Bruce Anderson; John Wilson; Robert Austin; California Advocates for Nursing Home Reform, Plaintiffs-Appellants,
Mark Ghaly, Secretary of California Department of Health and Human Services, Defendant-Appellee.
and Submitted September 6, 2018 San Francisco, California
from the United States District Court No. 3:15-cv-05120-HSG
for the Northern District of California Haywood S. Gilliam,
Jr., District Judge, Presiding
Matthew Borden (argued) and J. Noah Hagey, Braunhagey &
Borden LLP, for Plaintiffs-Appellants.
R. Stanton (argued), Deputy Attorney General; Xavier Becerra,
Attorney General of California; Julie Weng-Gutierrez, Senior
Assistant Attorney General; Susan M. Carson, Supervising
Deputy Attorney General; Office of the California Attorney
General, for Defendant-Appellee.
E. Reagan, Scott J. Kiepen, and Katrina A. Pagonis, Hooper,
Lundy & Bookman, P.C., San Francisco, California, for
Amicus Curiae California Association of Health Facilities.
Before: Marsha S. Berzon and Michelle T. Friedland, Circuit
Judges, and Kathleen Cardone, [*] District Judge.
panel vacated the district court's dismissal with
prejudice of a complaint in an action brought pursuant to 42
U.S.C. § 1983 by three former nursing home residents and
a nonprofit advocacy group who alleged that the residents
were subjected to unlawful "dumping," the practice
of sending a nursing home resident to a hospital for medical
or mental health treatment but refusing to readmit the
resident after discharge from the hospital.
the appeals process established by the State of California,
all three residents challenged their respective nursing
homes' refusal to readmit them after their
hospitalizations, and all three prevailed. None, however, was
readmitted. The residents brought a § 1983 action,
asserting that provisions in the Federal Nursing Home Reform
Amendments, which imposed various requirements for nursing
homes to be reimbursed under Medicaid, created a private
statutory right enforceable under § 1983. The district
court determined that the residents had no private right
enforceable through § 1983 and dismissed the complaint.
the factors set forth in Blessing v. Freestone, 520
U.S. 329, 340 (1997), the panel held that the Federal Nursing
Home Reform Amendments' provisions requiring states to
"provide for a fair mechanism . . . for hearing appeals
on transfers and discharges of residents," 42 U.S.C.
§ 1396r(e)(3), created a statutory right enforceable
under § 1983. This right includes within it the
opportunity for redress after a favorable appeal decision.
The panel further concluded, however, that the residents'
complaint did not plausibly allege a violation of that right
because the complaint did not allege that the State provided
no mechanism whatsoever to enforce each administrative appeal
order regarding nursing home transfers and discharges. The
panel held that the residents' failure to state a claim
could perhaps be cured by repleading. The panel therefore
vacated the district court's dismissal with prejudice of
the complaint and remanded for further proceedings consistent
with its opinion.
in the judgment, Judge Friedland stated that she agreed that
the residents' complaint did not state a claim even
assuming that the Federal Nursing Home Reform Amendments
created an individual enforceable right to redress of an
appeal decision under 42 U.S.C. § 1983. Accordingly,
Judge Friedland stated that she would not have reached the
more difficult questions addressed in the panel's
Berzon, Circuit Judge:
Medicaid Act requires that states participating in Medicaid
"provide for a fair mechanism . . . for hearing appeals
on transfers and discharges of residents" of nursing
homes covered by Medicaid. 42 U.S.C. § 1396r(e)(3). The
question in this case is whether nursing home residents may
challenge a state's violation of this statutory
requirement under 42 U.S.C. § 1983. We hold that they
is a cooperative federal-state program designed to
"enabl[e] each State . . . to furnish . . . medical
assistance on behalf of families with dependent children and
of aged, blind, or disabled individuals, whose income and
resources are insufficient to meet the costs of necessary
medical services." 42 U.S.C. § 1396-1; see also
Wilder v. Va. Hosp. Ass'n, 496 U.S. 498, 502 (1990).
Among those services is treatment at "nursing
facilities," also known as nursing homes or long-term
care facilities. See 42 U.S.C. § 1396d(a).
