

collection services or security services. 

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

cornerstone of its analysis in holding that providers are not 

intended beneficiaries of Section 30(A). To be consistent 

with Wilder, which held that providers are intended

beneficiaries of the Boren Amendment, however, a rationale 

leading to the conclusion that providers are not intended 

beneficiaries of Section 30(A) must rest not on similarities 

between the Boren Amendment and Section 30(A), as does 

the vast bulk of the majority opinion, but rather on 

differences. 

C. 

The only difference between the Boren Amendment and

Section 30(A) that the majority relies on is the Boren 

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 Boren 

Amendment and the absence of such a reference in Section 

30(A) are immaterial for purposes of determining whether 

providers are among the intended beneficiaries of Section 

30(A). 

First, the language of the Boren Amendment did not 

create any independent right on the part of providers to be 

reimbursed for their costs without reference to quality of 

care, as the majority maintains. The majority repeatedly 

quotes the language in the Boren Amendment requiring 

payments to be "reasonable and adequate to meet the costs 

which must be incurred by efficiently and economically 

operated facilities," Maj. Op. at 10, 11, but neglects 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 economically 

operated facilities in order to provide care and services in 

conformity with applicable State and Federal laws, 

regulations, and quality and safety standards ." (emphases 

added). The plain language of the Boren Amendment thus 

explicitly defined "costs" by reference to quality of care, and 

created no independent right of providers to be reimbursed 

for their costs beyond that conferred by the quality of care 

requirement, such as exists in Section 30(A). 

 35 
I acknowledge that quality of care guarantees in the 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 conformity 

with . . . quality and safety standards," while Section 30(A) 

requires rates that "are consistent with . . . quality of care." 

I cannot agree with the majority's conclusion, however, that 

this difference is so significant that quality of care "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 reimbursement 

rate could be so low that it violates the Boren Amendment's 

requirement that rates meet "the costs which must be 

incurred by efficiently and economically operated facilities 

in order to provide care and services in conformity with 

applicable State and Federal laws, regulations, and quality 

and safety standards," yet nonetheless be "consistent with 

. . . quality of care," as mandated by Section 30(A). 

Even assuming, arguendo, that the majority is correct 

that the Boren Amendment created an independent right on 

the part of providers to be reimbursed for their costs 

without reference to quality of care, the plaintiffs in Wilder 

were suing to enforce both their right to be reimbursed at 

rates that covered their costs, as well as their independent 

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 the 

economically and efficiently incurred cost of providing care 

to Medicaid patients in hospitals and do not assure access 

to inpatient care.") (emphasis added and internal quotation 

marks omitted). Had Wilder's holding rested on the Boren 

Amendment's reference to provider costs, as the majority 

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 additional 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 action 

not for a violation of a statute as an undifferentiated whole, 

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

Constitution or laws" of the United States. See Blessing v. 

Freestone, 520 U.S. 329, 340 (1997) ("In order to seek 

redress through S 1983, . . . a plaintiff must assert the 

violation of a federal right, not merely a violation of federal 

law."); id. at 342 ("It was incumbent upon the respondents 

to identify with particularity the rights they claimed, since 

it is impossible to determine whether Title IV-D, as an 

undifferentiated whole, gives rise to undefined`rights.' "). By 

permitting the providers' suit to proceed, the Supreme 

Court necessarily held that providers are among the

intended beneficiaries of not only the Boren Amendment'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 services. 

Finally, and most importantly, the Supreme Court's 

rationale in Wilder made clear that in concluding that 

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 rather on the 

Boren Amendment's express requirement that states 

establish a scheme to reimburse providers for services 

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 why it 

concluded that the Boren Amendment "was phrased in 

terms benefitting health care providers." The remainder of 

the sentence, which the majority never fully quotes, makes 

clear what particular statutory language in the Boren 

Amendment the Court in Wilder was in fact relying on in 

concluding that the Boren Amendment was "phrased in

terms benefitting providers": 

 There can be little doubt that health care providers are 

 the intended beneficiaries of the Boren Amendment. 

