Source: http://www.joeldufresnecase.com/supreme-court-opinions-federal/right-to-a-hearing/blum-v-yaretsky
Timestamp: 2019-07-20 04:54:40
Document Index: 213916487

Matched Legal Cases: ['§ 416', '§ 456', '§ 416', '§ 1983', '§ 1396', '§ 456', '§ 1396', '§ 367', '§ 1396', '§ 456', '§ 456', '§ 416', '§ 1396', '§ 1396', '§ 415', '§ 415', '§ 416', '§ 416', '§ 1983', '§ 420', '§ 414', '§ 415', '§ 456', '§ 435', '§ 1', '§ 1396', '§ 365', '§ 1396', '§ 1396', '§ 1396', '§ 414', '§ 416', '§ 421', '§ 1396', '§ 1396', '§ 456', '§ 416', '§ 456', '§ 731', '§ 1983', '§ 1983', '§ 1983', '§ 1983', '§ 1983', '§ 420', '§ 414', '§ 456', '§ 456', '§ 416', '§ 416', '§ 416', '§ 416', '§ 416', '§ 416', '§ 405']

Blum v. Yaretsky - Joel Dufresne Case
Argued: March 24, 1982
Warth v. Seldin, 422 U.S. 490, 502 (1975). Unless these individuals
can thus demonstrate the requisite case or controversy between themselves personally and [petitioners], "none may seek relief on behalf of himself or any other member of the class." O'Shea v. Littleton, 414 U.S. 488, 494 (1974).
From the beginning of this lawsuit, the respondents' challenge has been to the involuntary discharge or transfer of Medicaid patients from and by their nursing facilities without adequate safeguards. . . . Thus, the claim before this Court is whether state action attaches to a nursing facility's summary discharge or transfer of the patient. . . .
Brief for Respondents 21-22 (emphasis in original).
15. A completed DMS-1 form provides a summary of the patient's medical condition. Five of the eleven questions devoted to this subject require the assignment of numerical values. See 10 NYCRR App. C-1 (1978). A range of numerical values to be used in completing these questions are set forth in a second form, called the DMS-9. See ibid. The dissent's discussion of the DMS-9 suggests that completion of the DMS-1 form is a purely mechanical exercise that does not require the exercise of independent medical judgment. The dissent's discussion is incomplete. The other six questions on the DMS-1 ask the physician such questions as whether the patient requires daily supervision by a registered nurse, whether complications would arise without skilled nursing care, whether a program of therapy is necessary, and, if so, what kind, whether the patient should be considered for different levels of care, and whether the patient is medically qualified for the level of care he or she is receiving. The physician brings to bear his own medical judgment in answering these questions; their placement on the form would be inexplicable if the numerical scores were dispositive.
16. The dissent belittles this fact by noting that the decision to depart from the form in admitting a patient is made by a physician member of the nursing home's URC, and that such persons are "part and parcel of the statutory cost control process." Post at 1022. This signifies nothing more than the fact, disputed by no one, that the State requires utilization review in order to reduce unnecessary Medicaid expenditures. It remains true that physician members of the URC's are not employed by the State and, more important, render medical judgments concerning the patient's health needs that the State does not prescribe and for which it is not responsible. We must also emphasize, of course, that we are ultimately concerned with decisions to transfer patients who have already been admitted.
Apropos of this relevant issue, the dissent observes, post at 1023, that once a patient has been admitted, the State requires, as a condition to the disbursement of Medicaid funds, that, within five days after admission, the nursing home operator assess the patient's status according to standards contained in the DMS-1 and DMS-9 forms. As the dissent is also aware, post at 1023, n. 10, a physician member of the URC has the power to determine that the patient needs the level of care he is receiving despite an adverse score on the DMS-1. 10 NYCRR §§ 416.9(a)(2)(i), 421.13(a)(2)(i) (1980). That decision, rendered after consultation with the patient's attending physician, is purely a medical judgment for which the State, as before, is not responsible.
17. The dissent condemns us for conducting a "cursory" review of the regulations governing utilization review, post at 1019, and pointedly asks "where . . . is the Court's discussion of the frequent utilization reviews that occur after admission?" Post at 1024. The dissent, in its headlong dive into the sea of state regulations, forgets that patient transfers to lower levels of care initiated by utilization review committees are simply not part of this case. As we noted earlier, such transfers were the subject of a consent judgment in October, 1979. We are concerned only with transfers initiated by the patients' attending physicians or the nursing home administrators themselves. Therefore, we have focused on regulations that concern decisions which are not the product of URC recommendations. As we explain in the text, those regulations do not demonstrate that the State is responsible for the transfers with which we are concerned.
18. Federal regulations also require SNF's and HRF's to obtain from admitting physicians a plan of discharge for each patient. 42 CFR § 456.280 (b)(6), 456.380(b)(6) (1981). State regulations require that nursing home staff members assist in the preparation of these plans, which are designed to summarize
the patient's potential for return to the community, for transfer to another more appropriate setting or for achieving or maintaining the best obtainable level of function in the nursing home.
