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

Blum v. Yaretsky (full text) :: 457 U.S. 991 (1982) :: Justia U.S. Supreme Court Center Log In
› Blum v. Yaretsky
Blum v. Yaretsky 457 U.S. 991 (1982)
U.S. Supreme CourtBlum v. Yaretsky, 457 U.S. 991 (1982)Blum v. YaretskyNo. 80-1952Argued March 24, 1982Decided June 25, 1982457 U.S. 991CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
As a participating State in the Medicaid program established by the Social Security Act, 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), the latter providing less extensive, and generally less expensive, medical care than the former. The nursing homes are directly reimbursed by the State for the reasonable cost of health care services. To obtain Medicaid assistance, an individual must satisfy eligibility standards in terms of income or resources and must seek medically necessary services. As to the latter requirement, federal regulations require each nursing home to establish a utilization review committee (URC) of physicians whose functions include periodically assessing whether each patient is receiving the appropriate level of care, and thus whether the patient's continued stay in the facility is justified. Respondents, who were Medicaid patients in an SNF, instituted a class action in Federal District Court after the nursing home's URC decided that they should be transferred to a lower level of care in an HRF and so notified local officials, and after administrative hearings resulting in affirmance by state officials of the local officials' decision to discontinue benefits unless respondents accepted transfer to an HRF. Respondents alleged, inter alia, that they had not been afforded adequate notice either of the URC decisions and the reasons supporting them or of their right to an administrative hearing to challenge those decisions, as required by the Due Process Clause of the Fourteenth Amendment. Respondents later added claims as to procedural safeguards that should also apply to URC decisions transferring a patient to a higher level of care and to transfers of any kind initiated by the nursing homes themselves or by the patients' attending physicians. Ultimately, the court approved a consent judgment establishing procedural rights applicable to URC-initiated transfers to lower levels of care, and ruled in respondents' favor as to transfers to higher levels of care and all transfers initiated by the facility or its agent. The court permanently enjoined petitioner state officials and all SNF's and HRF's in the State from permitting Page 457 U. S. 992 or ordering discharges of class members, or their transfers to a different level of care, without prior written notice and an evidentiary hearing. The Court of Appeals affirmed, holding that URC-initiated transfers to a higher level of care, and all discharges and transfers by nursing homes or attending physicians, involved "state action" for purposes of the Fourteenth Amendment.
(b) The fact that the State responds to the nursing homes' discharge or transfer decisions by adjusting the patients' Medicaid benefits does not render it responsible for those decisions. Moreover, the pertinent statutes and regulations do not constitute affirmative commands by the State for summary discharge or transfer of Medicaid patients who are thought to be inappropriately placed in nursing facilities. The State, by requiring completion by physicians or nursing homes of forms relating to a patient's condition and discharge or transfer decisions, is not responsible for the decisions of the physicians or nursing homes. Those decisions ultimately turn on medical judgments made by private parties according to professional standards that are not established by the State. Similarly, regulations imposing penalties on nursing homes that fail to discharge or transfer patients whose continued stay is inappropriate do Page 457 U. S. 993 not themselves dictate the decision to discharge or transfer in a particular case. And even though the State subsidizes the cost of the facilities, pays the expenses of the patients, and licenses the facilities, the action of the nursing homes is not thereby converted into "state action." Nor do the nursing homes perform a function that has been "traditionally the exclusive prerogative of the State," Jackson v. Metropolitan Edison Co., 419 U. S. 345, 419 U. S. 353, so as to establish the required nexus between the State and the challenged action. Pp. 457 U. S. 1005-1012.
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 Page 457 U. S. 994 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). [Footnote 1] The latter provide less extensive, and generally less expensive, medical care than the former. [Footnote 2] 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, [Footnote 3] federal regulations require each nursing home to establish a utilization review committee (URC) of physicians whose functions include periodically assessing Page 457 U. S. 995 whether each patient is receiving the appropriate level of care, and thus whether the patient's continued stay in the facility is justified. [Footnote 4] 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. [Footnote 5] 42 CFR §§ 456.337(c), 456.437(d) (1981); 10 NYCRR §§ 416.9(f)(2), (3), 421.13(f)(2), (3) (1980).
