Opinion ID: 6931940
Heading Depth: 2
Heading Rank: 3

Heading: Applying the Three Part “Enforceable Rights” Test

Text: We turn now to the provisions on which the district court did rule. The court held that 42 U.S.C. §§ 1396n(c)(2), 1396n(f)(l), and 42 C.F.R. §§ 441.302 and 441.303(f)(1), did give rise to one or more private rights of action pursuant to § 1983. We apply the Wilder framework to each of these statutes or regulations in turn.

42 U.S.C. § 1396n(c)(2) and 42 C.F.R. § 441.302 provide that a state must make various assurances that are satisfactory to the Secretary in order to obtain a waiver. 15 The district court held that this statute and its corresponding regulation impose binding obligations upon participating states. We agree. First of all, although some of the assurances that a state is required to make under Section 1396n(c)(2) were obviously designed to save the government money, see, e.g., § 1396n(c)(2)(D) (providing that home care costs may not exceed the cost of institutional care), other assurances serve to protect the health and welfare of home care Medicaid recipients. E.g., § 1396n(c)(2)(A) (providing that a state must assure that “necessary safeguards ... have been taken to protect the health and welfare of individuals provided services under the waiver.”); § 441.302(a) (same); § 1396n(c)(2)(B) (requiring participating states to evaluate the level of care needed by home care Medicaid recipients); § 441.302(c) (same); § 1396n(c)(2)(C) (providing that recipients receive information about feasible alternatives); § 441.302(d) (same); § 1396n(c)(2)(E) (providing that a participating state must make an annual report to the Secretary describing, inter alia, the impact of the waiver on the health and welfare of home care Medicaid recipients); § 441.302(f)(2) (same). Second, §§ 1396n(e)(2) and 441.302 impose mandatory duties upon participating states. Such states must provide the various enumerated assurances in order to obtain a home care waiver. Third, there is nothing vague or amorphous about what the statute or corresponding regulations require of participating states. The duties set forth therein do not involve any fuzzy, undefined concepts like “reasonable efforts.” 16 Rather, these duties involve unambiguous directives that are well within the ability of the judiciary to enforce. Thus, §§ 1396n(c)(2) and 441.302 are more like the Boren Amendment that was at issue in Wilder than they are like the statute that was at issue in Suter. See Suter, — U.S. at -, 112 S.Ct. at 1368 (distinguishing Wilder).
Defendant maintains that § 1396n(c) “fall[s] on the Suter side of the fence.” Defendant’s Br. at 32. He argues that the Medicaid Act gives the Secretary an active role in overseeing the approval of a state’s waiver program, and that, according to Su-ter, such a role prevents the relevant provision from creating any enforceable rights. This argument is based upon a misreading of Suter. The Suter Court recognized that, with regard to the Adoption Assistance and Child Welfare Act, the Secretary was required to play an active role in overseeing state plans for reimbursing foster care payments. — U.S. at-, 112 S.Ct. at 1368. The Court explained that this active role “show[s] that the absence of a remedy to private plaintiffs under § 1983 does not make the reasonable efforts clause a dead letter.” Id. at-, 112 S.Ct. at 1369. In the present case, Defendant apparently interprets this passage to mean that the Secretary’s oversight is somehow inconsistent with a private right of action. The Suter Court was, rather, anticipating and rebutting the possible argument that its analysis rendered Congress’s requirement of “reasonable efforts” entirely meaningless and unenforceable. Id. The point in Suter was that the term “reasonable efforts,” as used in the Adoption Act, is too vague to create judicially enforceable rights, but not too vague to be enforced by the Secretary, who implements her own policies regarding the efforts that the states must put forth. To make the analogous point in the present ease, were we to hold that § 1396n(e)(2) did not give rise to any rights that are enforceable under § 1983, the section would not thereby be rendered meaningless and unenforceable, for the section gives an important oversight role to the Secretary. It does not follow, however, that administrative oversight and private enforcement .are somehow incompatible. Thus, the fact that the relevant statute requires oversight by the Secretary does not place the statute on “the Suter side of the fence.”
Defendant also argues that § 1396n(c)(2) fails to give rise to privately enforceable rights because it places the primary responsibility for compliance upon the Secretary rather than upon the participating states. For this argument, Defendant relies on Au-dette v. Sullivan, 19 F.3d 254 (6th Cir.1994), and Stowell v. Ives, 976 F.2d 65, 69 (1st Cir.1992). The Audette and Stowell courts found that a plaintiff has no § 1983 right of action against a state for the violation of 42 U.S.C. § 1396a(c)(1), 17 specifically because the statute “is essentially administrative in nature and imposes an obligation exclusively upon federal officials, not upon state actors.” Audette, 19 F.3d at 257 (quoting Stowell, 976 F.2d at 70). The courts distinguished statutes that place the “onus of compliance” on the federal government from those that place the onus on participating states, and held that only the latter can give rise to a cognizable section 1983 cause of action. Id. at 256-57 (quoting Stowell, 976 F.2d at 70); see also id. at 257 (“Section 1396a(c)(l) provides incentives — not commands — to the States.”) (quoting Stowell, 976 F.2d at 69). 