Court Opinion

ID: 6347985
Source: CourtListenerOpinion
Date Created: 2022-06-08 17:00:32.843233+00
Date Added: 2024-06-11T14:57:09.476556
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

DELORES POLK; SCOTT UNGAR;               No. 20-17095
HEATHER HERRICK; LIEN LOI;
JOLENE MONTOYA; PETER LOI;                  D.C. No.
SUSAN MCKAY, as individuals and          2:18-cv-02900-
representatives of the requested            KJM-KJN
class,
                Plaintiffs-Appellants,

                  v.

BETTY YEE, in her official capacity
as State Controller of California;
SERVICE EMPLOYEES
INTERNATIONAL UNION LOCAL 2015,
               Defendants-Appellees.

     Appeal from the United States District Court
         for the Eastern District of California
  Kimberly J. Mueller, Chief District Judge, Presiding
2                          POLK V. YEE

 ALICIA QUIRARTE,                                   No. 20-55266
                                   Plaintiff,
                                                      D.C. No.
                     and                           3:19-cv-01287-
                                                     CAB-KSC
 NORA MAYA, an individual; ANH LE,
 an individual; VIET LE, an
 individual; JOSE DIAZ, an individual,                OPINION
                 Plaintiffs-Appellants,

                      v.

 UNITED DOMESTIC WORKERS OF
 AMERICA, AFSCME LOCAL 3930, a
 labor organization; BETTY T. YEE, in
 her official capacity as State
 Controller of the State of California,
                 Defendants-Appellees,

 ROB BONTA, * in his official capacity
 as Attorney General of California,
               Intervenor-Defendant-
                              Appellee.

        Appeal from the United States District Court
           for the Southern District of California
      Cathy Ann Bencivengo, District Judge, Presiding

           Argued and Submitted February 8, 2022
                     Portland, Oregon

    *
      Rob Bonta has been substituted for his predecessor, Xavier
Becerra, as California Attorney General under Fed. R. App. P. 43(c)(2).
                            POLK V. YEE                               3

                        Filed June 8, 2022

    Before: Richard A. Paez and Jacqueline H. Nguyen,
   Circuit Judges, and John R. Tunheim, ** District Judge.

                    Opinion by Judge Nguyen

                          SUMMARY ***

                            Civil Rights

    The panel affirmed the district court’s dismissal of two
cases brought pursuant to 42 U.S.C. § 1983 by Medicaid
providers and former members of public-sector unions
alleging that the California State Controller, in deducting
union dues from appellants’ Medicaid reimbursements,
violated the anti-reassignment provision of the Medicaid
Act, which prohibits state Medicaid programs from paying
anyone other than the providers or recipients of covered
services.

    California uses some of its Medicaid funding to provide
assistance with daily activities to elderly and disabled
beneficiaries under a program called In-Home Support
Services (IHSS). The recipients of these services are
responsible for employing and overseeing the work of their
IHSS providers, who are often family members. IHSS

    **
       The Honorable John R. Tunheim, Chief United States District
Judge for the District of Minnesota, sitting by designation.
    ***
        This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
4                       POLK V. YEE

providers are paid by the State Controller because California
law treats them as public employees. The Controller makes
a variety of standard payroll deductions, including for
federal and state income tax, unemployment compensation,
and retirement savings. California law also authorizes the
Controller to deduct union dues from the paychecks of IHSS
providers.

    The panel held that the Medicaid Act’s anti-
reassignment provision, 42 U.S.C. § 1396a(a)(32), does not
confer a right on Medicaid providers enforceable under
§ 1983. The text and legislative history of the anti-
reassignment provision make clear that Congress was
focused on preventing fraud and abuse in state Medicaid
programs rather than on serving the needs of Medicaid
providers. Because Congress did not intend to benefit
Medicaid providers, the anti-reassignment provision did not
confer a right an enforceable under § 1983.

