Source: https://law.justia.com/cases/federal/appellate-courts/F2/586/280/291465/
Timestamp: 2019-08-23 17:46:00
Document Index: 729212966

Matched Legal Cases: ['§ 1396', '§ 205', '§ 249', '§ 249', '§ 10', '§ 10', '§ 10', '§ 1396', '§ 249', '§ 1395', '§ 205', '§ 404', '§ 405', '§ 249', '§ 1396', '§ 249', '§ 1395', '§ 249', '§ 250', '§ 1395', '§ 250']

Town Court Nursing Center, Inc.andemma Cooper, Mary Crawford, Hazel Kemp, Arnold L. Phillips,delphine Taddei, Nancy Truitt, Individually and on Behalf Ofthe Class of Patients Eligible for Pennsylvania Medicalassistance Program Benefits at Town Court Nursing Center, Inc. v. Frank S. Beal, Individually and in His Capacity As Secretaryof Public Welfare of the Commonwealth of Pennsylvania, Andjoseph A. Califano, Jr., Individually and in His Capacity Assecretary of the United States Department of Health,education and Welfare.appeal of Emma Cooper, Mary Crawford, Hazel Kemp, Arnold L.phillips, Delphine Taddei and Nancy Truitt, Individually Andon Behalf of the Class of Patients Eligible for Pennsylvaniamedical Assistance Program Benefits at Town Court Nursingcenter, Inc., in No. 77-2222.appeal of Joseph A. Califano, Jr., Secretary of the Unitedstates Department of Health, Education Andwelfare, in No. 77-2444, 586 F.2d 280 (3d Cir. 1978) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Third Circuit › 1978 › Town Court Nursing Center, Inc.andemma Cooper, Mary Crawford, Hazel Kemp, Arnold L. Phillips,delphin...
Town Court Nursing Center, Inc.andemma Cooper, Mary Crawford, Hazel Kemp, Arnold L. Phillips,delphine Taddei, Nancy Truitt, Individually and on Behalf Ofthe Class of Patients Eligible for Pennsylvania Medicalassistance Program Benefits at Town Court Nursing Center, Inc. v. Frank S. Beal, Individually and in His Capacity As Secretaryof Public Welfare of the Commonwealth of Pennsylvania, Andjoseph A. Califano, Jr., Individually and in His Capacity Assecretary of the United States Department of Health,education and Welfare.appeal of Emma Cooper, Mary Crawford, Hazel Kemp, Arnold L.phillips, Delphine Taddei and Nancy Truitt, Individually Andon Behalf of the Class of Patients Eligible for Pennsylvaniamedical Assistance Program Benefits at Town Court Nursingcenter, Inc., in No. 77-2222.appeal of Joseph A. Califano, Jr., Secretary of the Unitedstates Department of Health, Education Andwelfare, in No. 77-2444, 586 F.2d 280 (3d Cir. 1978)
U.S. Court of Appeals for the Third Circuit - 586 F.2d 280 (3d Cir. 1978)
Argued Jan. 4, 1978. Resubmitted En Banc July 10, 1978. Decided Sept. 29, 1978. As Amended Oct. 13, 1978
In No. 77-2444, Secretary of the Department of Health, Education and Welfare Califano has cross-appealed from that portion of the district court order which required that he "not withhold payments (from Town Court Nursing Center) for services actually provided to patients." Town Court Nursing Center, Inc. v. Beal, No. 77-2474 (E.D. Pa., Sept. 15, 1977) (order extending preliminary injunction in part and dissolving preliminary injunction in part). Because Medicaid certification and funding is so inextricably interrelated with federal administrative action through HEW, See Town Court, supra, 586 F.2d at 268-271, and in view of our holding that the residents of the nursing center have a right to a pre-termination hearing, that portion of the order from which Secretary Califano appeals will be affirmed.