10 NYCRR §§ 416.1(k)(2)(ii), 421.3(b)(2) (1976). These requirements hardly make the State responsible for actual decisions to discharge or transfer particular patients.
19. The dissent characterizes as "factually unfounded," post at 1014, our conclusion that decisions initiated by nursing homes and physicians to transfer patients to lower levels of care ultimately depend on private judgments about the health needs of the patients. It asserts that different levels of care exist only because of the State's desire to save money, and that the same interest explains the requirement that nursing homes transfer patients who do not need the care they are receiving. Post at 1014-1019. We do not suggest otherwise. Transfers to lower levels of care are not mandated by the patients' health needs. But they occur only after an assessment of those needs. In other words, although "downward" transfers are made possible and encouraged for efficiency reasons, they can occur only after the decision is made that the patient does not need the care he or she is currently receiving. The State is simply not responsible for that decision,although it clearly responds to it. In concrete terms, therefore, if a particular patient objects to his transfer to a different nursing facility, the "fault" lies not with the State, but ultimately with the judgment, made by concededly private parties, that he is receiving expensive care that he does not need. That judgment is a medical one, not a question of accounting.
20. This case, of course, does not involve the "under color of law" requirement of § 1983. Nevertheless, it is clear that the reasoning employed in Polk County is equally applicable to "state action" cases such as this one.
21. Respondents also point to statutes requiring the State periodically to send medical review teams to conduct on-site inspections of all SNF's and HRF's. During these inspections, state employees are required to review the appropriateness of each patient's continued stay in the facility and to report their findings to the nursing home and the agency responsible for administering the Medicaid program in the State. 42 U.S.C. §§ 1396a(a) (26), (31), 1396b(g)(1)(D) (1976 ed. and Supp. IV). See 42 CFR § 456.611 (1981). Petitioners concede that these inspections can result in a discharge or transfer directed by state health officials. As they correctly argue, however, transfers of this kind are not the subject of respondents' complaint, and none is presented by the record.
22. As a postscript to their "state action" arguments, respondents suggest that this Court avoid the issue by holding that federal and state statutes and regulations require the procedural safeguards which they seek. The lower courts did not pass on this assertion, and we decline to do so as well.
Congress established the Medicaid program in 1965 as Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (1976 ed. and Supp. IV), to provide federal financial assistance [p994] to States that choose to reimburse certain medical costs incurred by the poor. As a participating State, New York provides Medicaid assistance to eligible persons who receive care in private nursing homes, which are designated as either "skilled nursing facilities" (SNF's) or "health related facilities" (HRF's). [n1] The latter provide less extensive, and generally less expensive, medical care than the former. [n2] Nursing homes chosen by Medicaid patients are directly reimbursed by the State for the reasonable cost of health care services, N.Y.Soc.Serv.Law § 367-a.1 (McKinney Supp.1981).
An individual must meet two conditions to obtain Medicaid assistance. He must satisfy eligibility standards defined in terms of income or resources, and he must seek medically necessary services. See 42 U.S.C. § 1396. To assure that the latter condition is satisfied, [n3] federal regulations require each nursing home to establish a utilization review committee (URC) of physicians whose functions include periodically assessing [p995] whether each patient is receiving the appropriate level of care, and thus whether the patient's continued stay in the facility is justified. [n4] 42 CFR §§ 456.305, 456.406 (1981). If the URC determines that the patient should be discharged or transferred to a different level of care, either more or less intensive, it must notify the state agency responsible for administering Medicaid assistance. [n5] 42 CFR §§ 456.337(c), 456.437(d) (1981); 10 NYCRR §§ 416.9(f)(2), (3), 421.13(f)(2), (3) (1980).
At the time their complaint was filed, respondents Yaretsky and Cuevas were patients in the American Nursing Home, an SNF located in New York City. Both were recipients of assistance under the Medicaid program. In December, 1975, the nursing home's URC decided that respondents did not need the care they were receiving, and should be transferred to a lower level of care in an HRF. New York City officials, who were then responsible for administering the Medicaid program in the city, were notified of this decision, and prepared to reduce or terminate payments to the nursing home for respondents' care. Following administrative hearings, state social service officials affirmed the decision to discontinue benefits unless respondents accepted a transfer to an HRF providing a reduced level of care.
Respondents then commenced this suit, acting individually and on behalf of a class of Medicaid-eligible residents of New [p996] York nursing homes. [n6] Named as defendants were the Commissioners of the New York Department of Social Services and the Department of Health. Respondents alleged in part that the defendants had not afforded them adequate notice either of URC decisions and the reasons supporting them or of their right to an administrative hearing to challenge those decisions. [n7] Respondents maintained that these actions violated their rights under state and federal law and under the Due Process Clause of the Fourteenth Amendment. They sought injunctive relief and damages. [n8]
In January, 1978, the District Court certified a class [n9] and issued a preliminary injunction, restraining the defendants [p997] from reducing or terminating Medicaid benefits without timely written notice to the patients, provided by state or local officials, of the reasons for the URC decision, the defendants' proposed action, and the patients' right to an evidentiary hearing and continued benefits pending administrative resolution of the claim. App. 100-101, 112. [n10] The court's accompanying opinion relied primarily on existing federal and state regulations. Id. at 112-115.
