Today’s post provides an important update on the Supreme Court case Health & Hospital Corporation of Marion County (HHC) v. Talevski. As readers will remember, our blog has been following this case since it made its way to the Supreme Court. Our colleague Tom Barker initially provided background of the case last June, and we provided a summary of oral arguments made before the Supreme Court back in November. The primary issue in Talevski is whether a Medicaid beneficiary can file a civil rights suit in federal court under 42 U.S.C. § 1983 to seek relief for violation of the Federal Nursing Home Reform Act (FNHRA). However, the case also raised a larger, and more consequential, issue surrounding the ability of individuals to use the federal courts under 42 U.S.C. § 1983 to enforce the requirements of any programs enacted via the Spending Clause of the U.S. Constitution.
On June 8, 2023, in a 7-2 decision authored by Justice Ketanji Brown Jackson, the Court ruled in favor of Talevski, finding that the “FNHRA provisions at issue unambiguously create §1983 enforceable rights,” and that there is no discernable “incompatibility between private enforcement under §1983 and the remedial scheme that Congress devised” for the statute.
In reaching this conclusion, the Court explicitly rejected HHC arguments that Talevski could not invoke §1983 to vindicate rights recognized by the FNHRA, because the FNHRA was enacted pursuant to the Spending Clause, and §1983 contains a carveout for laws that Congress enacts via its spending powers. This argument rests on the theory that federal legislation premised on Spending Clause power is “in the nature of a contract,” and so Spending Clause statutes cannot be enforced via §1983 because contracts were not generally enforceable by third-party beneficiaries at the time §1983 was enacted in the 1870s. However, the Court notes that §1983 allows individuals to invoke the statute in cases of state deprivation of “any rights, privileges, or immunities secured by the Constitution and laws” of the United States, and the Court has long refused to read §1983’s reference to “laws” to mean only some laws. The Court also states that there is not sufficient historical evidence to support the assertion that third-party beneficiaries could not sue to enforce contractual obligations during the relevant time and, in any event, HHC’s focus on 1870s contract law governing third-part beneficiary suits is “perplexing,” given that the cause of action created by §1983 is regarded as a tort claim.
After rejecting HHC’s general argument regarding the scope of §1983 as applied to Spending Clause programs, the Court next applies existing §1983 Supreme Court jurisprudence to determine whether the relevant provisions of the FNHRA (unnecessary-restraint and predischarge-notice provisions) confer individual federal rights enforceable under §1983. As our colleague Tom Barker has discussed in the past, as an initial matter a federal statute creates §1983 enforceable rights only when the statute unambiguously confers those rights. Under this framework, established in the Supreme Court’s Gonzaga decision, Congress must have “intended to create a federal right” for the identified class of beneficiaries, instead of merely falling, “within the general zone of interest that the statute is intended to protect.”
Looking to the history of the FNHRA, the Court notes that the law was enacted out of concern that federally-funded nursing facilities were providing poor quality of care to nursing home residents in the years following the creation of the Medicare and Medicaid programs. Furthermore, the Court points to the fact that both provisions are located in a section of the statute which expressly concerns “requirements relating to residents’ rights”, with which nursing homes must comply. The Court finds that this “framework is indicative of an individual right-creating focus” that satisfies the Gonzaga test, making the provisions presumptively enforceable under §1983. The Court also notes that HHC can’t defeat this presumption (by, e.g., showing that Congress did not did not intend for §1983 to enforce those rights, through an express provision or implicitly through an incompatible enforcement scheme), finding that the FNHRA has neither an express provision nor an incompatible enforcement scheme, given that it lacks “a private judicial right of action, a private federal administrative remedy, or any careful congressional tailoring.”
This ruling is a win for Medicaid beneficiaries, as it can be seen as a rebuke against recent attempts to carve out the private enforcement of rights established under Spending Clause programs from the scope of §1983 entirely, and maintains a pathway for enforcing certain Medicaid requirements in federal court. This is important for Medicaid beneficairies, because the Medicaid statute itself does not contain a private right of action, and the only other approach to rectifying state violations of Medicaid requirements involves having the federal government step in and withhold funding from the state, which is seldom utilized and only serves to further restrict beneficiary access.
Notwithstanding the above, we note that the Court’s decision specifically focuses on the provisions of the Medicaid statute relevant to the FNHRA, and the question of which Medicaid provisions are considered to create enforceable rights under §1983 will continue to be governed by the rigorous Gonzaga test. We expect that future challenges regarding the enforceability of other Medicaid provisions via §1983 may find their to the Supreme Court at some point, and that this “ongoing saga” will likely continue. Stay tuned!