The Supreme Court has repeatedly stated that "some kind of hearing is required at some time before a person is finally deprived of his property interest." Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 16, 98 S. Ct. 1554, 56 L. Ed. 2d 30 (1978), Quoting Wolff v. McDonnell, 418 U.S. 539, 557-58, 94 S. Ct. 2963, 2975, 41 L. Ed. 2d 935 (1974). See also Mathews v. Eldridge, 424 U.S. 319, 333, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976). Inasmuch as the regulatory scheme invests each resident with a right to remain at the facility of his choosing so long as it qualifies under the plan, the decision to decertify the institution necessarily effects a deprivation of this right and entitles the resident to due process procedures.19
Once it is determined that the government is constrained from taking a particular action affecting private parties without according them due process of law, it is essential to ascertain what process is due. The principle that governs this second phase of the due process inquiry is to be contrasted with the inclusive approach towards identifying the rights that are entitled to due process protection. As the Supreme Court has instructed, "(d)ue process is flexible and calls for such procedural protections as the particular situation demands." Mathews v. Eldridge, 424 U.S. 319, 334, 96 S. Ct. 893, 902, 47 L. Ed. 2d 18 (1976), Quoting Morrissey v. Brewer, 408 U.S. 471, 482, 92 S. Ct. 2593, 34 L. Ed. 2d 484 (1972).27 Thus, practical considerations play a prominent role in fashioning the procedural safeguards that will implement the fundamental due process concern of preventing officials from arbitrarily interfering with private endeavors. The practical considerations reflect the recognition that the government must be able to function efficiently and expeditiously and that if scarce public resources are to be used optimally, the government cannot be unduly fettered in administering its programs by costly and time consuming bureaucratic procedures.28 Therefore, in assessing what procedural safeguards are necessary before government may deprive a private party of a constitutionally protected interest, courts should be careful to require only the minimal protections mandated by due process, leaving the other branches of government free to determine the extent of the procedural protective mechanisms that will be authorized.29 The constitutionality of a chosen scheme should be upheld if it permits the aggrieved party to air his views in such a manner that the risk of an erroneous determination by the government is reduced and the value of other, more burdensome procedures is outweighed by the cost and delay that they would entail.
This flexible framework for analyzing what procedural safeguards are mandated by due process has been clearly articulated in Mathews v. Eldridge, 424 U.S. 319, 334-35, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976):
(R)esolution of the issue whether the administrative procedures provided here are constitutionally sufficient requires analysis of the governmental and private interests that are affected. Arnett v. Kennedy, Supra (416 U.S. 134), at 167-168, 94 S. Ct. 1633 (Powell, J., concurring in part); Goldberg v. Kelly (397 U.S. 254), at 263-266, 90 S. Ct. 1011; Cafeteria Workers v. McElroy (367 U.S. 886), at 895, 81 S. Ct. 1743. More precisely, our prior decisions indicate that identification of the specific dictates of due process generally requires consideration of three distinct factors: First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. See. E. g., Goldberg v. Kelly, Supra (397 U.S. 254), at 263-271, 90 S. Ct. 1011.
