Chalfin v. Beverly Enterprises, Inc.

Decision Date26 June 1989
Docket NumberCiv. A. No. 87-3319.
Citation741 F. Supp. 1162
PartiesArlene CHALFIN, Harry Chalfin, Richard Chalfin, Alan Chalfin and Susan Chalfin-Dughi v. BEVERLY ENTERPRISES, INC.
CourtU.S. District Court — Eastern District of Pennsylvania

COPYRIGHT MATERIAL OMITTED

Stephen A. Feldman, Philadelphia, Pa., for plaintiffs.

Robert St. Leger Goggin, Philadelphia, Pa., for defendant.

MEMORANDUM

LOWELL A. REED, Jr., District Judge.

This is an action brought pursuant to Title XIX of the Social Security Act, 42 U.S.C. §§ 1396-1396i, and the regulations promulgated thereunder, commonly known as the Medicaid Program. Plaintiffs allege inter alia that defendant, owner and operator of the Rosemont Manor Nursing Home where Mrs. Arlene Chalfin was a patient from November to December 1986, violated the Social Security Act by discharging Mrs. Chalfin against her will and without the proper justification.1 Jurisdiction is founded upon diversity, 28 U.S.C. § 1332.2

Before the court is the motion of the defendant Beverly Enterprises to dismiss counts I, II, III, IV, and VII of the complaint as to all the plaintiffs, and to dismiss count V with respect to Harry Chalfin, Richard Chalfin, Alan Chalfin and Susan Chalfin-Dughi, and the cross motion of the plaintiffs for summary judgment on their contract claim (count VI).3 For the reasons set forth below, the motion of the defendant will be granted as to counts I, II, III, IV and V, granted in part and denied in part as to count VII, and plaintiffs' cross motion for summary judgment will be denied.

I Factual Background

Plaintiff, Arlene Chalfin, was admitted on or about November 11, 1986 to the Rosemont Manor Nursing Home which is owned and operated by the defendant, Beverly Enterprises, Inc. The plaintiff was, and still is, suffering from Alzheimer's Disease, and at the time of her admission was recovering from a seizure which caused multiple fractures. As a result of those injuries, Mrs. Chalfin was unable to ambulate at that time. Plaintiff was admitted to defendant's facility as a private patient.4

Plaintiffs assert that immediately after Mrs. Chalfin was admitted, her husband, Dr. Chalfin, asked a Rosemont social worker about the application process for Medical Assistance. Plaintiff further contends that the social worker informed Dr. Chalfin that "Medicaid beds" were generally unavailable. The social worker then advised Rosemont's administrator, Susan Ulmer about the inquiry at which time she reiterated to Dr. Chalfin the fact that the facility had no "Medicaid beds" available. At the time, the administrator indicated to Dr. Chalfin that she would be willing to help the family find another facility.

Plaintiffs contend that after they declined to place Mrs. Chalfin in a different facility, "Rosemont's administrator began a pattern of harassment designed to coerce the family to seek out another facility." The alleged harassment included verbal abuse of the family, refusing to permit the family from being involved in their spouse and mother's care, refusing to permit the family to touch her and attempting to evict plaintiff on the day before Thanksgiving. As a result of this attempt to evict her, the plaintiffs filed a complaint with the Department of Health.

The defendant denies that any harassment or discrimination ever took place at Rosemont and asserts that it only attempted to discharge Mrs. Chalfin on November 22nd after the Director of Nursing discovered Mrs. Chalfin's husband, a dentist, performing a dental procedure on his wife without prior permission or notice to anyone on the Rosemont staff. As a result, defendant contends that it was concerned that it could not adequately care for Mrs. Chalfin under these conditions and therefore issued her and her family a 30-day notice to relocate. Following a meeting with the Chalfins and the Rosemont Administrator on November 24th, the 30-day notice was withdrawn. Subsequently, the plaintiffs withdrew their pending complaint with the Department of Health.

On the evening of December 19, 1986, Mrs. Chalfin was transferred to Bryn Mawr Hospital. The defendant asserts that the reason Mrs. Chalfin was transferred was because her medical condition worsened and she was transferred with the approval of her treating physician. Plaintiffs contend that Mrs. Chalfin's treating physician, Dr. Rowland, never actually consented to and approved the transfer as he was not on call at that time and that a different doctor covering for him actually ordered the transfer. Plaintiffs assert that Dr. Rowland signed the discharge summary only after the fact and never approved the transfer prior to her admission to the hospital.

Plaintiffs state that following the transfer, after Dr. Chalfin inquired about holding the bed, Rosemont's administrator advised him to collect the balance of the funds which had been paid through December. Defendant contends that it was because of Mrs. Chalfin's serious medical condition that it advised the plaintiffs that Rosemont could no longer care for Mrs. Chalfin.