In March, 1979, the District Court issued a pretrial order that identified a new claim raised by respondents that a panoply of procedural safeguards should apply to URC decisions transferring a patient to higher, i.e., more intensive, level of medical care, as well as to decisions recommending transfers to a lower level of care. In addition, respondents claimed that such safeguards were required prior to transfers of any kind initiated by the nursing homes themselves, or by the patients' attending physicians. Id. at 157, ¶ II(J); 166-167, ¶ II(J). Respondents asserted that all of these transfers deprived patients of interests protected by the Fourteenth Amendment, and were the product of "state action." Id. at 167, ¶ II(J). [n11]
In October, 1979, the District Court approved a consent judgment incorporating the relief previously awarded by the preliminary injunction and establishing additional substantive and procedural rights applicable to URC-initiated transfers to lower levels of care. Id. at 227-239. The consent judgment left several issues of law to be decided by the District Court. The most important, for our purposes, was
whether there is state action and a constitutional right to [p998] a pre-transfer evidentiary hearing in a patient transfer to a higher level of care and/or a patient transfer initiated by the facility or its agents.
Id. at 234-235, VIII(A)(1). Ultimately, the District Court answered that question in respondents' favor, although without elaborating its reasons. Id. at 240. The court permanently enjoined petitioners, as well as all SNF's and HRF's in the State, from permitting or ordering the discharge of class members, or their transfer to a different level of care, without providing advance written notice and an evidentiary hearing on "the validity and appropriateness of the proposed action." Id. at 242-243.
The Court of Appeals for the Second Circuit affirmed that portion of the District Court's judgment we have described above. 629 F.2d 817 (1980). [n12] The court held that URC-initiated transfers from a lower level of care to a higher one, and all discharges and transfers initiated by the nursing homes or attending physicians, "involve state action affecting constitutionally protected property and liberty interests." Id. at 820. The court premised its identification of state action on the fact that state authorities "responded" to the challenged transfers by adjusting the patients' Medicaid benefits. Ibid. Citing our opinion in Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351 (1974), the court viewed this response as establishing a sufficiently close "nexus" between the State and either the nursing homes or the URC's to justify treating their actions as those of the State itself.
We granted certiorari to consider the Court of Appeals' conclusions about the nature of state action. 454 U.S. 815 (1981). We now reverse its judgment. [p999]
We first address a question raised by petitioners regarding our jurisdiction under Article III. They contend that respondents, who were threatened with URC-initiated transfers to lower levels of care, are without standing to object either to URC-initiated transfers to higher levels of care or to transfers of any kind initiated by nursing homes or attending physicians. According to petitioners, respondents obtained complete relief in the consent judgment approved by the District Court in October, 1979, which afforded substantive and procedural rights to patients who are the subject of URC-initiated transfers to lower level of care. Since they have not been threatened with transfers of any other kind, they have no standing to object, and the District Court consequently was without Art. III jurisdiction to enter its judgment.
It is axiomatic that the judicial power conferred by Art. III may not be exercised unless the plaintiff shows "that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant." Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99 (1979). It is not enough that the conduct of which the plaintiff complains will injure someone. The complaining party must also show that he is within the class of persons who will be concretely affected. Nor does a plaintiff who has been subject to injurious conduct of one kind possess by virtue of that injury the necessary stake in litigating conduct of another kind, although similar, to which he has not been subject. See Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 166-167 (1972).
Respondents appear to recognize these principles, but contend that, although the October, 1979, consent judgment halted the implementation of adverse URC decisions recommending discharge or transfer to lower levels of care, the URC determinations themselves were left undisturbed. These determinations reflected the judgment of physicians, chosen by the [p1000] nursing homes, that respondents' continued stay in their facilities was not medically necessary. Consequently, respondents maintain that they are subject to the serious threat that the nursing home administrators will reach similar conclusions, and will themselves initiate patient discharges or transfers without adequate notice or hearings. Petitioners belittle this suggestion, noting that the consent judgment permanently enjoined all New York nursing homes, as well as petitioners, from implementing URC transfers to lower levels of care; this injunction bars the nursing homes from adopting the URC decisions as their own. Petitioners concede, however, that the consent judgment permits the nursing homes and respondents' attending physicians to decide independently to initiate transfers.
We conclude that the threat of facility-initiated discharges or transfers to lower levels of care is sufficiently substantial that respondents have standing to challenge their procedural adequacy. In reaching this conclusion, we are mindful of
the primary conception that federal judicial power is to be exercised . . . only at the instance of one who is himself immediately harmed, or immediately threatened with harm, by the challenged action.
