Opinion ID: 6497990
Heading Depth: 3
Heading Rank: 1

Heading: Factor One: Intended Beneficiaries

Text: The first Blessing factor asks whether Congress intended section 1396u‐2(f) to benefit providers like Saint Anthony and whether it intended that benefit to be a right, as distinct from a generalized entitlement. We conclude that both answers are yes. First, providers are the intended beneficiaries of section 1396u‐2(f). The text requires MCOs to contract that they “shall make payment to health care providers … on a timely basis.” § 1396u‐2(f) (emphasis added). No one benefits more directly from a requirement for timely payments to providers than the providers themselves. Cf. BT Bourbonnais Care, LLC v. Nor‐ wood, 866 F.3d 815, 821 (7th Cir. 2017) (“Who else would have a greater interest than the [nursing facility operators] in the process ‘for determination of rates of payment under the [State] plan for … nursing facility services’”? (second altera‐ tion and omission in original)). To resist this conclusion, HFS asserts that the term “health care providers” includes practitioners but not hospitals. The district judge did not adopt this argument, nor do we. Section 1396u‐2(f) cross‐references section 1396a(a)(37)(A), which re‐ quires that states pay “practitioners” on the 30/90 pay sched‐ ule. See Illinois Council on Long Term Care v. Bradley, 957 F.2d 305, 306, 308 (7th Cir. 1992). “Practitioners” in that context means individual providers as opposed to institutional ones like Saint Anthony. HFS thus argues that since section 1396u‐ 2(f) requires states to ensure MCOs pay providers “consistent 16 No. 21‐2325 with the claims payment procedures described in section 1396a(a)(37)(A),” section 1396u‐2(f) adopts the 30/90 pay schedule requirement only as to “practitioners.” In the State’s view, holding that section 1396u‐2(f) applies to hospitals as well would exceed rather than be consistent with what section 1396a(a)(37)(A) requires. The argument is not persuasive. HFS reasons that Con‐ gress implicitly and indirectly defined “providers” nar‐ rowly—just for purposes of section 1396u‐2(f)—through a cross‐reference to section 1396a(a)(37)(A) that describes a state’s payment obligations to practitioners in a fee‐for‐ser‐ vice program. That is an improbably subtle reading. A more persuasive reading of the statutory text is that Congress in‐ voked only the payment procedures in section 1396a(a)(37)(A), not the beneficiaries of that provision. The statutory text ex‐ plains that payment must be made “on a timely basis con‐ sistent with the claims payment procedures described in section 1396a(a)(37)(A) of this title.” § 1396u‐2(f) (emphasis added). Those procedures include the 30/90 pay schedule. Congress knows how to use cross‐references for a defini‐ tional purpose in the Medicaid Act. See, e.g., § 1396u‐ 2(a)(1)(B)(i) (“[A] medicaid managed care organization, as de‐ fined in section 1396b(m)(1)(A) of this title….”); § 1396u‐ 2(b)(2)(A)(i) (“[T]o provide coverage for emergency services (as defined in subparagraph (B))….”). That is not what oc‐ curred here. The language is suﬃciently plain here, United States v. Melvin, 948 F.3d 848, 851–52 (7th Cir. 2020), and the plain meaning of “health care provider” includes hospitals. Cf. 42 U.S.C. § 1395w–25(d)(5) (enacted as part of the Bal‐ anced Budget Act of 1997). No. 21‐2325 17 HFS’s position is also inconsistent with the provision’s purpose as shown in additional statutory language. Section 1396u‐2(f) was part of the same Balanced Budget Act of 1997. See Pub. L. No. 105‐33, 111 Stat. 251 § 4708(c) (1997). Section 4708(c) is entitled: “Assuring Timeliness of Provider Pay‐ ments.” This language signals that Congress intended section 1396u‐2(f) to assure, i.e., to guarantee, timely payment to pro‐ viders. That understanding is consistent with later congres‐ sional action. In 2009 Congress enacted 42 U.S.C. § 1396u‐2(h) as part of the American Recovery and Reinvestment Act of 2009. See Pub. L. No. 111‐5, 123 Stat. 115, § 5006(d) (2009). That subsection established