Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

O'BANNON v. TOWN COURT NURSING CENTER ET AL.

decided: June 23, 1980.

O'BANNON, SECRETARY OF PUBLIC WELFARE OF PENNSYLVANIA
v.
TOWN COURT NURSING CENTER ET AL.



CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT.

Stevens, J., delivered the opinion of the Court, in which Burger, C. J., and Stewart, White, Powell, and Rehnquist, JJ., joined. Blackmun, J., filed an opinion concurring in the judgment, post, p. 790. Brennan, J., filed a dissenting opinion, post, p. 805. Marshall, J., took no part in the consideration or decision of the case.

Author: Stevens

[ 447 U.S. Page 775]

 MR. JUSTICE STEVENS delivered the opinion of the Court.

The question presented is whether approximately 180 elderly residents of a nursing home operated by Town Court Nursing Center, Inc., have a constitutional right to a hearing before a state or federal agency may revoke the home's authority to provide them with nursing care at government expense. Although we recognize that such a revocation may be harmful to some patients, we hold that they have no constitutional right to participate in the revocation proceedings.

Town Court Nursing Center, Inc. (Town Court), operates a 198-bed nursing home in Philadelphia, Pa. In April 1976 it was certified by the Department of Health, Education, and Welfare (HEW) as a "skilled nursing facility," thereby becoming eligible to receive payments from HEW and from the Pennsylvania Department of Public Welfare (DPW), for providing nursing care services to aged, disabled, and poor persons in need of medical care. After receiving its certification,*fn1 Town Court entered into formal "provider agreements" with both HEW and DPW. In those agreements HEW and DPW agreed to reimburse Town Court for a period of one year for care provided to persons eligible for Medicare or Medicaid benefits under the Social Security Act,*fn2 on the condition that Town Court continue to qualify as a skilled nursing facility.

On May 17, 1977, HEW notified Town Court that it

[ 447 U.S. Page 776]

     no longer met the statutory and regulatory standards for skilled nursing facilities and that, consequently, its Medicare provider agreement would not be renewed.*fn3 The HEW notice stated that no payments would be made for services rendered after July 17, 1977, explained how Town Court might request reconsideration of the decertification decision, and directed it to notify Medicare beneficiaries that payments were being discontinued. Three days later DPW notified Town Court that its Medicaid provider agreement would also not be renewed.*fn4

[ 447 U.S. Page 777]

     Town Court requested HEW to reconsider its termination decision. While the request was pending, Town Court and six of its Medicaid patients*fn5 filed a complaint in the United States District Court for the Eastern District of Pennsylvania alleging that both the nursing home and the patients were entitled to an evidentiary hearing on the merits of the decertification decision before the Medicaid payments were discontinued. The complaint alleged that termination of the payments would require Town Court to close and would cause the individual plaintiffs to suffer both a loss of benefits and "immediate and irreparable psychological and physical harm." App. 11a.

[ 447 U.S. Page 778]

     The District Court granted a preliminary injunction against DPW and HEW, requiring payments to be continued for new patients as well as for patients already in the home and prohibiting any patient transfers until HEW acted on Town Court's petition for reconsideration. After HEW denied that petition, the District Court dissolved the injunction and denied the plaintiffs any further relief, except that it required HEW and DPW to pay for services actually provided to patients.

Town Court and the six patients filed separate appeals from the denial of the preliminary injunction, as well as a motion, which was subsequently granted, for reinstatement of the injunction pending appeal. The Secretary of HEW cross-appealed from the portion of the District Court's order requiring payment for services rendered after the effective date of the termination. The Secretary of DPW took no appeal and, though named as an appellee, took no position on the merits.

The United States Court of Appeals for the Third Circuit, sitting en banc, unanimously held that there was no constitutional defect in the HEW procedures that denied Town Court an evidentiary hearing until after the termination had become effective and the agency had ceased paying benefits.*fn6 The

[ 447 U.S. Page 779]

     Court of Appeals came to a different conclusion, however, with respect to the patients' claim to a constitutional right to a pretermination hearing. Town Court Nursing Center, Inc. v. Beal, 586 F.2d 280 (1978).*fn7

Relying on the reasoning of Klein v. Califano, 586 F.2d 250 (CA3 1978) (en banc), decided the same day, a majority of the court concluded that the patients had a constitutionally protected property interest in continued residence at Town Court that gave them a right to a pretermination hearing. In Klein the court identified three Medicaid provisions -- a statute giving Medicaid recipients the right to obtain services from any qualified facility,*fn8 a regulation prohibiting certified