                        COUNSEL

William L. Messenger (argued), Heidi E. Schneider, and
Amanda K. Freeman, National Right to Work Legal Defense
Foundation Inc., Springfield, Virginia; Rebekah C. Millard,
Mariah Gondeiro, Karin Sweigart, and Robert Alan
Bouvatte, Jr., Freedom Foundation, Olympia, Washington;
for Plaintiffs-Appellants.

Anthony O’Brien (argued), Jeffrey A. Rich, and Lara
Haddad, Deputy Attorneys General; Anthony R. Hakl and
Mark R. Beckington, Supervising Deputy Attorneys
General; Thomas S. Patterson, Senior Assistant Attorney
General; Rob Bonta, Attorney General; Office of the
                        POLK V. YEE                          5

Attorney General, Sacramento, California; for Defendants-
Appellees Betty Yee and Rob Bonta.

Stacey M. Leyton (argued) and Scott A. Kronland, Altshuler
Berzon LLP, San Francisco, California, for Defendants-
Appellees Service Employees International Union Local
2015, and United Domestic Workers of America, AFSCME
Local 3930.

                         OPINION

NGUYEN, Circuit Judge:

    Appellants, Medicaid providers and former members of
public-sector unions, challenge the district courts’ dismissals
of these two cases, which we consolidated on appeal. When
appellants joined the unions, they authorized the California
State Controller to deduct union dues from their Medicaid
reimbursements. Appellants now contend that, when the
Controller made these deductions, she violated the “anti-
reassignment” provision of the Medicaid Act, which
prohibits state Medicaid programs from paying anyone other
than the providers or recipients of covered services. See
42 U.S.C. § 1396a(a)(32).

    Appellants brought these putative class actions under
42 U.S.C. § 1983, which makes state actors liable for
violating federal rights. But not every federal law gives rise
to a federal right that private parties can enforce under
§ 1983. We must therefore decide a threshold question —
not whether the anti-reassignment provision has been
violated, but whether that provision confers a federal right
on Medicaid providers.
6                       POLK V. YEE

    For a federal statute to confer a right, “Congress must
have intended that the provision in question benefit the
plaintiff.” Blessing v. Freestone, 520 U.S. 329, 340 (1997).
Here, the text and legislative history of the anti-reassignment
provision make clear that Congress was focused on
preventing fraud and abuse in state Medicaid programs
rather than on serving the needs of Medicaid providers.
Because Congress did not intend to benefit Medicaid
providers, we hold that the anti-reassignment provision does
not confer a right that they can enforce under § 1983. We
therefore affirm.

                              I

                              A

    Under Medicaid, the federal government provides
funding to state programs that offer health care for people of
limited means. The Medicaid Act imposes numerous
conditions on states concerning the operation of their
Medicaid programs, which the Secretary of Health and
Human Services may enforce by withholding funds from
non-compliant states. See 42 U.S.C. §§ 1396a, 1396c; see
also Planned Parenthood Ariz. Inc. v. Betlach, 727 F.3d 960,
963 (9th Cir. 2003). As one such condition on state
Medicaid programs, the anti-reassignment provision
prohibits states from making payments for services to
anyone other than the provider or recipient. See 42 U.S.C.
§ 1396a(a)(32).

    California uses some of its Medicaid funding to provide
assistance with daily activities to elderly and disabled
beneficiaries under a program called In-Home Support
Services (IHSS). See Cal. Welf. & Inst. Code § 12300 et
seq. The recipients of these services are responsible for
                       POLK V. YEE                        7

employing and overseeing the work of their IHSS providers,
who are often family members.

    IHSS providers are paid by the State Controller because
California law treats them as public employees. See id.
§ 12301.6(c)(1). The Controller makes a variety of standard
payroll deductions, including for federal and state income
tax, unemployment compensation, and retirement savings.
See id. § 12302.2(a)(1). California law also authorizes the
Controller to deduct union dues from the paychecks of IHSS
providers. See id. § 12301.6(i)(2).