Poe v. Ullman, 367 U.S. 497, 504 (1961). Of course, "[o]ne does not have to await the consummation of threatened injury to obtain preventive relief." Pennsylvania v. West Virginia, 262 U.S. 553, 593 (1923), quoted in Babbitt v. Farm Workers, 442 U.S. 289, 298 (1979). "[T]he question becomes whether any perceived threat to respondents is sufficiently real and immediate to show an existing controversy. . . ." O'Shea v. Littleton, 414 U.S. 488, 496 (1974). Even accepting petitioners' characterization of the scope of the permanent injunction embodied in the consent judgment, the nursing homes in which respondents reside remain free to determine independently that respondents' continued stay at current levels of care is not medically necessary. The possibility that they will do so is not "imaginary or speculative." Younger v. Harris, 401 [p1001] U.S. 37, 42 (1971). In light of similar determinations already made by the committee of physicians chosen by the facilities to make such assessments, the threat is quite realistic. See O'Shea v. Littleton, supra, at 496 ("past wrongs are evidence bearing on whether there is real and immediate threat of repeated injury").
We cannot conclude, however, that the threat of transfers to higher levels of care, whether initiated by the URC's, the nursing homes, or attending physicians, is "of sufficient immediacy and reality," Golden v. Zwickler, 394 U.S. 103, 108 (1969), that respondents have standing to seek an adjudication of the procedures attending such transfers. Nothing in the record available to this Court suggests that any of the individual respondents have been either transferred to more intensive care or threatened with such transfers. It is not inconceivable that respondents will one day confront this eventuality, but assessing the possibility now would "tak[e] us into the area of speculation and conjecture." O'Shea v. Littleton, supra, at 497. [n13]
Moreover, the conditions under which such transfers occur are sufficiently different from those which respondents do have standing to challenge that any judicial assessment of their procedural adequacy would be wholly gratuitous and advisory. Transfers to higher levels of care are recommended when the patient's medical needs cannot be satisfied by the facility in which he or she currently resides. Although [p1002] respondents contend that all transfers threaten elderly patients with physical or psychological trauma, one may infer that refusal to accept a transfer to a higher level of care could itself be a decision with potentially traumatic consequences. The same cannot be said of discharges or transfers to less intensive care. In addition, transfers to more intensive care typically result in an increase in Medicaid benefits to match the increased cost of medically necessary care. Respondents' constitutional attack on discharges or transfers to a lower level of care presupposes a deprivation of protected property interests. Finally, since July, 1978, petitioners have adhered to a policy permitting Medicaid patients to refuse URC-recommended transfers to higher levels of care without jeopardizing their Medicaid benefits. App. 180, ¶ 56. No similar policy was in force with respect to other transfers until the District Court mandated its adoption.
We conclude, therefore, that, although respondents have standing to challenge facility-initiated discharges and transfers to lower levels of care, the District Court exceeded its authority in adjudicating the procedures governing transfers to higher levels of care. We turn now to the "state action" question presented by petitioners.
The Fourteenth Amendment of the Constitution provides in part that "[n]o State shall . . . deprive any person of life, liberty, or property without due process of law." Since this Court's decision in the Civil Rights Cases, 109 U.S. 3 (1883),
the principle has become firmly embedded in our constitutional law that the action inhibited by the first section of the Fourteenth Amendment is only such action as may fairly be said to be that of the States.
Shelley v. Kraemer, 334 U.S. 1, 13 (1948). "That Amendment erects no shield against merely private conduct, however discriminatory or wrongful." Ibid. See Jackson v. Metropolitan Edison Co., 419 [p1003] U.S. 345 (1974); Adickes v. S. H. Kress & Co., 398 U.S. 144 (1970).
Faithful adherence to the "state action" requirement of the Fourteenth Amendment requires careful attention to the gravamen of the plaintiff's complaint. In this case, respondents objected to the involuntary discharge or transfer of Medicaid patients by their nursing homes without certain procedural safeguards. [n14] They have named as defendants state officials responsible for administering the Medicaid program in New York. These officials are also responsible for regulating nursing homes in the State, including those in which respondents were receiving care. But respondents are not challenging particular state regulations or procedures, and their arguments concede that the decision to discharge or transfer a patient originates not with state officials, but with nursing homes that are privately owned and operated. Their lawsuit, therefore, seeks to hold state officials liable for the actions of private parties, and the injunctive relief they have obtained requires the State to adopt regulations that will prohibit the private conduct of which they complain.
