Opinion ID: 479018
Heading Depth: 1
Heading Rank: 3

Heading: claims under federal law

Text: 15 Medicaid is a cooperative venture of the state and federal governments. A state which chooses to participate in Medicaid submits a state plan for the funding of medical services for the needy which is approved by the federal government. The federal government then subsidizes a certain portion of the financial obligations which the state has agreed to bear. A state participating in Medicaid must comply with the applicable statute, Title XIX of the Social Security Act of 1965, as amended, 42 U.S.C. Sec. 1396, et seq., and the applicable regulations. 16 The district court held that Silver was entitled to relief under 42 U.S.C. Sec. 1396a(a)(23). That section provides in relevant part: 17 A State plan for medical assistance must-- 18 .... 19 (23) ... provide that any individual eligible for medical assistance (including drugs) may obtain such assistance from any institution, agency, community pharmacy, or person, qualified to perform the service or services required (including an organization which provides such services, or arranges for their availability, on a prepayment basis), who undertakes to provide him such services. 20 42 U.S.C. Sec. 1396a(a)(23). The above-quoted provision is sometimes referred to as the freedom of choice provision. The district court ruled that Silver was qualified to perform podiatric services and that by adopting a policy that systematically refuses to compensate podiatrists for those services that they are licensed to provide while simultaneously compensating physicians for these same podiatry services, Defendant Commissioner has violated the aforestated freedom of choice provision. Record on Appeal at 134. 21 However, the district court failed to recognize that the Supreme Court in Maine v. Thiboutot, 448 U.S. 1, 6, 100 S.Ct. 2502, 2505, 65 L.Ed.2d 555 (1980), has held that the Social Security Act affords no private right of action. See also Edelman v. Jordan, 415 U.S. 651, 674-75, 94 S.Ct. 1347, 1361, 39 L.Ed.2d 662 (1974); id. at 690, 94 S.Ct. at 1369 (Marshall, J., dissenting). Thus, Silver had no express or implied right of action under the Social Security Act to challenge Alabama's policy. 22 Even though there is no express or implied cause of action under the Social Security Act, Silver's complaint could be deemed an action under 42 U.S.C. Sec. 1983. Supreme Court precedent establishes that, subject to certain exceptions discussed below, violations of the Social Security Act can be remedied in a Sec. 1983 action. In Maine v. Thiboutot, 448 U.S. at 4-6, 100 S.Ct. at 2504-05, the Court construed Sec. 1983 as authorizing suits to redress violations by state officials of rights created by federal statutes. Accord Middlesex County Sewerage Authority v. National Sea Clammers, 453 U.S. 1, 19, 101 S.Ct. 2615, 2625-26, 69 L.Ed.2d 435 (1981) (Sea Clammers). Section 1983 is the exclusive statutory cause of action available to a plaintiff seeking compliance with the Social Security Act on the part of a participating state. Thiboutot, 448 U.S. at 5-6, 100 S.Ct. at 2504-05; see also Taylor v. St. Clair, 685 F.2d 982, 988 (5th Cir.1982). 23 The Court, however, has recognized two exceptions to the application of Sec. 1983 to statutory violations. Sea Clammers, 453 U.S. at 19, 101 S.Ct. at 2626. First, if Congress has foreclosed private enforcement of the statute in question in the enactment of the statute itself, then Sec. 1983 is unavailable to enforce federal rights under that statute. Sea Clammers, 453 U.S. at 19, 101 S.Ct. at 2625-26; Pennhurst State School & Hospital v. Halderman, 451 U.S. 1, 28, 101 S.Ct. 1531, 1545, 67 L.Ed.2d 694 (1981) (Pennhurst I). For example, [w]hen the remedial devices provided in a particular Act are sufficiently comprehensive, they may suffice to demonstrate congressional intent to preclude the remedy of suits under Sec. 1983. Sea Clammers, 453 U.S. at 20, 101 S.Ct. at 2626. Second, if Congress has not created enforceable rights in the relevant statutory provision, there is no cause of action available under Sec. 1983. Sea Clammers, 453 U.S. at 19, 101 S.Ct. at 2625-26; Pennhurst I, 451 U.S. at 28, 101 S.Ct. at 2630. By its terms, Sec. 1983 does not create substantive rights; 2 it provides a remedy against state officials for deprivations of rights established elsewhere under federal law. See, e.g., Wilson v. Garcia, 471 U.S. 261, 278, 105 S.Ct. 1938, 1948, 85 L.Ed.2d 254 (1985). 24 If there were no exceptions to the Maine v. Thiboutot rule that Sec. 1983 may be used to redress violations by state officials of federal statutes, we would deem Silver's claim to have been brought under Sec. 1983 and consider the merits. However, with regard to the second exception to enforcement of federal statutory rights through Sec. 1983, Baggiano argues that Sec. 1396a(a)(23) does not create rights enforceable by health care providers. 