Respondents then commenced this suit, acting individually and on behalf of a class of Medicaid-eligible residents of New Page 457 U. S. 996 York nursing homes. [Footnote 6] 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. [Footnote 7] 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. [Footnote 8]
In January, 1978, the District Court certified a class [Footnote 9] and issued a preliminary injunction, restraining the defendants Page 457 U. S. 997 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. [Footnote 10] The court's accompanying opinion relied primarily on existing federal and state regulations. Id. at 112-115.
"whether there is state action and a constitutional right to Page 457 U. S. 998 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."
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. Page 457 U. S. 999
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 Page 457 U. S. 1000 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.
Poe v. Ullman, 367 U. S. 497, 367 U. S. 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, 262 U. S. 593 (1923), quoted in Babbitt v. Farm Workers, 442 U. S. 289, 442 U. S. 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, 414 U. S. 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 Page 457 U. S. 1001 U.S. 37, 401 U. S. 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 414 U. S. 496 ("past wrongs are evidence bearing on whether there is real and immediate threat of repeated injury").
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 Page 457 U. S. 1002 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.
Shelley v. Kraemer, 334 U. S. 1, 334 U. S. 13 (1948). "That Amendment erects no shield against merely private conduct, however discriminatory or wrongful." Ibid. See Jackson v. Metropolitan Edison Co., 419 Page 457 U. S. 1003 U.S. 345 (1974); Adickes v. S. H. Kress & Co., 398 U. S. 144 (1970).
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); Page 457 U. S. 1004 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.
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 436 U. S. 166; Jackson v. Metropolitan Edison Co., supra, at 419 U. S. 357; Moose Lodge No. 107 v. Irvis, supra, at 407 U. S. 173; Adickes v. S. H. Kress & Co., supra, at 398 U. S. 170. Mere approval of or acquiescence in the initiatives of a private party is not sufficient to justify holding the State responsible for those Page 457 U. S. 1005 initiatives under the terms of the Fourteenth Amendment. See Flagg Bros., supra, at 436 U. S. 164-165; Jackson v. Metropolitan Edison Co., supra, at 419 U. S. 357.
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 Page 457 U. S. 1006 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. [Footnote 15] 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). [Footnote 16] We cannot say that the Page 457 U. S. 1007 State, by requiring completion of a form, is responsible for the physician's decision.
"to make all efforts possible to transfer patients to the appropriate level of care or Page 457 U. S. 1008 home as indicated by the patient's medical condition or needs,"
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. [Footnote 19] This case, therefore, is not unlike Page 457 U. S. 1009 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. [Footnote 20] 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 454 U. S. 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. [Footnote 21]
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 Page 457 U. S. 1010 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.
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 Page 457 U. S. 1011 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 419 U. S. 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 419 U. S. 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, Page 457 U. S. 1012 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.
If the Fourteenth Amendment is to have its intended effect as a restraint on the abuse of state power, courts must be sensitive to the manner in which state power is exercised. In an era of active government intervention to remedy social ills, the true character of the State's involvement in, and coercive influence over, the activities of private parties, often through complex and opaque regulatory frameworks, may not always be apparent. But if the task that the Fourteenth Amendment assigns to the courts is thus rendered more burdensome, the courts' obligation to perform that task faithfully, and consistently with the constitutional purpose, is rendered more, not less, important. Page 457 U. S. 1013
Burton v. Wilmington Parking Authority, 365 U. S. 715, 365 U. S. 722 (1961). See Lugar v. Edmondson Oil Co., ante at 457 U. S. 939-942. [Footnote 2/2] The Court today departs from the Burton precept, ignoring the Page 457 U. S. 1014 nature of the regulatory framework presented by this case in favor of the recitation of abstract tests and a pigeonhole approach to the question of state action. But however correct the Court's tests may be in the abstract, they are worth nothing if they are not faithfully applied. Bolstered by its own preconception of the decisionmaking process challenged by respondents, and of the relationship between the State, the nursing home operator, and the nursing home resident, the Court subjects the regulatory scheme at issue here to only the most perfunctory examination. The Court thus fails to perceive the decisive involvement of the State in the private conduct challenged by the respondents.