When balancing the governmental and private interests to arrive at the process that is due, only once has the Supreme Court insisted on a full evidentiary hearing before the government decision in question became effective.30 The Court in Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970), held unconstitutional a procedure which provided for written submissions by the welfare recipient but no hearing before payments were cut off. In requiring that the welfare recipient be afforded a pre-termination full evidentiary hearing at which he can appear personally, offer oral evidence and confront witnesses, Goldberg recognized that
In other cases before the Supreme Court, due process has been found to be satisfied by administrative procedures that did not include a full evidentiary hearing before the deprivation. Thus, where a private party sought to garnish property, the Court held that due process requirements were met if the garnishing party was required to initiate an Ex parte proceeding before a neutral officer, supply an affidavit supporting his claim to the property, and post a bond, provided that the aggrieved party is given an opportunity to contest the seizure promptly thereafter. Mitchell v. W. T. Grant Co., 416 U.S. 600, 94 S. Ct. 1895, 40 L. Ed. 2d 406 (1974); Fuentes v. Shevin, 407 U.S. 67, 92 S. Ct. 1983, 32 L. Ed. 2d 556 (1972). Also, in Arnett v. Kennedy, 416 U.S. 134, 94 S. Ct. 1633, 40 L. Ed. 2d 15 (1974), the Court upheld the administrative procedures for dismissing a federal employee for cause, which included a copy of the charge and an opportunity to file a written response and to make an oral appearance before the dismissal, with an evidentiary proceeding only thereafter. Just last term the Supreme Court found that an informal administrative remedy whereby a customer whose municipal utility service was to be cut off for nonpayment of bills would be permitted to meet with "a responsible employee empowered to resolve the dispute" was sufficient to satisfy the dictates of due process. Memphis Light, Gas and Water Division v. Craft, 436 U.S. 1, 18, 98 S. Ct. 1554, 1565, 56 L. Ed. 2d 30 (1978).
(T)he judicial model of an evidentiary hearing is neither a required, nor even the most effective method of decisionmaking in all circumstances. . . . All that is necessary is that the procedures be tailored, in light of the decision to be made, to "the capacities and circumstances of those who are to be heard," Goldberg v. Kelly, 397 U.S. (254), at 268-269, 90 S. Ct. 1011 (footnote omitted), to insure that they are given a meaningful opportunity to present their case. In assessing what process is due in this case, substantial weight must be given to the good-faith judgments of the individuals charged by Congress with the administration of social welfare programs that the procedures they have provided assure fair consideration of the entitlement claims of individuals. See Arnett v. Kennedy, 416 U.S. (134), at 202, 94 S. Ct. 1633 (White, J., concurring in part and dissenting in part).
424 U.S. at 348-49, 96 S. Ct. at 909.
The majority recognizes, as it must, that due process would place procedural constraints on HEW only if the residents' interests in continued occupancy enjoy the stature of "property." An independent source, here the Medicaid law and regulations, must create the "underlying substantive interest" that is to be accorded this stature; federal constitutional law then determines whether that interest "rises to the level of a 'legitimate claim of entitlement' protected by due process." Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 9, 98 S. Ct. 1554, 1560, 56 L. Ed. 2d 30 (1978).
The majority finds that continued residency in the nursing home of one's choice absent specific cause for transfer is an underlying substantive interest created by three Medicaid provisions. Under the first, 42 U.S.C. § 1396a(a) (23), a Medicaid recipient may obtain medical care "from any institution . . . qualified to perform the service or services required." Clearly, what the majority characterizes as a recipient's right to obtain medical care from a "freely selected provider" is limited to a choice among institutions which have been determined by the Secretary to be "qualified." Next, the majority's reliance on 45 C.F.R. § 205.10(a) (5), ensuring a notice and hearing to a recipient whose benefits are suspended, reduced, discontinued or terminated, is obviously misplaced. As the majority itself notes, the decertification of these facilities did not reduce or suspend the residents' rights to continued benefits.
Finally, the majority relies upon 45 C.F.R. § 249.12(a) (1) (ii) (B) (4),1 which establishes as one requirement for an institution's certification that each resident admitted to that institution be "transferred or discharged only for medical reasons or for his welfare or that of other patients, or for nonpayment for his stay." The majority reads this provision as a limitation on the Secretary's power to interrupt a recipient's residence at a particular institution. Clearly, however, this provision is a standard of conduct imposed by the Secretary upon the provider. Violation of this standard is one of many grounds for decertifying the offending institution. See 45 C.F.R. §§ 249.33(a) (2), 249.10(b) (15). The provision creates no "substantive interest" in the residents vis-a-vis the Secretary.