The present litigation ensued, with Mrs. Chalfin and her family filing a seven count complaint seeking damages under Title XIX of the Social Security Act, 42 U.S.C. § 1396-1396i (1982 & Supp. IV 1986), the Pennsylvania Health Care Facilities Act, 35 Pa.Stat.Ann. §§ 448.101-448.904 (Purdon Supp.1989), the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa.Stat.Ann. §§ 201-1 to 201-9.2 (Purdon 1971 & Supp.1989), and state law breach of contract and intentional infliction of emotional distress claims.

II Discussion Medicaid

Medicaid is a joint federal-state program organized under Title XIX of the Social Security Act, 42 U.S.C. §§ 1396-1396i and the regulations promulgated thereunder, providing medical assistance benefits to qualified recipients through the recipient's state. The bill was "designed to liberalize the Federal law under which states operate their medical assistance programs so as to make medical services for the needy more generally available." S.Rep. No. 404, 89th Cong., 1st Sess., reprinted in 1965 U.S. Code Cong. & Admin.News 1943, 2014.

In accordance with Title XIX, the federal government reimburses qualifying states for a portion of expenditures made by such states for certain medical care and services provided to eligible recipients by qualified providers. An individual is entitled to Medicaid if she fulfills the criteria established by the state in which she lives. In order for a state to qualify for federal reimbursements, the state must establish an approved state plan for medical assistance which meets established federal guidelines. Accordingly, although states are in no way obligated to participate in the program, if a state chooses to participate, it must comply with federal regulations. See Roberson v. Wood, 464 F.Supp. 983, 984 (E.D.Ill.1979); Fuzie v. Manor Care, Inc., 461 F.Supp. 689, 693 (N.D.Ohio 1977).

Each participating state maintains the primary responsibility for implementing the Medicaid Program, for determining recipient eligibility for participation, and for ensuring that "care and services under the plan will be determined, and such care will be provided, in a manner consistent with simplicity of administration and the best interests of the recipients." 42 U.S.C. § 1396a(a)(19) (1982). Generally, states, rather than providing medical assistance directly, enter into provider agreements for a term of years with state-certified health care facilities who are willing to act as health care providers. This term is usually automatically renewed unless the health care provider is either decertified for failing to satisfy state requirements or voluntarily terminates the arrangement. See Bumpus v. Clark, 681 F.2d 679, 682 (9th Cir.1982), withdrawn as moot, 702 F.2d 826 (9th Cir.1983).

Implied Right of Action

The primary issue in this case and the linchpin upon which it turns, is whether a private right of action may be implied under Title XIX of the Social Security Act, 42 U.S.C. §§ 1396-1396i (1982 & Supp. IV 1986). While the issue is one of first impression in this circuit, several district courts and one court of appeals have had occasion to expressly confront this issue and have reached different conclusions. Compare Stewart v. Bernstein, 769 F.2d 1088, 1093 (5th Cir.1985) (private right of action may not be implied under the statute); Wagner v. Sheltz, 471 F.Supp. 903, 910 (D.Conn.1979) (same); Fuzie v. Manor Care, Inc., 461 F.Supp. 689, 697 (N.D.Ohio 1977) (same) with Roberson v. Wood, 464 F.Supp. 983, 989 (E.D.Ill.1979) (recognizing an implied private right of action under the statute); Berry v. First Healthcare Corporation, Medicare & Medicaid Guide (CCH) ¶ 28,693 (D.N.H. Oct. 26, 1977) (same). Because I find no evidence that Congress intended to create a private right of action under the statute,5 and because it is well established that "the federal judiciary will not engraft a remedy on a statute, no matter how salutary, that Congress did not intend to provide," California v. Sierra Club, 451 U.S. 287, 297, 101 S.Ct. 1775, 1781, 68 L.Ed.2d 101 (1981), I hold that plaintiffs may not maintain a private action under Title XIX of the Social Security Act.

The test used to determine whether a private right of action may be implied from a federal statute was articulated by the Supreme Court in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). "The question ... is one of statutory construction, and the key to the inquiry is the intent of the legislature." Plucinski v. I.A.M. National Pension Fund, 875 F.2d 1052, 1055 (3d Cir.1989) (citing Northwest Airlines, Inc. v. Transport Workers Union of America, 451 U.S. 77, 91, 101 S.Ct. 1571, 1580, 67 L.Ed.2d 750 (1981)). See also Barron v. Nightingale Roofing, Inc., 842 F.2d 20, 21 (1st Cir.1988). The four inquiries Cort established are: (1) "Is the plaintiff `one of the class for whose especial benefit the statute was enacted' ... that is, does the...

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