25 For purposes of this analysis, it is clear that the statute in question must create rights enforceable by the plaintiff in the case at hand--not rights enforceable by some potential plaintiff. See, e.g., Alexander v. Polk, 750 F.2d 250, 259 (3d Cir.1984) (It is clear that 7 C.F.R. Sec. 246.24 (1978) created an enforceable right on behalf of WIC recipients to be informed of the availability of fair hearings.); Boatowners & Tenants Ass'n v. Port of Seattle, 716 F.2d 669, 673-74 (9th Cir.1983) (There is no evidence whatsoever of an intent to provide [in the River and Harbor Improvements Act] economical moorage or to create any special benefit for the class of pleasure craft owners [who have brought this suit].); and Perry v. Housing Authority of City of Charleston, 664 F.2d 1210, 1217 (4th Cir.1981) (The plaintiffs have not pointed to any substantive provisions of the various housing acts [the United States Housing Act of 1937, the Housing Act of 1949, and the Housing and Urban Development Act of 1968] which give them a tangible right, privilege, or immunity.). 26 As with the Medicaid statute as a whole, 3 Sec. 1396a(a)(23) was intended to benefit Medicaid recipients. Baggiano argues that there is no indication that it creates rights enforceable by health care providers. First, the language of this provision is clearly drawn to give Medicaid recipients the right to receive care from the Medicaid provider of their choice, rather than the government's choice. However, there is no indication in the language that health care practitioners are given any rights by this provision. 27 Second, the legislative history is relevant in determining whether or not health care providers are given enforceable rights with respect to the freedom of choice provision. The Senate Report on the Act of Jan. 2, 1968, Pub.L. 90-248, pursuant to which the freedom of choice provision became part of the statute, stated that the bill would-- ... (4) Allow recipients free choice of qualified providers of health services. S.Rep. No. 744, 90th Cong., 1st Sess., reprinted in 1967 U.S.Code Cong. & Ad. News 2834, 2838 (USCCAN). Later, the Senate Report stated that the new subsection would provide that people covered under the medicaid program would have free choice of qualified medical facilities and practitioners. Id., reprinted in 1967 USCCAN at 2868. The Senate Report also stated: 28 (i) Free choice of medical services 29 Under the current provisions of law, there is no requirement on the States that recipients of medical assistance under a State title XIX program shall have freedom in their choice of medical institution or medical practitioner. In order to provide this freedom, a new provision is included in the law to require the States to offer this choice.... Under this provision, an individual is to have a choice from among qualified providers of service. Inasmuch as States may, under title XIX, set certain standards for the provision of care, and may establish rates for payment, it is possible that some providers of service may still not be willing or considered qualified to provide the services included in the State plan. 30 Id., reprinted in 1967 USCCAN at 3021. Baggiano argues that the legislative history unambiguously indicates that the provision was intended to benefit Medicaid recipients, and that there is no suggestion that health care providers were intended beneficiaries. 31 Finally, the Supreme Court has stated that Sec. 1396a(a)(23) creates rights in Medicaid recipients: 32 Title 42 U.S.C. Sec. 1396a(a)(23) ... gives recipients the right to choose among a range of qualified providers, without government interference. By implication, it also confers an absolute right to be free from government interference with the choice to remain in a [nursing] home that continues to be qualified. 33 O'Bannon v. Town Court Nursing Center, 447 U.S. 773, 785, 100 S.Ct. 2467, 2475, 65 L.Ed.2d 506 (1980) (emphasis in original). Thus, although it is clear that recipients have enforceable rights under Sec. 1396a(a)(23), Baggiano argues that there is no indication in the language of the statute, the legislative history, or the Supreme Court's interpretation of this provision that Congress intended to create rights enforceable by health care providers. 