18 Defendant argues that the same point applies to § 1396n(c)(2), that the statute imposes duties on the Secretary, not the states, regarding when the Secretary is allowed to grant a state’s waiver request. We disagree. We find, rather, that § 1396n(c)(2), and its corresponding regulation, § 441.302, places the onus of compliance squarely upon participating states. Defendant went awry when he failed to follow the Stowell court’s guidance regarding how to determine who bears the onus of compliance. This guidance was offered in the context of the Stowell court’s attempt to distinguish a key footnote in Suter. In footnote 12, the Suter Court set forth a paradigm example of a statute that imposed “precise requirements on the States aside from the submission of a plan”: For example, 42 U.S.C. § 672(e) provides that “no Federal payment may be made under this part” for a child voluntarily placed in foster care for more than 180 days unless within that period there is a judicial determination that the placement is in the best interest of the child. — U.S. at-n. 12, 112. S.Ct. at 1369 n. 12. The Suter Court found that, in contrast with the “reasonable efforts” clause of § 671(a)(15), which was too vague to give rise to any rights that are enforceable under § 1983, the “precise requirements” of § 672(e) manifested a “different” congressional intent — i.e., an intent to create private rights of action under § 1983. Id. In Stowell, the appellants attempted to argue that § 1396a(c)(l) was analogous to § 672(e). The court rejected this argument: In point of fact, section 1396a(c)(l) is identical, in relevant respects, not to section 672(e) but to section 671(a)(15) — the statutory provision that the Suter Court, in footnote 12, was contrasting with 672(e). The Court deemed it noteworthy that section 671(a)(15) requires “submission of a plan to be approved by the Secretary” while section 672(e) provides that “no Federal payment may be made” unless certain conditions are met. In other words, the Suter Court distinguished between cases in which, on the one hand, a statutory provision is, in effect, a communication to a specific federal official whose approval is required prior to disbursement of federal funds (section 671(a)(15)), and cases in which, on the other hand, a statutory provision is, in effect, a communication from Congress to those States that elect to apply for earmarked funds (section 672(e)). 976 F.2d at 71 (citation omitted). Applying this distinction to the statute at issue in the present case, it is clear that § 1396n(c)(2), like § 672(e), falls into the latter category; it is a communication from Congress to the participating states. The language of § 1396n(c)(2) — “A waiver shall not be granted under this subsection unless the State provides [certain] assurances satisfactory to the Secretary” — is entirely analogous to that of § 672(e) — “No Federal payment may be made under this part” unless certain conditions are met by the states. Thus, like § 672(e), § 1396n(c)(2) places the primary responsibility for compliance on the participating states rather than on the Secretary. This same point applies with equal force to § 441.302, which places a similar onus of compliance on the states. 19 In contrast, § 1396a(c)(l) is directed only to the Secretary and not to the states — “the Secretary shall not approve_” It follows that the holdings in Audette and Stowell do not apply to §§ 1396n(c)(2) and 441.302. 20
In light of the foregoing, it follows that at least some of the subsections of §§ 1396n(e)(2) and 441.302 confer rights upon home care Medicaid recipients that are enforceable under § 1983. However, not every subpart of these sections does so. For example, §§ 1396n(c)(2)(D) 21 and 441.-302(e) provide that a state may not spend more on home care than it would have spent on institutional care were the home care waiver unavailable. These provisions fail the first prong of the Wilder test; they were not intended to benefit Plaintiffs as Medicaid recipients. Rather, they were intended to save the government money by limiting the amount of Medicaid funds that a state may spend on home care. 22 Similarly, § 441.-302(b), which requires financial accountability for the way a participating state spends its Medicaid home and community-based care funds, was designed to benefit taxpayers in general rather than Medicaid recipients in particular. Therefore, although we affirm the district court’s holding that §§ 1396n(c)(2) and 441.-302 give rise to enforceable rights, we do so only with regard to subsections 1396n(c)(2)(A), (B), (C), and (E), and 441.-302(a), (c), (d), and (f)(2). These are the subsections that, as discussed above, inure specifically to the benefit of home care Medicaid recipients.
Like § 1396n(c)(2), § 1396n(f)(l) is another provision that Plaintiffs did not mention in their Amended Complaint, but which the court below focussed upon as creating enforceable rights. However, with respect to § 1396n(f)(l), we are obliged to disagree with the district court. Section 1396n(f)(l) provides that even after a waiver is granted, the Secretary shall continue to monitor the state’s waiver program in order to assure that the requirements continue to be met, and shall terminate waivers where he finds states to be noncompliant. This statute places the onus of compliance directly upon the Secretary rather than the states. Like § 1396a(c)(l), it “provides incentives—not commands—to the States.” Audette, 19 F.3d at 257 (quoting Stowell, 976 F.2d at 69). Thus, as per Au-dette, we are bound to hold that it does not create rights enforceable against the states. We reverse the district court’s holding to the contrary.
This regulation provides that a state must furnish the HCFA with “[a]n explanation with supporting documentation satisfactory to HCFA of how the agency estimated the per capita expenditures for services.” It further provides a detailed formula that is to be used for making these estimates. The regulation makes it clear that its purpose is to limit the amount of money that a state may receive; the costs under a waiver program “must not exceed ... the cost of services in the absence of a waiver.” § 441.-303(f)(1). Thus, the purpose of this regulation was not to benefit Medicaid recipients. It follows that the regulation confers no enforceable rights upon such recipients. The district court erred by holding to the contrary.