 The provision establishes a system for reimbursement 

 of providers and is phrased in terms benefitting health 

 care providers: It requires a state plan to provide for 

 37 
 "payment of the hospital services, nursing facility 

 services, and services in an intermediate care facility for 

 the mentally retarded provided under the plan." 42 

 U.S.C. S 1396a(a)(13)(A) (1982 ed., Supp. V)

Wilder, 496 U.S. at 510 (internal alterations omitted) 

(emphasis added). 

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

the Wilder Court stated that the Boren Amendment "is 

phrased in terms benefitting health care providers: It 

requires a state plan to provide for `payment of the hospital 

services, nursing facility services, and services in an 

intermediate care facility for the mentally retarded provided 

under the plan,' " the Court was relying on language in the 

Boren Amendment other than the language it directly

quoted. It is difficult to imagine how a judicial opinion 

could be more clear about what particular statutory

language it is relying on to establish a given proposition 

than by expressly quoting that language immediately

following the proposition, as the Supreme Court did in 

Wilder. The majority's conclusion that the Court quoted 

only a portion of the statutory language that it relied on in 

concluding that the Boren Amendment was "phrased in

terms benefitting health care providers" is particularly 

puzzling given that, according to the majority, that portion 

of the Boren Amendment that the Court actually quoted in 

the passage above was insufficient to establish the

proposition for which it was cited, while that portion 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 providers," 

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 Amendment 

was "phrased in terms benefitting health care providers," 

would even bother to quote the particular language in the 

Boren Amendment requiring "payment of the hospital 

services, nursing facility services, and services in an 

intermediate care facility for the mentally retarded provided 

under the plan," given that, according to the majority, the 

nearly identical language in Section 30(A) requiring 

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

"manifests concern solely for the well-being of recipients." 

Maj. Op. at 12 (emphasis added).3 

_________________________________________________________________ 

3. The majority attempts to overcome the obvious difficulty posed by the 

Wilder Court's quotation of the particular language in the Boren 

Amendment that it was relying on by invoking the canon of construction 

that a statute should be construed to avoid rendering any part of it 

superfluous. According to the majority, if the reason 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 retarded 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 parsing phrases, and 

seeking shades of meaning in the interstices of sentences 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 nor the last time that a 

judicial opinion sought clarity at risk of redundancy. 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 state plan to provide for 

`payment of the hospital services, nursing facility services, and services 

in an intermediate care facility for the mentally retarded provided under 

the plan.' " 

At all events, the Supreme Court's statement that the Boren 

Amendment "establishes a system for reimbursement of providers" and 

the Supreme Court's conclusion that the Boren Amendment "is phrased 

in terms benefitting health care providers" because it "requires a state 

plan to provide for `payment of the hospital services, nursing facility 

services, and services in an intermediate care facility for the mentally 

retarded provided under the plan' " do not amount to "say[ing] exactly 

the same thing twice." Maj. Op. at 12. The first statement is addressed 

to the substance of the Boren Amendment (the Boren Amendment 

"establishes a system for reimbursement of providers," 496 U.S. at 510); 

the second statement is addressed to the Boren Amendment's text (the 

Boren Amendment "is phrased in terms benefitting health care providers: 

 39 
Given that the excerpt quoted above contains the Wilder 

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 Amendment's 

cost-reimbursement language," and that "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." 

Maj. Op. at 10 (emphases added). Nowhere in its analysis 

did the Court rely on the Boren Amendment's reference to 

provider costs, much less "stress" such language, as the 

majority contends. And whatever this Court may think 

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 reliance on a 

fact that played no role in the Court's rationale. Rather, the 

scope of the Wilder Court's holding must be determined by 

reference to the Wilder Court's ratio decidendi as articulated 

by the Wilder Court. 

As is readily apparent from the analysis quoted above, 

the Wilder Court made perfectly clear that in concluding 

that "there can be little doubt that healthcare providers are 

the intended beneficiaries of the Boren Amendment," it was 

relying on the language in the Boren Amendment requiring 

a state plan to provide for "payment of the hospital services, 

nursing facility services, and services in an intermediate 

care facility for the mentally retarded provided under the 

plan." See Ark. Med. Soc'y, Inc. v. Reynolds , 6 F.3d 519, 

526 (8th Cir. 1993) ("Wilder concluded that institutional 

providers were intended beneficiaries of the Boren 

_________________________________________________________________ 

It requires a state plan to provide for `payment of the hospital services, 

nursing facility services, and services in an intermediate care facility 

for 

the mentally retarded provided under the plan.' " 496 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 for Section 30(A) to 

benefit providers as opposed to simply knowing that providers would be 

benefitted -- calls for us . . . to take into account the precise 

statutory 

language adopted by Congress."). 