E. g., Friendly, Some Kind of Hearing, 123 U. Pa. L. Rev. 1267, 1276 (1975)
See Memphis Light, Gas and Water Division v. Craft, 436 U.S. 1, 7, 12, 98 S. Ct. 1554, 56 L. Ed. 2d 30 (1978); Arnett v. Kennedy, 416 U.S. 134, 167, 94 S. Ct. 1633, 1650, 40 L. Ed. 2d 15 (1974) (Powell, J., concurring in part); Id. at 177, 186, 94 S. Ct. at 1655, 1660 (White, J., concurring in part and dissenting in part); Id. at 207, 212, 94 S. Ct. at 1670, 1673 (Marshall, J., dissenting). For a historical sketch of the development of the two-step analysis, See L. Tribe, American Constitutional Law § 10-8 at 507-08; § 10-10 at 532-33 (1978)
See e. g., Memphis Light, Gas and Water Division v. Craft, 436 U.S. 1, 98 S. Ct. 1554, 56 L. Ed. 2d 30 (U.S., May 1, 1978) (public utility service); Mathews v. Eldridge, 424 U.S. 319, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976) (disability benefits under Social Security Act); Goss v. Lopez, 419 U.S. 565, 95 S. Ct. 729, 42 L. Ed. 2d 725 (1975) (public high school education); Wolff v. McDonnell, 418 U.S. 539, 94 S. Ct. 2963, 41 L. Ed. 2d 935 (1974) ("good time" credits towards a shortened jail sentence, and solitary confinement); Perry v. Sinderman, 408 U.S. 593, 92 S. Ct. 2694, 33 L. Ed. 2d 570 (1972) (teacher's employment tenure at state university); Morrissey v. Brewer, 408 U.S. 471, 92 S. Ct. 2593, 33 L. Ed. 2d 484 (1972) (conditional freedom following parole); Bell v. Burson, 402 U.S. 535, 91 S. Ct. 1586, 29 L. Ed. 2d 90 (1971) (driver's license); Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970) (state welfare benefits). But see cases cited in note 8 Infra
See, e. g., Board of Regents v. Roth, 408 U.S. 564, 571, 92 S. Ct. 2701, 33 L. Ed. 2d 548 (1972); Morrissey v. Brewer, 408 U.S. 471, 481, 92 S. Ct. 2593, 33 L. Ed. 2d 484 (1972); Graham v. Richardson, 403 U.S. 365, 374, 91 S. Ct. 1848, 29 L. Ed. 2d 534 (1971); Goldberg v. Kelly, 397 U.S. 254, 262, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970); Sherbert v. Verner, 374 U.S. 398, 404, 83 S. Ct. 1790, 10 L. Ed. 2d 965 (1963). For discussions of the erosion of the right-privilege distinction, see R. O'Neil, The Price of Dependency: Civil Liberties in the Welfare State (1970); Linde, Justice Douglas on Freedom in the Welfare State: Constitutional Rights in the Public Sector, 39 Wash.L.Rev. 4 (1964); Powell, The Right to Work for the State, 16 Colum. L. Rev. 99 (1916); Van Alstyne, The Demise of the Right-Privilege Distinction in Constitutional Law, 81 Harv. L. Rev. 1439, 1445-49 (1968); Comment, Entitlement, Enjoyment, and Due Process of Law, 1974 Duke L.J. 89; Note, The Effect of Tenure on Public School Teachers' Substantive Constitutional and Procedural Due Process Rights, 38 Mo.L.Rev. 279, 281-87 (1973); Comment, Due Process and Public Employment in Perspective: Arbitrary Dismissals of Non-Civil Service Employees, 19 U.C.L.A.L.Rev. 1052 (1972)
Board of Regents v. Roth, 408 U.S. 564, 577, 92 S. Ct. 2701, 33 L. Ed. 2d 548 (1972). In Roth the Supreme Court held that a teacher hired by a state university for a fixed term of one academic year did not possess a constitutionally protected interest in re-employment for the next year. Other cases that have dismissed claims of entitlement on the ground that in fact they merely expressed unilateral expectations that were not recognized by state or federal law include Meachum v. Fano, 427 U.S. 215, 96 S. Ct. 2532, 49 L. Ed. 2d 451 (1976) (transfer of prisoner to another state prison); Paul v. Davis, 424 U.S. 693, 96 S. Ct. 1155, 47 L. Ed. 2d 405 (1976) (police flyer