                             B

    Appellants provide services through California’s IHSS
program. They all became members of the public-sector
union with exclusive bargaining rights in their counties —
either the Service Employees International Union Local
2015 (SEIU) or the United Domestic Workers of America
AFSCME Local 3930 (UDW). When they signed up,
appellants authorized the State Controller to deduct union
dues from their paychecks. That authorization included an
agreement that they could only revoke their consent during
brief annual windows.

    Appellants resigned from their unions outside the annual
revocation windows. But they wanted their dues deductions
to stop immediately. When the dues deductions continued,
they brought these two putative class actions under
42 U.S.C. § 1983 against their former unions and State
Controller Betty Yee.

    Appellants alleged that the continuing dues deductions
violated their rights under the First Amendment and the
Medicaid Act’s anti-reassignment provision. In Polk v. Yee,
the district court granted a motion to dismiss under Federal
8                       POLK V. YEE

Rule of Civil Procedure 12(b)(6), and the Polk appellants
elected not to amend their complaint. In Quirarte v. UDW,
the district court granted a motion for judgment on the
pleadings under Rule 12(c).

    Both district courts dismissed these cases for the same
reasons. As to the First Amendment claim, the district courts
concluded that the unions were not state actors and that
appellants’ consent to pay union dues precluded any First
Amendment liability. This court subsequently decided
Belgau v. Inslee, which rejected a virtually identical First
Amendment claim on the same rationale. 975 F.3d 940 (9th
Cir. 2020), cert. denied, 141 S. Ct. 2795 (2021). Appellants
now concede that Belgau forecloses their First Amendment
claim. As to the Medicaid Act claim, both district courts
held that the anti-reassignment provision does not confer a
right on providers that is enforceable under § 1983.

    Appellants in both cases timely appealed. Shortly before
oral argument, we consolidated these appeals for all
purposes under Federal Rule of Appellate Procedure 3(b)(2).

                             II

    We have jurisdiction under 28 U.S.C. § 1291.
Reviewing de novo, see Daewoo Elecs. Am. Inc. v. Opta
Corp., 875 F.3d 1241, 1246 (9th Cir. 2017) (judgment on the
pleadings); Dougherty v. City of Covina, 654 F.3d 892, 897
(9th Cir. 2011) (dismissal under Rule 12(b)(6)), we affirm.

                             A

   In Blessing v. Freestone, the Supreme Court established
a three-part test to determine whether a federal statute
confers a right enforceable under § 1983: “(1) ‘Congress
must have intended that the provision in question benefit the
                         POLK V. YEE                          9

plaintiff,’ (2) ‘the plaintiff must demonstrate that the right
assertedly protected by the statute is not so “vague and
amorphous” that its enforcement would strain judicial
competence,’ and (3) ‘the statute must unambiguously
impose a binding obligation on the States.’” Anderson v.
Ghaly, 930 F.3d 1066, 1073 (9th Cir. 2019) (quoting
Blessing, 520 U.S. at 340–41). “If all three prongs are
satisfied, ‘the right is presumptively enforceable’ through
§ 1983.” Planned Parenthood, 727 F.3d at 966 (quoting
Gonzaga Univ. v. Doe, 536 U.S. 273, 284 (2002)).

    To demonstrate that the anti-reassignment provision
confers a federal right, appellants must satisfy the first prong
by showing that Congress intended to benefit Medicaid
providers. See Sanchez v. Johnson, 416 F.3d 1051, 1062
(9th Cir. 2005) (holding that no enforceable right existed
because the first prong was not met). Under this prong, we
must “determine whether Congress ‘unambiguously
conferred’ a federal right,” which above all “requires ‘rights-
creating language.’” Henry A. v. Willden, 678 F.3d 991,
1005 (9th Cir. 2012) (quoting Gonzaga, 536 U.S. at 283–84
& n.3). “[I]t is Congress’s use of explicit, individually
focused, rights-creating language that reveals congressional
intent to create an individually enforceable right in a
spending statute.” Sanchez, 416 F.3d at 1057. Because the
Medicaid Act “does not describe every requirement in the
same language,” we carefully examine the language of the
particular Medicaid provision at issue. Id. at 1062. And to
confirm what that language reveals, we may look to other
indicia of congressional intent, including structure,
legislative history, and agency interpretations. See Ball v.
Rodgers, 492 F.3d 1094, 1112–15 (9th Cir. 2007).