 40 
Amendment because the Amendment concerned their 

reimbursement."); see also Evergreen Presbyterian 

Ministries, Inc. v. Hood, 235 F.3d 908, 925 (5th Cir. 2000) 

("[T]he [Wilder] Court concluded that there was little 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 required a state 

plan to provide for their payment.") (internal quotations and 

alterations omitted); Visiting Nurse Ass'n of N. Shore, Inc. v. 

Bullen, 93 F.3d 997, 1004 (1st Cir. 1996) ("The Wilder 

Court . . . observed that the statute `is phrased in terms 

benefitting health care providers,' and . . . then proceeded 

to illustrate how the plain language of the Boren 

Amendment `establishes a system for reimbursement of 

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 requires a state 

plan to provide for `payment of the hospital services, 

nursing facility services, and services in an intermediate 

care facility for the mentally retarded provided under the 

plan,' " 496 U.S. at 510 (quoting the Boren Amendment), I 

would conclude that Section 30(A) is phrased in terms 

benefitting health care providers: It requires a state plan to 

provide for "payment for[ ] care and services available under 

the plan." See Ark. Med. Soc'y, 6 F.3d at 526 ("[T]he equal 

access provision [of Section 30(A)] addresses payment for 

`care and services' provided by noninstitutional providers. 

The providers here are beneficiaries for the same reason 

that the providers in Wilder were beneficiaries."); Visiting 

Nurse Ass'n, 93 F.3d at 1004 (1st Cir. 1996) ("As long 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) 

_________________________________________________________________ 

4. One further point needs to be made -- that the majority's departure 

from Wilder creates serious line-drawing problems. Whereas Wilder held 

that any statute that expressly requires states to pay providers is 

 41 
intended to benefit providers, the majority holds that 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 distinguish those 

payment floors that are intended to benefit providers 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 defined by reference to 

provider costs or provider economics. See Maj. Op. 12 (distinguishing 

Wilder on the ground that the Boren Amendment"measured the 

sufficiency of payments by reference to the economics 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 beneficiaries of a statute 

requiring 

states to pay providers some minimum amount turns on whether the 

language of the statute expressly defines the minimum reimbursement 

rate by reference to provider costs or provider economics, then providers 

would not be among the intended beneficiaries of a statute that required 

states to pay pharmacies $2,500 each time they dispense a given dosage 

of a particular prescription drug, but would be among 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 rates solely by 

reference to the health needs of recipients. See Maj. Op. at 12 

(observing 

that under Section 30(A), "the adequacy of payments is measured in 

relation to the health needs of recipients"). But if the majority's test 

of 

whether providers are intended beneficiaries of a statute requiring states 

to pay providers is whether the statute's language expressly defines 

reimbursement rates solely by reference to the health needs of 

recipients, then that test too, produces unreasonable results. Under 

such a test, providers would not be among the intended 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 beneficiaries of a 

statute whose language expressly required states to pay providers a 

dollar every time they filled a Medicaid prescription. 

Finally, it may be that the minimum reimbursement rates actually 

mandated by the Boren Amendment were lower than the actual 

minimum rates mandated by Section 30(A). For example, the Boren 

 42 
In sum, although there are differences between the 

specific language of the Boren Amendment and the specific 

language of Section 30(A), as there inevitably will be 

between any two statutes, these differences are immaterial 

in light of Wilder's rationale, and the Supreme Court in 

Wilder gave no indication that its rationale was"good for 

this day and train only." County of Washington v. Gunther, 

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 their 

rights under Section 30(A) was the Fifth Circuit in

Evergreen Presbyterian Ministries, Inc. v. Hood, 235 F.3d 

908 (5th Cir. 2000), which I would decline to follow. In 

holding that providers are not among the intended 

beneficiaries of Section 30(A), the Fifth Circuit in Evergreen 

relied heavily on the Supreme Court's decision in Blessing 

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 entitlement, 

and not simply a systemwide guarantee. Id. at 343. In 

Blessing, the plaintiffs were mothers whose children 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 enforce 42 

_________________________________________________________________ 

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 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." 