[ 447 U.S. Page 780]

     facilities from transferring or discharging a patient except for certain specified reasons,*fn9 and a regulation prohibiting the reduction or termination of financial assistance without a hearing*fn10 -- which, in its view, created a "legitimate entitlement to continued residency at the home of one's choice absent specific cause for transfer." Id., at 258. It then cited the general due process maxim that, whenever a governmental benefit may be withdrawn only for cause, the recipient is entitled to a hearing as to the existence of such cause. See Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 11. Finally, it held that, since the inevitable consequence of decertifying a facility is the transfer of all its residents receiving Medicaid benefits, a decision to decertify should be treated as a decision to transfer, thus triggering the patients' right to a hearing on the issue of whether there is adequate cause for the transfer.*fn11

[ 447 U.S. Page 781]

     Applying this reasoning in Town Court, six judges held that the patients were entitled to a pretermination hearing on the issue of whether Town Court's Medicare and Medicaid provider agreements should be renewed.*fn12 The court thus reinstated that portion of the preliminary injunction that prohibited patient transfers until after the patients had been granted a hearing and affirmed that portion that required HEW and DPW to continue paying benefits on behalf of Town Court residents. It then remanded, leaving the nature of the hearing to be accorded the patients to be determined, in the first instance, by the District Court. Three judges dissented, concluding that neither the statutes nor the regulations granted

[ 447 U.S. Page 782]

     the patients any substantive interest in decertification proceedings and that they had no constitutionally protected property right in uninterrupted occupancy.*fn13

[ 447 U.S. Page 783]

     The Secretary of DPW filed a petition for certiorari, which we granted.*fn14 441 U.S. 904. We now reverse, essentially for the reasons stated by Chief Judge Seitz in his dissent.

[ 447 U.S. Page 784]

     At the outset, it is important to remember that this case does not involve the question whether HEW or DPW should, as a matter of administrative efficiency, consult the residents of a nursing home before making a final decision to decertify it.*fn15 Rather, the question is whether the patients have an interest in receiving benefits for care in a particular facility that entitles them, as a matter of constitutional law, to a hearing before the Government can decertify that facility. The patients have identified two possible sources of such a right. First, they contend that the Medicaid provisions relied upon by the Court of Appeals give them a property right to remain in the home of their choice absent good cause for transfer and therefore entitle them to a hearing on whether such cause exists. Second, they argue that a transfer may have such severe physical or emotional side effects that it is tantamount to a deprivation of life or liberty, which must be preceded by a due process hearing.*fn16 We find both arguments unpersuasive.*fn17

[ 447 U.S. Page 785]

     Whether viewed singly or in combination, the Medicaid provisions relied upon by the Court of Appeals do not confer a right to continued residence in the home of one's choice. Title 42 U. S. C. ยง 1396a (a)(23) (1976 ed., Supp. II) 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 home that continues to be qualified. But it clearly does not confer a right on a recipient to enter an unqualified home and demand a hearing to certify it, nor does it confer a right on a recipient to continue to receive benefits for care in a home that has been decertified. Second, although the regulations do protect patients by limiting the circumstances under which a home may transfer or discharge a Medicaid recipient, they do not purport to limit the Government's right to make a transfer necessary by decertifying a facility.*fn18 Finally, since decertification

[ 447 U.S. Page 786]

     does not reduce or terminate a patient's financial assistance, but merely requires him to use it for care at a different facility, regulations granting recipients the right to a hearing prior to a reduction in financial benefits are irrelevant.

In holding that these provisions create a substantive right to remain in the home of one's choice absent specific cause for transfer, the Court of Appeals failed to give proper weight to the contours of the right conferred by the statutes and regulations. As indicated above, while a patient has a right to continued benefits to pay for care in the qualified institution of his choice, he has no enforceable expectation of continued benefits to pay for care in an institution that has been determined to be unqualified.

The Court of Appeals also erred in treating the Government's decision to decertify Town Court as if it were equivalent in every respect to a decision to transfer an individual patient. Although decertification will inevitably necessitate the transfer of all those patients who remain dependent on Medicaid benefits, it is not the same for purposes of due process analysis as a decision to transfer a ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.