This case is obviously different from those cases in which the defendant is a private party and the question is whether his conduct has sufficiently received the imprimatur of the State so as to make it "state" action for purposes of the Fourteenth Amendment. See, e.g., Flagg Bros., Inc. v. Brooks, 436 U.S. 149 (1978); Jackson v. Metropolitan Edison Co., supra; Moose Lodge No. 107 v. Irvis, 407 U.S. 163 (1972); [p1004] Adickes v. S. H. Kress & Co., supra. It also differs from other "state action" cases in which the challenged conduct consists of enforcement of state laws or regulations by state officials who are themselves parties in the lawsuit; in such cases, the question typically is whether the private motives which triggered the enforcement of those laws can fairly be attributed to the State. See, e.g., Peterson v. City of Greenville, 373 U.S. 244 (1963). But both these types of cases shed light upon the analysis necessary to resolve the present case.
First, although it is apparent that nursing homes in New York are extensively regulated,
[t]he mere fact that a business is subject to state regulation does not, by itself, convert its action into that of the State for purposes of the Fourteenth Amendment.
Jackson v. Metropolitan Edison Co., 419 U.S. at 350. The complaining party must also show that
there is a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself.
Id. at 351. The purpose of this requirement is to assure that constitutional standards are invoked only when it can be said that the State is responsible for the specific conduct of which the plaintiff complains. The importance of this assurance is evident when, as in this case, the complaining party seeks to hold the State liable for the actions of private parties.
Second, although the factual setting of each case will be significant, our precedents indicate that a State normally can be held responsible for a private decision only when it has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the State. Flagg Bros., Inc. v. Brooks, supra, at 166; Jackson v. Metropolitan Edison Co., supra, at 357; Moose Lodge No. 107 v. Irvis, supra, at 173; Adickes v. S. H. Kress & Co., supra, at 170. Mere approval of or acquiescence in the initiatives of a private party is not sufficient to justify holding the State responsible for those [p1005] initiatives under the terms of the Fourteenth Amendment. See Flagg Bros., supra, at 164-165; Jackson v. Metropolitan Edison Co., supra, at 357.
Third, the required nexus may be present if the private entity has exercised powers that are "traditionally the exclusive prerogative of the State." Jackson v. Metropolitan Edison Co., supra, at 353; see Flagg Bros., Inc. v. Brooks, supra, at 157-161.
Analyzed in the light of these principles, the Court of Appeals' finding of state action cannot stand. The court reasoned that state action was present in the discharge or transfer decisions implemented by the nursing homes because the State responded to those decisions by adjusting the patient's Medicaid benefits. Respondents, however, do not challenge the adjustment of benefits, but the discharge or transfer of patients to lower levels of care without adequate notice or hearings. That the State responds to such actions by adjusting benefits does not render it responsible for those actions. The decisions about which respondents complain are made by physicians and nursing home administrators, all of whom are concededly private parties. There is no suggestion that those decisions were influenced in any degree by the State's obligation to adjust benefits in conformity with changes in the cost of medically necessary care.
Respondents do not rest on the Court of Appeals' rationale, however. They argue that the State "affirmatively commands" the summary discharge or transfer of Medicaid patients who are thought to be inappropriately placed in their nursing facilities. Were this characterization accurate, we would have a different question before us. However, our review of the statutes and regulations identified by respondents does not support respondents' characterization of them.
As our earlier summary of the Medicaid program explained, a patient must meet two essential conditions in order to obtain financial assistance. He must satisfy eligibility criteria [p1006] defined in terms of income and resources, and he must seek medically necessary services. 42 U.S.C. § 1396. To assure that nursing home services are medically necessary, federal law requires that a physician so certify at the time the Medicaid patient is admitted, and periodically thereafter. 42 U.S.C. § 1396b(g)(1) (1976 ed. and Supp. IV). New York requires that the physician complete a "long-term care placement form" devised by the Department of Health, called the DMS-1. 10 NYCRR §§ 415.1(a), 420.1(b) (1980). A completed form provides, inter alia, a numerical score corresponding to the physician's assessment of the patient's mental and physical health. As petitioners note, however, the physicians, and not the forms, make the decision about whether the patient's care is medically necessary. [n15] A physician can authorize a patient's admission to a nursing facility despite a "low" score on the form. See 10 NYCRR §§ 415.1(a)(2), 420.1(b)(2) (1978). [n16] We cannot say that the [p1007] State, by requiring completion of a form, is responsible for the physician's decision.
In any case, respondents' complaint is about nursing home decisions to discharge or transfer, not to admit, Medicaid patients. But we are not satisfied that the State is responsible for those decisions either. [n17] The regulations cited by respondents require SNF's and HRF's
to make all efforts possible to transfer patients to the appropriate level of care or [p1008] home as indicated by the patient's medical condition or needs,
10 NYCRR §§ 416.9(d)(1), 421.13(d)(1) (1980). [n18] The nursing homes are required to complete patient care assessment forms designed by the State and "provide the receiving facility or provider with a current copy of same at the time of discharge to an alternate level of care facility or home." 10 NYCRR §§ 416.9(d)(4), 421.13(d)(4) (1980).