But the level of care decisions at issue in this case, even when characterized as the "independent" decision of the nursing Page 457 U. S. 1015 home, see ante at 457 U. S. 1000, have far less to do with the exercise of independent professional judgment than they do with the State's desire to save money. To be sure, standards for implementing the level of care scheme established by the Medicaid program are framed with reference to the underlying purpose of that program -- to provide needed medical services. And not surprisingly, the State relies on doctors to implement this aspect of its Medicaid program. But the idea of two mutually exclusive levels of care -- skilled nursing care and intermediate care -- embodied in the federal regulatory scheme and implemented by the State, reflects no established medical model of health care. On the contrary, the two levels of long-term institutionalized care enshrined in the Medicaid scheme are legislative constructs, designed to serve governmental cost containment policies.
"The committee bill would provide for a vendor payment in behalf of persons . . . who are living in facilities Page 457 U. S. 1016 which are more than boarding houses but which are less than skilled nursing homes. The rate of Federal sharing for payments for care in those institutions would be at the same rate as for medical assistance under title XIX. Such homes would have to meet safety and sanitation standards comparable to those required for nursing homes in a given state."
To implement this cost-saving mechanism, the Federal Government has required States participating in the Medicaid Program to establish elaborate systems of periodic "utilization review." [Footnote 2/3] With respect to patients whose expenses are not reimbursed through Medicaid, these attempts to assign the patient to one of two mutually exclusive "levels of care" would be anomalous. While the criteria used to determine which patients require the services of "skilled nursing facilities," which require "intermediate care facilities," and which require no long-term institutional care at all, obviously have a medical nexus, those criteria are not geared to the Page 457 U. S. 1017 specific needs of particular residents as determined by a physician; the level of care determination is not analogous to choosing specific medication or rehabilitative services needed by a nursing home patient. The inherent imprecision of using two broad levels to classify facilities and residents has been noted by the commentators. [Footnote 2/4] The vigor with which these reviews are performed in the nursing home context, see infra at 457 U. S. 1022-1024, is extraordinarily unmedical in character. From a purely medical standpoint, the idea of shifting nursing home residents from a "higher level of care" to a "lower level of care," which almost invariably involves transfer from one facility to another, rarely makes sense. As one commentator has observed:
The arbitrariness of the statutory system of treatment levels is evident from a comparison of the proportion of nursing home residents in skilled nursing facilities (SNF's) and those in intermediate care facilities (ICF's) in different States. A 1973 survey of 32 States revealed that 47.9% of Medicaid patients were in SNF's, 52.1% were in ICF's. But the proportion of SNF and ICF beds varied enormously from State to State. For example, less than 10% of Medicaid recipients receiving long-term institutional care in States such as Louisiana, Maine, Oregon, and Virginia were in SNF's; the number housed in SNF's in New York and Pennsylvania was nearly 80%, and in Florida and Georgia the figure was closer Page 457 U. S. 1018 to 90%. [Footnote 2/5] Quite obviously, the answer to this disparity lies not in medical considerations or judgments, but rather in the varying fiscal policies, and the vigor of enforcement, in the participating States.
10 NYCRR § 416.9(d)(1) (1980) (emphasis added). See also § 421.13(d)(1). [Footnote 2/6] The responsibility the State assigns to nursing home operators to transfer patients to appropriate levels of care is, of course, designed primarily to implement the State's goal of reducing Medicaid costs, [Footnote 2/7] and the termination or reduction of benefits follows forthwith upon the facility's discharge or transfer of a resident. As the court below noted: "The state has, in essence, delegated a decision Page 457 U. S. 1019 to . . . reduce a public assistance recipient's benefits to a private' party," 629 F.2d 817, 820 (CA2 1980), by assigning to that private party the responsibility to determine the recipient's need. But we should not rely on that fact alone in evaluating the nexus between the State and the challenged private action. Here the State's involvement clearly extends to supplying the standards to be used in making the delegated decision.