1982, at the urging of Congress, the Health Care Financing
Administration, a subdivision of the Department of Health and
Human Services and the predecessor to the Centers for
Medicare and Medicaid Services (CMS), commissioned a study to
review the regulation of nursing homes participating in
Medicare and Medicaid. H.R. Rep. No. 100-391, pt. 1, at
451-52 (1987), as reprinted in 1987 U.S.C.C.A.N.
2313-1, 2313-271 to -272. The ensuing study, published in
1986, concluded that "[t]here is broad consensus that
government regulation of nursing homes, as it now functions,
is not satisfactory because it allows too many marginal or
substandard nursing homes to continue in operation."
Comm. on Nursing Home Regulation, Inst. of Med.,
Improving the Quality of Care in Nursing Homes 2
(1986). To address these issues, the study offered a series
of recommendations to strengthen the regulation of nursing
homes. See id. at 25.
response, Congress amended the Medicare and Medicaid Acts
"to improve the quality of care for Medicaid-eligible
nursing home residents," adopting many of the
study's recommendations. H.R. Rep. No. 100-391, pt. 1, at
452. Enacted as part of the Omnibus Budget Reconciliation Act
of 1987, Pub L. No. 100-203, 101 Stat. 1330, the resulting
amendments, the Federal Nursing Home Reform Amendments
(FNHRA), imposed various requirements as a prerequisite for
nursing homes to be reimbursed under Medicaid. Those
requirements are codified at 42 U.S.C. § 1396r. See
Grammer v. John J. Kane Reg'l Ctrs.-Glen Hazel, 570
F.3d 520, 523 n.1 (3d Cir. 2009).
FNHRA's provisions are standards for residents'
"[t]ransfer and discharge rights." 42 U.S.C. §
1396r(c)(2). Those standards require that "[a] nursing
facility must permit each resident to remain in the facility
and must not transfer or discharge the resident from the
facility unless" one of six circumstances applies:
(i) the transfer or discharge is necessary to meet the
resident's welfare and the resident's welfare cannot
be met in the facility;
(ii) the transfer or discharge is appropriate because the
resident's health has improved sufficiently so the
resident no longer needs the services provided by the
(iii) the safety of individuals in the facility is
(iv) the health of individuals in the facility would
otherwise be endangered;
(v) the resident has failed, after reasonable and appropriate
notice, to pay . . . for a stay at the facility; or
(vi) the facility ceases to operate.
Id. § 1396r(c)(2)(A).
nursing home does seek to transfer or discharge a resident,
it must first provide notice to the resident. Id.
§ 1396r(c)(2)(B). That notice must, among other required
information, inform the resident of her "right to appeal
the transfer or discharge under the State process established
under subsection (e)(3) of this section." Id.
(e)(3), in turn, sets forth specific requirements for the
state-established appeals process:
The State, for transfers and discharges from nursing
facilities effected on or after October 1, 1989, must provide
for a fair mechanism, meeting the guidelines established
under subsection (f)(3) of this section, for hearing appeals
on transfers and discharges of residents of such facilities;
but the failure of the Secretary to establish such guidelines
under such subsection shall not relieve any State of its
responsibility under this paragraph.
Id. § 1396r(e)(3).
phrase "guidelines established under subsection
(f)(3)" refers to another FNHRA provision instructing
the Secretary of Health and Human Services to "establish
guidelines for minimum standards which State appeals
processes under subsection (e)(3) . . . must meet."
Id. § 1396r(f)(3). In accordance with that
instruction, CMS has promulgated a series of regulations
fleshing out the requirements for the state-established
appeals process. See 42 C.F.R. §§
431.200-.246. Those regulations provide that the state
"must grant an opportunity for a hearing to . . . [a]ny
resident who requests it because he or she believes a skilled
nursing facility or nursing facility has erroneously
determined that he or she must be transferred or
discharged." Id. § 431.220(a). The
regulations also set forth procedural requirements for the
hearing itself. See id. §§ 431.240-.243.
And, ultimately, if "[t]he hearing decision is ...