Children's Healthcare Is A Legal Duty, Inc. v. Min De Parle, NANCY-ANN

• Decision Date: 18 October 1999
• Docket Number: No. 98-3521,NANCY-ANN,98-3521
• Parties: (8th Cir. 2000) CHILDREN'S HEALTHCARE IS A LEGAL DUTY, INCORPORATED, A CORPORATION UNDER THE LAWS OF IOWA; BRUCE BOSTROM; STEVEN PETERSEN, PLAINTIFFS/APPELLANTS, v.MIN DE PARLE, IN HER OFFICIAL CAPACITY AS DIRECTOR OF HEALTH CARE FINANCE ADMINISTRATION, AN AGENCY OF THE UNITED STATES; DONNA SHALALA, IN HER OFFICIAL CAPACITY AS SECRETARY OF THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, AN AGENCY OF THE UNITED STATES, DEFENDANTS/APPELLEES, FIRST CHURCH OF CHRIST, SCIENTIST, IN BOSTON, MASSACHUSETTS, INTERVENOR DEFENDANT/ APPELLEE. AMERICAN ACADEMY OF PEDIATRICS; THE AMERICAN MEDICAL ASSOCIATION; THE AMERICAN NURSES ASSOCIATION; IOWA MEDICAL SOCIETY; MINNESOTA CIVIL LIBERTIES UNION; THE AMERICAN HUMANIST ASSOCIATION; AMERICANS FOR RELIGIOUS LIBERTY; COUNCIL FOR SECULAR HUMANISM, AMICI ON BEHALF OF APPELLANT, SENATOR EDWARD M. KENNEDY, AMICUS ON BEHALF OF APPELLEE, CHRISTIAN LEGAL SOCIETY; NATIONAL COUNCIL OF CHURCHES OF CHRIST IN THE USA; CHRISTIAN MEDICAL AND DENTAL SOCIETY; THE NATIONAL ASSOCIATION OF EVANGELICALS; GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH; PRESBYTERIAN CHURCH, (U.S.A.), AMICI ON BEHALF OF APPELLEE. Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1084

212 F.3d 1084 (8th Cir. 2000)

CHILDREN'S HEALTHCARE IS A LEGAL DUTY, INCORPORATED, A CORPORATION UNDER THE LAWS OF IOWA; BRUCE BOSTROM; STEVEN PETERSEN, PLAINTIFFS/APPELLANTS, v. NANCY-ANN MIN DE PARLE, IN HER OFFICIAL CAPACITY AS DIRECTOR OF HEALTH CARE FINANCE ADMINISTRATION, AN AGENCY OF THE UNITED STATES; DONNA SHALALA, IN HER OFFICIAL CAPACITY AS SECRETARY OF THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, AN AGENCY OF THE UNITED STATES, DEFENDANTS/APPELLEES, FIRST CHURCH OF CHRIST, SCIENTIST, IN BOSTON, MASSACHUSETTS, INTERVENOR DEFENDANT/ APPELLEE.

AMERICAN ACADEMY OF PEDIATRICS; THE AMERICAN MEDICAL ASSOCIATION; THE AMERICAN NURSES ASSOCIATION; IOWA MEDICAL SOCIETY; MINNESOTA CIVIL LIBERTIES UNION; THE AMERICAN HUMANIST ASSOCIATION; AMERICANS FOR RELIGIOUS LIBERTY; COUNCIL FOR SECULAR HUMANISM, AMICI ON BEHALF OF APPELLANT,

SENATOR EDWARD M. KENNEDY, AMICUS ON BEHALF OF APPELLEE,

CHRISTIAN LEGAL SOCIETY; NATIONAL COUNCIL OF CHURCHES OF CHRIST IN THE USA; CHRISTIAN MEDICAL AND DENTAL SOCIETY; THE NATIONAL ASSOCIATION OF EVANGELICALS; GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH; PRESBYTERIAN CHURCH, (U.S.A.), AMICI ON BEHALF OF APPELLEE.

No. 98-3521

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: October 18, 1999

Filed: May 1, 2000

Appeal from the United States District Court for the District of Minnesota. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before Wollman, Chief Judge, Lay and Loken, Circuit Judges.

Wollman, Chief Judge.

Section 4454 of the Balanced Budget Act of 1997 creates exceptions to the Medicare and Medicaid Acts for persons who have religious objections to the receipt of medical care. These exceptions enable such individuals to receive government assistance for non-medical care that they receive in facilities that, for religious reasons, administer only non-medical services. Appellants Bruce Bostrom, Steven Peterson, and Children's Healthcare is a Legal Duty, Inc., utilizing taxpayer standing, filed suit in federal district claiming that section 4454 impermissibly establishes religion in violation of the First Amendment of the United States Constitution. The district court ¹ found that section 4454 is a permissible accommodation of religion and thus does not transgress the Establishment Clause. We affirm. ²

I. Factual Background

In 1965, Congress enacted the Medicare Act, 42 U.S.C. 1395 et. seq., and the Medicaid Act, 42 U.S.C. 1396 et. seq., in an attempt to make health care more readily available to certain segments of the public. The Medicare Act creates a system of comprehensive health insurance for the disabled and the elderly. See 42 U.S.C. 1395c. Funded by federal employment taxes, Medicare reimburses hospitals and skilled nursing facilities for the costs of providing hospital and post-hospital care to program beneficiaries. See 42 U.S.C. 1395d(a), 1395f. The Medicaid Act, in contrast, provides medical assistance to low-income families with dependent children and to impoverished individuals who are aged, blind, or disabled. See 42 U.S.C. 1396. Medicaid is jointly financed by the federal and state governments and is administered by the states, which must submit plans that meet broad statutory requirements in order to receive federal funding. See 42 U.S.C. 1396, 1396(a).