Ante at 457 U. S. 1006 (footnote omitted and emphasis added). The Court concludes: "We cannot say that the State, by requiring completion of a form, is responsible for the physician's decision." Page 457 U. S. 1020 Ante at 457 U. S. 1006-1007 (emphasis added). A closer look at the regulations at issue suggests that petitioners have been less than candid in their characterization of the admission process and the role of the numerical score.
The details of the DMS-9 Numerical Standards Master Sheet also bear more emphasis than the Court gives them, for that form describes with particularity the patients who are entitled to SNF care, ICF care, or no long-term residential care at all. The DMS-9 provides numerical scores for various resident dysfunctions. For example, if the resident is incontinent with urine often, he receives a score of 20; if seldom, a score of 10; if never, a score of O. A similar rating is made as to stool incontinence: often, 40; seldom, 20; never, 0. A tabulation is made with respect to "function status." For example, if the resident can walk only with "some help," he receives 35 points; only with "total help," 70 points; if he cannot walk, 105 points. If the resident needs "total help" to dress, he receives 80 points; if "some help" is required, 40 points. Ratings are also made of the patient's "mental status." For example, if the patient is never alert, he receives 40 points; if sometimes alert, 20 points; always alert, 0 points. Page 457 U. S. 1021 If his judgment is always impaired, he receives, 30 points; sometimes, 15 points; never, 0 points. And ratings are also set forth for other physical "impairments." For example, if the patient's vision is unimpaired, he receives 0 points; if he has partial sight, 1 point; if he is blind, 2 points.
The criterion for admission to a SNF is a DMS-9 "predictor score" of 180. 10 NYCRR § 415.1(a)(2) (1978). For admission to an HRF (health-related facility), the required score is 60. § 420.1(b)(2). Where the admission, or denial of admission, is based on the guidelines set forth in these regulations, there is, of course, no doubt, that the State is directly, and solely, "responsible for the specific conduct of which the plaintiff complains," ante at 457 U. S. 1004 (emphasis omitted), even if it has chosen to authorize a private party to implement that decision. [Footnote 2/8] Page 457 U. S. 1022
As this provision makes clear, if the potential resident does not qualify under the specific standards of the DMS-1, as tabulated on the DMS-9, the patient can be admitted only on the basis of direct approval by Medicaid officials themselves, or on the basis of a determination by the utilization review agent of the transferring facility -- and, of course, such agents are themselves clearly part and parcel of the statutory cost control process. [Footnote 2/9] See n. 8, supra. No decision is made on Page 457 U. S. 1023 the basis of a medial judgment exercised outside the regulatory framework, by the resident's personal physician acting on the basis of his personal medical judgment. The attending physician's role is, at this stage, limited to "scoring" the patient's condition according to standards set forth by the State on the DMS-9.
Yet the State's involvement does not end with the initial certification. Within five days after admission, the matter is again subjected to assessment, this time by the operator of the transferee facility. This time, the transferee nursing home operator is required to tabulate the DMS-9 score. If the patient's score is not adequate by the standards of the DMS-9, admission must be denied unless sanctioned by the facility's utilization review agent. [Footnote 2/10] The utilization review agent of the admitting facility, like that of the transferring facility, operates under a "written utilization control plan, approved by the department [of health]." 10 NYCRR §§ 416.9, 421.13 (1980). And that statutory body has the final say in Page 457 U. S. 1024 each instance. There can thus be little doubt that, in the vast majority of cases, decisions as to "level of treatment" in the admission process are made according to the State's specified criteria. That some deviation from the most literal application of the State's guidelines is permitted cannot change the character of the State's involvement. Indeed, absent such provision for exceptional cases, the formularized approach embodied in the DMS-9 would be unconscionable. And indeed, even with respect to these exceptional cases, the admissions procedure is administered through bodies whose structure and operations conform to state requirements, and whose decisions follow state guidelines -- albeit guidelines somewhat more flexible than the DMS-1, in allowing some "psychosocial" factors to be taken into account. See infra, this page and 457 U. S. 1025-1026.