    Crucially, whether Congress intended to confer a right is
a distinct question from whether the correct interpretation of
10                       POLK V. YEE

the statute would benefit the plaintiff. “‘[F]alling within the
general zone of interest that the statute is intended to protect’
is not enough.” All. of Nonprofits for Ins., Risk Retention
Grp. v. Kipper, 712 F.3d 1316, 1326 (9th Cir. 2013) (quoting
Gonzaga, 536 U.S. at 283). “[I]t is rights, not the broader or
vaguer ‘benefits’ or ‘interests’ that may be enforced under
the authority of [§ 1983].” Gonzaga, 536 U.S. at 283. Even
if a statute “incidental[ly] benefit[s]” the plaintiff, All. of
Nonprofits, 712 F.3d at 1327, that does not by itself show
that Congress “intended that the provision in question
benefit the plaintiff,” Blessing, 520 U.S. at 340 (emphasis
added); see also Sanchez, 416 F.3d at 1059 (explaining that,
while Medicaid providers “may certainly benefit from their
relationship with the State, . . . they are, at best, indirect
beneficiaries” under 42 U.S.C. § 1396a(a)(30)(A), which
thus confers no right).

    Appellants devote a substantial portion of their briefs to
arguing that the anti-reassignment provision prohibits all
payments to third parties, including union dues deductions.
But that is not the issue before us. Whether the anti-
reassignment provision prohibits union dues deductions is a
separate question about the scope of the statute. We need
not decide that question and we instead ask whom Congress
intended to benefit.

                               B

    With those principles in mind, we begin with the
language of the anti-reassignment provision: “A State plan
for medical assistance must . . . provide that no payment
under the plan for any care or service provided to an
individual shall be made to anyone other than such
individual or the person or institution providing such care or
                            POLK V. YEE                              11

service, under an assignment or power of attorney or
otherwise . . . .” 1 42 U.S.C. § 1396a(a)(32).

    Because “cooperative federalism programs like
Medicaid . . . are necessarily phrased as a set of directives to
states that wish to receive federal funding,” Anderson,
930 F.3d at 1074, we cannot infer a lack of congressional
intent to create an enforceable right from the bare fact that a
Medicaid provision is a state program requirement, see
42 U.S.C. § 1320a-2; Ball, 492 F.3d at 1111–12. We
therefore give no weight to the initial portion of the anti-
reassignment provision — “[a] State plan for medical
assistance must . . . provide” — which only captures
Medicaid’s status as a federal spending program.

      We instead examine whether the statute makes
“recognizing and enforcing individual beneficiaries’ rights
. . . a condition for federal funding of the state program.”
Anderson, 930 F.3d at 1074. The key question is whether
the text of the statute is “phrased in terms of the persons
benefited . . . with an unmistakable focus on the benefited
class.” Gonzaga, 536 U.S. at 284 (citation and internal
quotation marks omitted). The dividing line is between
statutes that are “concerned with whether the needs of any
particular person have been satisfied” and those that are
“concerned . . . solely with an aggregate institutional policy
and practice.” Ball, 492 F.3d at 1107 (citation and internal
quotation marks omitted). We ask on which side of the line
the main portion of the text falls: “no payment . . . for any
care or service provided to an individual shall be made to

    1
      This provision is subject to narrow exceptions not relevant to this
case. See 42 U.S.C. § 1396a(a)(32)(A)–(D).
12                      POLK V. YEE

anyone other than such individual or the person or institution
providing such care or service.” 42 U.S.C. § 1396a(a)(32).