Fortunately, Wilder avoided the problem of distinguishing those 

mandatory payment floors that are intended to benefit 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 providers as much as a 

high minimum reimbursement rate), under Wilder as long as the statute 

expressly requires states to pay providers, providers are intended 

beneficiaries. 

 43 
U.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 create 

an individual right, enforceable under S 1983, to have 

states achieve substantial compliance with Title IV-D. First, 

the Court noted that the plaintiffs had failed to identify a 

particular provision of Title IV-D that grants them an 

individual entitlement, and may not simply sue to enforce 

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 rights they 

claimed, since it is impossible to determine whether Title 

IV-D, as an undifferentiated whole, gives rise to undefined 

`rights.' "). Second, the Court reasoned that because 

S 609(a)(8)'s "substantial compliance" requirement would be 

satisfied if the state provided the mandated services in only 

75% of the cases reviewed during the federal audit period, 

"even when a State is in `substantial compliance' with Title 

IV-D, any individual plaintiff might still be among the 10 or 

25 percent of persons whose needs ultimately go unmet." 

Id. at 344. Thus, "[f]ar from creating an individual 

entitlement to services, the standard [which plaintiffs 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 Blessing, 

plaintiffs' claims in this case are easily distinguishable from 

plaintiffs' claims in Blessing. First, unlike the plaintiffs in 

Blessing, the plaintiffs in this case have identified 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 Wilder, 

we held that health care providers had an enforceable right 

to reimbursement . . . as required by a particular provision 

in the Medicaid statute") (emphasis added). This case is 

therefore distinguishable from Blessing for the same reason 

that the Blessing Court concluded that Wilder was 

distinguishable from Blessing. 

 44 
Blessing is further distinguishable on the ground that in 

that case, the plaintiffs would not necessarily have obtained 

any benefit had they succeeded on the merits of their claim, 

since the provision that they sought to enforce under 

S 1983 required only "substantial compliance" with Title IVD. See Blessing, 520 U.S. at 344 ("[E]ven when a State is in 

`substantial compliance' with Title IV-D, any individual 

plaintiff might still be among the 10 or 25 percent of 

persons whose needs ultimately go unmet."). By contrast, 

in this case each individual plaintiff will necessarily benefit 

if they succeed on the merits, since they would each be 

individually entitled to reimbursement at higher rates. 

I therefore disagree with Evergreen's reliance on Blessing 

in concluding that Section 30(A) creates only a system-wide 

guarantee, not an individual entitlement on the part of 

providers. The Fifth Circuit in Evergreen illustrated its 

reasoning with the following example: 

 Assume we have a nursing home in Baton Rouge with 

 150 residents, which, following the [rate reduction at 

 issue], is forced into bankruptcy and then liquidation. 

 Assume further that the district court decides that the 

 relevant geographic market to measure the access of 

 recipients is the Baton Rouge market for nursing home 

 care and also that the district court concludes that the 

 recipients are entitled to the same access to nursing 

 home care in Baton Rouge as that of non-Medicaid 

 recipients. Finally, assume that, once the nursing 

 home closes, all 150 residents are able to fill vacant 

 beds in other facilities in Baton Rouge. Under this 

 scenario, there is no violation of the recipients' equal 

 access rights, despite the fact that the bankrupt 

 nursing home was put out of business. 

 From this example, it is apparent that while 

 recipients have an individual entitlement to equal 

 access to medical care, any benefit to healthcare 

 providers is indirect at best. The statute does not 

 confer any direct right upon the individual 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.

 45 
235 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 Section 

30(A) is not violated. See Evergreen, 235 F.3d at 929 

("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 increased 

reimbursement rates under a factual scenario in which 

Section 30(A) is not violated. But in a factual scenario 

where reimbursement rates are so low that Section 30(A)'s 

adequate access guarantee is violated, every provider who 

participates in Medicaid would be individually entitled to 

reimbursement at the higher rate mandated by Section 

30(A). 