identifying individual as a "known" shoplifter); Bishop v. Wood, 426 U.S. 341, 96 S. Ct. 2074, 48 L. Ed. 2d 684 (1976) (police officer employment). The insistence in these cases that the "legitimate claim of entitlement" be identified only by reference to positive law has been criticized by commentators as manifesting too narrow and rigid a conception of the rights guaranteed by the Constitution and as being internally inconsistent. See L. Tribe, American Constitutional Law §§ 10-10 & 10-11 (1978); Monaghan, Of "Liberty" and "Property", 62 Cornell L. Rev. 405 (1977); Van Alstyne, Cracks in the "New Property": Adjudicative Due Process in the Administrative State, id. at 445; Tushnet, The Newer Property: Suggesting for The Revival of Substantive Due Process, 1975 Supreme Court Review 261; Comment, Entitlement, Enjoyment and Due Process of Law, 1974 Duke L.I. 89; Comment Two Views of a Prisoner's Right to Due Process: Meachum v. Fano, Harv.Civ.Rights Civ.Lib.L.Rev. 405 (1977); The Supreme Court, 1975 Term, 90 Harv. L. Rev. 56, 86-104 (1976). However, in determining whether there is a protected property interest in the situation before us, we are bound by the guidelines enunciated by the Supreme Court
42 U.S.C. § 1396a(a) (23); 45 C.F.R. § 249.20 (1976). The parallel provision in the Medicare scheme is 42 U.S.C. § 1395a
45 C.F.R. § 205.10(a) (5); Id. § (4) (i). The Medicare scheme guarantees similar procedural protections. 20 C.F.R. § 404.901 et seq. (1976); See id. at § 405.701
45 C.F.R. § 249.12(a) (1) (ii) (B) (4) (1976)
Memphis Light, Gas and Water Division v. Craft, 436 U.S. 1, 9, 98 S. Ct. 1554, 1563, 56 L. Ed. 2d 30 (1978)
This analysis rests solely on the limited property right established by the first provision cited by the Klein majority, 42 U.S.C. § 1396a(a) (23); 45 C.F.R. § 249.20 (1976). The other two provisions referred to in Klein merely shed light on Congress's intent to create a property interest in favor of nursing home residents to remain in the qualified home of their choice
Memphis Light, Gas and Water Division v. Craft, 436 U.S. 1, 98 S. Ct. 1554, 56 L. Ed. 2d 30 (1978); Arnett v. Kennedy, 416 U.S. 134, 94 S. Ct. 1633, 40 L. Ed. 2d 15 (1974); Perry v. Sindermann, 408 U.S. 593, 92 S. Ct. 2694, 33 L. Ed. 2d 570 (1972); Board of Regents v. Roth, 408 U.S. 564, 92 S. Ct. 2701, 33 L. Ed. 2d 548 (1974)
See United States v. Carolene Products Co., 304 U.S. 144, 152 n.4, 58 S. Ct. 778, 82 L. Ed. 1234 (1938)
See also Cafeteria and Restaurant Workers Local 473 v. McElroy, 367 U.S. 886, 895, 81 S. Ct. 1743, 6 L. Ed. 2d 1230 (1961); Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U.S. 123, 162-63, 71 S. Ct. 624, 95 L. Ed. 817 (1951) (Frankfurter, J., concurring)
See Mathews v. Eldridge, 424 U.S. 319, 347-48, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976)
See Goldberg v. Kelly, 397 U.S. 254, 267, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970)
See Mathews v. Eldridge, 424 U.S. 319, 340, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976)
The Court determined that since the recipient is entitled to retroactive benefits if he ultimately prevails, his only interest is in the uninterrupted receipt of funds pending final disposition of his claim. 424 U.S. at 340, 96 S. Ct. 893
The Court mentioned "the incremental cost resulting from the increased number of hearings and the expense of providing benefits to ineligible recipients pending decision," and noted the strong interest of the public "in conserving scarce fiscal and administrative resources," particularly since "the cost of protecting those whom the preliminary administrative process has identified as likely to be found undeserving may in the end come out of the pockets of the deserving. . . ." 424 U.S. at 347-48, 96 S. Ct. at 909