    The focus of this statutory language is on state payment
practices. “Payment” is the subject of the statute’s main
clause. And the statute is phrased in terms of what the state
may not do — make “payment . . . to anyone other than”
service providers or recipients — rather than in terms of
what providers are to receive. Id. The statute only
references providers following “other than,” which
underscores this focus on state payments. Even when
describing the payees, the statute emphasizes those who are
not to be paid. The provision’s language “is directly
concerned with the State as administrator and only indirectly
with recipients and providers as beneficiaries of the
administered services.” Sanchez, 416 F.3d at 1062. But see
Anderson, 930 F.3d at 1074 (noting that “[g]iven the
conditional nature of [federal spending] programs, the
statutes enacting them will nearly always be phrased with a
partial focus on the state”).

    Nothing in the statutory language reflects that Congress
was “concerned with ‘whether the needs of [Medicaid
providers] have been satisfied.’” Ball, 492 F.3d at 1107
(quoting Gonzaga, 526 U.S. at 288). The statute does not
say that “payment must only be made to providers or
recipients,” much less that “only providers or recipients are
to receive payment,” as other rights-conferring Medicaid
provisions are phrased. Cf. Planned Parenthood, 727 F.3d
at 966 (“Any individual eligible for medical assistance . . .
may obtain such assistance from any [provider] qualified to
perform the service or services required.” (quoting 42 U.S.C.
§ 1396a(a)(23)) (emphasis omitted)); Watson v. Weeks,
436 F.3d 1152, 1159–60 (9th Cir. 2006) (“[A] state plan for
medical assistance must provide ‘for making medical
                            POLK V. YEE                             13

assistance available, including at least [designated care and
services],’ to ‘all individuals’ meeting specified financial
eligibility standards.” (quoting 42 U.S.C. § 1396a(a)(10))).
Unlike these other formulations, which are phrased in terms
of Medicaid providers, the anti-reassignment provision
“refers to [Medicaid providers] only in the context of
describing the necessity of developing state-wide policies
and procedures,” and as “a means to an administrative end
rather than as individual beneficiaries of the statute.” 2
Sanchez, 416 F.3d at 1059.

    Given this administrative focus, we cannot say that the
anti-reassignment provision’s language shows that Congress
“unambiguously conferred” an enforceable right on
Medicaid providers. Gonzaga, 536 U.S. at 283.

                                  C

    We need not, however, rely on the statutory language
alone. Another signal of congressional intent — legislative
history — confirms that the anti-reassignment provision
does not confer a right on Medicaid providers. When
legislative history suggests whom Congress intends to
benefit, it can be highly probative under the first prong of the
Blessing test. See All. of Nonprofits, 712 F.3d at 1326–27.

   In Alliance of Nonprofits, we recognized that the
Liability Risk Retention Act (LRRA), which preempts

    2
       The anti-reassignment provision refers to Medicaid providers as
“person[s],” 42 U.S.C. § 1396a(a)(32), and “usually such use is
sufficient . . . to finding a right for § 1983 purposes,” Planned
Parenthood, 727 F.3d at 966 (quoting Ball, 492 F.3d at 1108). But, as
we explain, the statute’s administrative focus and its clear legislative
history show that this language does not signal Congress’s intent to
confer an enforceable right in this case.
14                           POLK V. YEE

certain state laws applicable to insurers, contained some
rights-creating language. Id. at 1326. But we explained that
“even if such language is necessary to the conclusion that
Congress intended to create an enforceable right, that does
not mean it is sufficient to do so.” Id. (citation omitted). We
then looked to the legislative history, which indicated that
“Congress primarily enacted the LRRA to benefit buyers of
insurance, rather than the insurance companies themselves.”
Id. at 1326–27. Accordingly, we held that the legislative
history demonstrated that the statute conferred at most an
“incidental benefit” on insurers, which “does not rise to the
level of the ‘unambiguously conferred’ right that Gonzaga
University requires us to find.” Id. at 1327 (quoting
Gonzaga, 536 U.S. at 283).