Second, Evergreen incorrectly assumed that unless a

statute requiring providers to be reimbursed at a given rate 

ensures that no providers will ever be put out of business, 

the statute does not create any direct right on the part of 

providers. See Evergreen, 235 F.3d at 929 ("The statute 

does not confer any direct right upon the individual 

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."). Under any 

statute addressed to provider reimbursement, however, it 

will almost always be the case that some providers may go 

out of business notwithstanding the statute. But this 

possibility does not mean that the statute creates no 

individual entitlement on the part of providers. 

Consider, for example, a statute that expressly requires 

states to reimburse pharmacies at least $25 each time they 

dispense a given dosage of a particular prescription drug to 

a Medicaid recipient. A $25 reimbursement rate might force 

certain providers out of business, but it is hard to imagine 

a statute that more directly confers an individual 

entitlement on providers. Similarly, there was no guarantee 

in the Boren Amendment that no provider would ever be 

put out of business, but the Court in Wilder nonetheless 

held that the Boren Amendment conferred on providers 

rights that are enforceable under S 1983. 

Finally, the Evergreen Court mistakenly reasoned that 

because the minimum reimbursement rate mandated by 

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

criterion of Medicaid recipients' access to healthcare, it 

does not confer an individual entitlement on providers. 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 Section 

30(A) defines the mandatory minimum provider 

reimbursement rate by reference to the number of providers 

in the market place, however, does not make the rate any 

less mandatory or any less of a minimum. As long as a 

statute expressly requires providers to be reimbursed at 

rates that are at least equal to a defined minimum, then 

the statute creates an individual entitlement on the part of 

every provider to be reimbursed at that minimum, 

regardless whether the minimum is defined by reference to 

providers' costs, recipients' access, quality of care, market 

rates, or a fixed sum. 

Thus, contrary to the Fifth Circuit's conclusion that "it 

cannot be said that section 30(A) necessarily confers upon 

each provider an individual right to a particular payment," 

Section 30(A) clearly does confer upon each provider an 

individual right to be paid at rates that are at least equal to 

the statutory minimum. See Wilder, 496 U.S. at 510

("There can be little doubt that health care providers are 

the intended beneficiaries of the Boren Amendment. The 

provision establishes a system for reimbursement of

providers and is phrased in terms benefitting health care 

providers: It requires a state plan to provide for `payment of 

the hospital services, nursing facility services, and services 

in an intermediate care facility for the mentally retarded 

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 (1991) 

("Who else is more aggrieved by the absence of an adequate 

or reasonable hospital reimbursement rate than a 

disadvantaged hospital and who has a more compelling 

interest to press for a correction?"). 

 47 
V. 

Finally, although one can find isolated instances of 

Medicaid recipients suing to enforce Section 30(A), see, e.g., 

Evergreen Presbyterian Ministries, Inc. v. Hood, 235 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 Medicaid 

recipients will provide sufficient private enforcement. See 

Maj. Op. at 21-22 ("If, as the plaintiffs in this case allege, 

the rates set under the HealthChoices program are so low 

that compliance with the `quality of care' and access 

requirements is threatened, we see no reason to believe 

that recipients in the affected area of the Commonwealth 

will not seek legal redress to ensure that these critical 

mandates are met."). Medicaid recipients are, by definition, 

people facing severe financial hardship, and therefore 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 ensuring 

recipients' quality of care and adequate access, and 

healthcare providers are more likely than Medicaid 

recipients to possess information about the relationship 

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 have an 

idea of how a particular rate compares with provider costs 

_________________________________________________________________ 

5. To be sure, attorney's fees are available to a successful S 1983 

plaintiff. See 42 U.S.C. S 1988 ("In any action or proceeding to enforce a 

provision of section[ ] . . . 1983 . . . of this title, . . . 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 recipients in Section 30(A) 

cases, however, since such attorneys would assume the 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 the reasonableness of 

attorney's fees under federal fee shifting statutes, courts may not 

enhance the fee award above the "lodestar" amount to compensate 

attorneys for assuming the risk of receiving no payment for their services 

if the lawsuit failed). 

