Fuzie v. Manor Care, Inc.

• Citation: 461 F. Supp. 689
• Decision Date: 05 July 1977
• Docket Number: Civ. A. No. C77-265.
• Parties: Stella FUZIE, Plaintiff, v. MANOR CARE, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

461 F. Supp. 689

Stella FUZIE, Plaintiff, v. MANOR CARE, INC., et al., Defendants.

Civ. A. No. C77-265.

United States District Court, N. D. Ohio, E. D.

July 5, 1977.

COPYRIGHT MATERIAL OMITTED

H. M. Cochran, Jr., Charles M. Delbaum, Marley Ford Eiger, Gordon J. Beggs, American Civil Liberties Union, Cleveland, Ohio, Toby S. Edelman, National Senior Citizens Law Center, Washington, D. C., Neal S. Dudovitz, Gill W. Deford, Sally Hart Wilson, National Senior Citizens Law Center, Los Angeles, Cal., for plaintiff.

John R. Gall, Squire, Sanders & Dempsey, Cleveland, Ohio, Joseph E. Casson, Malcolm J. Harkins, III, Arent, Fox, Kintner, Plotkin & Kahn, Washington, D. C., for defendants Manor Care, Inc. and Manor Care of Willoughby, Inc.

Terry L. Tataru, William J. Anderson, Columbus, Ohio, for defendant Kwegyer Aggrey.

MEMORANDUM AND ORDER

KRUPANSKY, District Judge.

This is an action instituted pursuant to the Civil Rights Act of 1871, 42 U.S.C. § 1983; and Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., and regulations promulgated thereunder, wherein the plaintiff, Stella Fuzie, a Medicaid recipient resident at the private nursing home owned and operated by defendant Manor Care of Willoughby, Inc. (Manor Care), seeks to enforce the provisions of certain regulations promulgated under the Medicaid Program by the Secretary of Health, Education and Welfare (the Secretary) on behalf of herself and all persons similarly situated, against defendant Manor Care, a qualified provider of Medicaid services, and defendant Kwegyer Aggrey, Director of the Ohio Department of Public Welfare (ODPW), as the state official charged with the administration of the Ohio Medicaid Plan. The jurisdiction of this Court is invoked pursuant to 28 U.S.C. §§ 1331 and 1343.

Defendant Manor Care has moved the Court to dismiss this action against it for lack of subject-matter jurisdiction, pursuant to Rule 12(b)(1), Fed.R.Civ.P., and for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6) thereof.

A review of the pleadings and exhibits herein discloses that Manor Care is currently a party to a contract with the ODPW whereby Manor Care is reimbursed for providing skilled and intermediate level nursing care and services to Medicaid recipients. The plaintiff was admitted as a Medicaid patient to Manor Care of Willoughby, the defendant's nursing home, on February 6, 1976, and is presently a Medicaid recipient certified to require intermediate-maximum level care.

The plaintiff contends that Manor Care has commenced a systematic program of transferring or discharging from its nursing home all patients who are Medicaid recipients with the exception of those who became eligible for Medicaid assistance subsequent to exhausting their assets as private patients; the transfers or discharges are allegedly being effected for other than medical reasons.

The Amended Complaint charges that Manor Care has notified the plaintiff's guardian ad litem, Irene Fuzie, of its intention to transfer or discharge the plaintiff from Manor Care of Willoughby, and that it thereby threatens her with immediate, permanent and irreparable harm to her health, in violation of regulations promulgated by the Secretary with respect to skilled nursing care facilities at 20 C.F.R. § 405.1121(k)(4), incorporated into the Medicaid regulations at 45 C.F.R. § 249.33(a)(1):

(k) Standard: Patients' rights. The governing body of the facility establishes written policies regarding the rights and responsibilities of patients and, through the administrator, is responsible for development of, and adherence to, procedures implementing such policies. These policies and procedures are made available to patients, to any guardians, next of kin, sponsoring agency(ies), or representative payees selected pursuant to section 205(j) of the Social Security Act, and Subpart Q of Part 404 of this chapter, and to the public. The staff of the facility is trained and involved in the implementation of these policies and procedures. These patients' rights, policies and procedures ensure that, at least, each patient admitted to the facility:

* * * * * *

(4) Is transferred or discharged only for medical reasons, or for his welfare or that of other patients, or for non-payment for his stay (except as prohibited by titles XVIII or XIX of the Social Security Act), and is given reasonable advance notice to ensure orderly transfer or discharge, and such actions are documented in his medical record; 20 C.F.R. § 405.1121(k)(4).