The continued stay reviews parallel the admission determination with respect to both the State's procedural and substantive standards. [Footnote 2/11] Again, the DMS-1 and the DMS-9 Page 457 U. S. 1025 channel the medical inquiry and function as the principal determinants of the resident's status, for whenever a resident does not achieve an appropriate score on the DMS-1, as determined by a nonphysician representative of the utilization review agent, the resident's case is directed to a physician member. That physician member does not personally examine the resident, but rather relies on the DMS-1 and other documentary information. See App. 172-173. If the matter is resolved adversely to the resident, only then must the attending physician be notified. The attending physician is allowed to present relevant information, though the final decision remains with the utilization review agent. See 10 NYCRR §§ 416.9(b)(2), 421.13(b)(2) (1980). And again, the State's substantive standards, not independent medical judgment, pervade review determinations. Evaluations are based only on the DMS-1 and DMS-9 tabulation, on a "psychosocial" evaluation respecting the resident's response to transfer and other physical, emotional, and mental characteristics of the patient, on the resident's discharge plan (prepared according to state regulations), and upon "additional criteria and standards . . . which shall have been approved Page 457 U. S. 1026 by the department [of health]." 10 NYCRR §§ 416.9(b)(4), 421.13(b)(4) (1980) (emphasis added). [Footnote 2/12]
The Court is wrong. As a fair reading of the relevant regulations makes clear, the State (and Federal Government) have created, and administer, the level system as a cost-saving tool of the Medicaid program. The impetus for this Page 457 U. S. 1027 active program of review imposed upon the nursing home operator is primarily this fiscal concern. The State has set forth precisely the standards upon which the level of care determinations are to be made, and has delegated administration of the program to the nursing home operators, rather than assume the burden of administering the program itself. Thus, not only does the program implement the State's fiscal goals, but, to paraphrase the Court, "[t]hese requirements . . . make the State responsible for actual decisions to discharge or transfer particular patients." See ante at 457 U. S. 1008, n. 18. Where, as here, a private party acts on behalf of the State to implement state policy, his action is state action.
The deficiency in the Court's analysis is dramatized by its inattention to the special characteristics of the nursing home. Quite apart from the State's specific involvement in the transfer decisions at issue in this case, the nature of the nursing home as an institution, sustained by state and federal funds, and pervasively regulated by the State so as to ensure that it is properly implementing the governmental undertaking to provide assistance to the elderly and disabled that is embodied in the Medicaid program, undercuts the Court's sterile approach to the state action inquiry in this case. The private nursing homes of the Nation exist, and profit, at the sufferance of state and federal Medicaid and Medicare agencies. The degree of interdependence between the State and the nursing home is far more pronounced than it was between the State and the private entity in Burton v. Wilmington Parking Authority, 365 U. S. 715 (1961). The State subsidizes practically all of the operating and capital costs of the facility, and pays the medical expenses of more than 90% of its residents. And, in setting reimbursement rates, the State generally affords the nursing homes a profit as well. Even more striking is the fact that the residents of those homes are, by definition, utterly dependent on the State for Page 457 U. S. 1028 their support and their placement. For many, the totality of their social network is the nursing home community. Within that environment, the nursing home operator is the immediate authority, the provider of food, clothing, shelter, and health care, and, in every significant respect, the functional equivalent of a State. Cf. Marsh v. Alabama, 326 U. S. 501 (1946). Surely, in this context, we must be especially alert to those situations in which the State "has elected to place its power, property and prestige behind" the actions of the nursing home owner. See Burton v. Wilmington Parking Authority, supra, at 365 U. S. 725.
We may hypothesize many decisions of nursing home operators that affect patients but are not attributable to the State. [Footnote 2/13] But with respect to decisions to transfer patients Page 457 U. S. 1029 downward from one level of care to another, if that decision is in any way connected with the statutory review structure set forth above, [Footnote 2/14] then there is no doubt that the standard for decision, and impetus for the decision, is the responsibility of the State. Indeed, with respect to the level of care determination, the State does everything but pay the nursing home operator a fixed salary. Because the State is clearly responsible for the specific conduct of petitioners about which respondents complain, and because this renders petitioners state actors for purposes of the Fourteenth Amendment, I dissent.
Due process does not require a hearing when a private nursing home chooses to transfer or discharge...	Facts	Private nursing home facilities that received Medicaid funding were required under state law to deci...