Lawsuit threat for government-run facilities sails again

In 2015 the U.S. Supreme Court, in the case of Armstrong v. Exceptional Child Center, denied Medicaid providers the right to sue over the adequacy of Medicaid payment rates. 

It was a 5-4 decision based on dubious reasoning, as two leading health law professors wrote in Health Affairs: “In his opinion for the Court, Justice Scalia reached the astonishing conclusion that Congress had ‘implicitly’ precluded access to the courts, an approach to the question of when Congress bars judicial review that has virtually no precedent.”        

Indeed, former officials with the U.S. Department of Health and Human Services had submitted a brief in which they argued that:

“Not only has HHS historically understood and accepted that the Medicaid Act is privately enforceable, it has come to rely on that fact. Every aspect of the Department’s administration of the Medicaid program — from its regulations to its annual budget — is premised on the understanding that private parties will shoulder much of the enforcement burden.”

Fast forward to 2023. In the face of an unprecedented pandemic, Medicaid long-term care providers are on the ropes, with nursing homes severely beset. Yet, providers have no right of access to federal courts to seek redress for being objectively underfunded by state governments.

This makes it all the more jarring that in Health and Hospital Corp. v. Talevski seven members of the U.S. Supreme Court just declared private parties may sue publicly-owned nursing homes under the Federal Nursing Home Reform Act (FNHRA). This ruling came despite the Biden Administration arguing “administrative enforcement mechanisms appropriately protect the rights the statute confers” and that damage awards “paid to a particular resident” would be “in conflict with Congress’s judgment in FNHRA that monetary penalties collected from noncompliant facilities should be used to benefit residents generally.”

The Indiana facility in the Talevski case was county-run, and here in New Hampshire, each county also operates its own nursing homes, which, like private facilities, suffer the effects of state Medicaid underfunding. Some have wait lists of over 100 prospective residents because they cannot find staff within Medicaid means. So now, these taxpayer-owned facilities can face both civil monetary penalties (and other sanctions) and damages from private suits? Talk about double jeopardy! 

Indiana and 16 other states had, in their brief, relied on Armstrong, and argued, “government enforcement actions represent policy assessments of their own by politically accountable actors. Private enforcement actions have no such built-in accountability limits.” 

Yet, in their own amicus brief, leading Democratic members of Congress essentially argued the position rejected in Armstrong: “Congress and the states depend on private enforcement of rights encapsulated in these statutes to protect vulnerable individuals and groups. Limiting Congress’ ability to establish such private-enforcement mechanisms will leave federal-state programs with modest oversight.” 

To the credit of these members of Congress, they were at least consistent, having offered fundamentally the same argument before the Court in Armstrong, a precedent very conspicuously omitted in their Talevski brief. And I completely agreed with that position in Armstrong. 

Yet, with the private right-of-action ship having been sunk in Armstrong, I’m dumbfounded as to how it is so incongruously set afloat in Talevski. 

In a brief relying on cherry-picked anecdotes — anecdotes in no way focused on government-run facilities — AARP argued for private litigation “against government-run facilities” by asserting “inadequacy of government oversight of nursing facilities” — which is rich considering the “inadequacy of government oversight of” the Medicare Advantage plan AARP peddles. 

Yet if, in fact, there are deficiencies in government oversight, and I do not question there can be, then government must correct them, rather than society relying on a scattershot approach of private lawsuits — perhaps taking years to finally resolve, given appeals, with uncertain outcomes — to systemically redress any failures. 

Instead, the mind reels at the paradox the Court birthed: No private remedy exists for the government’s knowing neglect of nursing home care writ large, but now you can sue individual government nursing homes. What’s next?

Brendan Williams is the president and CEO of the New Hampshire Health Care Association and author of “The Enemy Within: Medicare Advantage and The Future of U.S. Healthcare” in the Quinnipiac Health Law Journal.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

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