The Court focused on the fact that in most cases the validity of the disability claim hinges on the evaluation of easily documented routine and unbiased medical reports, and concluded that since credibility is rarely an issue the reports could be assessed upon written submissions, as provided in the existing procedures. This was found to create a decided distinction between Eldridge and Goldberg v. Kelly, Supra, in that oral presentation was deemed to be essential for a welfare recipient to communicate his case to the decisionmaker in view of the low educational level of most recipients. 424 U.S. at 343-45, 96 S. Ct. 893
Among other procedural safeguards, the administrative mechanism required the state agency which administered the program to evaluate periodically the recipient's continued eligibility. Its assessments were to be based on investigations performed by its own medical and nonmedical personnel as well as upon information which it solicited from those who treated the recipient and from a detailed questionnaire from the recipient himself. Upon reaching a tentative conclusion that benefits should be terminated, the agency was required to provide the recipient with a summary of the evidence upon which it based its assessment, to afford him an opportunity to review his file, and to permit him to respond in writing and submit additional evidence. After the state agency made its final determination, it was to be reviewed by an examiner in the Social Security Administration Bureau of Disability Insurance and accepted by the Administration. Benefits were to be terminated two months after the month in which medical recovery is found to have occurred. The recipient is given the right to have the termination reviewed by different levels in the state agency, the Administration, and finally, the federal courts. If he prevails to any degree the recipient is entitled to retroactive payments. 424 U.S. at 336-39, 96 S. Ct. 893
424 U.S. at 340-43, 96 S. Ct. 893
Mathews v. Eldridge, 424 U.S. 319, 343, 96 S. Ct. 893, 907, 47 L. Ed. 2d 18 (1976)
Id. at 349, 96 S. Ct. at 909
Klein v. Mathews, 430 F. Supp. 1005 (D. N.J., 1977), Remanded with instructions to dismiss as moot, No. 77-1896, 586 F.2d 250 (3d Cir. 1978).
42 U.S.C. § 1395cc(b) (2)
Cf. 45 C.F.R. § 249.12(a) (1) (ii) (B) (4) (1976) (regulation permits facility to transfer patients only, Inter alia, "for his welfare or that of other patients.")
45 C.F.R. § 250.23 (1976). The statute limits accreditation of a facility to twelve months, 42 U.S.C. § 1395cc(a) (1), thus necessitating annual surveys
45 C.F.R. § 250.23(a) (3) (v) (1976) specifically requires that the medical review team inspection include "personal contact with and observation of each patient receiving assistance under the plan by a team member or members, and review of each such patient's medical record." See also Text accompanying note 23 Supra (dissent takes judicial notice of Pennsylvania manual stating that on-site survey "generally involves" interviews with residents)
Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 98 S. Ct. 1554, 56 L. Ed. 2d 30 (1978); Arnett v. Kennedy, 416 U.S. 134, 94 S. Ct. 1633, 40 L. Ed. 2d 15 (1974); Perry v. Sindermann, 408 U.S. 593, 92 S. Ct. 2694, 33 L. Ed. 2d 570 (1972); Board of Regents v. Roth, 408 U.S. 564, 92 S. Ct. 2701, 33 L. Ed. 2d 548 (1972)