special rules for “Indian enrol‐ lees, Indian health care providers, and Indian managed care entities.” § 1396u‐2(h). Relevant to our purposes, section 1396u‐2(h)(2)(B) cross‐references section 1396u‐2(f) and de‐ scribes it as the “rule for prompt payment of providers”: (2) Assurance of payment to Indian health care providers for provision of covered services Each contract with a managed care entity under section 1396b(m) of this title or un‐ der section 1396d(t)(3) of this title shall require any such entity, as a condition of receiving payment under such contract, to satisfy the following requirements: … (B) Prompt payment To agree to make prompt payment (consistent with rule for prompt pay‐ ment of providers under section 1396u– 2(f) of this title) to Indian health care 18 No. 21‐2325 providers that are participating pro‐ viders with respect to such entity…. § 1396u‐2(h)(2)(B) (emphasis added). Given this evidence, it would seem odd to construe a pro‐ vision Congress intended to assure timeliness of provider payment as not applying to many providers, as HFS advo‐ cates. That would appear to defeat the statute’s evident pur‐ pose in most cases. We decline to read the text in such a man‐ ner. Quarles v. United States, 139 S. Ct. 1872, 1879 (2019) (“We should not lightly conclude that Congress enacted a self‐de‐ feating statute.”). If the text required such a result, that would be one thing, but we should not adopt such an improbable reading of the text to reach such an odd result. In applying the first Blessing factor, we next conclude that section 1396u‐2(f) grants providers a right, not merely a gen‐ eralized benefit. It is here that we disagree with the district court. In granting the motion to dismiss, the court determined that section 1396u‐2(f) failed the first Blessing factor. The court invoked Gonzaga, asserting that providers received only “a generalized ‘benefit’” from section 1396u‐2(f), which “isn’t good enough” to constitute a right enforceable under section 1983. Saint Anthony Hospital, 548 F. Supp. 3d at 734, quoting Gonzaga, 536 U.S. at 283. The district court concluded that sec‐ tion 1396u‐2(f) “itself does not entitle providers to much of anything, and does not contain any ‘explicit rights‐creating terms.’” Id., quoting Gonzaga, 536 U.S. at 284. We read the statute diﬀerently. Gonzaga provides a useful contrast regarding rights‐creating language. In Gonzaga, a for‐ mer student sued Gonzaga University and an employee un‐ der section 1983 for allegedly violating his rights under the No. 21‐2325 19 Family Educational Rights and Privacy Act (FERPA). Part of the statutory language at issue directed the Secretary of Edu‐ cation that “[n]o funds shall be made available’ to any ‘edu‐ cational agency or institution’ which has a prohibited ‘policy or practice’” of permitting the release of education records without parents’ written consent. Gonzaga, 536 U.S. at 287 (al‐ teration in original), quoting 20 U.S.C. § 1232g(b)(1); see also § 1232g(b)(2). That prohibited activity is allegedly what oc‐ curred in the case. The Supreme Court concluded that Congress did not grant an individual whose interests were violated under FERPA a right enforceable through section 1983. Because the statutory provisions did not have an individualized focus, they failed Blessing factor one: “[The] provisions further speak only in terms of institutional policy and practice, not individ‐ ual instances of disclosure. Therefore, as in Blessing, they have an ‘aggregate’ focus, they are not concerned with ‘whether the needs of any particular person have been satisfied,’ and they cannot ‘give rise to individual rights.’” Gonzaga, 536 U.S. at 287–88 (internal citation omitted), quoting Blessing, 520 U.S. at 343–44. The Court also highlighted that the Secretary of Edu‐ cation could take away funds only if the university did not substantially comply with the statutory requirements. This fact contributed to the understanding that the focus was on sys‐ temwide performance rather than individual instances of im‐ proper disclosure. Finally, since FERPA’s provisions spoke only to the Secretary and directed him to withdraw funding from schools that had a “prohibited ‘policy or practice,’” the Court determined that their focus was “two steps removed from the interests of individual students and parents.” Id. at 287 (citation omitted). The provisions therefore failed to con‐ fer an individual right enforceable under section 1983. 