    Here, as in Alliance of Nonprofits, the legislative history
leaves no doubt that Congress did not intend to benefit
Medicaid providers. The anti-reassignment provision was
enacted in response to a practice by providers of assigning
their receivables to third parties, also known as “factoring.” 3

     3
        Many courts have so characterized the anti-reassignment
provision. See Matter of Missionary Baptist Found. of Am., Inc.,
796 F.2d 752, 757 n.6 (5th Cir. 1986) (“An examination of the legislative
history of this provision reveals that its purpose was to prevent
‘factoring’ agencies from purchasing medicare and medicaid accounts
receivable at a discount and then serving as the collection agency for the
accounts.”); Danvers Pathology Assocs., Inc. v. Atkins, 757 F.2d 427,
430 (1st Cir. 1985) (Breyer, J.) (“The purpose of the statute was to stop
this ‘factoring’ of Medicaid receivables—the selling of Medicaid
obligations to collection agencies at a discount and the presentation of
those obligations by the collection agencies to the state for payment.”);
Michael Reese Physicians & Surgeons, S.C. v. Quern, 606 F.2d 732, 734
(7th Cir. 1979) (“Congress wished to eliminate factors, thereby making
each provider responsible for billing for services rendered and personally
liable for payments received for those services.”), aff’d on reh’g en banc,
625 F.2d 764 (7th Cir. 1980).
                       POLK V. YEE                      15

Providers would collect a percentage of the value of their
claims, and the assignees would “undertake the effort and
expense of submitting those claims to the states and would
keep the reimbursement payments for themselves.”
California v. Azar, 501 F. Supp. 3d 830, 834 (N.D. Cal.
2020).

    The House and Senate reports show that Congress
adopted the anti-reassignment provision out of concern that
factoring had led to fraud and abuse in the Medicaid
program. The anti-reassignment provision was added to the
Medicaid Act as part of the Social Security Amendments of
1972. Pub. L. No. 92-603, § 236(b)(3), 86 Stat. 1329, 1415
(1972). The reports from both chambers explained why
Congress viewed factoring as a problem and how the anti-
reassignment provision would help.

       Experience with this practice under these
       programs shows that some physicians and
       other persons providing services reassign
       their rights to other organizations or groups
       under conditions whereby the organization or
       group submits claims and receives payment
       in its own name. Such reassignments have
       been a source of incorrect and inflated claims
       for services and have created administrative
       problems with respect to determinations of
       reasonable charges and recovery of
       overpayments. Fraudulent operations of
       collection agencies have been identified in
       medicaid. Substantial overpayments to many
       organizations have been identified in the
       medicare program, one involving over a
       million dollars.
16                     POLK V. YEE

           Your committee’s bill seeks to overcome
           these difficulties by prohibiting payment
           under these programs to anyone other
           than the patient, his physician, or other
           person who provided the service . . . .

           H.R. Rep. No. 92-231, at 104 (1971),
           reprinted in 1972 U.S.C.C.A.N. 4989,
           5090; see also S. Rep. No. 92-1230,
           at 205 (1972).

    The anti-reassignment provision was amended as part of
the Medicare-Medicaid Anti-Fraud and Abuse Amendments
of 1977 to eliminate a loophole that involved power of
attorney agreements. Pub. L. No. 95-142, § 2(a)(3), 91 Stat.
1175, 1176 (1977). The reports from both chambers again
underscored that the goal of the anti-reassignment provision
was to prevent fraud and abuse in the Medicaid program and
argued that the “power of attorney” loophole should be
closed to better accomplish that purpose.

       By 1972, it had become apparent that such
       reassignments were a significant source of
       incorrect and inflated claims for services paid
       by medicare and medicaid. In addition, cases
       of fraudulent billings by collection agencies
       and substantial overpayments to these so-
       called “factoring” agencies were also found.
       Congress concluded that such arrangements
       were not in the best interest of the
       government or the beneficiaries served by the
       medicare and medicaid programs . . . .