 48 
and the reimbursement rates offered by non-Medicaid

healthcare plans. Nor are Medicaid recipients likely to have 

ready access to statistical information on the extent to 

which healthcare is available to the general public, for 

purposes of determining whether current reimbursement 

rates comply with Section 30(A)'s adequate access mandate. 

By contrast, professional associations such as the 

pharmacists association plaintiff in this case are more 

likely to possess the market data necessary to determine 

whether a colorable claim under Section 30(A) exists. 

In sum, because Section 30(A) is expressly addressed to 

the financial incentives of healthcare providers to

participate in Medicaid, healthcare providers are wellsituated to vindicate recipients' and providers' shared 

interest in ensuring that provider reimbursement rates are 

consistent with quality of care and sufficient to guarantee 

Medicaid recipients access to care and services to the same 

extent as the general public. These practical considerations 

further support the result compelled by Wilder . 

VI. 

Because I believe that the question whether providers 

may bring S 1983 actions to enforce Section 30(A) is 

squarely controlled by Wilder, I would decline to follow 

Evergreen Presbyterian Ministries, Inc. v. Hood, 235 F.3d 

908 (5th Cir. 2000), and would join those Circuits that, 

relying on Wilder, have permitted providers to bring such 

claims. See Visiting Nurse Ass'n of N. Shore, Inc. v. Bullen, 

93 F.3d 997, 1005 (1st Cir. 1996) ("[W]e conclude that 

plaintiffs possess standing . . . to enforce section 

1396a(a)(30) . . . ."); Methodist Hosps., Inc. v. Sullivan, 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 using 42 

U.S.C. S 1983."). I thus respectfully dissent. 

To hold as have these other Courts would not of course 

be the end of the case, for the plaintiffs would still have 

 49 
significant hurdles in the next phase. In particular, 

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 that they 

violate either the quality of care or adequate access 

mandate contained in Section 30(A), a question on which I 

express no opinion here. Since the Court has not 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 resolve 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 Section 

30(A)'s quality of care and adequate access mandates. 

 50 
RENDELL, Circuit Judge, dissenting, with whom Chief

Judge BECKER joins: 

I join in Chief Judge Becker's thoughtful dissenting 

opinion and write separately only to offer a permissible 

reading of the statutory language different from that urged 

by the majority. The majority terms the language"complex" 

and "breaks it down." However, I see it as fairly straightforward -- at least regarding what we need to decide -- 

when properly parsed. If we were to "parse" the statute at 

issue in grammarian fashion, we would note that the"state 

plan" is the noun, "must provide," the verb, and "methods 

and procedures," the object. Then comes the descriptive 

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 services -- by 

individual recipients -- and the payment-- to providers -- 

for care and services. 

What then follows in the statute -- preceded by"as may 

be necessary . . ." -- is no more than a further descriptive 

phrase setting forth the barometer or standard against 

which the utilization and payment methods and procedures 

are to be measured. Why should only the users be able to 

challenge a plan that must pass muster not only in terms 

of the methods and procedures for "utilization," but also the 

methods and procedures for "payment?" 

I think it eminently reasonable to conclude that both 

aspects -- use and payment -- are foci, and that both 

constituencies can speak to whether the statutory 

requirement ("as may be necessary to . . .") has been 

fulfilled, and both should have the right to complain 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 provision, and 

I do not view the provision as hopelessly vague. Rather, I 

see no need to mention it because it sets forth a standard 

that is quite susceptible to proof. I have little difficulty 

imagining the gist of the testimony of recipients, providers, 

and state administrators as to how the procedures in place 

impact the sufficiency of payment and quality of service, so 

that judicial decision making can be exercised. I do, 

 51 
however, continue to have difficulty in understanding why 

there cannot be two intended beneficiaries, especially 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 actually 

quite insignificant. In repealing Boren, Congress replaced 

the standard for the rates ("reasonable and adequate") with 

the requirement that the state provide for a public process 

for determination of rates. What is significant, however, is 

the fact that the Boren Amendment language that had been 

held to afford a cause of action required that rates be 

"reasonable and adequate," and the language we are 

quibbling over similarly describes a standard for payments 

to providers. I see no meaningful distinction between the 

two and therefore respectfully dissent. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 52