These regulations do not require the nursing homes to rely on the forms in making discharge or transfer decisions, nor do they demonstrate that the State is responsible for the decision to discharge or transfer particular patients. Those decisions ultimately turn on medical judgments made by private parties according to professional standards that are not established by the State. [n19] This case, therefore, is not unlike [p1009] Polk County v. Dodson, 454 U.S. 312 (1981), in which the question was whether a public defender acts "under color of" state law within the meaning of 42 U.S.C. § 1983 when representing an indigent defendant in a state criminal proceeding. [n20] Although the public defender was employed by the State and appointed by the State to represent the respondent, we concluded that "[t]his assignment entailed functions and obligations in no way dependent on state authority." Id. at 318. The decisions made by the public defender in the course of representing his client were framed in accordance with professional canons of ethics, rather than dictated by any rule of conduct imposed by the State. The same is true of nursing home decisions to discharge or transfer particular patients because the care they are receiving is medically inappropriate. [n21]
Respondents next point to regulations which, they say, impose a range of penalties on nursing homes that fail to discharge or transfer patients whose continued stay is inappropriate. One regulation excludes from participation in the [p1010] Medicaid program health care providers who "[f]urnished items or services that are substantially in excess of the beneficiary's needs." 42 CFR § 420.101(a)(2) (1981). The State is also authorized to fine health care providers who violate applicable regulations. 10 NYCRR § 414.18 (1978). As we have previously concluded, however, those regulations themselves do not dictate the decision to discharge or transfer in a particular case. Consequently, penalties imposed for violating the regulations add nothing to respondents' claim of state action.
As an alternative position, respondents argue that, even if the State does not command the transfers at issue, it reviews and either approves or rejects them on the merits. The regulations cited by respondents will not bear this construction. Although the State requires the nursing homes to complete patient care assessment forms and file them with state Medicaid officials, 10 NYCRR §§ 415.1(a), 420.1(b) (1978), and although federal law requires that state officials review these assessments, 42 CFR §§ 456.271, 456.372 (1981), nothing in the regulations authorizes the officials to approve or disapprove decisions either to retain or discharge particular patients, and petitioners specifically disclaim any such responsibility. Instead, the State is obliged to approve or disapprove continued payment of Medicaid benefits after a change in the patient's need for services. See 42 CFR § 435.916 (1981). Adjustments in benefit levels in response to a decision to discharge or transfer a patient does not constitute approval or enforcement of that decision. As we have already concluded, this degree of involvement is too slim a basis on which to predicate a finding of state action in the decision itself.
Finally, respondents advance the rather vague generalization that such a relationship exists between the State and the nursing homes it regulates that the State may be considered a joint participant in the homes' discharge and transfer of Medicaid patients. For this proposition, they rely upon [p1011] Burton v. Wilmington Parking Authority, 365 U.S. 715 (1961). Respondents argue that state subsidization of the operating and capital costs of the facilities, payment of the medical expenses of more than 90% of the patients in the facilities, and the licensing of the facilities by the State, taken together, convert the action of the homes into "state" action. But, accepting all of these assertions as true, we are nonetheless unable to agree that the State is responsible for the decisions challenged by respondents. As we have previously held, privately owned enterprises providing services that the State would not necessarily provide, even though they are extensively regulated, do not fall within the ambit of Burton. Jackson v. Metropolitan Edison Co., 419 U.S. at 357-358. That programs undertaken by the State result in substantial funding of the activities of a private entity is no more persuasive than the fact of regulation of such an entity in demonstrating that the State is responsible for decisions made by the entity in the course of its business.
We are also unable to conclude that the nursing homes perform a function that has been "traditionally the exclusive prerogative of the State." Jackson v. Metropolitan Edison Co., supra, at 353. Respondents' argument in this regard is premised on their assertion that both the Medicaid statute and the New York Constitution make the State responsible for providing every Medicaid patient with nursing home services. The state constitutional provisions cited by respondents, however, do no more than authorize the legislature to provide funds for the care of the needy. See N.Y. Const., Art. XVII, §§ 1, 3. They do not mandate the provision of any particular care, much less long-term nursing care. Similarly, the Medicaid statute requires that the States provide funding for skilled nursing services as a condition to the receipt of federal moneys. 42 U.S.C. §§ 1396a(a)(13)(B), 1396d(a)(4)(A) (1976 ed. and Supp. IV). It does not require that the States provide the services themselves. Even if respondents' characterization of the State's duties were correct, [p1012] however, it would not follow that decisions made in the day-to-day administration of a nursing home are the kind of decisions traditionally and exclusively made by the sovereign for and on behalf of the public. Indeed, respondents make no such claim, nor could they.
We conclude that respondents have failed to establish "state action" in the nursing homes' decisions to discharge or transfer Medicaid patients to lower levels of care. [n22] Consequently, they have failed to prove that petitioners have violated rights secured by the Fourteenth Amendment. The contrary judgment of the Court of Appeals is accordingly
[For opinion of JUSTICE WHITE concurring in the judgment, see ante p. 843.]