From their enactment until 1996, both the Medicare and Medicaid Acts contained express exceptions for members of the First Church of Christ, Scientist (Christian Scientists), a religious group that objects to medical care and embraces prayer as the sole means of healing. The exceptions sought to extend to Christian Scientists the non-medical elements of Medicare-and Medicaid-funded services, and also to except Christian Science sanitoria, the facilities providing such care, from the Acts' medical oversight requirements. The exceptions remained in effect until August 7 1996, when the United States District Court for the District of Minnesota declared them unconstitutional as facially discriminating among religious sects in violation of the Establishment Clause. See Children's Healthcare is a Legal Duty, Inc. v. Vladeck, 938 F.Supp. 1466, 1485 (D.Minn. 1996) (CHILD I).

In response to CHILD I, Congress enacted section 4454 of the Balanced Budget Act of 1997. Act of Aug. 5, 1997, Pub. L. No. 105-33, 4454, 111 Stat. 251, 426-32. With section 4454, Congress sought to replace the sect-specific portions of the Medicare and Medicaid Acts "with a sect-neutral accommodation available to any person who is relying on a religious method of healing and for whom the acceptance of the medical health services would be inconsistent with his or her religious beliefs." H.R. Conf. Rep. No. 105-217, at 767 (1997). To achieve this end, Congress struck all references to "Christian Science sanitoria" contained within the Medicare and Medicaid Acts and replaced them with the phrase "religious non-medical health care institutions" (RNHCIs). Congress then defined an RNHCI as an institution that, among other things, "provides only non-medical nursing items and services exclusively to patients who choose to rely solely upon a religious method of healing or for whom the acceptance of medical health services would be inconsistent with their religious beliefs," and that "on the basis of its religious beliefs, does not provide . . . medical items and services . . . for its patients." 42 U.S.C. 1395x(ss)(1)(C), (F).

Section 4454's incorporation of RNHCI terminology into the Medicare and Medicaid Acts enables individuals who hold religious objections to medical care to receive government assistance for care that they receive at RNHCIs, and it also frees RNHCIs from all medically-based supervision. Section 4454 achieves these results under the Medicare Act through three primary provisions. First, section 4454 expressly includes RNHCIs within Medicare's definition of "hospital" and "skilled nursing facility," designations required for Medicare coverage, even though RNHCIs do not meet the technical criteria necessary to qualify as either of these facilities. See 42 U.S.C. 1395x(e), 1395x(y)(1). Second, section 4454 provides that Medicare will pay for services rendered in an RNHCI if the recipient of the services has a condition such that the recipient would have been entitled to Medicare benefits if the recipient had received the same services in a medical facility. See 42 U.S.C. 1395i-5(a)(2). Third, section 4454 exempts RNHCIs from the medical oversight requirements of 42 U.S.C. 1320c, which establishes "peer review organizations" that oversee the services provided in facilities that qualify for Medicare funding. See 42 U.S.C. 1320c-11.

Section 4454 accomplishes the same results under the Medicaid Act through two key provisions. First, it modifies the statutory requirements for state Medicaid plans when such plans relate to RNHCIs. See 42 U.S.C. 1396a(a). For example, state plans may not establish state agency oversight of the quality of care provided in RNCHIs, nor may they require RNHCI utilization review committees, the in-house groups that review admissions decisions, to be composed of medical personnel. See id. Second, section 4454 excludes RNHCIs from Medicaid's definition of "nursing home," thereby exempting RNHCIs from state licensing requirements for nursing home administrators. See 42 U.S.C. 1396g(e)(1).

In response to the enactment of section 4454, appellants brought the present action against the United States, contending that section 4454 violates the Establishment Clause both on its face and as applied to Christian Science sanitoria. The district court rejected appellants' claim, granting summary judgment in favor of the government and intervenor Christian Scientists. The court found that section 4454 does not facially discriminate among religious sects and therefore is not subject to strict scrutiny review. The court then applied the less stringent standard of Lemon v. Kurtzman, 403 U.S. 602, 612-13 (1971), and concluded that section 4454 is a permissible accommodation of religion under the Establishment Clause. This appeal followed. ³

We review the district court's grant of summary judgment de novo. See Henerey v. City of St. Charles, 200 F.3d 1128, 1131(8th Cir.1999). In so doing, we must decide whether the record, when viewed in the light most favorable to the nonmoving party, shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c).

II. Facial Challenge to Section 4454

In considering appellants' facial challenge, we initially must determine whether section 4454 discriminates among religious sects. ⁴ If so, we apply strict scrutiny review under Larson v. Valente, 456 U.S. 228 (1982). If not, we administer the three-part test set forth by the Supreme Court in Lemon v. Kurtzman, 403 U.S. 602, 612-13 (1971). See Hernandez v. Commissioner, 490 U.S. 680, 695 (1989) (applying the Lemon test where no facial sect preference exists).

A.

In Larson, the Supreme Court held that a law that on its face grants a denominational preference may be upheld only if it is supported by a compelling state interest. See 456 U.S. at 246-47; Hernandez, 490 U.S. at 695. To facially discriminate among religions, a law need not expressly distinguish between religions by sect name. See Larson, 456 U.S. at 232 n.3. Such discrimination can be evidenced by objective factors such as the law's legislative history and its practical effect while in operation. See Church of the Lukumi Babalu Aye, Inc. v. Hialeah, 508 U.S. 520, 535, 540 (1993); Larson, 456 U.S. at 254.

Citing these factors, appellants contend that section 4454 is "unmistakably targeted to Christian Science institutions" and thus is a denominational preference that is subject to strict scrutiny review. The district court rejected appellants' argument and refused to apply...