United States District Court, N.D. California
ORDER DENYING DEFENDANT'S MOTION TO DISMISS FIRST
AMENDED COMPLAINT RE: DKT. NO. 37
HAYWOOD S. GILLIAM, JR. UNITED STATES DISTRICT JUDGE.
Court previously held that Plaintiffs have no right of action
enforceable through § 1983 under the relevant Federal
Nursing Home Reform Act (“FNHRA”) subsections and
dismissed the complaint with prejudice. Dkt. No. 23. On July
18, 2019, the Ninth Circuit reversed the Court's decision
and found that the relevant FNHRA provisions do create a
statutory right enforceable under § 1983. Anderson
v. Ghaly, 930 F.3d 1066, 1070 (9th Cir. 2019). However,
the Ninth Circuit also held that the “present complaint
does not allege a plausible violation of the FNHRA appeals
provision” and remanded the case for further
proceedings. Id. at 1080.
light of the Ninth Circuit's opinion in
Anderson, Plaintiffs filed an amended complaint.
Dkt. No. 35 (“FAC”). Defendant filed a motion to
dismiss, now presently before the Court. Dkt. No. 37
(“Mot.”). The Court finds this matter appropriate
for disposition without oral argument and the matter is
deemed submitted. See Civ. L.R. 7-1(b). For the
reasons articulated below, the Court DENIES
Bruce Anderson, John Wilson, and Robert Austin (collectively,
the “Resident Plaintiffs”) and Plaintiff
California Advocates for Nursing Home Reform
(“CANHR”) filed this action under 42 U.S.C.
§ 1983 against Defendant Mark Ghaly, in his official
capacity as Secretary of the California Department of Health
and Human Services. See generally FAC. Plaintiffs
allege that Defendant violated their federal rights under
certain FNHRA sections establishing a “‘fair
mechanism for hearing appeals' regarding transfers and
discharges from skilled nursing facilities.” FAC
Court first provides the relevant statutory framework and
Applicable Statutory Framework
enacted FNHRA as amendments to the Medicare and Medicaid Acts
to improve the quality of care for Medicaid and
Medicare-eligible nursing home residents. See
Anderson, 930 F.3d at 1070 (citations omitted). FNHRA
imposed various requirements “as a prerequisite for
nursing homes to be reimbursed under Medicaid” and
Medicare. Id.; see also id. at 1070 n.1.
The requirements are codified in the Medicaid Act at 42
U.S.C. § 1396r and the Medicare Act at 42 U.S.C.
FNHRA subsection (e)(3), “[t]he State . . . must
provide for a fair mechanism for hearing appeals on transfers
and discharges of residents of [skilled nursing facilities].
Such mechanism must meet the guidelines established by the
Secretary under subsection (f)(3) of this section.” 42
U.S.C. § 1395i-3(e)(3); see also id. §
1396r(e)(3). Subsection (f)(3) provides that “the
Secretary shall establish guidelines for minimum standards
which State appeals processes under subsection (e)(3) of this
section must meet to provide a fair mechanism for hearing
appeals on transfers and discharges of residents from skilled
nursing facilities.” 42 U.S.C. § 1395i-3(f)(3);
see also id. § 1396r(f)(3).
response to the FNHRA's directive, the Centers for
Medicare and Medicaid Services (“CMS”) adopted
several regulations. Most relevant to the current action, 42
C.F.R. § 431.205(b) requires that the hearing be before
the state's Medicaid agency or provide for a right of
appeal to that agency. 42 C.F.R. § 431.205(b). Moreover,
under 42 C.F.R. § 431.246:
The agency must promptly make corrective payments,
retroactive to the date an incorrect action was taken, and,
if appropriate, provide for admission or readmission of an
individual to a facility if-
(a) The hearing decision is favorable to the applicant or
(b) The agency decides in the applicant's or
beneficiary's favor before the hearing.
42 C.F.R. § 431.246.
hearings are held before the Department of Health Care
Services (“DHCS”), which is the state agency
charged with oversight of the Medicaid program. See
Cal. Health & Safety Code § 1599.1(h)(1); Cal. Welf.
& Inst. Code § 10740. Under § 1599.1(h)(1):
If a resident of a long-term health care facility has been
hospitalized in an acute care hospital and asserts his or her
rights to readmission pursuant to bed hold provisions, or
readmission rights of either state or federal law, and the
facility refuses to readmit him or her, the resident may
appeal the facility's refusal.
Cal. Health & Safety Code § 1599.1(h)(1). In
addition, the facility's refusal to readmit the resident
“shall be treated as if it were an involuntary transfer
under federal law, ” and the rights and procedures that
apply to transfers and discharges “shall apply to the