N.Y.Soc.Serv.Law § 365-a.2(b) (McKinney Supp.1982). Title XIX requires, as a condition to the receipt of federal funds, that participating States provide financial assistance to eligible persons in need of "skilled nursing facility services." 42 U.S.C. §§ 1396a(a)(13)(B), 1396d(a)(4)(A) (1976 ed. and Supp. IV). Federal assistance is also available to States that choose to reimburse the cost of "intermediate care facility services." § 1396d(a)(15). See §§ 1396d(c), (f). New York regulations refer to facilities that provide the latter type of care as HRF's. 10 NYCRR § 414.1(a) (1981).
Compare 10 NYCRR §§ 416.1-416.2 with §§ 421.1-421.2 (1978). The parties have stipulated that Medicaid reimbursement rates for HRF's are generally lower than those for SNF's. See App. 169, ¶ 12.
Congress has provided that federal funds supplied to assist in reimbursing nursing home costs will be reduced unless the participating State provides for the periodic review of patient care
42 U.S.C. § 1396a(a)(30). See §§ 1396b(g)(1)(C), 1396b(i)(4), 1395x(k).
These committees must be composed of private physicians who are not directly responsible for the patient whose care is being reviewed. 42 CFR §§ 456.306, 456.406 (1981). Under New York law, the committee members may not be employed by the SNF or HRF, and may not have a financial interest in any residential care facility. 10 NYCRR §§ 416.9(b)(2), 421.13(b)(2) (1980).
If the committee determines that a discharge or transfer is called for, it must afford the patient's attending physician an opportunity to present his views, although the committee's decision ultimately is final. 42 CFR §§ 456.336(f), (h), 456.436(f), (i) (1981). See 10 NYCRR §§ 731.11, 741.14 (1980).
The class was defined to include patients
who have been, are or will be threatened or forced to leave their nursing homes and have their Medicaid benefits reduced or terminated as a result of "Utilization Review" committee findings alleging that they are not eligible for the level of nursing home care they receive.
App.19, ¶ 1. The complaint also named as a plaintiff the New York chapter of the Gray Panthers, an organization that "has among its objectives the development of a health care system for the elderly which provides quality health care to all persons." Id. at 21, ¶ 5.
The complaint also alleged that URC transfers to lower levels of care and corresponding reductions in Medicaid benefits were arbitrary, and were caused by improperly constituted URC's that acted without adequate written criteria and failed to afford adequate notice either to the patients or their attending physicians.
Ten individuals, who are also respondents in this Court, later intervened in the suit. Each intervenor was a resident of either an SNF or an HRF, and had been the subject of a URC decision recommending transfer to a lower level of care. The intervenors all were afforded administrative hearings resulting in affirmance of petitioners' decisions to reduce or terminate Medicaid benefits if the intervenors did not follow URC recommendations.
The class was defined to include
all persons who are residents in skilled nursing or intermediate care facilities in the State of New York and who, following utilization review recommendations and/or fair hearings, are determined by defendants to be ineligible to receive the level of care at the facilities in which they reside, and to be subject to reduction or termination of their Medicaid benefits.
The court also required the defendants to afford class members access to all pertinent case files and medical records. Id. at 101-102. The Court of Appeals for the Second Circuit upheld portions of the injunction challenged by petitioners. Yaretsky v. Blum, 592 F.2d 65 (1979).
The pretrial order also redefined the class to include "all residents of skilled nursing and health related nursing facilities in New York State who are recipients of Medicaid benefits." App. 151.
The court modified the injunction by relieving petitioners of obligations that, in the opinion of federal authorities, would render the State ineligible for Medicaid funding. 629 F.2d at 822. The court also reversed the District Court's holding that state administrators were precluded by due process or state law from rejecting a hearing officer's recommendation favorable to a patient without reading a verbatim transcript of the hearing and the exhibits. Id. at 822-825. This holding is not before us.
Respondents suggest that members of the class they represent have been transferred to higher levels of care as a result of URC decisions. Respondents, however,
must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.
As the Court noted in Lugar v. Edmondson Oil Co., ante at 926-932, the state action necessary to support a claimed violation of the Fourteenth Amendment, and the action "under color of law" required by 42 U.S.C. § 1983 (1976 ed., Supp. IV), represent parallel avenues of inquiry in a case claiming a remedy under § 1983 for a violation of the Fourteenth Amendment's Due Process Clause. Of course, the "color of law" inquiry required by § 1983 focuses directly on the question whether the conduct of the particular 1983 defendant is sufficiently connected with the state action that is present whenever the constitutionality of a state law, regulation, or practice is properly challenged. But this question may just as easily be framed as whether the § 1983 defendant is a "state actor."
In Lugar, we addressed a decidedly different question of "state action." In that case, the § 1983 plaintiff sought damages against a private party who had availed himself of an unconstitutional state attachment procedure, and had enlisted the aid of government officials to impair plaintiff's property for his own benefit. We concluded that
The State must provide for the periodic review of patient care
See, e.g., Bishop, Plough, & Willemain, Nursing Home Levels of Care: Problems and Alternatives, 2 Health Care Financing Rev. No. 2, pp. 33, 36 (1980).
