Opinion ID: 474329
Heading Depth: 2
Heading Rank: 1

Heading: The Property Interest

Text: 22 In his response to the Government's motion to dismiss for lack of jurisdiction, Dr. Koerpel attempted to show the law upon which his property interest was grounded. He claimed that [i]n 1978 Congress enacted 42 U.S.C. Sec. 426-1 whereby all individuals needing dialysis were eligible for Medicare reimbursement, thus creating reimbursement expectations on the part of both consumers and providers of health care. (R., Vol.1, p. 280.) The statute discusses only the entitlement of patients to benefits. It does not mention any entitlement for practitioners like Dr. Koerpel who provide health services. In Dr. Koerpel's own words, his is a reimbursement expectation. 23 A mere expectation of entitlement is insufficient to create a property right. [S]uch unilateral hope cannot constitute a protected 'property' interest as to require a pre-termination hearing. Geriatrics, Inc. v. Harris, 640 F.2d 262, 264-5 (10th Cir.), cert. denied, 454 U.S. 832, 102 S.Ct. 129, 70 L.Ed.2d 109 (1981). Dr. Koerpel has pointed to nothing other than 42 U.S.C. Sec. 426-1, which would give rise to his property interest. 24 In Board of Regents v. Roth, 408 U.S. 564, 576, 92 S.Ct. 2701, 2708, 33 L.Ed.2d 548 (1972), the Supreme Court held: 25 To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it. It is a purpose of the ancient institution of property to protect those claims upon which people rely in their daily lives, reliance that must not be arbitrarily undermined. It is a purpose of the constitutional right to a hearing to provide an opportunity for a person to vindicate those claims. 26 Property interests, of course, are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law--rules or understandings that secure certain benefits and that support claims of entitlement to those benefits. Thus, the welfare recipients in Goldberg v. Kelly, supra, had a claim of entitlement to welfare payments that was grounded in the statute defining eligibility for them. 27 Id. at 577, 92 S.Ct. at 2709 (citations omitted) (emphasis added). 28 Following the general principles set out in Roth, we have held that [a] protectable property interest must be an interest secured by statute or legal rule or through a mutually explicit understanding. Geriatrics, supra, at 264. Although some Tenth Circuit cases deal with the property interest for other purposes, Geriatrics appears to be the only opinion by this court which has dealt with property in a context similar to the case at bar. 29 In Geriatrics we held that the nursing home there had no property interest and commented: 30 Eventide [the nursing home which was to be suspended from the Medicaid program] is not the intended beneficiary of the Medicaid program. Instead, the purpose underlying the funding program is to extend financial benefits to the patients eligible to receive their medical care at government expense. 42 U.S.C. Sec. 1395a. Eventide argues also that termination of benefits would force the Home to close and that it therefore has a significant financial interest to retain its certification. The Home's financial need for government assisted patients is incidental to the purpose and design of the program. Eventide's operating license has not been rescinded and it may still operate as a nursing home and render care to private-pay patients. The unfortunate reality that it will probably encounter difficulty operating at capacity is not of constitutional significance. 31 Id. at 265. 32 Like the nursing home in Geriatrics, Dr. Koerpel is not the intended beneficiary of the Medicare program or of the statutory provision that he relies upon. His license to practice medicine is not being revoked and although Dr. Koerpel is likely to suffer financial losses, these losses are not controlling. They are not of constitutional significance for the establishment of a protectable property interest. Geriatrics, supra. 33 Geriatrics involved a provider agreement between the nursing home and the Government. Despite the existence of the agreement, the court found that it did not create a property interest because of its limited terms and nonrenewability. By analogy, Dr. Koerpel stands to lose income if he is declared ineligible. However, such losses do not advance to the level of a protected property right because no clear promises have been made by the Government. To engraft upon the Social Security system a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to everchanging conditions which it demands. Flemming v. Nestor, 363 U.S. 603, 610, 80 S.Ct. 1367, 1372, 4 L.Ed.2d 1435 (1960) (citation omitted). 34 In summary, the rule derived from Supreme Court cases and cases from this circuit is that a property right must be based on an independent source such as a law, rule, or mutually explicit understanding. Roth, supra; Leis v. Flynt, 439 U.S. 438, 441, 99 S.Ct. 698, 700, 58 L.Ed.2d 717 (1979); Vinyard v. King, 728 F.2d 428 (10th Cir.1984); Chavez v. City of Santa Fe Housing Authority, 606 F.2d 282, 284 (10th Cir.1979); Coleman v. Darden, 595 F.2d 533, 537-38 (10th Cir.), cert. denied, 444 U.S. 927, 100 S.Ct. 267, 62 L.Ed.2d 184 (1979). Dr. Koerpel has not demonstrated any federal laws, 2 rules, or mutually explicit understandings which secure a property interest. If any state scheme exists which could be construed to create a continuing entitlement to Medicare reimbursements, Dr. Koerpel has not brought it to the court's attention. 35 We conclude that Dr. Koerpel has shown no property interest in his continuing eligibility for Medicare reimbursement. His contentions that he has such an interest do not rise to the level of a colorable constitutional claim.