34 On the other hand, although the Medicaid statute as a whole was enacted for the benefit of the recipients, Silver argues that Medicaid providers have been allowed to bring Sec. 1983 actions under other subsections for adjustments of the states' methods of reimbursement. See, e.g., Alabama Nursing Home Ass'n v. Harris, 617 F.2d 385 (5th Cir.1980); Alabama Nursing Home Ass'n v. Harris, 617 F.2d 388 (5th Cir.1980); Nebraska Health Care Ass'n v. Dunning, 778 F.2d 1291, 1296 (8th Cir.1985); Yapalater v. Bates, 494 F.Supp. 1349, 1356-59 (S.D.N.Y.1980), aff'd, 644 F.2d 131 (2d Cir.1981), cert. denied, 455 U.S. 908, 102 S.Ct. 1255, 71 L.Ed.2d 447 (1982). 35 For several reasons we decline at this time to resolve the issue of whether this provision of the Social Security Act creates a right enforceable by Silver. There is no precedent in this circuit or in any other circuit on this question. Since the issue was not presented to the district court, we are without the benefit of that court's consideration of the question. Finally, as discussed above, Medicaid recipients do have enforceable rights under Sec. 1396a(a)(23), and an actual recipient has made a motion to intervene in this case. See Section IV, infra. Therefore, on remand, the district court may not have to reach this issue. If the district court finds that the patient has a Sec. 1983 cause of action and permits the intervention, a decision on the merits of the patient's statutory claim will moot the issue of jurisdiction over the identical claim brought by the podiatrist. If intervention is not allowed, the district court must consider this issue in the first instance. 36 In summary, because there is no express or implied cause of action under Sec. 1396a(a)(23), the judgment of the district court with respect to Silver's federal statutory claim must be vacated. We express no opinion on the question of whether Silver may maintain an action under Sec. 1983. This issue is remanded to the district court, although that court, too, may find it unnecessary to resolve the question in light of the motion to intervene. 4
37 Having decided that Silver was entitled to relief on his federal statutory claim, the district court did not address the federal constitutional claims. Since we have declined to determine whether or not Silver can bring an action to enforce the statute, his constitutional claims remain to be decided. Silver alleges that Alabama's policy of denying reimbursement to podiatrists while reimbursing medical doctors for podiatric services violates the equal protection and the substantive due process guarantees of the Fourteenth Amendment. Of course, such constitutional claims can be remedied in a Sec. 1983 action. However, we conclude that Silver's constitutional claims are so clearly without merit that it would be futile to remand these claims for the district court to entertain them in the first instance. Thus the constitutional claims are dismissed. 38 Social and economic legislation ... that does not employ suspect classifications or impinge on fundamental rights must be upheld against equal protection attack when the legislative means are rationally related to a legitimate governmental purpose. Hodel v. Indiana, 452 U.S. 314, 331, 101 S.Ct. 2376, 2387, 69 L.Ed.2d 40 (1981) (citations omitted). Similarly, in order to satisfy substantive due process requirements, the legislation must be rationally related to its purpose and must not be arbitrary or discriminatory. United States v. Coastal States Crude Gathering Co., 643 F.2d 1125, 1127-28 (5th Cir. Unit A, 1981), cert. denied, 454 U.S. 835, 102 S.Ct. 136, 70 L.Ed.2d 114 (1981). 5 Silver has not alleged that this policy involves any suspect classification or fundamental right. Without specifically stating its reason for this policy, Alabama has asserted that the decision not to reimburse podiatrists has a rational basis. Where ... there are plausible reasons for [the legislature's] action, our inquiry is at an end. It is, of course, 'constitutionally irrelevant whether this reasoning in fact underlay the legislative decision,' ... because [the Supreme Court] has never insisted that a legislative body articulate its reasons for enacting a statute. United States Railroad Retirement Board v. Fritz, 449 U.S. 166, 178-79, 101 S.Ct. 453, 461, 66 L.Ed.2d 368 (1980) (citation omitted). In this case, there are several legitimate state interests to which this policy is rationally related. For example, this policy encourages patients to visit one health care provider for all of their examinations, diagnoses and treatments, rather than visiting a podiatrist for foot problems and a medical doctor for other problems. In addition, this policy might cut down administrative costs--monitoring and reimbursing multiple health care providers might require greater resources than monitoring and reimbursing physicians alone. Thus, Silver's constitutional claims are without merit and must be dismissed.