See B. Vladeck, Unloving Care 138 (1980).
If the nursing home fails to assign the patients to the level of care the State deems appropriate, it is subject to sanction. Federal regulations provide that health care providers who furnish "items or services that are substantially in excess of the beneficiary's needs" may be excluded from participating in the program. 42 CFR § 420.101(a)(2) (1981). A nursing home that fails to follow state regulations is also subject to state-imposed daily penalties. See 10 NYCRR § 414.18 (1978).
To acknowledge that the active system of utilization review serves a primarily fiscal purpose is not to demean the importance of that purpose, or the extent of overplacement of Medicaid recipients in skilled nursing facilities. That figure has been variously estimated at 10 to 40 percent. See Bishop, Plough, & Willemain, supra, n. 4.
The Court mistakes the significance of the DMS-1, and the relevant inquiry, when it attempts to characterize that form as merely an instrument for recording the exercise of an independently exercised medical judgment. See ante at 1006, n. 15. Of course, a medical background is essential in filling out the forms. But it remains clear that the State's standards are to be applied in making the transfer determination.
Federal regulations require each nursing home to establish a utilization review committee whose functions include review of admission decisions, and the periodic assessment of the resident's condition to determine whether the resident's continued stay in the facility is justified. See 42 CFR §§ 456.301, 456.406 (1981). These review agents, as they are deemed in the New York regulations, are composed of physicians not directly responsible for the patient whose care is being reviewed. §§ 456.306, 456.606. Under New York law, the physicians of the review agent may not have a financial interest in a residential care facility. 10 NYCRR §§ 416.9(b)(2), 421.13(b)(2) (1980). In New York, the review agent generally consists of two or more physicians selected and appointed by the facility. Medicaid provides reimbursement for their services. App. 173.
A physician member of the utilization review agent has the power to determine that the patient qualifies for the type of care that the facility offers, even if the patient's score on the DMS-1 is insufficient. 10 NYCRR §§ 416.9(a)(2)(i), 421.13(a)(2)(i) (1980). If that physician member confirms that the patient is not in need of the facility's level of care, he must then notify the patient's attending physician "and afford that physician an opportunity for consultation." § 416.9(a)(2)(ii). But even if the attending physician disagrees with the adverse admission finding of the utilization review agent physician, it is the utilization review agent, not the attending physician, that makes the admission decision. §§ 416.9(a)(2)(iv), 421.13(a)(2)(iv). The utilization review agent must, however, notify "the responsible social services district" of"any adverse admission decision." §§ 416.9(a)(3), 421.13(a)(3).
The Court takes issue with our reliance on the nature of continued stay reviews performed by the utilization review agent, noting that "patient transfers to lower levels of care initiated by utilization review committees are simply not part of this case." Ante at 1007, n. 17. The Court's position with respect to the work of the utilization review committee is schizophrenic, at best: the Court expressly relies on its characterization of the review committee's work as representing an independent physician's assessment in reaching its conclusion that the DMS-1 and DMS-9 do not supply the criteria controlling the nursing home operator's decision to admit or retain a patient in the home. Ante at 1006; see discussion supra at 1022. In any event, the Court simply misses the point. The nursing home operator is under a continuing duty
If it is finally determined by the utilization review agent that the patient should be assigned to a lower level of care, the regulations set forth an elaborate scheme of review before the State Department of Health. See 10 NYCRR §§ 416.9(f), 421.13(f) (1980). These provisions apply even when the attending physician concurs in the determination. The utilization review committee must notify the Department of Health of its adverse finding and
Of course, the nursing home operator's power to make transfer decisions for other than medical reasons is severely limited by regulation. He may only discharge or transfer the resident for valid medical reasons, for the welfare of the affected patient or other patients, or for nonpayment. 42 CFR §§ 405.1121(k)(4), 442.311(C) (1981); 10 NYCRR 414.14(4) (1980).
The issue presented in this case -- the issue that the Court decides presents a live controversy -- concerns facility-initiated discharges or transfers. See ante at 1000. Transfers initiated by the Utilization Review Committee are within the terms of the consent decree entered by the District Court below, and are not before the Court today. These transfers even more clearly show the State's hand in the transfer decision -- indeed, it appears that the physicians on the Committees are reimbursed for their services by Medicaid. But there is absolutely no basis upon which to conclude that that decision to transfer a patient to a lower level of care can be made in any meaningful way independently of the state regulatory standards described in text. Of course, we might hypothesize a decision of the resident's personal physician, not premised on the State's view of what constitutes an appropriate level of care for the patient, to remove the patient from the particular facility. In these circumstances, I would agree that the nursing home owner, in simply responding to the personal physician's request, is not a state actor. But it appears to me that the Court's decision sweeps more broadly than that, and clearly reaches transfers based directly upon and arising from the State's procedures and standards.