       Despite these efforts to stop factoring of
       medicare and medicaid bills, some
                        POLK V. YEE                         17

       practitioners and other persons have
       circumvented the intent of the law by use of
       a power of attorney. The use of a power of
       attorney allows the factoring company to
       receive the medicare or medicaid payment in
       the name of the physician, thus allowing the
       continuation of program abuses which
       factoring activities were shown to produce in
       the past.

       The bill would modify existing law to
       preclude the use of a power of attorney as a
       device for reassignments of benefits under
       medicare and medicaid . . . .

       H.R. Rep. No. 95-393, at 44 (1977), reprinted
       in 1977 U.S.C.C.A.N. 3039, 3051; see also
       S. Rep. No. 95-453, at 6–7 (1977).

    These reports clearly show that Congress was concerned
not with “whether the needs of [Medicaid providers] have
been satisfied,” but instead with “aggregate institutional
policy and practice.” Ball, 492 F.3d at 1107 (citations and
internal quotation marks omitted). The anti-reassignment
provision was Congress’s effort to end a practice among
Medicaid providers because it interfered with the sound
fiscal administration of the Medicaid program. In the face
of this legislative history, we cannot say that “Congress . . .
intended that the provision in question benefit [Medicaid
providers],” as the first prong of the Blessing test requires.
520 U.S. at 340; see also All. of Nonprofits, 712 F.3d
at 1326–27.

    This legislative history harmonizes with our reading of
the text. The textual focus on payment practices reflects
18                      POLK V. YEE

Congress’s goal of ensuring that state Medicaid payments
are not lost to fraud and abuse. Given that goal, the anti-
reassignment provision’s reference to Medicaid providers is
only “as a means to an administrative end rather than as
individual beneficiaries of the statute.” Sanchez, 416 F.3d
at 1059. Considering text and legislative history together
eliminates any doubt that Congress did not intend to confer
a right on Medicaid providers enforceable under § 1983.

                              D

    Appellants emphasize that, even though Congress was
motivated by concerns about factoring, it enacted a broader
prohibition encompassing all forms of diversion of Medicaid
funds to third parties. However, as discussed above,
appellants’ argument would at most show that Medicaid
providers are indirectly benefited by Congress’s decision to
enact a broad prohibition — not that Congress’s purpose was
to benefit Medicaid providers. That does not suffice. See
All. of Nonprofits, 712 F.3d at 1327 (explaining that an
“incidental benefit does not rise to the level of [an]
‘unambiguously conferred’ right” (quoting Gonzaga,
536 U.S. at 283)); see also Sanchez, 416 F.3d at 1059.

    Appellants also point out that the Centers for Medicare
and Medicaid Services (CMS) adopted their broad
interpretation of the anti-reassignment provision in a 2019
regulation. See Reassignment of Medicaid Provider Claims,
84 Fed. Reg. 19718 (May 6, 2019), vacated by Azar, 501 F.
Supp. 3d at 843. More recently, however, CMS issued a rule
clarifying that employment-type payroll deductions do not
violate the anti-reassignment provision. See Reassignment
of Medicaid Provider Claims, 87 Fed. Reg. 29675 (May 16,
2022) (codified at 42 C.F.R. § 447.10(i)). But even if CMS
maintained its old interpretation, appellants still cannot show
that Congress intended to confer an enforceable right. As
                        POLK V. YEE                       19

we have pointed out in response to similar arguments before,
“an agency cannot create a right enforceable through § 1983
where Congress has not done so.” Dev. Servs. Network v.
Douglas, 666 F.3d 540, 548 (9th Cir. 2011); see also
AlohaCare v. Haw. Dep’t of Human Servs., 572 F.3d 740,
747 (9th Cir. 2009) (“Although ‘a regulation may be relevant
in determining the scope of the right conferred by Congress,’
ultimately ‘the inquiry must focus squarely on Congress’s
intent.’” (citation omitted)).

    We therefore hold that the Medicaid Act’s anti-
reassignment provision, 42 U.S.C. § 1396a(a)(32), does not
confer a right on Medicaid providers enforceable under
§ 1983. We affirm the district courts’ dismissals of these
cases.

   AFFIRMED.