A similar requirement is imposed upon intermediate level care facilities at 45 C.F.R. § 249.12(a)(1)(ii)(B)(4):

(a) The standards for an intermediate care facility (as defined in § 249.10(b)(15) of this part) which are specified by the Secretary pursuant to section 1905(c) and (d) of the Social Security Act and are applicable to all intermediate care facilities are as follows. The facility:

(1) Maintains methods of administrative management which assure that:

* * * * * *

(ii) There are written policies and procedures available to staff, residents, their families or legal representatives and the public which:

* * * * * *

(B) Ensure that each resident admitted to the facility:

* * * * * * (4) Is transferred or discharged only for medical reasons or for his welfare or that of other patients, or for nonpayment for his stay (except as prohibited by the title XIX program) . . ..

Medicaid is a joint federal-state program providing medical assistance benefits to qualified recipients under Title XIX of the Social Security Act, as amended (the Act), 42 U.S.C. §§ 1396-1396i, and regulations promulgated by the Secretary at 20 C.F.R. pts. 246-250.

Pursuant to 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, 42 U.S.C. § 1383c. In order to qualify for federal reimbursement, a state must satisfy requirements regarding recipient eligibility, the scope of care and services provided, and provider certification, among other things, by means of an approved state plan for medical assistance, 42 U.S.C. § 1396a.

The state then contracts with qualified providers of services, such as defendant Manor Care, which in the case of skilled nursing care facilities must satisfy the requirements of § 1861(j) of the Act, 42 U.S.C. § 1395x(j), pursuant to Title XIX § 1902(a)(28), 42 U.S.C. § 1396a(a)(28), and the regulations promulgated by the Secretary at 20 C.F.R. § 405.1101-.1137 pursuant to § 1861(j)(15) of the Act, 42 U.S.C. § 1395x(j)(15). Standards with respect to intermediate care facilities are established pursuant to § 1905(c) of the Act, 42 U.S.C. § 1396d(c), at 45 C.F.R. § 249.12.

Sections 1861(j)(15), 42 U.S.C. § 1395x(j)(15), and 1905(c), 42 U.S.C. § 1396d(c), both contemplate state regulation and implementation of the federal program and its requirements with respect to qualified providers. The regulations establishing the standards for payment for skilled nursing facility and intermediate care facility services are set forth at 45 C.F.R. § 249.33, and provide for a comprehensive scheme of state regulation of such facilities pursuant to the state plan. The regulations promulgated by the Secretary under § 1861(j) of the Act, 42 U.S.C. § 1395x(j), with respect to skilled nursing facilities at 20 C.F.R. subpt. K are incorporated into the regulations establishing the standards for administration of the Title XIX state plan at 45 C.F.R. § 249.33(a)(1).

Pursuant to O.R.C. § 5101.51, the ODPW provides medical assistance under Title XIX of the Social Security Act to recipients such as the plaintiff qualified under state and federal law, by means of a program required to conform to the Social Security Act, O.R.C. § 5101.51(A). The ODPW administers Ohio's approved state plan and has promulgated rules and regulations pursuant thereto, including a Medicaid Handbook and a Public Assistance Manual. Qualified providers are required to abide by these rules and regulations as a condition of their provider agreements with the state to provide Medicaid services.

The federal regulatory requirements with respect to the administration of the provider facility, 20 C.F.R. subpt. K, are incorporated by reference into the Ohio Plan. Payments under Medicaid are made on a reimbursement basis: pursuant to 42 U.S.C. §§ 1383c, 1396a, and 1396b, the federal government reimburses a participating state for a percentage of sums which have been expended by it through the program. Under federal law, 42 U.S.C. § 1396a(a)(13)(E) and 45 C.F.R. § 250.30(a)(3), and state law, O.R.C. § 5101.51(A)(1) and the State Plan, the provider facilities are reimbursed by the state for services which have been rendered under the program.

In providing funds to assist participating states to furnish necessary medical services to qualified individuals, see Title XIX § 1901, 42 U.S.C. § 1396, Congress has established an administrative structure which provides, inter alia, for state assistance of Medicaid recipients receiving care or services in "private or public institutions," see Title XIX § 1902(a)(9)(B), 42 U.S.C. § 1396a(a)(9)(B). The plaintiff asserts that by virtue of defendant Manor Care's voluntary participation in the Medicaid program through a contract with the State of Ohio and its certification as a provider of Medicaid services by the federal and state governments, the nursing home's proposed transfer or discharge of the plaintiff constitutes action under color of state law, 42 U.S.C. § 1983, and state action within the meaning of the Fourteenth Amendment to the Constitution, as required to render defendant Manor Care liable to suit thereunder. This concept of state action "has been found to be virtually synonymous with the `under color of state law' requirement of § 1983, United States v. Price, 383 U.S. 787, 794-95 n. 7, 86 S.Ct. 1152, 16...