20 No. 21‐2325 The opposite is true here. Section 1396u‐2(f) is concerned with whether the needs of particular persons and entities— providers like Saint Anthony—have been satisfied. The statu‐ tory text specifies that the State “shall provide” that MCOs “shall make payment to health care providers … on a timely basis.” 42 U.S.C. § 1396u‐2(f). The focus of section 1396u‐2(f) is not “two steps removed” from the interest of providers. Its focus is directly on the interest Saint Anthony asserts here: en‐ suring that providers receive timely payment from MCOs. And the provision is not concerned only with whether MCOs in the aggregate pay providers on the 30/90 pay schedule, but whether individual providers are receiving the payments in the timeframe promised. We see this in the provision’s close attention to provider‐ specific exemptions from the 30/90 pay schedule. Section 1396u‐2(f) says that its mandate applies “unless the health care provider and the organization agree to an alternate pay‐ ment schedule.” It establishes a personal right to timely pay‐ ment, which all providers are entitled to insist upon. Cf. Planned Parenthood of Indiana, 699 F.3d at 974 (Medicaid state plan requirement permitting all eligible recipients to receive medical assistance from the provider of their choice estab‐ lished a personal right “to which all Medicaid patients are en‐ titled” but, implicitly, need not accept (emphasis added)). Ei‐ ther way, the focus is on the individual provider. The focus is not on whether MCOs in the aggregate substantially comply with the timely payment requirement. Section 1396u‐2(f) is thus not just a benchmark for aggregate performance. That conclusion finds support in our precedents under the Medicaid statutes. Section 1396a(a)(10)(A) provides that “[a] State plan for medical assistance must … provide … for No. 21‐2325 21 making medical assistance available … to all [eligible] indi‐ viduals.” We have held that the provision confers private rights to individuals enforceable under section 1983. See Mil‐ ler v. Whitburn, 10 F.3d 1315, 1319–20 (7th Cir. 1993); accord, Bontrager v. Indiana Family & Social Services Admin., 697 F.3d 604, 607 (7th Cir. 2012) (reaﬃrming Miller’s rights analysis af‐ ter Blessing and Gonzaga). In Miller, we found it significant that the State was required to provide medical assistance to all eli‐ gible individuals. The same is true here, but with respect to timely payments to providers that do not opt out of the 30/90 pay schedule. And in Wilder, the statute, like the statute here, required states to provide for payment to health care provid‐ ers: “a state plan” must ensure “‘payment … of the hospital services, nursing facility services, and services in an intermedi‐ ate care facility for the [recipients] under the plan.’” 496 U.S. at 510 (omission in original), quoting 42 U.S.C. 1396a(a)(13)(A) (1982 ed., Supp. V). The Supreme Court concluded that this statutory language granted rights to health care providers en‐ forceable under section 1983. See id. at 524. Wilder may lie close to the outer edge of the line for section 1983 cases under Spending Clause legislation, but recognizing the rights‐creat‐ ing language in section 1396u‐2(f) does not push that logic any further. At bottom, section 1396u‐2(f) defines the minimum terms of the provider’s right to timely payment and is provider‐spe‐ cific. It uses “individually focused terminology,” Gonzaga, 536 U.S. at 287, unmistakably “phrased in terms of the persons benefited,” id. at 284, quoting Cannon v. University of Chicago, 441 U.S. 677, 692 n.13 (1979), and satisfies Blessing factor one. 22 No. 21‐2325